Reflect on the assigned readings for Week 2 and then type a two page paper regarding what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. Define and describe what you thought was worthy of your understanding in half a page, and then explain why you felt it was important, how you will use it, and/or how important it is in project management. After submitting your two page paper as an initial post in the “Reflection and Discussion Forum,” then type at least two peer replies in response to your classmates posts (200 word minimum each).
responses
1) response for Rahul
According to Kloppenborg, Anantatmula & Wells (2019), a project charter is referred to as an informal contract entered between a team of a project and the sponsor of the same project. In a contract, two or more parties are involved freely, and each party benefits from it. Also, contract documentation can evolve with the changing conditions that may occur. Moreover, a project charter serves crucial roles to the project team; for instance, this charter authorizes the project managers to proceed with the operations. Secondly, it helps in the development of common understanding amongst the parties involved. Thirdly, it leads to the creation of commitments of resources to projects and finally screening out the poor projects.
Furthermore, another important aspect of this week’s discussion is the discussion on the elements of a typical charter project that comprise of the title of the project charter, overview of the scope, case of the business, business’ background, milestone’s schedule, potential risks, estimates of the budgets, plan for the requirements, among others. Additionally, in this discussion, steps for constructing a milestone schedule have been discussed. Description of the present situation requiring the project and the successful completion of the project are the first two steps involved in the construction of a milestone schedule (Kloppenborg et al., 2019).
This week’s discussion is important as it has enabled me to understand what a project charter is and how it is beneficial to the success of the business. Also, this discussion is important has it has outlined the crucial elements of a project charter, and it has described how each element is useful (Kloppenborg et al., 2019). Furthermore, using the knowledge gained from the discussion, each section of a project charter can be created easily. Lastly, this discussion has provided the skills of milestone charter creation and the steps involved.
Additionally, the knowledge obtained from this discussion is crucial in the management of the project. One of its essentials is that it authorizes the manager of the project to proceed with the project activities by authorizing the resources allocated to a given project. Again, for proper management of the project, this charter is responsible for the provision of the official status within the parent organization. Again, understanding the project charter results in the development of teamwork amongst the stakeholders involved in the execution of the project (Kloppenborg et al., 2019). It also leads to the effectiveness of the management of the project as there is mutual agreement, trust, and commitments amongst the parties involved.
Understanding the scope overview of the project helps the management in the prevention of the unnecessary expansion that may occur that was not earlier agreed. Business case, on the other hand, binds the project to the strategy of the organization. With the project charter, the management can tell when a project is needed and hence estimates and budgets for the requirements to execute the project. Again, the management can learn from the present project, and the lessons obtained can be beneficial to other projects (Kloppenborg et al., 2019). The management can identify the possible risks and plan for them before they occur. Finally, the project sponsors, managers, and the core team can make agreements at higher levels using the project charter.
REFERENCES
Kloppenborg, T., Anantatmula, V., & Wells, K. (2019). Contemporary project management (4th ed). Stamford, CT: Cengage Learning.
2) response for Sri surya
Hi everyone,
To begin with, the chapters “Project Selection and Prioritization” and “Chartering Projects” covered several topics and I want to discuss about few important topics. Mainly the strategic analysis plays a vital role and “The strategic analysis is often called strengths, weakness, opportunities and threats (SWOT). There are few selection criteria for projects such as
- How well does this project fir=t with at least one organizational objective?
- How competitively can the company price the project results?
- What unique advantages will the project provide?
- How sustainable will the project results be?
- What risk are there if we do not perform this project?
Based on the available data we can create a project selection and prioritization matrix, each and every organization needs several changes as a part of continuous improvement, so in such cases this matrix plays a vital role. Even the project manager generally considers few issues such as
- The urgency of each project
- The cost of delaying the expected benefits from various projects
- Practical details concerning the timing
- Opportunity costs associated with the project etc.
The next step or the first step for any project is “Project Charter”, usually it is an informal contract between the project team and sponsor. There are four major purposes for a charter i.e.
- Authorizes the project manager to proceed.
- Helps the project manager, sponsor and team members if any are previously assigned
- Helps the project manager, sponsor and team members commit to the spirit of project
- Quickly scree out obviously poor projects.
Later steps include creating timelines and milestones schedules, so there is a need for acceptance criteria. For such situations, the author mentioned about the six-step-procedure i.e.
- Step 1: Current state of the project
- Step 2: Targeted or future state predicted state
- Step 3: Final project deliverables
- Step 4: Key points where quality needs to be verified
- Step 5: Allot primary shareholder for each milestone
- Step 6: Realistic expected completion dates for each and every individual milestone
The chapters pretty much determined the project scope as key element for any kind of successful project management irrespective to their line of activity. So, the key objective was to determine whether the project scope has an impact on project measure like cost, schedule and percentage completion. Project success was considered as self-defined, besides it showed the importance of Project scope for making the firm more efficient. It helps us in monitoring or getting real time data such as:
- Initial Planned and actual project budget
- Initial Planned and actual project schedule
- Percentage completion
Thank you,
CONTEMPORARY PROJECT MANAGEMENT, 4E
Timothy J. Kloppenborg
Vittal Anantatmula
Kathryn N. Wells
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‹#›
Project Selection and Prioritization
Chapter 2
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‹#›
Chapter 2 Project Selection and Prioritization
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‹#›
Explain the strategic planning and portfolio management processes.
Describe how to select, prioritize, and resource projects as an outgrowth of strategic planning.
From a contractor’s viewpoint, describe how to secure projects.
Chapter 2 Core Objectives
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Compare strengths and weaknesses of using financial and scoring models to select projects.
Demonstrate how to select and prioritize projects using a scoring model.
Chapter 2 Technical Objectives
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5
Explain the strengths an organization might possess that could improve its ability to perform projects.
Chapter 2 Behavioral Objectives
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Strategic Analysis
Guiding Principles
Vision
Mission Statement
Strategic Objectives
Flow-down Objectives
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Strategic Planning Process
Strategic Planning and Portfolio Alignment
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Strategic Analysis
SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)
Elements within the project team’s control
Elements over which the project team has little/no control
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SWOT Analysis for the Built Green Home at Suncadia
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Breakout session! SWOT analysis
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
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Give students an example project that has been in the news lately and divide them into groups. Have the various groups brainstorm one of the four categories of the SWOT analysis and report to the class when finished.
11
Kate Wells () –
Guiding Principles
The vision is one sentence that describes the organization in the future
Requires extra effort to be achieved
Multiyear goals may require need for a new vision
Mission statement – mechanism for achieving the vision
Triple Bottom Line
Social
Environmental
Economic
Organization’s core purpose
Core values
Culture
Beliefs
Primary business
Primary customers
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This approach emphasizes the social, environmental, and economic health of
all of the company’s stakeholders rather than a narrow emphasis only on the economic
return for shareholders.
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Mission Statement Considerations
Purpose
Core values
Beliefs
why an organization exists
how decisions will be made
how people will be treated
what the leaders stand for
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Mission Statement Considerations
Culture
Primary business areas
Primary customers
how members should act
what business the organization engages in
which groups of people need to be satisfied
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Cincinnati Children’s Hospital Medical Center
Vision and Mission
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Strategic Objectives
Means of achieving the vision and mission
Objective setting occurs annually
Describe short- term and long-term results
Describe measures of achievement
Effective objectives are
Specific
Measurable
Achievable
Results-based
Time-specific
SMART
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Internet Society Strategic Objectives
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Flow-down Objectives
Enforce strategic objectives
Implemented through ongoing operations
Projects are the primary method for implementing objectives
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Portfolio Management
Portfolios
Programs
Projects and subprojects
Assess organization’s ability to perform projects
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19
Portfolios
Composed of projects, programs, sub-portfolios, and ongoing operations
Seek a balance between:
Large and small projects
High-risk, high-reward and low-risk projects
Quick completion and substantial time projects
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Programs
Include a group of related projects, subprograms, and activities
Last as long as the organization lasts
Projects within a program are of limited duration
Managed at a level above the project manager
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Project managers should attempt to understand how both portfolio and program decisions impact
their projects and then spend most of their efforts focused on their project.
21
The Project Portfolio
A collection of projects grouped to be collectively managed
Portfolio management:
Portfolio of Projects
IDENTIFY
SELECT
PRIORITIZE
RESOURCE
GOVERN
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Projects and Subprojects
A large project may be composed of multiple subprojects
The project manager coordinates subprojects and makes decisions that are best for the overall project
A subproject comes from dividing a project into more manageable pieces
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Portfolio, Program, Project, and Subproject Relationships
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Portfolio of Projects and Operational Work Processes
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Reasons for Project Failure
Not enough resources
Not enough time
Unclear expectations
Changes to the project
Disagreement about expectations
Projects must be aligned with the goals of the parent organization.
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Assess Organization’s Ability to Perform Projects
TEAMWORK
Do we have a teamwork attitude, free and open communication, creativity, and empowered decision-making?
PM Process
Do we have a clearly defined project management process?
ASSOCIATES
Do our associates have the right attitudes, skills, and competencies to use the project management process?
LEADERS
Are our leaders at each level willing to take appropriate personal risk?
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Assess Organization’s Ability to Perform Projects
FOUNDATION
Does senior leadership establish a strong leadership foundation?
LEADERSHIP
Do individuals and teams exhibit leadership at their respective levels?
EXTERNAL ENVIRONMENT
Do we monitor and understand our external environment?
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Identifying Potential Projects
Social need
Customer Request
Legal requirement
Technological advance
All should participate
Identify twice the projects
Brief description of project
(“elevator pitch”)
Market demand
Strategic opportunity
Environmental consideration
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29
Identifying Potential Projects
Summarize the work
Why the project is important
business case – why is this project worth the organization’s investment?
statement of work – what will be done and/or produced?
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Project Selection, Prioritization, and Initiation
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Methods for Selecting Projects
What value does each potential project brings to the organization?
Are the demands of performing each project understood?
Are the resources needed to perform the project available?
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Methods for Selecting Projects
Is there enthusiastic support both from external customers and from one or more internal champions?
Which projects will best help the organization achieve its goals?
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Methods for Selecting Projects
Include financial and scoring models
Projects are investments
Three different approaches
Financial analysis as the primary means of selection
Financial models as screening devices
Financial justification as one factor in a multi-factor scoring model
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Using a Cost-Benefit Analysis Model to Select Projects
Most widely accepted model
Discount the expected future value
Subtract discounted costs from discounted benefits
Divide the cash flow by the initial cash outlay
A ratio above 1.0 means the project is expected to profit
Net Present Value (NPV)
Benefit-Cost Ratio (BCR)
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Using a Cost-Benefit Analysis Model to Select Projects
Percentage return expected on the investment
A ratio above the current cost of capital
Higher IRR is better
Time required to pay back the initial project investment
Shorter payback periods are desirable
Internal rate of return (IRR)
PAYBACK PERIOD (PP)
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Using a Cost-Benefit Analysis Model to Select Projects
Financial models ensure the cost and return perspective.
Financial models DO NOT ensure alignment with strategic goals.
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Financial Models for Project Selection
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Using a Scoring Model to Select Projects
Scoring models often used when multiple important criteria exist
Identify potential criteria
Determine mandatory criteria
Weight criteria
Evaluate projects
Sensitivity analyses
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Examples of Project Selection Criteria
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Project Selection and Prioritization Matrix
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Completed Project Selection and Prioritization Matrix
Evaluate
Rate
Weight
Display
Select
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Breakout session!
First, brainstorm criteria you would use to create a scoring model
Next, complete a selection/prioritization model like the one in Exhibit 2.10
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For this breakout session, you can use an example such as buying a new car. You can also see Exercises 1 & 2 in the text for examples of the matrix.
43
Sensitivity Analysis
What would happen if factors were to change?
Some criteria may be deemed more important than others
Add missing criteria or new alternatives
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Revised Project Selection and Prioritization Matrix
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Prioritizing Projects
Which projects assigned resources and scheduled to begin first
Scoring models provide input
Other considerations:
Urgency of each project
Cost of delaying the expected benefits
Practical details of timing
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Alternative Breaks Project Selection and Prioritization Matrix
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Resourcing Projects:
Leaders should start assigning resources from highest priority project down until resources become limited
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Securing Projects
The client perspective
Selection and prioritization process
Make versus buy decision
The contractor perspective
Identify potential project opportunities
Determine which opportunities to pursue
Prepare and submit project proposal
Negotiate to secure the project
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Identify Potential Project Opportunities
Perform portfolio alignment exercise
Attend trade shows and professional conferences
Practice customer relationship management
Establish & nurture personal contacts
Link information systems
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Determine Which Opportunities to Pursue
Target projects to pursue
Use SWOT analysis
Determine if project will help achieve contractor objectives
Consider cost to pursue the work
Consider probability of securing the project
Consider capability to perform the work
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Prepare and Submit Project Proposal
Understand the source selection criteria
Consider technical, managerial, and financial factors in contractor selection
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Typical Source Selection Criteria
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Schedule
Negotiate to Secure the Project
PM to find a solution to secure project work with enough profit potential
Negotiate money to be paid for a project and…
Contractual terms
Personnel
Quality standards
Reporting mechanisms
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Summary
Selection begins with strategic planning
Use SWOT analysis
Develop mission and vision statements as guiding principles
Use portfolio management to consider:
Resources
Organizational capabilities
Individual capabilities
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Summary
Evaluate potential projects through financial and/or scoring models
Prioritize selected projects for completion
External project may be a better fit
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Prioritizing Projects at LADD
Outcomes not always predictable
Some projects nonnegotiable—and would pave way for other, larger projects
Focused on 12 top-ranked projects and quarterly results
PM IN ACTION
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CONTEMPORARY PROJECT MANAGEMENT, 4E
Timothy J. Kloppenborg
Vittal Anantatmula
Kathryn N. Wells
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‹#›
Chartering Projects
Chapter 3
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‹#›
Chapter 3 Core Objectives:
Describe what a project charter is and why it is critical to project success
List elements of a charter and why each is used
Create each section of a charter
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3
Chapter 3 Technical Objectives:
Initialize a project in Microsoft Project
Set up a milestone schedule
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Chapter 3 Behavioral Objectives:
As a team, create a complete charter for a real project and present it to a sponsor for ratification
Negotiate with a sponsor to make your project realistic and achievable
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Ball Aerospace & Technologies Corp. Systems Engineering Solutions
“At Ball, we increase stakeholder buy-in by addressing and thinking about things up front; with an agreed-upon charter, this gives the project team some guidance to effectively plan and execute the effort.”
Lydia Lavigne, Ball Aerospace
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Atos Origin has been through three mergers/acquisitions in the last 15 years.
The project life cycle for most projects follow the typical IT project management approach.
A team of global employees works to service a client need
Onsite – program managers, project managers, business analysts, and technical architects
Offshore – designers, developers, testers
Entire operation is managed through a program management office (PMO)
PMO identifies, prioritizes, and ensures delivery of all projects
Adaptability and empathy are helpful strengths for project managers in this environment
Adaptability including the ability to hold the global team together
Empathy useful in respecting different choices of team members
6
What is a Project Charter?
An informal contract between the project team and the sponsor
A contract
is entered into freely by two or more parties.
cannot arbitrarily be changed
offers something of value for each party
is a living document that can evolve with changing conditions
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What is a Project Charter?
Signing a charter represents transition
Project initiating stage
Project planning stage
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Why is a Project Charter used?
1. Authorize the project manager to proceed
2. Help to develop a common understanding
3. Create commitment
4. Screen out poor projects
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Authorize the project manager to proceed
Project charter authorizes commitment of resources to a project
Project charter provides official status within the parent organization.
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Common understanding
Teamwork develops.
Agreement, trust, communication, and commitment develop.
Project team does not worry if management will accept a decision.
Sponsor is less likely to change the original agreement.
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When is a charter needed?
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Typical Elements in a Project Charter
Title
Scope overview
Business case
Background
Milestone schedule
Risks/assumptions/constraints
Spending approvals/budget estimates
Communication plan requirements
Team operating principles
Lessons learned
Signatures and commitment
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Typical Elements in a Project Charter
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© 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Scope Overview
High-level description of “what” and “how”
The project in a nutshell
Product scope – characteristic features and functions of what is being created
Requirements—characteristic or condition needed to satisfy either a contract or a stakeholder’s expectations
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Scope Overview
Used to help prevent scope creep
Considered to be the project boundaries
Quantifying the scope helps with understanding of project size
Scope creep – uncontrolled expansion to what was agreed upon
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© 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Business Case
Project purpose or justification statement
Answers the question “why?”
Used to justify the necessity of the project
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Business Case
Ties project to the organization’s strategy
Provides rationale or high-level cost/benefit estimates
Persuades and inspires decision makers and team members
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Background
Used to provide more detail to support the scope statement and business case statements
Background statement is optional
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Milestone Schedule with Acceptance Criteria
Divides the project into intermediate steps whose completion can be verified
Lists major milestones and deliverables
Milestone schedule – summary-level project schedule composed of major milestones and/or completion of deliverables
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Milestone Schedule with Acceptance Criteria
Who will judge the quality of the deliverable and by what criteria?
Acceptance criteria represent the project’s vital signs
Never turn in a deliverable without knowing how it will be judged
Something of value will be delivered at each iteration
Acceptance criteria – markers against which deliverables can be evaluated for completeness and correctness.
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Risks, Assumptions, and Constraints
Constraint – anything that limits project implementation
Assumptions – suppositions made during project planning that are treated as factual, though they’ve not been proven
Risk – an uncertain situation which could have a negative or positive effect on the project if it occurs
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Risks, Assumptions, and Constraints
Reminders of what could prevent successful completion of a project
Forethought and planning increases the likelihood of discovering problems before they occur
A false assumption becomes a risk
A constraint that limits money, time, or resources is a risk
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Risks
Identify negative risk and a plan to overcome it.
A positive risk can be considered an opportunity plan to capitalize on it
Consider the risk of NOT undertaking the project
Assign an “owner” responsibility for each negative risk
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Resource Estimates
A preliminary budget with level of confidence in the estimate
Identify expenses the project manager can authorize
Identify expenses the sponsor needs to control
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Stakeholder List
Identify stakeholders
What does each stakeholder care about?
Who are the key stakeholders?
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Team Operating Principles
Enhance team functioning
Increase team effectiveness
Ensure all parties are aware of what is expected
How to accomplish work
How to conduct meetings
How to treat each other with respect
How to make decisions
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Lessons Learned
Successes and failures of previous projects become practical advice
Avoid the risk of repeating mistakes from previous projects
Lessons learned – knowledge gained from one project which may be applicable to similar future projects
Lessons learned register – accumulation of knowledge learned, which can be easily referenced and cataloged.
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Signatures and Commitment
Who is involved
Extent to which each person can make decisions
Expected time commitment for each person
The project sponsor, project manager, and core team members show commitment by signing the charter
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Constructing a Project Charter
Sponsor creates first draft of scope overview and business case
Leadership team may contribute additional information
Scope overview and business case should be one to four sentences each
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Scope Overview
and Business Case
Example
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Breakout session!
Create an “elevator pitch” for your project
30 second summary
What your project is (scope overview) &
Why it is necessary (business case)
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Background Instructions (Optional)
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Milestone Schedule with Acceptance Criteria
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© 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Six Steps in Constructing a Milestone Schedule
1. Describe the current situation that requires the project
(1st row of the milestone column)
Describe the project at its successful completion
(Last row of the milestone column)
Describe the acceptance criteria for the final project deliverables
(Bottom row of 3rd and 4th columns)
Determine the few key points in the milestone column where quality needs to be verified
For each milestone, determine who the primary stakeholder(s) is(are) and how the resulting deliverable will be judged
Determine expected completion dates for each milestone
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Create a Milestone schedule, using a chart with these four columns:
Milestones
Dates
Stakeholders
Acceptance criteria
Follow the six steps on the previous slide (section 3-5c in textbook) to complete the milestone schedule
1st iteration follows steps; all other iterations just-in-time
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Breakout session!
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Six Sigma Milestone Schedule and Acceptance Criteria Template
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Risks, Assumptions, and Constraints Instructions
Brainstorm all risks to
Identify and document assumptions
Quantify risks based on:
probability of occurring
impact if realized
Which risks should be considered “major?”
Major risks require formal response plan
Schedule
Budget
Usefulness
Satisfaction
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Risk Assessment Example
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Risk Response Planning Example
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As a group, identify as many risks as possible
Write each risk on a post-it note
Create a graph, such as that in Exhibit 3.9
As a team, decide where on the chart each risk goes (based on probability and impact)
Create risk response plans for each “major” risk and assign an owner to each risk
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Breakout session!
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Resources Needed Instructions
Use crude estimates for people, equipment, space, and money needs
Describe how estimates were developed & level of confidence
Develop limit of spending authority for project manager
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Estimate resources, following the example of Exhibit 3.11:
Money, people, space, equipment, etc.
Include level of confidence in your estimates
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Breakout session!
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Stakeholder List Instructions
Identify all stakeholders
Determine most important stakeholders
Ask each stakeholder what interest they have in the project
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Create a list of project stakeholders
Individuals and/or groups
What is their interest in the project?
Who are the key stakeholders?
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Breakout session!
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Team Operating Principles Instructions
Establish how:
meetings will be conducted
decisions will be made
work gets done
everyone will treat each other with respect
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Team Operating Principles Example
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Create a short list of team operating instructions
Establish how:
meetings will be conducted
decisions will be made
work gets done
everyone will treat each other with respect
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Breakout session!
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Lessons Learned Instructions
Consider what has worked/not worked
Copy or tailor what has worked
Avoid what has not worked
Report lessons learned more than once over life of project
Before undertaking project
At key reviews
Upon project completion
Make lessons available in a knowledge base
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Project Lessons Learned Example
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Signatures and Commitment Instructions
Project sponsor, manager, team members
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Ratifying the Project Charter
Present the project charter to the sponsor for approval
Sponsor asks questions for clarification and agreement
Sponsor, project manager, and core team sign the project charter
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Starting a Project using Microsoft Project
MS Project 2016 Introduction
Setting up your first project
Define your project
Create a Milestone Schedule
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MS Project 2016 Introduction
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MS Project 2016 Introduction
Ribbon – set of 7 tabs used to construct, resource, baseline, status, communicate information about a schedule
File
Task
Resource
Project
Report
View
Format
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Project Schedule Details View Pane(s)– displays info about project:
Timeline view– “big picture” of project schedule
Gantt chart view—displays tasks on a calendar
Zoom Slider – change timescale by sliding left or right
View Shortcuts– quick switch from active view to: Gantt chart, Task usage, Team planner, Resource sheet, and Report
Schedule Mode selector – manual or automatic
MS Project 2016 Introduction
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Initialize MS Project 2016 for General Use
Auto Scheduled mode (use this one!)
MS Project automatically calculates a schedule using schedule drivers
Manually Scheduled mode (default)
Ignores schedule drivers and uses manually entered data
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Setting up your first project
1. File, Options, Schedule
2. Scheduling options – All New Projects
3. New tasks created – Auto Scheduled
4. OK
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Define your Project
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Define your Project
Enter identifying information:
Click File tab
Project Info>>Advanced Properties
Summary tab—enter title
OK
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Define your Project
Generate “Project Summary” task row:
File>>Options>>Advanced
“Display options for project”
Check “show project summary task”
OK
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Create a Milestone Schedule*
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Task Name cells, enter milestone names
Duration cells, enter 0 for each milestone
For each milestone row:
Double click milestone name to activate “Task Information” dialog box
Advanced tab, change Constraint type to “Must Finish On”
Constraint date, enter milestone date
OK
*More details provided in textbook
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Create a Milestone Schedule
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© 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
Create a Milestone Schedule
(Complete instructions found in textbook)
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Summary
A project charter enables the project sponsor, project manager, and core team to agree on the project at a high level.
Charters include scope overview, business case, milestone schedule, acceptance criteria, risks, and signatures (other sections optional).
A rough draft of the business case and scope overview are written.
Sponsor goes over the charter with the project manager and core team.
The charter is the document that completes the project initiating stage and begins the planning stage.
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PMBOK Exams
Many questions regarding order of processes and deliverables
Remember that all parts of a charter are composed in the Initiating stage and expanded on in detail during Planning stage of project
Signing charter transitions project from Initiating to Planning
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Information Systems Enhancement Project Charter
Used when a nonprofit agency formed a project team to upgrade its information systems
Design principles – how to write a project charter
Content principles – suggestions regarding the content of each section
PM IN ACTION
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Casa de Paz Development Project
Create the scope overview and business case for further website development
What expertise would you like from various stakeholders to create the milestone schedule with acceptance criteria?
What are key risks for this project?
Who are key stakeholders?
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Contemporary
Project Management
Timothy J. Kloppenborg
•
Vittal Anantatmula
•
Kathryn N. Wells
F O U R T H E D I T I O N
Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
MS Project 2016 Instructions in Contemporary Project Management 4e
Chapter MS Project
3 MS Project 2016 Introduction
Ribbon, Quick Access Toolbar, view panes, Zoom Slider, Shortcuts, Scheduling Mode Selector
Setting Up Your First Project
Auto schedule, start date, identifying information, summary row
Create Milestone Schedule
Key milestones, zero duration, must finish on, information
7 Set Up a Work Breakdown Structure (WBS)
Understand the WBS definitions and displays
Enter WBS Elements (tasks), Create the outline,
Insert WBS Code Identifier column, Hide or show subtasks detail
8 Using MS Project for Critical Path Schedules
Set Up the Project Schedule
Set or update the project start date, Define organization’s working and nonworking time
Build the Network Diagram and Identify the Critical Path
Enter tasks and milestones, edit the timescale, understand and define task dependencies, assign task
duration estimates, identify the critical path, understand the network diagram view
Display and Print Schedules
9 Define Resources
Resource views, max units, resource calendars
Assigning Resources
Basic assignment, modify an assignment
Identify Overallocated Resources
Resource usage and Detailed Gantt views together
Overallocated Resources
Finding overallocated resources, dealing with overallocations
Crashing a Critical Path Activity
10 Develop Bottom-up Project Budget
Assignment costs, task costs, various cost perspectives
Develop Summary Project Budget
12 Baseline the Project Plan
First time baseline, subsequent baselines, viewing variances
14 Using MS Project to Monitor and Control Projects
What Makes a Schedule Useful?
How MS Project recalculates based on reported actuals, current and future impacts of variances, define
the performance update process (who, what, when)
Steps to Update the Project Schedule
Acquire performance data, set and display status date, Enter duration-based performance data,
reschedule remaining work, revise future estimates
15 Close Project
Creating project progress reports, sharing reports, export a report to MS Excel, archive project work,
capture and publish lessons learned
Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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PMBOK® Guide 6e Coverage in Contemporary Project Management 4e
The numbers refer to the text page where the process is defined.
Project management (PM) processes and knowledge areas 10–11 Project life cycle 7–10, 62–64
Projects and strategic planning 33–37 Organizational influences 102–110
Portfolio and program management 37–42
PMBOK® Guide, 6th ed. Coverage
Knowledge
Areas
Initiating
Process
Group Planning Process Group
Executing Process
Group
Monitoring &
Controlling
Process Group
Closing
Process
Group
Project
Integration
Management
Develop
Project
Charter
60–79
Develop Project Management Plan
409–410
Direct and Manage
Project Work 459–460
Manage Project
Knowledge 192–193,
504–508
Monitor and Control
Project Work 460–462
Perform Integrated
Change Control
229–232, 462–463
Close
Project
or Phase
503,
508–511
Project Scope
Management
Plan Scope Management 211–212
Collect Requirements 212–216
Define Scope 216–220
Create WBS 220–229
Validate Scope
500–501
Control Scope
475–476
Project
Schedule
Management
Plan Schedule Management 246
Define Activities 249–253
Sequence Activities 253–255
Estimate Activity Durations 255–258
Develop Schedule 259–267
Control Schedule
476–480
Project Cost
Management
Plan Cost Management 329–330
Estimate Costs 330–341
Determine Budget 342–344
Control Costs 345,
476–480
Project Quality
Management
Plan Quality Management 401–404 Manage Quality
404–406, 469–474
Control Quality
406–409, 469–474
Project
Resources
Management
Plan Resource Management 290–295
Estimate Activity Resources 290
Aquire Resources
138–141
Develop Team 141–157
Manage Team 157–161
Control Resources 476
Project Com-
munications
Management
Plan Communications Management
188–192
Manage
Communications
193–199, 465–467
Monitor
Communications
467–468
Project Risk
Management
Plan Risk Management 360–366
Identify Risks 75, 366–368
Perform Qualitative Risk Analysis 75,
368–372
Perform Quantitative Risk Analysis
372–373
Plan Risk Responses 75, 373–377
Implement Risk
Responses 464–465
Monitor Risks
463–464
Project
Procurement
Management
Plan Procurement Management
431–433, 438–441
Conduct
Procurements
434–438
Control Procurments
441
Project Stake-
holder
Management
Identify
Stakehold-
ers 75–77,
178–184
Plan Stakeholder Engagement 184–186 Manage Stakeholder
Engagement 187–188
Monitor Stakeholder
Engagement 188
Source: Adapted from A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management
Institute, Inc., 2017): 31.
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Contemporary Project
Management
ORGANIZE LEAD PLAN PERFORM
FOURTH EDITION
TIMOTHY J. KLOPPENBORG
Xavier University
VITTAL ANANTATMULA
Western Carolina University
KATHRYN N. WELLS
Keller Williams Real Estate
Australia • Brazil • Mexico • Singapore • United Kingdom • United States
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This is an electronic version of the print textbook. Due to electronic rights restrictions,
some third party content may be suppressed. Editorial review has deemed that any suppressed
content does not materially affect the overall learning experience. The publisher reserves the right
to remove content from this title at any time if subsequent rights restrictions require it. For
valuable information on pricing, previous editions, changes to current editions, and alternate
formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for
materials in your areas of interest.
Important Notice: Media content referenced within the product description or the product
text may not be available in the eBook version.
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Contemporary Project Management,
Fourth Edition
Timothy J. Kloppenborg
2019 2015
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Printed in the United States of America
Print Number: 01 Print Year: 2017
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MS Project 2016 Instructions in Contemporary Project Management 4e
Chapter MS Project
3 MS Project 2016 Introduction
Ribbon, Quick Access Toolbar, view panes, Zoom Slider, Shortcuts, Scheduling Mode Selector
Setting Up Your First Project
Auto schedule, start date, identifying information, summary row
Create Milestone Schedule
Key milestones, zero duration, must finish on, information
7 Set Up a Work Breakdown Structure (WBS)
Understand the WBS definitions and displays
Enter WBS Elements (tasks), Create the outline,
Insert WBS Code Identifier column, Hide or show subtasks detail
8 Using MS Project for Critical Path Schedules
Set Up the Project Schedule
Set or update the project start date, Define organization’s working and nonworking time
Build the Network Diagram and Identify the Critical Path
Enter tasks and milestones, edit the timescale, understand and define task dependencies, assign task
duration estimates, identify the critical path, understand the network diagram view
Display and Print Schedules
9 Define Resources
Resource views, max units, resource calendars
Assigning Resources
Basic assignment, modify an assignment
Identify Overallocated Resources
Resource usage and Detailed Gantt views together
Overallocated Resources
Finding overallocated resources, dealing with overallocations
Crashing a Critical Path Activity
10 Develop Bottom-up Project Budget
Assignment costs, task costs, various cost perspectives
Develop Summary Project Budget
12 Baseline the Project Plan
First time baseline, subsequent baselines, viewing variances
14 Using MS Project to Monitor and Control Projects
What Makes a Schedule Useful?
How MS Project recalculates based on reported actuals, current and future impacts of variances, define
the performance update process (who, what, when)
Steps to Update the Project Schedule
Acquire performance data, set and display status date, Enter duration-based performance data,
reschedule remaining work, revise future estimates
15 Close Project
Creating project progress reports, sharing reports, export a report to MS Excel, archive project work,
capture and publish lessons learned
Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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PMBOK® Guide 6e Coverage in Contemporary Project Management 4e
The numbers refer to the text page where the process is defined.
Project management (PM) processes and knowledge areas 10–11 Project life cycle 7–10, 62–64
Projects and strategic planning 33–37 Organizational influences 102–110
Portfolio and program management 37–42
PMBOK® Guide, 6th ed. Coverage
Knowledge
Areas
Initiating
Process
Group Planning Process Group
Executing Process
Group
Monitoring &
Controlling
Process Group
Closing
Process
Group
Project
Integration
Management
Develop
Project
Charter
60–79
Develop Project Management Plan
409–410
Direct and Manage
Project Work 459–460
Manage Project
Knowledge 192–193,
504–508
Monitor and Control
Project Work 460–462
Perform Integrated
Change Control
229–232, 462–463
Close
Project
or Phase
503,
508–511
Project Scope
Management
Plan Scope Management 211–212
Collect Requirements 212–216
Define Scope 216–220
Create WBS 220–229
Validate Scope
500–501
Control Scope
475–476
Project
Schedule
Management
Plan Schedule Management 246
Define Activities 249–253
Sequence Activities 253–255
Estimate Activity Durations 255–258
Develop Schedule 259–267
Control Schedule
476–480
Project Cost
Management
Plan Cost Management 329–330
Estimate Costs 330–341
Determine Budget 342–344
Control Costs 345,
476–480
Project Quality
Management
Plan Quality Management 401–404 Manage Quality
404–406, 469–474
Control Quality
406–409, 469–474
Project
Resources
Management
Plan Resource Management 290–295
Estimate Activity Resources 290
Aquire Resources
138–141
Develop Team 141–157
Manage Team 157–161
Control Resources 476
Project Com-
munications
Management
Plan Communications Management
188–192
Manage
Communications
193–199, 465–467
Monitor
Communications
467–468
Project Risk
Management
Plan Risk Management 360–366
Identify Risks 75, 366–368
Perform Qualitative Risk Analysis 75,
368–372
Perform Quantitative Risk Analysis
372–373
Plan Risk Responses 75, 373–377
Implement Risk
Responses 464–465
Monitor Risks
463–464
Project
Procurement
Management
Plan Procurement Management
431–433, 438–441
Conduct
Procurements
434–438
Control Procurments
441
Project Stake-
holder
Management
Identify
Stakehold-
ers 75–77,
178–184
Plan Stakeholder Engagement 184–186 Manage Stakeholder
Engagement 187–188
Monitor Stakeholder
Engagement 188
Source: Adapted from A Guide to the Project Management Body of Knowledge (PMBOK® Guide), 6th ed. (Newtown Square, PA: Project Management
Institute, Inc., 2017): 31.
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Brief Contents
Preface xx
About the Authors xxix
PART 1 Organizing Projects
1 Introduction to Project Management 2
2 Project Selection and Prioritization 32
3 Chartering Projects 60
PART 2 Leading Projects
4 Organizational Capability: Structure, Culture, and Roles 100
5 Leading and Managing Project Teams 136
6 Stakeholder Analysis and Communication Planning 176
PART 3 Planning Projects
7 Scope Planning 210
8 Scheduling Projects 244
9 Resourcing Projects 286
10 Budgeting Projects 328
11 Project Risk Planning 358
12 Project Quality Planning and Project Kickoff 386
PART 4 Performing Projects
13 Project Supply Chain Management 426
14 Determining Project Progress and Results 456
15 Finishing the Project and Realizing the Benefits 498
Appendix A PMP and CAPM Exam Prep Suggestions 522
Appendix B Agile Differences Covered 527
Appendix C Answers to Selected Exercises 532
Appendix D Project Deliverables 537
Appendix E Strengths Themes As Used in Project Management [Available Online]
Index 539
v
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Requirements
Documents
13.1 Identify
Stakeholders
Stakeholder
Register
Stakeholder
Engagement
Assessment Matrix
Integration
Scope
Schedule
Cost
Quality
Resources
Communication
Risk
Procurement
Stakeholders
12.1 Plan
Procurement
Management
11.1 Plan
Risk
Management
10.1 Plan
Communications
Management
9.1 Plan
Resource
Management
8.1 Plan
Quality
Management
7.1 Plan
Cost
Management
6.1 Plan
Schedule
Management
5.1 Plan
Scope
Management
Duration
Estimates
Scope
Statement
Activity List
Milestone List
Network
4.1 Develop
Project Charter
Charter
Assumptions Log
Cost Baseline
Resource Requirements
RACI
Team
Charter
Quality
Mgt.
Plan
Communications
Matrix
Risk Register
Bid
Documents
Make or Buy
Analysis
6.5 Develop
Schedule
Schedule Baseline
5.2 Collect
Requirements
5.4 Create
WBS
Scope
4.2 Develop Project Management Plan
Activities
9.2 Estimate
Activity
Resources
11.2 Identify
Risks
11.3 Perform
Qualitative
Risk Analysis
11.4 Perform
Quantitative
Risk Analysis
11.5 Plan
Risk
Responses
13.2 Plan
Stakeholders
Engagement
6.4 Estimate
activity
Durations
7.3 Determine
Budget
7.2 Estimate
Costs
6.3 Sequence
Activities
1.2 Foundational Elements
2.4 Organizational Systems
3.4 Project Manager Competencies
Selecting Projects
Project Customer Tradeoff Matrix
Life Cycle and Development Approach
Elevator Pitch
Leader Roles and Responsibilities
Project Selection and Prioritization Matrix
Project Resource Assignment Matrix
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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11.6 Implement
Risk Responses
13.3 Manage
Stakeholder
Engagement
13.4 Monitor
Stakeholder
Engagement
4.3 Direct and Manage
Project Work
4.4 Manage Project
Knowledge
Scope
Baseline with WBS
Resource Histogram
Project Crashing
Retrospectives
Closure
Documents
Customer
Feedback
Transition Plan
Scope
Backlog
Burn
Down/Up
Charts
Quality
Reports
s
Analysis
Realizing
s
PM Plan Baselines Life Cycle
and Development Approach 4.7 Close Project
or Phase
6.6 Control
Schedule
Earned Value
Analysis
7.4 Control
Costs
5.6 Control
Scope
5.5 Validate
Scope
8.2 Manage
Quality
9.3 Acquire
Resources
9.4 Develop
Team
9.6 Control
Resources
9.5 Manage
Team
8.3 Control
Quality
Change
Requests
10.2 Manage
Communications
11.7 Monitor
Risks
10.3 Monitor
Communications
Team
Assignments
Team
Assessments
Agendas
Minutes
Issues Log
Meeting Evaluation
Progress Report
12.2 Conduct
Procurements
12.3 Control
Procurements
Source
Selection
Matrix
Lessons
Learned
Register
Quality
Measurements
4.6 Perform
Integrated
Change Control
4.5 Monitor and
Control
Project Work
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx
About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxix
PART 1 Organizing Projects
CHAPTER 1
Introduction to Project Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 What Is a Project? 3
1.2 History of Project Management 5
1.3 How Can Project Work Be Described? 6
1.3a Projects versus Operations 6 / 1.3b Soft Skills and Hard Skills 7 / 1.3c Authority
and Responsibility 7 / 1.3d Project Life Cycle 7
1.4 Understanding Projects 10
1.4a Project Management Institute 10 / 1.4b Project Management Body of Knowledge
(PMBOK®) 10 / 1.4c The PMI Talent Triangle 11 / 1.4d Selecting and Prioritizing
Projects 14 / 1.4e Project Goals and Constraints 14 / 1.4f Defining Project Success
and Failure 15 / 1.4g Using Microsoft Project to Help Plan and Measure
Projects 16 / 1.4h Types of Projects 16 / 1.4i Scalability of Project Tools 17
1.5 Project Roles 17
1.5a Project Executive-Level Roles 18 / 1.5b Project Management-Level Roles 19 /
1.5c Project Associate-Level Roles 20
1.6 Overview of the Book 20
1.6a Part 1: Organizing and Initiating Projects 20 / 1.6b Part 2: Leading Projects 21 /
1.6c Part 3: Planning Projects 21 / 1.6d Part 4: Performing Projects 23
PMP/CAPM Study Ideas 23
Summary 24
Key Terms Consistent with PMI Standards and Guides 24
Chapter Review Questions 25
Discussion Questions 25
PMBOK® Guide Questions 26
Integrated Example Projects 27
Suburban Homes Construction Project 27
Casa DE PAZ Development Project 28
Semester Project Instructions 28
Project Management in Action 29
References 30
Endnotes 31
viii
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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CHAPTER 2
Project Selection and Prioritization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.1 Strategic Planning Process 33
2.1a Strategic Analysis 33 / 2.1b Guiding Principles 34 / 2.1c Strategic
Objectives 36 / 2.1d Flow-Down Objectives 37
2.2 Portfolio Management 37
2.2a Portfolios 38 / 2.2b Programs 39 / 2.2c Projects and Subprojects 39 /
2.2d Assessing an Organization’s Ability to Perform Projects 42 / 2.2e Identifying
Potential Projects 42 / 2.2f Using a Cost-Benefit Analysis Model to Select
Projects 43 / 2.2g Using a Scoring Model to Select Projects 45 / 2.2h Prioritizing
Projects 48 / 2.2i Resourcing Projects 48
2.3 Securing Projects 49
2.3a Identify Potential Project Opportunities 50 / 2.3b Determine Which Opportunities to
Pursue 50 / 2.3c Prepare and Submit a Project Proposal 51 / 2.3d Negotiate to
Secure the Project 51
PMP/CAPM Study Ideas 52
Summary 52
Key Terms Consistent with PMI Standards and Guides 52
Chapter Review Questions 53
Discussion Questions 53
PMBOK® Guide Questions 53
Exercises 54
Integrated Example Projects 55
Casa DE PAZ Development Project 56
Semester Project Instructions 56
Project Management in Action 57
References 58
Endnotes 59
CHAPTER 3
Chartering Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
3.1 What Is a Project Charter? 62
3.2 Why Is a Project Charter Used? 63
3.3 When Is a Charter Needed? 64
3.4 Typical Elements in a Project Charter 65
3.4a Title 65 / 3.4b Scope Overview 65 / 3.4c Business Case 66 /
3.4d Background 66 / 3.4e Milestone Schedule with Acceptance Criteria 66 /
3.4f Risks, Assumptions, and Constraints 67 / 3.4g Resource Estimates 69 /
3.4h Stakeholder List 69 / 3.4i Team Operating Principles 69 / 3.4j Lessons
Learned 70 / 3.4k Signatures and Commitment 70
3.5 Constructing a Project Charter 70
3.5a Scope Overview and Business Case Instructions 70 / 3.5b Background
Instructions 71 / 3.5c Milestone Schedule with Acceptance Criteria
Instructions 72 / 3.5d Risks, Assumptions, and Constraints Instructions 75 /
3.5e Resources Needed Instructions 75 / 3.5f Stakeholder List Instructions 75 /
Contents ix
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3.5g Team Operating Principles Instructions 77 / 3.5h Lessons Learned
Instructions 77 / 3.5i Signatures and Commitment Instructions 78
3.6 Ratifying the Project Charter 79
3.7 Starting a Project Using Microsoft Project 79
3.7a MS Project 2016 Introduction 80 / 3.7b Setting up Your First Project 81 /
3.7c Define Your Project 82 / 3.7d Create a Milestone Schedule 83
PMP/CAPM Study Ideas 88
Summary 88
Key Terms Consistent with PMI Standards and Guides 88
Chapter Review Questions 89
Discussion Questions 89
PMBOK® Guide Questions 89
Exercises 90
Integrated Example Projects 91
Casa DE PAZ Development Project 93
Semester Project Instructions 93
Project Management in Action 93
References 96
Endnotes 97
PART 2 Leading Projects
CHAPTER 4
Organizational Capability: Structure, Culture, and Roles . . . . . . . . . . . . . . . . . . . . . 100
4.1 Types of Organizational Structures 103
4.1a Functional 103 / 4.1b Projectized 104 / 4.1c Matrix 105
4.2 Organizational Culture and Its Impact on Projects 109
4.2a Culture of the Parent Organization 110 / 4.2b Project Cultural Norms 111
4.3 Project Life Cycles 111
4.3a Define-Measure-Analyze-Improve-Control (DMAIC) Model 112 / 4.3b Research and
Development (R&D) Project Life Cycle Model 113 / 4.3c Construction Project Life
Cycle Model 113 / 4.3d Agile Project Life Cycle Model 113
4.4 Agile Project Management 114
4.4a What Is Agile? 114 / 4.4b Why Use Agile? 114 / 4.4c What Is an Agile
Mindset? 114 / 4.4d What Are the Key Roles in Agile Projects? 115 / 4.4e How Do
You Start an Agile Project? 115 / 4.4f How Do You Continue an Agile Project?
115 / 4.4g What Is Needed for Agile to Be Successful? 116
4.5 Traditional Project Executive Roles 116
4.5a Steering Team 116 / 4.5b Sponsor 117 / 4.5c Customer 119 / 4.5d Chief
Projects Officer/Project Management Office 121
4.6 Traditional Project Management Roles 121
4.6a Functional Manager 121 / 4.6b Project Manager 122 / 4.6c Facilitator 124
4.7 Traditional Project Team Roles 126
4.7a Core Team Members 126 / 4.7b Subject Matter Experts 126
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4.8 Role Differences on Agile Projects 126
PMP/CAPM Study Ideas 128
Summary 128
Key Terms Consistent with PMI Standards and Guides 128
Chapter Review Questions 129
Discussion Questions 129
PMBOK® Guide Questions 129
Exercises 130
Integrated Example Projects 130
Casa DE PAZ Development Project 131
Semester Project Instructions 131
Project Management in Action 132
References 134
Endnotes 135
CHAPTER 5
Leading and Managing Project Teams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
5.1 Acquire Project Team 138
5.1a Preassignment of Project Team Members 139 / 5.1b Negotiation for Project Team
Members 139 / 5.1c On-Boarding Project Team Members 140
5.2 Develop Project Team 141
5.2a Stages of Project Team Development 142 / 5.2b Characteristics of High-Performing
Project Teams 144 / 5.2c Assessing Individual Member Capability 147 /
5.2d Assessing Project Team Capability 148 / 5.2e Building Individual and Project
Team Capability 150 / 5.2f Establishing Project Team Ground Rules 153
5.3 Manage Project Team 157
5.3a Project Manager Power and Leadership 157 / 5.3b Assessing Performance of
Individuals and Project Teams 159 / 5.3c Project Team Management Outcomes 159
5.4 Relationship Building Within the Core Team 160
5.5 Managing Project Conflicts 161
5.5a Sources of Project Conflict 162 / 5.5b Conflict-Resolution Process and
Styles 163 / 5.5c Negotiation 164
5.6 Communication Needs of Global and Virtual Teams 166
5.6a Virtual Teams 166 / 5.6b Cultural Differences 166 / 5.6c Countries and Project
Communication Preferences 167
PMP/CAPM Study Ideas 167
Summary 168
Key Terms Consistent with PMI Standards and Guides 168
Chapter Review Questions 168
Discussion Questions 169
PMBOK® Guide Questions 170
Integrated Example Projects 170
Casa DE PAZ Development Project 171
Semester Project Instructions 171
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Project Management in Action 172
References 174
Endnotes 175
CHAPTER 6
Stakeholder Analysis and Communication Planning . . . . . . . . . . . . . . . . . . . . . . . . . 176
6.1 Identify Stakeholders 178
6.1a Find Stakeholders 179 / 6.1b Analyze Stakeholders 180 / 6.1c Document
Stakeholders 183
6.2 Plan Stakeholder Engagement 184
6.2a Creating a Stakeholder Engagement Assessment Matrix 184 / 6.2b Planning to Build
Relationships with Stakeholders 185
6.3 Manage Stakeholder Engagement 187
6.4 Monitor Stakeholder Engagement 188
6.5 Plan Communications Management 188
6.5a Purposes of a Project Communications Plan 188 / 6.5b Communications Plan
Considerations 189 / 6.5c Communications Matrix 191 / 6.5d Manage Project
Knowledge 192
6.6 Manage Communications 193
6.6a Determine Project Information Needs 193 / 6.6b Establish Information Retrieval and
Distribution System 193 / 6.6c Project Meeting Management 194 / 6.6d Issues
Management 197
PMP/CAPM Study Ideas 199
Summary 199
Key Terms Consistent with PMI Standards and Guides 200
Chapter Review Questions 200
Discussion Questions 200
PMBOK® Guide Questions 201
Integrated Example Projects 202
Casa DE PAZ Development Project 202
Semester Project Instructions 203
Project Management in Action 204
References 206
Endnotes 207
PART 3 Planning Projects
CHAPTER 7
Scope Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
7.1 Plan Scope Management 211
7.2 Collect Requirements 212
7.2a Gather Stakeholder Input and Needs 213
7.3 Define Scope 217
7.3a Reasons to Define Scope 217 / 7.3b How to Define Scope 217 / 7.3c Defining
Scope in Agile Projects 218
xii Contents
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7.4 Work Breakdown Structure (WBS) 220
7.4a What Is the WBS? 220 / 7.4b Why Use a WBS? 221 / 7.4c WBS
Formats 222 / 7.4d Work Packages 224 / 7.4e How to Construct a WBS 226
7.5 Establish Change Control 229
7.6 Using MS Project for Work Breakdown Structures (WBS) 232
7.6a Set Up a WBS in MS Project 232
PMP/CAPM Study Ideas 237
Summary 239
Key Terms Consistent with PMI Standards and Guides 239
Chapter Review Questions 239
Discussion Questions 239
PMBOK® Guide Questions 240
Exercises 241
Integrated Example Projects 241
Casa DE PAZ Development Project 242
Semester Project Instructions 242
Project Management in Action 242
References 243
CHAPTER 8
Scheduling Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244
8.1 Plan Schedule Management 246
8.2 Purposes of a Project Schedule 247
8.3 Historical Development of Project Schedules 247
8.4 How Project Schedules Are Limited and Created 248
8.5 Define Activities 249
8.6 Sequence Activities 253
8.6a Leads and Lags 254 / 8.6b Alternative Dependencies 255
8.7 Estimate Activity Duration 255
8.7a Problems and Remedies in Duration Estimating 256 / 8.7b Learning Curves 258
8.8 Develop Project Schedules 259
8.8a Two-Pass Method 259 / 8.8b Enumeration Method 263
8.9 Uncertainty in Project Schedules 264
8.9a Program Evaluation and Review Technique 265 / 8.9b Monte Carlo Simulation 266
8.10 Show the Project Schedule on a Gantt Chart 268
8.11 Using Microsoft Project for Critical Path Schedules 268
8.11a Set up the Project Schedule 269 / 8.11b Build the Network Diagram and Identify
the Critical Path 270
PMP/CAPM Study Ideas 275
Summary 276
Key Terms Consistent with PMI Standards and Guides 276
Chapter Review Questions 277
Discussion Questions 277
Contents xiii
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Exercises 278
PMBOK® Guide Questions 280
Integrated Example Projects 281
Casa DE PAZ Development Project 281
Semester Project Instructions 283
Project Management in Action 283
References 284
Endnotes 285
CHAPTER 9
Resourcing Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286
9.1 Abilities Needed When Resourcing Projects 288
9.1a The Science and Art of Resourcing Projects 288 / 9.1b Considerations When
Resourcing Projects 288 / 9.1c Activity- versus Resource-Dominated Schedules 289
9.2 Estimate Resource Needs 290
9.3 Plan Resource Management 290
9.3a Identify Potential Resources 291 / 9.3b Determine Resource Availability 293 /
9.3c Decide Timing Issues When Resourcing Projects 294
9.4 Project Team Composition Issues 295
9.4a Cross-Functional Teams 295 / 9.4b Co-Located Teams 295 / 9.4c Virtual
Teams 295 / 9.4d Outsourcing 295
9.5 Assign a Resource to Each Activity 296
9.5a Show Resource Responsibilities on RACI Chart 297 / 9.5b Show Resource
Assignments on Gantt Chart 297 / 9.5c Summarize Resource Responsibilities by Time
Period with Histogram 297
9.6 Dealing with Resource Overloads 300
9.6a Methods of Resolving Resource Overloads 300
9.7 Compress the Project Schedule 303
9.7a Actions to Reduce the Critical Path 303 / 9.7b Crashing 304 / 9.7c Fast
Tracking 307
9.8 Alternative Scheduling Methods 309
9.8a Critical Chain Project Management (CCPM) 309 / 9.8b Reverse Phase
Schedules 310 / 9.8c Rolling Wave Planning 310 / 9.8d Agile Project
Planning 310 / 9.8e Auto/Manual Scheduling 310
9.9 Using MS Project for Resource Allocation 311
9.9a Step 1: Defining Resources 311 / 9.9b Step 2: Set Up a Resource Calendar 312 /
9.9c Step 3: Assigning Resources 312 / 9.9d Step 4: Finding Overallocated
Resources 315 / 9.9e Step 5: Dealing with Overallocations 316 / 9.9f Crashing a
Critical Path Activity 317
PMP/CAPM Study Ideas 319
Summary 319
Key Terms Consistent with PMI Standards and Guides 320
Chapter Review Questions 320
Discussion Questions 320
PMBOK® Guide Questions 321
Exercises 322
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Integrated Example Projects 324
Casa DE PAZ Development Project 324
Semester Project Instructions 325
Project Management in Action 325
References 327
Endnote 327
CHAPTER 10
Budgeting Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328
10.1 Plan Cost Management 329
10.2 Estimate Cost 330
10.2a Types of Cost 331 / 10.2b Accuracy and Timing of Cost Estimates 334 /
10.2c Methods of Estimating Costs 335 / 10.2d Project Cost Estimating Issues 338
10.3 Determine Budget 342
10.3a Aggregating Costs 342 / 10.3b Analyzing Reserve Needs 342 /
10.3c Determining Cash Flow 344
10.4 Establishing Cost Control 345
10.5 Using MS Project for Project Budgets 345
10.5a Developing a Bottom-Up Project Budget Estimate 345 / 10.5b Develop Summary
Project Budget 347
PMP/CAPM Study Ideas 349
Summary 349
Key Terms Consistent with PMI Standards and Guides 350
Chapter Review Questions 350
Discussion Questions 350
PMBOK® Guide Questions 351
Exercises 352
Integrated Example Projects 353
Casa DE PAZ Development Project 354
Semester Project Instructions 354
Project Management in Action 354
References 356
Endnotes 356
CHAPTER 11
Project Risk Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358
11.1 Plan Risk Management 360
11.1a Roles and Responsibilities 362 / 11.1b Categories and Definitions 362
11.2 Identify Risks 366
11.2a Information Gathering 366 / 11.2b Reviews 367 / 11.2c Understanding
Relationships 368 / 11.2d Risk Register 368
11.3 Risk Analysis 368
11.3a Perform Qualitative Risk Analysis 368 / 11.3b Perform Quantitative Risk
Analysis 372 / 11.3c Risk Register Updates 373
Contents xv
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11.4 Plan Risk Responses 373
11.4a Strategies for Responding to Risks 373 / 11.4b Risk Register Updates 377
PMP/CAPM Study Ideas 377
Summary 378
Key Terms Consistent with PMI Standards and Guides 378
Chapter Review Questions 379
Discussion Questions 379
PMBOK® Guide Questions 379
Exercises 380
Integrated Example Projects 381
Casa DE PAZ Development Project 381
Semester Project Instructions 382
Project Management in Action 382
References 384
Endnotes 384
CHAPTER 12
Project Quality Planning and Project Kickoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
12.1 Development of Contemporary Quality Concepts 388
12.1a Quality Gurus 388 / 12.1b Total Quality Management/Malcolm Baldrige 389 /
12.1c ISO 9001:2008 390 / 12.1d Lean Six Sigma 390
12.2 Core Project Quality Concepts 392
12.2a Stakeholder Satisfaction 393 / 12.2b Process Management 394 / 12.2c Fact-
Based Management 396 / 12.2d Fact-Based Project Management Example 398 /
12.2e Empowered Performance 399 / 12.2f Summary of Core Concepts 400
12.3 Plan Quality Management 401
12.3a Quality Policy 401 / 12.3b Quality Management Plan Contents 403 /
12.3c Quality Baseline 404 / 12.3d Process Improvement Plan 404
12.4 Manage Quality 404
12.5 Control Quality 406
12.6 Cost of Quality 409
12.7 Develop Project Management Plan 409
12.7a Resolve Conflicts 409 / 12.7b Establish Configuration Management 410 /
12.7c Apply Sanity Tests to All Project Plans 410
12.8 Kickoff Project 410
12.8a Preconditions to Meeting Success 411 / 12.8b Meeting Activities 411
12.9 Baseline and Communicate Project Management Plan 413
12.10 Using MS Project for Project Baselines 413
12.10a Baseline the Project Plan 413 / 12.10b Create the First Time Baseline 414 /
12.10c Subsequent Baselines 414 / 12.10d Viewing Baselines and Variances 415
PMP/CAPM Study Ideas 416
Summary 417
Key Terms Consistent with PMI Standards and Guides 417
Chapter Review Questions 418
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Discussion Questions 418
PMBOK® Guide Questions 418
Exercises 419
Integrated Example Projects 420
Casa DE PAZ Development Project 420
Semester Project Instructions 420
Project Management in Action 421
References 423
Endnotes 424
PART 4 Performing Projects
CHAPTER 13
Project Supply Chain Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426
13.1 Introduction to Project Supply Chain Management 428
13.1a SCM Components 430 / 13.1b SCM Factors 430 / 13.1c SCM
Decisions 430 / 13.1d Project Procurement Management Processes 431
13.2 Plan Procurement Management 431
13.2a Outputs of Planning 431 / 13.2b Make-or-Buy Decisions 432
13.3 Conduct Procurements 434
13.3a Sources for Potential Suppliers 434 / 13.3b Approaches Used When Evaluating
Prospective Suppliers 435 / 13.3c Supplier Selection 436
13.4 Contract Types 438
13.4a Fixed-Price Contracts 439 / 13.4b Cost-Reimbursable Contracts 440 /
13.4c Time and Material (T&M) Contracts 440
13.5 Control Procurements 441
13.6 Improving Project Supply Chains 441
13.6a Project Partnering and Collaboration 442 / 13.6b Third Parties 447 / 13.6c Lean
Purchasing 447 / 13.6d Sourcing 447 / 13.6e Logistics 447 /
13.6f Information 448
PMP/CAPM Study Ideas 448
Summary 448
Key Terms Consistent with PMI Standards and Guides 449
Chapter Review Questions 449
Discussion Questions 449
PMBOK® Guide Questions 450
Exercises 451
Integrated Example Projects 451
Casa DE PAZ Development Project 452
Semester Project Instructions 452
Project Management in Action 452
References 453
Endnotes 454
Contents xvii
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CHAPTER 14
Determining Project Progress and Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456
14.1 Project Balanced Scorecard Approach 458
14.2 Internal Project Issues 459
14.2a Direct and Manage Project Work 459 / 14.2b Monitor and Control Project
Work 460 / 14.2c Monitoring Project Risk 463 / 14.2d Implement Risk
Responses 464 / 14.2e Manage Communications 465 / 14.2f Monitor
Communications 467
14.3 Customer Issues 469
14.3a Manage and Control Quality 469 / 14.3b Control Scope 475
14.4 Financial Issues 476
14.4a Control Resources 476 / 14.4b Control Schedule and Costs 476 / 14.4c Earned
Value Management for Controlling Schedule and Costs 476
14.5 Using MS Project to Monitor and Control Projects 480
14.5a What Makes a Schedule Useful? 480 / 14.5b How MS Project Recalculates the
Schedule Based on Reported Actuals 481 / 14.5c Current and Future Impacts of Time
and Cost Variance 481 / 14.5d Define the Performance Update Process 481 /
14.5e Steps to Update the Project Schedule 482
14.6 Replanning If Necessary 487
PMP/CAPM Study Ideas 488
Summary 488
Key Terms Consistent with PMI Standards and Guides 488
Chapter Review Questions 489
Discussion Questions 489
PMBOK® Guide Questions 490
Exercises 491
Integrated Example Projects 492
Casa DE PAZ Development Project 493
Semester Project Instructions 493
Project Management in Action 494
References 496
Endnotes 497
CHAPTER 15
Finishing the Project and Realizing the Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 498
15.1 Validate Scope 500
15.2 Terminate Projects Early 501
15.3 Close Project 503
15.3a Write Transition Plan 503 / 15.3b Knowledge Management 504 / 15.3c Create
the Closeout Report 508
15.4 Post-Project Activities 509
15.4a Reassign Workers 509 / 15.4b Celebrate Success and Reward Participants 509 /
15.4c Provide Ongoing Support 510 / 15.4d Ensure Project Benefits Are
Realized 510
xviii Contents
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15.5 Using MS Project for Project Closure 511
15.5a Creating Project Progress Reports 511 / 15.5b Archiving Project Work 512
PMP/CAPM Study Ideas 515
Summary 515
Key Terms Consistent with PMI Standards and Guides 515
Chapter Review Questions 515
Discussion Questions 516
PMBOK® Guide Questions 516
Exercise 517
Integrated Example Projects 517
Casa DE PAZ Development Project 518
Semester Project Instructions 518
Project Management in Action 518
References 520
Endnotes 521
Appendix A PMP and CAPM Exam Prep Suggestions . . . . . . . . . . . . . . . . . . . . . . . . . . 522
Appendix B Agile Differences Covered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
Appendix C Answers to Selected Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532
Appendix D Project Deliverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537
Appendix E Strengths Themes As Used in Project Management . . . . [Available Online]
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539
Contents xix
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Preface
While project managers today still need to use many techniques that have stood the test
of several decades, they increasingly also must recognize the business need for a project,
sort through multiple conflicting stakeholder demands. They must know how to deal
with rapid change, a myriad of communication issues, global and virtual project teams,
modern approaches to quality improvement, when to tailor their project management
approach to include methods and behaviors from Agile, and many other issues that are
more challenging than those in projects of the past.
Contemporary project management utilizes the tried-and-true project management
techniques along with modern improvements such as the most current versions of Micro-
soft® Project Professional 2016, the sixth edition of the Guide to the Project Management
Body of Knowledge (PMBOK® Guide), and many approaches derived from adaptive
(Agile) project management. Contemporary project management also uses many tools
and understandings that come from modern approaches to quality and communications,
expanded role definitions, leadership principles, human strengths, and many other
sources. Contemporary project management is scalable, using simple versions of impor-
tant techniques on small projects and more involved versions on more complex projects.
Distinctive Approach
This book covers contemporary project management topics using contemporary project
management methods. For example, when considering the topic of dealing with multiple
stakeholders, every chapter was reviewed by students, practitioners, and academics. This
allowed simultaneous consideration of student learning, practitioner realism, and aca-
demic research and teaching perspectives.
The practical examples and practitioner reviewers came from a variety of industries, dif-
ferent parts of the world, and from many sizes and types of projects in order to emphasize
the scalability and universality of contemporary project management techniques.
New to This Edition
Core, behavioral, and technical learning objectives. We have expanded the number
of learning objectives and classified them as core, behavioral, or technical. About
half of the objectives are core: what we believe every student of project management
should learn. A professor could teach a solid project management introductory class
by deeply using only the core objectives. On the other hand, there are measurable
student objectives for either a behavioral or a technical approach. All suggested stu-
dent assignments and questions are tied specifically to one of the learning objectives.
A professor could use this text for a two-semester sequence that emphasizes both in-
depth behavioral and technical approaches.
Videos. Exclusively available to those using the MindTap product for this book, we
have created dozens of short (average time, five minutes) videos to show the art of
many of the techniques. These demonstrate the use of many of the techniques in a
by-hand or spreadsheet fashion as well as using Microsoft Project 2016. Several
questions that can be assigned to students are included with the videos that
xx
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demonstrate how to use Microsoft Project to complement learning. Answers (some-
times definitive, sometimes representative, depending on the nature of the tech-
nique) are included in the instructor’s manual (IM).
Extensive flowchart to help the sixth edition of the PMBOK® Guide come to life.
All sixth edition PMBOK® Guide knowledge areas, processes, and process groups,
plus major deliverables from each process and the primary workflows between
them, are specifically included in an interactive, color-coded flowchart that is
included in full inside the back cover of the text. We also start each chapter by
showing the portion of the flowchart that is covered in that chapter. We now use
definitions both from the PMBOK® Guide, Sixth Edition and also from more than
a dozen Project Management Institute specialized Practice Guides and Standards.
The end of each chapter contains specific suggestions for PMP® and CAPM® test
preparation pertaining to the chapter’s topics plus ten PMBOK® Guide-type ques-
tions that are typical of what would be seen on PMP® and CAPM® exams.
Appendix A gives general study suggestions for the CAPM® and PMP® exams.
Project deliverables. A list of 38 project deliverables that can be used as assignments
for students and in-class exercises are included in Appendix D. Each deliverable is
specifically tied to a student learning objective and shown on the PMBOK® Guide
flowchart. About half of these are core, while the others are behavioral or technical.
Examples of completed deliverables are included in the text. Teaching suggestions
and grading rubrics are included in the IM. Appendix D identifies the type of objec-
tive, chapter covered, and PMBOK® Guide process, knowledge area, and process
group in which the deliverable is typically created on a real project.
Substantial increase in Agile coverage. Agile techniques and methods are consid-
ered much more often than even three years ago. As such, many experienced project
managers who have also become Agile proponents have contributed to the increased
Agile coverage in this book. At multiple points in most chapters, if Agile methods or
suggested behaviors are different from traditional project management, these varia-
tions are noted. We use an Agile icon to draw attention to these. We also have cre-
ated Appendix B, which is a bulleted list of the approximately 180 differences
between Agile and traditional project management that are discussed in the book.
This extensive coverage allows a professor to teach project management emphasizing
an Agile approach, if desired. It also allows a professor to develop an Agile project
management course.
Two new continuing project examples. We have created two project examples that
are included in all 15 chapters of the text. One project is a construction project by a
for-profit company that is planned and managed in a traditional fashion. The other
is a development project at a nonprofit that is planned and managed in a more (but
not exclusively) Agile fashion. In Chapter 1, we introduce both these case studies.
After that, we alternate chapters, with each chapter showing what one project did
using the concepts and techniques of a chapter and posing questions for the stu-
dents to answer about the other project. Answers to the questions are in the IM.
This can be another useful vehicle for students to practice their skills and to generate
class discussion.
Distinctive Features
PMBOK® Guide, Sixth Edition approach. This consistency with the current stan-
dard gives students a significant leg up if they decide to become certified Project
Management Professionals (PMPs®) or Certified Associates in Project Management
Preface xxi
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(CAPMs®). This text includes an color-coded PMBOK® Guide, Sixth Edition flow-
chart, all definitions consistent with PMI guides and standards, CAPM and PMP
test preparation suggestions, and test practice questions.
Actual project as learning vehicle. A section at the end of each chapter lists deliver-
ables for students to create (in teams or individually) for a real project. These assign-
ments have been refined over the last two decades while working with the local
PMI® chapter, which provided a panel of PMP® judges to evaluate projects from a
practical point of view. Included in the IM are extensive tools and suggestions devel-
oped over the last 20 years for instructors, guiding them as they have students learn
in the best possible way—with real projects. Students are encouraged to keep clean
copies of all deliverables so they can demonstrate their project skills in job inter-
views. A listing of these deliverables is included in Appendix D.
Student-oriented, measurable learning objectives. Each chapter begins with a list of
the core objectives for the chapter along with more in-depth behavioral and/or tech-
nical objectives for most chapters. The chapter also starts with showing the
PMBOK® topics covered in the chapter. The chapter material, end-of-chapter ques-
tions and problems, PowerPoint® slides, all deliverables, and test questions have all
been updated to correlate to specific objectives.
Microsoft® Project Professional 2016 fully integrated into the fabric of eight chap-
ters. Microsoft® Project Professional 2016 is shown in a step-by-step manner with
numerous screen captures. On all screen captures, critical path activities are shown
in contrasting color for emphasis. We have created videos to demonstrate these
techniques and developed questions tied to specific learning objectives that can be
assigned to the videos to test student learning.
Blend of traditional and modern methods. Proven methods developed over the past
half century are combined with exciting new methods, including Agile, that are
emerging from both industry and research. This book covers the responsibilities of
many individuals who can have an impact on projects both as they are practiced in
traditional and in Agile environments, so aspiring project managers can understand
not only their own roles, but also those of people with whom they need to interact.
Integrated example projects. A variety of experienced project leaders from around
the world have contributed examples to demonstrate many of the techniques and
concepts throughout the book. These highly experienced and credentialed managers
have worked closely with the authors to ensure that the examples demonstrate ideas
discussed in the chapter. The variety of industries, locations, and sizes of the projects
help the students to visualize both how universal project management is and how to
appropriately scale the planning and management activities.
Organization of Topics
The book is divided into four major parts. Part 1, Organizing Projects, deals with get-
ting a project officially approved.
Chapter 1 introduces contemporary project management by first tracing the history
of project management and then discussing what makes a project different from
an ongoing operation. Various frameworks that help one understand projects—
such as the PMBOK® Guide and Agile—are introduced, as well as the executive-,
managerial-, and associate-level roles in managing projects.
Chapter 2 discusses how projects support and are an outgrowth of strategic plan-
ning, how a portfolio of projects is selected and prioritized, how a client company
xxii Preface
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selects a contractor company to conduct a project, and how a contractor company
secures project opportunities from client companies.
Chapter 3 presents project charters in a step-by-step fashion. Short, powerful charters
help all key participants to develop a common understanding of key project issues and
components at a high level and then to formally commit to the project. Charters have
become nearly universal in initiating projects in recent years. Microsoft® Project Pro-
fessional 2016 is utilized to show milestone schedules within charters.
Part 2, Leading Projects, deals with understanding the project environment and roles
and dealing effectively with team members and stakeholders.
Chapter 4 deals with organizational capability issues of structure, life cycle, culture,
and roles. The choices parent organizations make in each of these provide both
opportunities and limitations to how projects can be conducted.
Chapter 5 deals with leading and managing the project team. It includes acquiring
and developing the project team, assessing both potential and actual performance of
team members and the team as a whole, various types of power a project manager
can use, and how to deal productively with project conflict.
Chapter 6 introduces methods for understanding and prioritizing various stake-
holder demands and for building constructive relationships with stakeholders. Since
many projects are less successful due to poor communications, detailed communica-
tion planning techniques are introduced along with suggestions for managing meet-
ings, an important channel of communication.
Part 3, Planning Projects, deals with all aspects of project planning as defined in
thePMBOK® Guide. It proceeds in the most logical order possible to maximize effective-
ness and stress continuity, so that each chapter builds on the previous ones, and students
can appreciate the interplay between the various knowledge areas and processes.
Chapter 7 helps students understand how to determine the amount of work the
project entails. Specifically covered are methods for determining the scope of both
the project work and outputs, the work breakdown structure (WBS) that is used to
ensure nothing is left out, and how the WBS is portrayed using Microsoft® Project
Professional 2016.
Chapter 8 is the first scheduling chapter. It shows how to schedule project activities
by identifying, sequencing, and estimating the durations for each activity. Then, crit-
ical path project schedules are developed, and methods are shown for dealing with
uncertainty in time estimates, Gantt charts are introduced for easier communica-
tions, and Microsoft® Project Professional 2016 is used to automate the schedule
development and communications.
Chapter 9 is the second scheduling chapter. Once the critical path schedule is deter-
mined, staff management plans are developed, project team composition issues are
considered, resources are assigned to activities, and resource overloads are identified
and handled. Schedule compression techniques of crashing and fast tracking are
demonstrated, and multiple alternative scheduling techniques including Agile are
introduced. Resource scheduling is demonstrated with Microsoft® Project Profes-
sional 2016.
Chapter 10 deals with project budgeting. Estimating cost, budgeting cost, and estab-
lishing cost controls are demonstrated. Microsoft® Project Professional 2016 is used
for developing both bottom-up and summary project budgets.
Chapter 11 demonstrates project risk planning. It includes risk management plan-
ning methods for identifying risks, establishing a risk register, qualitatively analyzing
Preface xxiii
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risks for probability and impact, quantitatively analyzing risks if needed, and decid-
ing how to respond to each risk with contingency plans for major risks and aware-
ness for minor risks.
Chapter 12 starts by covering project quality planning. This includes explaining the
development of modern quality concepts and how they distill into core project qual-
ity demands. Next, the chapter covers how to develop a project quality plan. It then
ties all of the planning chapters together with discussions of a project kickoff meet-
ing, a baselined project plan, and the ways Microsoft® Project Professional 2016 can
be used to establish and maintain the baseline.
Part 4, Performing Projects, discusses the various aspects that must be managed
simultaneously while the project is being conducted.
Chapter 13 deals with project supply chain management issues. Some of these issues,
such as developing the procurement management plan, qualifying and selecting ven-
dors, and determining the type of contract to use are planning issues, but for sim-
plicity, they are covered in one chapter with sections on how to conduct and control
procurements and to improve the project supply chain.
Chapter 14 is concerned with determining project results. This chapter starts with a
balanced scorecard approach to controlling projects. Internal project issues covered
include risk, change, and communication. Quality is also covered, with an emphasis
on achieving client satisfaction. Financial issues discussed are scope, cost, and sched-
ule, including how to use Microsoft® Project Professional 2016 for control.
Chapter 15 deals with how to end a project—either early or on time. This includes
validating to ensure all scope is complete, formally closing procurements and the
project, knowledge management, and ensuring the project participants are rewarded
and the clients have the support they need to realize intended benefits when using
the project deliverables.
MindTap
MindTap is a complete digital solution for your project management course. It has
enhancements that take students from learning basic concepts to actively engaging in
critical thinking applications, while learning Project 2016 skills for their future careers.
The MindTap product for this book features videos from the authors that explain
tricky concepts, videos that explain the finer points of what you can do with Project
2016, and quizzes and homework assignments with detailed feedback so that students
will have a better understanding of why an answer is right or wrong.
Instructor Resources
To access the instructor resources, go to www.cengage.com/login, log in with your SSO
account username and password, and search this book’s ISBN (9781337406451) to add
instructor resources to your account. Key support materials—instructor’s manual with
solutions, test bank in Word and Blackboard formats, data set solutions, and PowerPoint®
presentations—provide instructors with a comprehensive capability for customizing their
classroom experience. All student resources are also available on the instructor companion
site.
Instructor s Manual with Solutions. Prepared by Tim Kloppenborg and updated by
Kate Wells, based on their years of experience facilitating the student learning expe-
rience in their own project management classes (undergraduate, MBA, Masters in
xxiv Preface
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Health Informatics, and continuing education on six continents), with teaching in
classroom, hybrid, and online formats, each chapter of the instructor’s manual
includes an overview of core, behavioral, and technical learning objectives, detailed
chapter outlines, teaching recommendations for both classroom and online, and
many specific suggestions for implementing community-based projects into your
project management class. Solutions are also provided for all of the end-of-chapter
content.
Microsoft® Word Test Bank. Prepared for this edition by Joyce D. Brown, PMP®
and Thomas F. McCabe, PMP® of the University of Connecticut, this comprehen-
sive test bank builds upon the original test bank created by Kevin Grant of the Uni-
versity of Texas at San Antonio. The test bank is organized around each chapter’s
learning objectives. All test questions are consistent with the PMBOK®. Every test
item is labeled according to its difficulty level, the learning objective within the text-
book to which it relates, and its Blooms Taxonomy level, allowing instructors to
quickly construct effective tests that emphasize the concepts most significant for
their courses. The test bank includes true/false, multiple choice, essay, and quantita-
tive problems for each chapter.
Cognero Test Bank. Cengage Learning Testing Powered by Cognero is a flexible,
online system that allows you to author, edit, and manage test bank content from
multiple Cengage Learning solutions; create multiple test versions in an instant;
and deliver tests from your LMS, your classroom, or wherever you want. The Cog-
nero test bank contains the same questions that are in the Microsoft® Word test
bank.
PowerPoint Presentations. Prepared by Kate Wells, the PowerPoint presentations
provide comprehensive coverage of each chapter’s essential concepts in a clean, con-
cise format. Instructors can easily customize the PowerPoint presentations to better
fit the needs of their classroom.
Templates. Electronic templates for many of the techniques (student deliverables)
are available on the textbook companion website. These Microsoft® Word and
Excel documents can be downloaded and filled in for ease of student learning and
for consistency of instructor grading.
Student Resources
Students can access the following resources by going to www.cengagebrain.com and
searching 9781337406451. The companion website for this book has Excel and Word
Project templates, data sets for selected chapters, and instructions for how to get access
to a trial version of Microsoft Online Professional Trial. (Note that while we are happy
to provide instructions for accessing this trial, Microsoft controls that access and we are
not responsible for it being removed in the future.)
Acknowledgments
A book-writing project depends on many people. Through the last three decades of proj-
ect work, we have been privileged to learn from thousands of people, including students,
faculty members, co-trainers, co-consultants, co-judges, clients, research partners, trade
book authors, and others. Hundreds of individuals who have provided help in research
and developing teaching methods are co-members of the following:
PMI’s undergraduate curriculum guidelines development team,
PMI’s Global Accreditation Center,
Preface xxv
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Multiple chapters of the Project Management Institute,
The Cincinnati and Louisville sections of the Center for Quality of Management,
Project Management Executive Forum, and
Agile Cincinnati.
We also want to acknowledge the wonderful help of various professionals at Cengage
Learning, including Aaron Arnsparger (Sr. Product Manager) and Conor Allen (Content
Developer). We also want to thank Charles McCormick, Jr., retired Senior Acquisitions
Editor, for his extensive help and guidance on the first and second editions of Contem-
porary Project Management.
Other individuals who have provided significant content are Nathan Johnson of
Western Carolina University, who provided the Microsoft® Project 2016 material, Joyce
D. Brown, PMP® and Thomas F. McCabe, PMP® of University of Connecticut, who
revised the test bank and provided additional PMBOK® questions to each chapter, Jim
King, who professionally taped and edited videos, and Kathryn N. Wells, Independent
Consultant, PMP®, CAPM®, who provided the PowerPoint presentations.
Special thanks are also due to all the people whose feedback and suggestions have
shaped this edition of Contemporary Project Management as well as the previous two
editions:
Carol Abbott,
Fusion Alliance, Inc.
Stephen Allen,
Truman State University
Siti Arshad-Snyder,
Clarkson College
Loretta Beavers,
Southwest Virginia
Community College
Shari Bleure,
Skyline Chili
Neil Burgess,
Albertus Magnus College
Reynold Byers,
Arizona State University
John Cain,
Viox Services
Robert Clarkson,
Davenport University
Nancy Cornell,
Northeastern University
Steve Creason,
Metropolitan State
University
Jacob J. Dell,
University of Texas at
San Antonio
Scott Dellana,
East Carolina University
Maling Ebrahimpour,
Roger Williams
University
Jeff Flynn,
ILSCO Corporation
Jim Ford,
University of Delaware
Lynn Frock,
Lynn Frock & Company
Lei Fu,
Hefei University of
Technology
Patricia Galdeen,
Lourdes University
Kathleen Gallon,
Christ Hospital
Paul Gentine,
Bethany College
Kevin P. Grant,
University of Texas–San
Antonio
Joseph Griffin,
Northeastern University
Raye Guye,
ILSCO Corporation
William M. Hayden Jr.,
State University of
New York at Buffalo
Sarai Hedges,
University of Cincinnati
Marco Hernandez,
Dantes Canadian
Stephen Holoviak,
Pennsylvania State
University
Bill Holt,
North Seattle Community
College
Morris Hsi,
Lawrence Tech
University
xxvi Preface
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Sonya Hsu,
University of Louisiana
Lafayette
Paul Hudec,
Milwaukee School of
Engineering
Anil B. Jambekar,
Michigan Technological
University
Dana Johnson,
Michigan Technological
University
Robert Judge,
San Diego State
University
David L. Keeney,
Stevens Institute of
Technology
George Kenyon,
Lamar University
Naomi Kinney,
MultiLingual Learning
Services
Paul Kling,
Duke Energy
Matthew Korpusik,
Six Sigma Black Belt
Sal Kukalis,
California State
University–Long Beach
Young Hoon Kwak,
George Washington
University
Laurence J. Laning,
Procter & Gamble
Dick Larkin,
Central Washington
University
Lydia Lavigne,
Ball Aerospace
Jon Lazarus,
Willamette University
James Leaman,
Eastern Mennonite
University
Linda LeSage,
Davenport University
Claudia Levi,
Edmonds Community
College
Marvette Limon,
University of Houston
Downtown
John S. Loucks,
St. Edward’s University
Diane Lucas,
Penn State University–
DuBois Campus
Clayton Maas,
Davenport University
S. G. Marlow,
California State
Polytechnic University
Daniel S. Marrone,
SUNY Farmingdale State
College
Chris McCale,
Regis University
Abe Meilich,
Walden University
Bruce Miller,
Xavier Leadership Center
Ali Mir,
William Paterson
University
William Moylan,
Eastern Michigan
University
Merlin Nuss,
MidAmerica Nazarene
University
Warren Opfer,
Life Science Services
International
Peerasit Patanakul,
Stevens Institute of
Technology
Joseph Petrick,
Wright State University
Kenneth R. Pflieger,
Potomac College
Charles K. Pickar,
Johns Hopkins University
Connie Plowman,
Portland Community
College
Mark Poore,
Roanoke College
Antonios Printezis,
Arizona State University
Joshua Ramirez,
PMP,
MSM-PM, Columbia
Basin College
Chris Rawlings,
Bob Jones University
Natalee Regal,
Procter & Gamble
Pedro Reyes,
Baylor University
Linda Ridlon,
Center for Quality of
Management,
Division of GOAL/QPC
Kim Roberts,
Athens State University
David Schmitz,
Milwaukee School of
Engineering
Sheryl R. Schoenacher,
SUNY Farmingdale State
College
Jan Sepate,
Kimberly Clark
Patrick Sepate,
Summitqwest Inc.
Preface xxvii
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William R. Sherrard,
San Diego State
University
Brian M. Smith,
Eastern University
Kimberlee D. Snyder,
Winona State University
Tony Taylor,
MidAmerica Nazarene
University
Rachana Thariani,
Atos-Origin
Dawn Tolonen,
Xavier University
Nate Tucker,
Lee University
Guy Turner,
Castellini Company
Jayashree Venkatraman,
Microsoft Corporation
Nathan Washington,
Southwest Tennessee
Community College
Scott Wright,
University of Wisconsin–
Platteville
And we especially want to thank our family members for their love and support: Bet,
Nick, Jill, Andy, Cadence, and Ellie
—Timothy J. Kloppenborg
xxviii Preface
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About the Authors
Timothy J. Kloppenborg is an Emeritus Professor of Management at Williams Col-
lege of Business, Xavier University. He previously held faculty positions at University
of North Carolina Charlotte and Air Force Institute of Technology and has worked
temporarily at Southern Cross University and Tecnológico de Monterrey. He has
authored over 100 publications, including 10 books, such as Strategic Leadership of
Portfolio and Project Management, Project Leadership, and Managing Project Quality.
His articles have appeared in MIT Sloan Management Review, Project Management
Journal, Journal of Management Education, Journal of General Management, SAM
Advanced Management Journal, Information Systems Education Journal, Journal of
Managerial Issues, Quality Progress, Management Research News, and Journal of Small
Business Strategy. In his capacity as the founding collection editor of portfolio and
project management books for Business Expert Press, he has edited 14 books with
more in the pipeline. Tim has been active with the Project Management Institute for
over 30 years and a PMP® since 1991. He is a retired U.S. Air Force Reserve officer
who served in transportation, procurement, and quality assurance. Dr. Kloppenborg
has worked with over 150 volunteer organizations, many directly and others through
supervising student projects. He has hands-on and consulting project management
experience on six continents in construction, information systems, research and devel-
opment, and quality improvement projects with organizations such Duke Energy, Ernst
and Young LLP, Greater Cincinnati Water Works, Kroger, Procter & Gamble, Tri-
Health, and Texas Children’s Hospital. Dr. Kloppenborg has developed and delivered
innovative corporate training, undergraduate, MBA, and Executive MBA classes in
project management, leadership, teamwork, and quality improvement and he teaches
PMP Prep classes. He holds a BS in business administration from Benedictine College,
an MBA from Western Illinois University, and a PhD in Operations Management from
University of Cincinnati.
Dr. Vittal Anantatmula is a professor in the College of Business, Western Carolina
University and a campus of University of North Carolina. He is also the Director of
Graduate Programs in Project Management and was a recipient of excellence in teaching
and research awards. Dr. Anantatmula is a Global Guest Professor at Keio University,
Yokohama, Japan. He is a director and board member of the Project Management Insti-
tute Global Accreditation Center (PMI-GAC). He serves on the editorial board of several
scholarly journals. At Western Carolina University, he was recognized with the Univer-
sity Scholar Award in 2017. He has won several other awards for excellence in both
research and teaching.
Prior to joining Western Carolina University, he taught at The George Washington
University. He worked in the petroleum and power industries for several years as an
electrical engineer and project manager and as a consultant in several international orga-
nizations, including the World Bank. Dr. Anantatmula has authored more than 60 pub-
lications, five books, and about 50 conference papers. Two of his conference papers
received the best paper award. His work has been published in scholarly journals, includ-
ing Project Management Journal, Journal of Knowledge Management, Journal of Manage-
ment in Engineering, Journal of Information and Knowledge Management Systems, and
xxix
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Engineering Management Journal. He received his PhD from The George Washington
University and is a certified project management professional.
Kathryn N. Wells holds a master’s degree in Education, as well as degrees in Organi-
zational Communication and Spanish. Kate has a passion for teaching, in both academic
and corporate settings. In addition to over a decade’s experience in project management
education, Kate is a top-producing real estate agent with Keller Williams. Her blend of
experience in real estate—including working with many investors—and classroom teach-
ing gives her a unique perspective and insights into many components of project man-
agement, including Planning, Communication, Stakeholder Management, and Project
Control.
In addition to her work on Contemporary Project Management, Kate is the lead
author of Project Management Essentials (2015) and co-author of Project Management
for Archaeology (2017), both published by Business Expert Press. She has trained and
consulted with several organizations around the world and has occasionally been con-
tracted to provide translations of project management educational materials (Spanish to
English). Some of her clients include the University of Cincinnati, Children’s Hospital of
Cincinnati, Givaudan International, and Tec de Monterrey University—where Kate has
repeatedly served as visiting faculty at multiple campuses in Mexico. Kate is a certified
project management professional (PMP).
xxx About the Authors
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1
ORGANIZE LEAD PERFORMPLAN
P A R T 1
ORGANIZING PROJECTS
Chapter 1
Introduction to Project
Management
Chapter 2
Project Selection and
Prioritization
Chapter 3
Chartering Projects
Organizing for success in project management includes
several basic frameworks for understanding projects and
tools to select, prioritize, resource, and initiate projects.
Basic frameworks described in Chapter 1 include how
the work of project management can be categorized by
knowledge area and process group, how project success
is determined, and how both plan-driven and adaptive
approaches are frequently used. Chapter 2 describes
how projects are investments meant to help achieve
organizational goals. Tools are demonstrated to select,
prioritize, and resource projects. Chapter 3 describes
how charters are essential to initiating projects and then
demonstrates how to construct each portion of a charter.
1
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C H A P T E R 1
Introduction to Project Management
I have returned from a successful climb of Mount Aconcagua in Argentina; at
22,841 feet, it is the highest peak in the world outside of the Himalayas. While
there, seven other climbers died; we not only survived, but our experience was
so positive that we have partnered to climb together again.
During the three decades that I ve been climbing mountains, I ve also been
managing projects. An element has emerged as essential for success in both of
these activities: the element of discipline. By discipline, I am referring to doing
what I already know needs to be done. Without this attribute, even the most
knowledgeable and experienced will have difficulty avoiding failure.
The deaths on Aconcagua are an extreme example of the consequences asso-
ciated with a lack of discipline. The unfortunate climbers, who knew that the pre-
dicted storms would produce very hazardous conditions, decided to attempt the
summit instead of waiting. They did not have the discipline that we demonstrated
to act on our earlier decision to curtail summit attempts after the agreed-to turn-
around time or in severe weather.
CHAPTER OBJECTIVES
After completing this
chapter, you should
be able to:
CORE OBJECTIVES:
Define a project and
project management
in your own words,
using characteristics
that are common to
most projects, and
describe reasons why
more organizations
are using project
management.
Describe major activ-
ities and deliverables
at each project life
cycle stage.
List and define the ten
knowledge areas and
five process groups of
the project manage-
ment body of knowl-
edge (PMBOK ®).
Delineate measures
of project success
and failure, and
reasons for both.
Contrast predictive
or plan-driven and
adaptive or change-
driven project life
cycle approaches.
BEHAVIORAL OBJECTIVES:
Identify project roles
and distinguish key
responsibilities for
project team
members.
Describe the impor-
tance of collaborative
effort during the
project life cycle.
fra
nt
ic
00
/S
hu
tte
rs
to
ck
.c
om
2
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I ve experienced similar circumstances in project management. Often I have
found myself under pressure to cast aside or shortcut project management prac-
tices that I have come to rely on. For me, these practices have become the pillars
of my own project management discipline. One of these pillars, planning, seems to
be particularly susceptible to challenge. Managing projects at the Central Intelli-
gence Agency for three decades, I adjusted to the annual cycle for obtaining fund-
ing. This cycle occasionally involved being given relatively short notice near the end
of the year that funds unspent by some other department were up for grabs to
whoever could quickly make a convincing business case. While some may inter-
pret this as a circumstance requiring shortcutting the necessary amount of plan-
ning in order to capture some of the briefly available funds, I understood that my
discipline required me to find a way to do the needed planning and to act quickly.
I understood that to do otherwise would likely propel me toward becoming one of
the two-thirds of the projects identified by the Standish Group in their 2009
CHAOS report as not successful. I understood that the top 2 percent of project
managers, referred to as Alpha Project Managers in a 2006 book of the same
name, spend twice as much time planning as the other 98 percent of project man-
agers. The approach that I took allowed me to maintain the discipline for my plan-
ning pillar. I preplanned a couple of projects and had them ready at the end of the
year to be submitted should a momentary funding opportunity arise.
A key to success in project management, as well as in mountain climbing, is to
identify the pillars that will be practiced with discipline. This book offers an excel-
lent set of project management methods from which we can identify those pillars
that we will decide to practice with the required levels of discipline. I believe that
project management is about applying common sense with uncommon discipline.
Michael O Brochta, PMP, founder of Zozer Inc. and previously
senior project manager at the Central Intelligence Agency
1-1 What Is a Project?
Frequently, a business is faced with making a change, such as improving an existing
work process, constructing a building, installing a new computer system, merging with
another company, moving to a new location, developing a new product, entering a new
market, and so on. These changes are best planned and managed as projects.
Often, these changes are initiated due to operational necessity or to meet strategic
goals, such as the following:
Market demand
Customer request
PMBOK ® 6E COVERAGE
PMBOK ® 6E OUTPUTS
1.2 Foundational Elements Project Customer Trade-off Matrix
2.4 Organizational Systems
Project Success Definition
3.3 The Project Manager s Sphere of Influence
3.4 Project Manager Competencies
3.5 Performing Integration
PMBOK® GUIDE
Topics:
Project management
introduction
Project life cycle
Stakeholders
Project management
process
Project integration
management
CHAPTER OUTPUTS
Customer Trade-off
Matrix
Project Success
Definition
3
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Technological advance
Legal requirements or regulatory compliance
Replace obsolete equipment, technology, system, or physical facility
Crisis situation
Social need
So, what is a project?
A project is a new, time-bound effort that has a definite beginning and a definite
ending with several related and/or interdependent tasks to create a unique product or
service. The word temporary is used to denote project duration; however, it does not
mean that project duration is short; in fact, it can range from a few weeks to several
years. Temporary also does not apply to the project deliverable, although project
teams are certainly temporary.
A project requires an organized set of work efforts that are planned with a level of
detail that is progressively elaborated on as more information is discovered. Projects are
subject to limitations of time and resources such as money and people. Projects should
follow a planned and organized approach with a defined beginning and ending. Project
plans and goals become more specific as early work is completed. The project output
often is a collection of a primary deliverable along with supporting deliverables such as
a house as the primary deliverable and warrantees and instructions for use as supporting
deliverables.
Taking all these issues into consideration, a project can be defined as a time-bound
effort constrained by performance specifications, resources, and budget to create a unique
product or service.
Each project typically has a unique combination of stakeholders. Stakeholders are
people and groups who can impact the project or might be impacted by either the
work or results of the project. Projects often require a variety of people to work
together for a limited time, and all participants need to understand that completing
the project will require effort in addition to their other assigned work. These people
become members of the project team and usually represent diverse functions and
disciplines.
Project management is the art and science of using knowledge, skills, tools, and tech-
niques efficiently and effectively to meet stakeholder needs and expectations. This
includes work processes that initiate, plan, execute, control, and close work. During
these processes, trade-offs must be made among the following factors:
Scope (size and features)
Quality (acceptability of the results)
Cost
Schedule
Resources
Risks
When project managers successfully make these trade-offs, the project results meet
the agreed-upon requirements, are useful to the customers, and promote the organiza-
tion. Project management includes both administrative tasks for planning, documenting,
and controlling work and leadership tasks for visioning, motivating, and promoting work
associates. The underlying principle of project management discipline is to make effec-
tive and efficient use of all resources and it is this principle that influences some of these
trade-off decisions. Project management knowledge, skills, and methods can be applied
and modified for most projects regardless of size or application.
4 Part 1 Organizing Projects
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1-2 History of Project Management
Projects of all sizes have been undertaken throughout history. Early construction pro-
jects included the ancient pyramids, medieval cathedrals, Indian cities, and Native
American pueblos. Other large early projects involved waging wars and building
empires. In the development of the United States, projects included laying railroads,
developing farms, and building cities. Many smaller projects consisted of building
houses and starting businesses. Projects were conducted throughout most of the
world s history, but there was very little documentation. Therefore, there is no evidence
of systematic planning and control. It is known that some early projects were accom-
plished at great human and financial cost and that others took exceedingly long peri-
ods of time to complete. For example, the Panama Canal was started in 1881 and
completed in 1914.
Project management eventually emerged as a formal discipline to be studied and
practiced. In the 1950s and 1960s, techniques for planning and controlling schedules
and costs were developed, primarily on huge aerospace and construction projects. Dur-
ing this time, project management was primarily involved in determining project sche-
dules based on understanding the order in which work activities had to be completed.
Many large manufacturing, research and development, government, and construction
projects used and refined management techniques. In the 1980s and 1990s, several
software companies offered ever more powerful and easier ways to plan and control
project costs and schedules. Risk management techniques that were originally devel-
oped on complex projects have increasingly been applied in a simplified form to less
complex projects.
In the last few years, people have realized more and more that communication and
leadership play major roles in project success. Rapid growth and changes in the
information technology and telecommunications industries especially have fueled
massive growth in the use of project management in the 1990s and early 2000s.
Simultaneously, systems and processes were developed for electronic documentation
of the historical data of projects using information systems (IS) and knowledge man-
agement tools.
People who are engaged in a wide variety of industries, including banking, insurance,
retailing, hospital administration, healthcare, and many other service industries, are now
turning to project management to help them plan and manage efforts to meet their
unique demands. Project planning and management techniques that were originally
developed for large, complex projects can be modified and used to better plan and man-
age even smaller projects. Now, project management is commonly used on projects of
many sizes and types in a wide variety of manufacturing, government, service, and non-
profit organizations.
Further, in today s global economy, geographically dispersed virtual project teams are
becoming a familiar entity in many organizations. Managing a project is challenging in
the current global economy due to the exponential growth of information technology
and ever-increasing market demand that organizations offer products and services effi-
ciently and quickly. Understanding the characteristics of global projects for improving
global project performance is of critical importance.
The use of project management has grown quite rapidly and is likely to continue
growing. With increased international competition and a borderless global economy,
customers want their products and services developed and delivered better, faster, and
cheaper. Because project management techniques are designed to manage scope, quality,
cost, and schedule, they are ideally suited to this purpose.
Chapter 1 Introduction to Project Management 5
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AGILE Throughout this book, we will present concepts and techniques that are either unique to
Agile projects or are emphasized more on Agile projects. Many of these ideas can be
used to improve practice on traditional projects.
In 2001, a group of thought leaders became frustrated with the use of traditional,
plan-driven project management for software projects and as a result, they wrote a doc-
ument called The Agile Manifesto.1 The four core values of Agile as shown below are
completely consistent with our approach to Contemporary Project Management. Agile
will be defined in Chapter 3, but throughout the book, a margin icon will indicate ideas
from Agile, and the text will be in color.
Value individuals more than processes.
Value working software more than documentation.
Value customer collaboration more than negotiation.
Value response to change over following a plan.
1-3 How Can Project Work Be Described?
Project work can be described in the following ways:
Projects are temporary and unique, while other work, commonly called operations,
is more continuous.
Project managers need certain soft skills and hard skills to be effective.
Project managers frequently have more responsibility than authority.
Projects go through predictable stages called a life cycle.
Managing a project requires identifying requirements, establishing clear and achiev-
able objectives, balancing competing demands of quality, scope, cost, and time, and
meeting customer expectations by making adjustments to all aspects of the project. Due
to uniqueness, projects are often associated with uncertainties and unknowns that pres-
ent many challenges to managing project work.
1-3a Projects versus Operations
All work can be described as fitting into one of two types: projects or operations. Projects
as stated above are temporary, and no two are identical. Some projects may be extremely
different from any other work an organization has performed up to that time, such as
planning a merger with another company. Other projects may have both routine and
unique aspects, for example, building a house; such projects can be termed process ori-
ented. These projects are associated with fewer unknowns and uncertainties.
Operations, on the other hand, consist of the ongoing work needed to ensure that an
organization continues to function effectively. Operations managers can often use check-
lists to guide much of their work. Project managers can use project management methods
to help determine what to do, but they rarely have checklists that identify all the activities
they need to accomplish. Some work may be difficult to classify as totally project or totally
operations. However, if project management methods and concepts help one to better plan
and manage work, it does not really matter how the work is classified.
Both the projects and the operations are associated with processes. A process is described
as a series of actions designed to bring about the consistent and similar result or service. A
process is usually designed to improve productivity. Thus, processes are repetitive and pro-
duce consistent and similar results, whereas projects are unique: each project delivers results
that are distinct from other projects. However, one must remember that project manage-
ment discipline includes various processes (planning, risk management, communication
6 Part 1 Organizing Projects
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management, etc.) that facilitate managing projects and product- or service-oriented
processes such as scope definition, scope management, and quality management.
1-3b Soft Skills and Hard Skills
To effectively manage and lead in a project environment, a person needs to develop both
soft and hard skills. Soft skills include the ability to work in teams, interpersonal
skills, communication, conflict resolution, negotiation, and leadership activities. Hard
skills can include risk analysis, quality control, scheduling, budgeting, change control,
planning other related activities, and project execution. Soft and hard skills go hand in
hand. Some people have a stronger natural ability and a better comfort level in one or
the other, but to be successful as a project manager, a person needs to develop both,
along with the judgment about when each is needed. A wise project manager may pur-
posefully recruit an assistant who excels in his area of weakness. Training, experience,
and mentoring can also be instrumental in developing necessary skills.
Soft skills such as interpersonal relations, conflict resolution, and communication are
of critical importance in managing people. As such, of all the resources, managing
human resources presents more challenges. Managing and leading people are the most
challenging aspects of a managing a project and the project team. These challenges
underline the importance of soft skills.
1-3c Authority and Responsibility
A project manager will frequently be held accountable for work that she cannot order
people to perform. Projects are most effectively managed with one person being assigned
accountability. However, that person often needs to negotiate with a functional man-
ager, who is someone with management authority over an organizational unit. 2 Func-
tional managers negotiate for workers to perform the project work in a timely fashion.
Since the workers know their regular manager often has other tasks for them and will be
their primary rater, they are tempted to concentrate first on the work that will earn
rewards. Hence, a project manager needs to develop strong communication and leader-
ship skills to extract cooperation from functional managers and to persuade project team
members to focus on the project when other work also beckons. Often, it is the project
manager s responsibility that the work be performed, but at the same time, he or she has
no formal authority over the project team members.
1-3d Project Life Cycle
All projects go through predictable stages called a project life cycle. A project life cycle is
the series of phases that a project goes through from its initiation to its closure. 3 An
organization needs the assurance that the work of the project is proceeding in a satisfac-
tory manner, that the results are aligned with the original plan, and they are likely to serve
the customer s intended purpose. The project customer is the person or organization that
will use the project s product, service, or result. Customers can be internal to the organiza-
tion (that is, part of the company performing the project) or external to the organization.
Many different project life cycle models are used for different types of projects, such
as information systems, improvement, research and development, and construction. The
variations these pose will be explored in Chapter 4. In this book, we will use the follow-
ing project stages:
Selecting and initiating starts when an idea for a project first emerges and the proj-
ect is selected and planned at a high level, and ends when key participants commit
to it in broad terms.
Chapter 1 Introduction to Project Management 7
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AGILE
Planning starts after the initial commitment, includes detailed planning, and ends
when all stakeholders accept the entire detailed plan.
Executing starts when the plan is accepted, and includes authorizing, executing,
monitoring, and controlling work until the customer accepts the project deliverables.
Closing and realizing includes all activities after customer acceptance to ensure the
project is completed, lessons are learned, resources are reassigned, contributions are
recognized, and benefits are realized.
The pace of work and amount of money spent may vary considerably from one life
cycle stage to another. Often, the selecting is performed periodically for all projects at
a division or corporate level, and then initiating is rather quick just enough to
ensure that a project makes sense and key participants will commit to it. The plan-
ning stage can become rather detailed and will normally require quite a bit more
work. The execution stage or stages are the time when the majority of the hands-on
project tasks are accomplished. This tends to be a time of considerable work. Closing
is a time when loose ends are tied up and the work level decreases significantly, but
realizing benefits from the project occurs over time, may be measured months after
project completion, and may be done by people other than those who performed the
project. Occasionally, some of these phases overlap with each other, depending on
the project complexity, urgency of the deliverable, and ambiguity associated with
the project scope.
See Exhibit 1.1 for a predictive or plan-driven project life cycle and Exhibit 1.2 for
an adaptive or change-driven project life cycle. The primary difference is that in the
first, the product is well understood and all planning precedes all executing,
while in the second, early results lead into planning later work. The extreme of pre-
dictive is sometimes called waterfall and the extreme of adaptive is sometimes called
Agile.
EXHIBIT 1.1
PREDICTIVE OR PLAN-DRIVEN PROJECT LIFE CYCLE WITH
MEASUREMENT POINTS
Other
Approvals
Closing &
Realizing
Administrative
Closure
Benefits
Measures
Level of
Effort
Stage
Stage
Ending
Gates
Selecting &
Initiating
Charter
Selection
Planning
Kickoff
Executing
Project
Result
Progress
Reports
8 Part 1 Organizing Projects
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Three other points should be made concerning the project life cycle. First, most com-
panies with well-developed project management systems insist that a project must pass
an approval of some kind to move from one stage to the next.4 In both exhibits, the
approval to move from selecting and initiating to planning, for instance, is the approval
of a charter. Second, in some industries, the project life cycle is highly formalized and
very specific. For example, in the construction industry, the executing stage is often
described as the three stages of design, erection, and finishing. Third, many companies
even have their own project life cycle model, such as the one Midland Insurance Com-
pany has developed for quality improvement projects, as shown in Exhibit 1.3.
EXHIBIT 1.3
MIDLAND INSURANCE COMPANY PROJECT LIFE CYCLE FOR
QUALITY IMPROVEMENT PROJECTS
Initiation Planning Execution Close Out
1) De ne Problem
2) Factually Describe
Situation
3) Analyze Causes
4) Solution Planning
and Implementation
5) Evaluation of
Effects
6) Sustain Results
7) Share Results
Source: Martin J. Novakov, American Modern Insurance Group.
EXHIBIT 1.2
ADAPTIVE OR CHANGE-DRIVEN PROJECT LIFE CYCLE WITH
MEASUREMENT POINTS
Other
Approvals
Closing &
Realizing
Administrative
Closure
Benefits
Measures
Level of
Effort
Stage
Stage
Ending
Gates
Selecting &
Initiating
Charter
Selection
Planning
Executing
Planning
Executing
· · ·
Interim
Result
Interim
Result
Project
Result
Chapter 1 Introduction to Project Management 9
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This book will present examples of company-specific life cycle models, but for clarity
will use the predictive or plan-driven model shown in Exhibit 1.1 when describing con-
cepts, except when we discuss Agile with the adaptive or change-driven model. In addi-
tion to stage-ending approvals, frequently projects are measured at additional points
such as selection, progress reporting, and benefits realization, as shown in Exhibit 1.1.
1-4 Understanding Projects
Several frameworks that can help a person better understand project management are
described below: the Project Management Institute (PMI); the Project Management
Body of Knowledge (PMBOK® Guide); methods of selecting and prioritizing projects,
project goals and constraints; project success and failure; use of Microsoft Project to
help plan and measure projects, and various ways to classify projects.
1-4a Project Management Institute
Project management has professional organizations just as do many other professions
and industry groups. The biggest of these by far is the Project Management Institute.
The Project Management Institute was founded in 1969, grew at a modest pace until
the early 1990s, and has grown quite rapidly since then. As of February 2017, PMI had
well over 475,000 members. PMI publishes and regularly updates over a dozen exten-
sions, guides, and standards. The best known is A Guide to the Project Management
Body of Knowledge (PMBOK® Guide). Definitions in this book that have specific nuances
come from the most current edition of PMI standards and guides. Those definitions that
are common knowledge are defined in typical terms. PMI has established eight profes-
sional certifications, with the most popular being Project Management Professional
(PMP)®. Currently, over 650,000 people hold the PMP® certification. To be certified as
a PMP®, a person needs to have the required experience and education, pass an exami-
nation on the PMBOK® Guide, and sign and be bound by a code of professional con-
duct. PMI has also established a second certification Certified Associate in Project
Management (CAPM) that is geared toward junior people working on projects before
they are eligible to become PMPs. PMI also has established six additional credentials plus
multiple practice standards and extensions to the PMBOK® Guide in areas such as pro-
gram management, Agile, risk, scheduling, resource estimating, work breakdown struc-
tures, earned value management, construction, and government.5
1-4b Project Management Body of Knowledge (PMBOK®)
A Guide to the Project Management Body of Knowledge®, known as PMBOK®, consists of
three introductory chapters covered collectively in Chapters 1, 2, and 3 of this book; five
process groups; 10 knowledge areas; and 49 processes. A project management process
group is a logical grouping of the project management processes to achieve specific project
objectives. 6 The five process groups, paraphrased from the PMBOK® Guide, are as follows:
1. Initiating define a project or a new phase by obtaining authorization
2. Planning establish the project scope, refine objectives, and define plans and actions
to attain objectives
3. Executing complete the work defined to satisfy project specifications
4. Monitoring and controlling track, review, and regulate progress and performance,
identify changes required, and initiate changes
5. Closing formally complete or close project or phase 7
10 Part 1 Organizing Projects
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The 10 knowledge areas, paraphrased from the PMBOK® Guide, are as follows:
1. Integration management processes and activities to identify, define, combine,
unify, and coordinate the various processes and project management activities
2. Scope management processes to ensure that the project includes all the work
required, and only the work required, to complete the project successfully
3. Schedule management processes to manage timely completion of the project
4. Cost management processes involved in planning, estimating, budgeting, financ-
ing, funding, managing, and controlling costs so that the project can be completed
within the approved budget
5. Quality management processes to incorporate the organization s quality policy
regarding planning, managing, and controlling quality requirements to meet stake-
holder expectations
6. Resource management processes to identify, acquire, and manage resources
needed to successfully complete the project
7. Communications management processes to ensure timely and appropriate plan-
ning, collection, creation, distribution, storage, retrieval, management, control, mon-
itoring, and ultimate disposition of project information
8. Risk management processes of conducting risk management planning, identifica-
tion, analysis, response planning, response implementation, and monitoring risk on
a project
9. Procurement management processes to purchase or acquire products, services, or
results from outside the project team
10. Stakeholder management processes to identify the people, groups, or organizations,
that could impact or be impacted by the project, analyze their expectations and impact,
and develop strategies for engaging them in project decisions and execution 8
Project Processes There are 49 individual project work processes that are each in a
process group and a knowledge area. Exhibit 1.4 shows the general flow of when each
process occurs during a project if one reads the chart from left to right. For example,
the first two processes are to develop the project charter and identify stakeholders. Both
occur during project initiation. The charter development is part of integration manage-
ment, while stakeholder identification is part of stakeholder management. These pro-
cesses flow from one into another, as shown in the more complete flowchart in the
inside back cover of the text. These processes use inputs and create outputs. Many of
the outputs are project charts and tools that are used to plan and control the project, as
also shown on that complete flowchart. Other outputs are deliverables. A deliverable
is any unique and verifiable product, result, or capability to perform a service that is
produced to complete a process, phase, or project.9
One should remember that all these processes might not be required for all projects.
These PMBOK processes are designed to be all-inclusive and are meant for large and
complex projects.
1-4c The PMI Talent Triangle
PMI research shows that to be a successful project manager, a person needs to develop
knowledge and skills in technical areas, leadership, and strategic business management.
The objectives in this book are grouped first with those core skills and knowledge that
all project management classes would typically cover. Core objectives are those the
authors firmly believe anyone who takes a course in project management should master.
The core objectives include those that the Talent Triangle classifies as technical,
Chapter 1 Introduction to Project Management 11
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EXHIBIT 1.4
FLOWCHART OF PMBOK PROCESSES AND MAJOR OUTPUTS
13.1 Identify
Stakeholders
INITIATINGKNOWLEDGE AREAS
Integration
Scope
Schedule
Cost
Quality
Resources
Communication
Risk
Procurement
Stakeholders
12.1 Plan
Procurement
Management
11.1 Plan
Risk
Management
10.1 Plan
Communications
Management
9.1 Plan
Resource
Management
8.1 Plan
Quality
Management
7.1 Plan
Cost
Management
6.1 Plan
Schedule
Management
5.1 Plan
Scope
Management
Flowchart of PMBOK Processes and
Major Deliverables
4.1 Develop
Project Charter
6.5 Develop
Schedule
5.2 Collect
Requirements
5.4 Create
WBS
5.3 Define
Scope
PLANNING
4.2 Develop Project Management Plan
6.2 Define
Activities
9.2 Estimate
Activity
Resources
11.2 Identify
Risks
11.3 Perform
Qualitative
Risk Analysis
11.4 Perform
Quantitative
Risk Analysis
11.5 Plan
Risk
Responses
13.2 Plan
Stakeholders
Engagement
6.4 Estimate
activity
Durations
7.3 Determine
Budget
7.2 Estimate
Costs
6.3 Sequence
Activities
Section
1.2 Foundational Elements
2.4 Organizational Systems
3.3 The Project Manager’s Sphere of Influence
3.4 Project Manager Competencies
Selecting Projects
12
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11.6 Implement
Risk Responses
13.3 Manage
Stakeholder
Engagement
13.4 Monitor
Stakeholder
Engagement
EXECUTING MONITORING & CONTROLLING CLOSING
4.3 Direct and Manage
Project Work
4.4 Manage Project
Knowledge
4.7 Close Project
or Phase
6.6 Control
Schedule
7.4 Control
Costs
5.6 Control
Scope
5.5 Validate
Scope
8.2 Manage
Quality
9.3 Acquire
Resources
9.4 Develop
Team
9.6 Control
Resources
9.5 Manage
Team
8.3 Control
Quality
10.2 Manage
Communications
11.7 Monitor
Risks
10.3 Monitor
Communications
12.2 Conduct
Procurements
12.3 Control
Procurements
4.6 Perform
Integrated
Change Control
4.5 Monitor and
Control
Project Work
KNOWLEDGE AREAS
Integration
Scope
Schedule
Cost
Quality
Resources
Communication
Risk
Procurement
Stakeholders
Benefits
Analysis
Realizing
Benefits
13
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behavioral, and strategic. More advanced technical objectives appear in some chapters
for professors who wish to teach with a technical approach. More advanced behavioral
objectives are also included in some chapters for professors who wish to emphasize the
behavioral/leadership aspects of project management.
1-4d Selecting and Prioritizing Projects
During the selecting and initiating stage of a project, one of the first tasks leaders must do is to
identify potential projects. Ideally, this is accomplished in a systematic manner not just by
chance. Some opportunities will present themselves. Other good opportunities need to be dis-
covered. All parts of the organization should be involved. For example, salespeople can
uncover opportunities through open discussions with existing and potential customers. Opera-
tions staff members may identify potential productivity-enhancing projects. Everyone in the
firm should be aware of industry trends and use this knowledge to identify potential projects.
Potential projects are identified based on business needs such as capability enhance-
ment, new business opportunities, contractual obligations, changes in strategic direction,
innovative business ideas, replacing obsolete equipment, or adopting new technology.
Once identified, organizations need to prioritize among the potential projects. The best
way to do this is to determine which projects align best with the major goals of the firm.
The executives in charge of selecting projects need to ensure overall organizational priori-
ties are understood, communicated, and accepted. Once this common understanding is in
place, it is easier to prioritize among the potential projects. The degree of formality used in
selecting projects varies widely. Regardless of the company s size and the level of formality
used, the prioritization efforts should include asking the following questions:
What value does each potential project bring to the organization?
Are the demands of performing each project understood?
Are the resources needed to perform the project available?
Is there enthusiastic support both from the external customers and from one or
more internal champions?
Which projects will best help the organization achieve its goals?
One of the popular decision tools used to select projects is an evaluation model based
on selection criteria; these selection criteria, in turn, are based on project attributes, orga-
nizational indices, financial performance attributes, and strategic goals. More sophisticated
tools like decision trees, analytical hierarchical process (AHP), expected net present value,
and other economic evaluation models are sometimes used for project selection.
1-4e Project Goals and Constraints
All projects should be undertaken to accomplish specific goals. Those goals can be described
both by scope and by quality. Scope is a combination of product scope and project scope.
Product scope is the entirety of what will be present in the actual project deliverables.
Project scope is the entirety of what will and will not be done to meet the specified require-
ments. Quality is the characteristics of a product or service that bear on its ability to satisfy
stated or implied needs. 10 Taken together, scope and quality are often called performance
and should result in outputs that customers can be satisfied with as they use them to
effectively do their job. From a client perspective, projects generally have time and cost
constraints. Thus, a project manager needs to be concerned with achieving desired scope
and quality, subject to constraints of time and cost. If the project were to proceed exactly
according to plan, it would be on time, on budget, and with the agreed-upon scope and the
agreed-upon quality.
14 Part 1 Organizing Projects
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AGILE
However, many things can happen as a project is conducted. Obstacles or challenges that
may limit the ability to perform often arise, as do opportunities to exceed original expecta-
tions. A project manager needs to understand which of these four goals and constraints
(scope, quality, time, budget) should take precedence and which can be sacrificed. The proj-
ect manager needs to help the customer articulate how much he wants to enhance achieve-
ment of one of these four dimensions. The customer must also state which dimension he is
willing to sacrifice, by how much, and under what circumstances to receive better achieve-
ment of the other one. For example, on a research and development (R&D) project, a cus-
tomer may be willing to pay an extra $5,000 to finish the project 10 days early. On a church
construction project, a customer may be willing to give up five extra light switches in
exchange for greater confidence that the light system will work properly. Understanding
the customer s desires in this manner enables a project manager to make good project deci-
sions. A project manager can use a project customer trade-off matrix such as the one in
Exhibit 1.5 to reflect the research and development project trade-offs discussed above.
In addition, project plans undergo changes due to uncertainties and unknowns asso-
ciated with the project. These changes must be assessed for their impact on cost and
duration of the project before implementing them.
From an internal perspective, a project manager also needs to consider two more
constraints: the amount of resources available and the decision maker s risk tolerance.
From an Agile perspective, in a given iteration, resources (including cost) and schedule
are considered fixed and what can vary is value to the customer.
1-4f Defining Project Success and Failure
Project success is creating deliverables that include all of the agreed-upon features (meet
scope goals). The outputs should satisfy all specifications and please the project s custo-
mers. The customers need to be able to use the outputs effectively as they do their work
(meet quality goals). The project should be completed on schedule and on budget (meet
time and cost constraints).
Project success also includes other considerations. A successful project is one that is
completed without heroics that is, people should not burn themselves out to complete the
project. Those people who work on the project should learn new skills and/or refine existing
skills. Organizational learning should take place and be captured for future projects. Finally,
the performing organization should reap business-level benefits such as development of
EXHIBIT 1.5
PROJECT CUSTOMER TRADE-OFF MATRIX
ENHANCE MEET SACRIFICE
Cost Pay up to $5,000 extra if it saves 10 days
Schedule Save up to 10 days
Quality Must meet
Scope Must meet
Source: Adapted from Timothy J. Kloppenborg and Joseph A. Petrick, Managing Project Qualify (Vienna, VA:
Management Concepts, 2002): 46.
Chapter 1 Introduction to Project Management 15
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new products, increased market share, increased profitability, decreased cost, and so on.
A contemporary and complete view of project success is shown in Exhibit 1.6.
Project failure can be described as not meeting the success criteria listed in Exhibit
1.6. Many projects are fully successful in some ways but less successful in other aspects.
The goal of excellent project management is to reach high levels of success on all mea-
sures on all projects. Serious project failure when some of the success criteria are
missed by a large amount and/or when several of the success criteria are missed can
be attributed to numerous causes. In each chapter of this textbook, more specific possible
failure causes will be covered, along with how to avoid them, but some basic causes of
failure are as follows:
Incomplete or unclear requirements
Inadequate user involvement
Inadequate resources
Unrealistic time demands
Unclear or unrealistic expectations
Inadequate executive support
Changing requirements
Inadequate planning
1-4g Using Microsoft Project to Help Plan and Measure Projects
A useful tool to capture and conveniently display a variety of important project data is
Microsoft® (MS) Project. MS Project is demonstrated in a step-by-step fashion using screen
shots from a single integrated project throughout the book. If you re using the MindTap prod-
uct for this book, you have access to short videos demonstrating how to use the software.
1-4h Types of Projects
Four ways to classify projects that help people understand the unique needs of each are
by industry, size, understanding of project scope, and application.
CLASSIFYING BY INDUSTRY Projects can be classified in a variety of ways. One
method is by industry, which is useful in that projects in different industries often have
unique requirements. Several industry-specific project life cycle models are in use, and
various trade groups and special interest groups can provide guidance.
EXHIBIT 1.6
PROJECT SUCCESS
Meeting Agreements
Cost, schedule, and specifications met
Customer s Success
Needs met, deliverables used, customer satisfied
Performing Organization s Success
Market share, new products, new technology
Project Team s Success
Loyalty, development, satisfaction
Source: Adapted from Timothy J. Kloppenborg, Debbie Tesch, and Ravi Chinta, 21st Century Project Success Mea-
sures: Evolution, Interpretation, and Direction, Proceedings, PMI Research and Education Conference 2012 (Limer-
ick, Ireland, July 2012).
16 Part 1 Organizing Projects
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AGILE
CLASSIFYING BY SIZE Another method of classifying projects is by size. Large pro-
jects often require more detailed planning and control. Typically, most of the processes
outlined in PMBOK are relevant and applicable for large projects that require a few years
and hundreds of project team members for execution. However, even the smallest pro-
jects still need to use planning and control just in a more simplified manner. For exam-
ple, construction of a multistory building in China would require a highly detailed
construction schedule, but even a much simpler construction project of building a one-
car garage also needs to follow a schedule.
CLASSIFYING BY TIMING OF PROJECT SCOPE CLARITY A third method of classi-
fying projects deals with how early in the project the project manager and team are likely
to be able to determine with a high degree of certainty what the project scope will be. For
example, it may be rather simple to calculate the cubic feet of concrete that are required to
pour a parking lot and, therefore, how much work is involved. At the opposite end of the
spectrum, when developing a new pharmaceutical or developing a new technology, very
little may be determined in the project until the results of some early experiments are
reported. Only after analyzing these early experiment results is it possible to begin estimat-
ing cost and determining the schedule with confidence. For such projects, change is con-
stant and is caused by uncertainty and unknowns associated with these projects.
Consequently, it is important to manage project risks. The planning becomes iterative,
with more detail as it becomes available. In the first case, predictive or plan-driven project
techniques may work well. In the second case, adaptive or change-driven methods to iter-
atively determine the scope and plan for risks may be more important.
Agile methods are increasingly being used when scope clarity emerges slowly.
CLASSIFYING BY APPLICATION For the purpose of this book, we will discuss many
types of projects, such as those dealing with organizational change, quality and produc-
tivity improvement, research and development, information systems, and construction.
Many of these projects include extensive cross-functional work, which contributes to
the challenges associated with managing project teams and the triple constraints of
scope, duration, and cost. Remember, all projects require planning and control. Part of
the art of project management is determining when to use certain techniques, how much
detail to use, and how to tailor the techniques to the needs of a specific project.
1-4i Scalability of Project Tools
Projects range tremendously in size and complexity. In considering construction projects,
think of the range from building a simple carport to building an office tower. In both cases,
one would need to determine the wants and needs of the customer(s), understand the amount
of work involved, determine a budget and schedule, decide what workers are available and
who will do which tasks, and then manage the construction until the owner accepts the project
results. It should be easy to see that while both projects require planning and control, the level
of detail for the carport is a tiny fraction of that for the office tower. In this book, we first
demonstrate concepts and techniques at a middle level and then use a variety of project exam-
ples to demonstrate how to scale the complexity of the techniques up or down.
1-5 Project Roles
To successfully initiate, plan, and execute projects, a variety of executive, management, and
associate roles must be accomplished. Traditional project roles are shown in Exhibit 1.7.
Chapter 1 Introduction to Project Management 17
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In a large organization, a person often fills only one of these roles; sometimes, more than
one person fills a particular role. In small organizations, the same person may fill more
than one role. The names of the roles also vary by organization. The work of each role
must be accomplished by someone. Project managers are successful when they build strong
working relationships with the individuals who execute each of these roles.
1-5a Project Executive-Level Roles
The four traditional project executive-level roles are the sponsor, customer, steering
team, and the project management office. The first executive-level project role is that
of sponsor. A modern definition of executive sponsor is a senior manager serving in a
formal role given authority and responsibility for successful completion of a project
deemed strategic to an organization s success. 11 This textbook expands the sponsor s
role to include taking an active role in chartering the project, reviewing progress
reports, playing a behind-the-scenes role in mentoring, and assisting the project man-
ager throughout the project life, specifically in making critical decisions and supporting
the project team.
The second executive-level project role is that of the customer. The customer needs to
ensure that a good contractor for external projects or project manager for internal pro-
jects is selected, make sure requirements are clear, and maintain communications
throughout the project. In many traditional projects, the sponsor carries out the role of
customer. On many Agile projects, the customer role is quite significant.
The third executive role is the steering or leadership team for an organization. This
is often the top leader (CEO or other officer) and his or her direct reports. From a proj-
ect standpoint, the important role for this team is to select, prioritize, and resource pro-
jects in accordance with the organization s strategic planning and to ensure that accurate
progress is reported and necessary adjustments are made. Another important function of
this executive role is midstream evaluation of projects and portfolios to ensure that they
stay on track and produce expected results.
The fourth executive-level project role is that of project management office (PMO),
which is defined as a management structure that standardizes the project-related gov-
ernance processes and facilitates the sharing of resources, methodologies, tools and
techniques. 12 The PMO work can range from supporting project managers to control-
ling them by requiring compliance to directives in actually managing projects. The
PMO supports projects by mentoring, training, and assisting project teams and pro-
motes enterprise functions such as developing and augmenting processes, creating
and maintaining historical information, and advocating for project management
discipline.
EXHIBIT 1.7
TRADITIONAL PROJECT ROLES
EXECUTIVE ROLES MANAGERIAL ROLES ASSOCIATE ROLES
Sponsor Project Manager Core Team Member
Customer Functional Manager Subject Matter Expert (SME)
Steering Team Facilitator
Project Management Office
18 Part 1 Organizing Projects
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AGILE Agile project management roles are shown in Exhibit 1.8. Most of the same work still
needs to be accomplished in organizations using Agile methods. Some of the work is
performed by different people because of the emphasis on empowering teams, and
some is performed at different times as requirements and scope emerge gradually instead
of just at the project start. Collaborative effort and communication, specifically with the
client, are common features of Agile project teams.
On Agile projects, arguably the most essential role is the customer representative
sometimes called the product owner. This person ensures that the needs and wants of
the various constituents in the customer s organization are identified and prioritized
and that project progress and decisions continually support the customer s desires.
In Agile projects, the customer representative role is so continuous and active that we
show it as both an executive- and managerial-level role. The customer representative
does much of what a sponsor might in traditional projects, but there also may be a des-
ignated sponsor (sometimes known as a product manager) who controls the budget.
A portfolio team often performs much of the work of a traditional steering team, and
a similar office that may be titled differently such as Scrum office performs much of
the work of a project office.
1-5b Project Management-Level Roles
The most obvious management-level role is the project manager. The project manager is
the person assigned by the performing organization to lead the team that is responsible
for achieving the project objectives. 13 The project manager is normally directly account-
able for the project results, schedule, and budget. This person is the main communicator,
is responsible for the planning and execution of the project, and works on the project from
start to finish. The project manager often must get things done through the power of influ-
ence since his or her formal power may be limited. The contemporary approach to project
management is to lead in a facilitating manner to the extent possible.
Another key management role is the functional manager (sometimes called a resource
manager). Functional managers are the department or division heads the ongoing man-
agers of the organization. They normally determine how the work of the project is to be
accomplished, often supervise that work, and often negotiate with the project manager
regarding which workers are assigned to the project.
The third managerial role is that of facilitator. If the project is complex and/or con-
troversial, it sometimes makes sense to have another person help the project manager
with the process of running meetings and making decisions.
EXHIBIT 1.8
AGILE PROJECT ROLES
EXECUTIVE ROLES MANAGERIAL ROLES ASSOCIATE ROLES
Customer (product owner) Customer (product owner) Team Member
Sponsor (product manager) Scrum Master
Portfolio Team Functional Manager
Project Management/Scrum Office Coach
Chapter 1 Introduction to Project Management 19
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AGILE
AGILE
On Agile projects, the customer representative or product owner works with the team on
a continuous basis, often performing some of the work a project manager might on a
traditional project. The Scrum Master serves and leads in a facilitating and collaborative
manner. This is a more limited, yet more empowering role than the traditional project
manager. The functional manager has a similar, but sometimes more limited, role than
the traditional department head. Many organizations using Agile also have a coach who
acts as a facilitator and trainer.
1-5c Project Associate-Level Roles
The project team is composed of a selected group of individuals with complimentary
skills and disciplines who are required to work together on interdependent and interrelated
tasks for a predetermined period to meet a specific purpose or goal. 14 In this book, these
individuals are called core team members. The core team, with the project manager, does
most of the planning and makes most of the project-level decisions.
The temporary members who are brought on board as needed are called subject mat-
ter experts.
The team members in Agile projects are assigned fulltime as much as possible, so there are
few subject matter experts. The teams are self-governing, so they perform many of the plan-
ning and coordinating activities that a project manager would typically perform. Small and
co-located teams often characterize Agile projects, and they work closely together.
1-6 Overview of the Book
Contemporary project management blends traditional, plan-driven, and contemporary
Agile approaches. It is integrative, iterative, and collaborative. Project management is
integrative since it consists of the 10 knowledge areas and the 5 process groups
described in the PMBOK® Guide, and one must integrate all of them into one coherent
and ethical whole. Project management is iterative in that one starts by planning at a
high level and then repeats the planning in greater detail as more information becomes
available and the date for the work performance approaches. Project managers need to
balance planning, control, and agility. Project management is collaborative since there
are many stakeholders to be satisfied and a team of workers with various skills and
ideas who need to work together to plan and complete the project. With these thoughts
of integration, iteration, and collaboration in mind, this book has four major parts:
Organizing and Initiating Projects, Leading Projects, Planning Projects, and Perform-
ing Projects.
1-6a Part 1: Organizing and Initiating Projects
Part 1 consists of three chapters that deal with organizing for and initiating projects.
CHAPTER 2 Chapter 2 covers project selection and prioritization. This includes both
internal projects, which should be selected in a manner consistent with the strategic
planning of the organization, and external projects. It also explains how to respond to
requests for proposals.
CHAPTER 3 Chapter 3 discusses chartering projects. The project charter is a docu-
ment issued by the project initiator or sponsor that formally authorizes the existence of
a project and provides the project manager with the authority to apply organizational
20 Part 1 Organizing Projects
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resources to project activities. 15 The charter can further be considered an agreement by
which the project sponsor and project manager (and often the project core team) agree
at a high level what the project is, why it is important, key milestone points in the sched-
ule, major risks, and possibly a few other items. It allows the project manager and core
team to understand and agree to what is expected of them.
Finally, Microsoft Project, a tool that facilitates effective project planning, controlling,
and communicating, is introduced. Microsoft Project is utilized in eight chapters to dem-
onstrate how to automate various project planning and control techniques. The examples
and illustrations in this book use Microsoft Project 2016. If a person is using an earlier
version of Microsoft Project, there are slight differences. If a person is using a competing
project scheduling package, the intent remains the same, but the mechanics of how to
create certain documents may differ.
1-6b Part 2: Leading Projects
Part 2 consists of three chapters on leadership aspects of projects.
CHAPTER 4 Chapter 4 focuses on organizational structure, organizational culture,
project life cycle, and project management roles of the parent organization. The orga-
nizational structure section describes ways an organization can be configured and the
advantages and disadvantages of each in regard to managing projects. Next covered is
the culture of the parent organization and the impact it has on the ability to effectively
plan and manage projects. The industry and type of project often encourage managers
to select or customize a project life cycle model. The roles covered include executive-,
managerial-, and associate-level responsibilities that must be performed. The demands
of each role are explained, along with suggestions for how to select and develop people
to effectively fill each role, considering both the role and the unique abilities and inter-
ests of each person.
CHAPTER 5 Chapter 5 describes how to carry out the project work with a project team
in order to accomplish the project objectives. The project manager needs to simultaneously
champion the needs of the project, the team, and the parent organization. The project
manager manages the people side of the project by effectively using the stages of project
team development, assessing and building the team members capability, supervising their
work, managing and improving their decision making, and helping them maintain enthu-
siasm and effective time management. Project managers guide their team in managing and
controlling stakeholder engagement.
CHAPTER 6 Chapter 6 begins by identifying the various project stakeholders, their
wants and needs, and how to prioritize decisions among them. Chapter 5 also includes
communications planning for the project because poor communication can doom an
otherwise well-planned and well-managed project. The information needs of each stake-
holder group should be included in the communications plan.
1-6c Part 3: Planning Projects
Part 3 includes six chapters dealing with various aspects of project planning.
CHAPTER 7 Chapter 7 shows how to determine the project scope and outline it in the
work breakdown structure (WBS). The WBS is deliverable-oriented hierarchical
decomposition of the work to be executed by the project team to accomplish the project
objectives and create the required deliverables. 16
Chapter 1 Introduction to Project Management 21
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The WBS is a document that progressively breaks the project down into its compo-
nents so that each piece can be described as a deliverable for which one person can plan,
estimate the costs, estimate the time, assign resources, manage, and be held accountable
for the results. This is a critical document since it is the foundation for most of the other
planning and control activities. The chapter ends with instructions on putting a WBS
into Microsoft Project.
CHAPTER 8 Chapter 8 deals with scheduling projects. The project schedule is an
output of a schedule model instance that presents the time-based information required
by the communication plan, including activities with planned dates, durations, mile-
stone dates, and resource allocation.17 This chapter starts with background information
on project scheduling and then covers construction of schedules by defining activities,
determining the order in which they need to be accomplished, estimating the duration
for each, and then calculating the schedule. Chapter 8 also includes instructions on
how to interpret a project schedule; clearly communicate it using a bar chart called a
Gantt chart; and use Microsoft Project to construct, interpret, and communicate proj-
ect schedules.
CHAPTER 9 Chapter 9 demonstrates how to schedule resources on projects: determin-
ing the need for workers, understanding who is available, and assigning people. All of the
techniques of resourcing projects are integrated with the behavioral aspects of how to
deal effectively and ethically with the people involved. Resource needs are shown on a
Gantt chart developed in Chapter 8, the responsibilities are shown as they change over
time, conflicts and overloads are identified, and methods for resolving conflicts are intro-
duced. Alternative approaches for creating and compressing schedules are shown. Many
of the techniques in this chapter are also shown with MS Project.
CHAPTER 10 Chapter 10 discusses the project budget, which is dependent on both the
schedule and the resource needs developed in the previous two chapters. The project
budget is The sum of work package cost estimates, contingency reserve, and manage-
ment reserve.18 Cost planning, estimating, budgeting, establishing cost control, and
using MS Project for project budgets are all included.
CHAPTER 11 Chapter 11 starts with establishing a risk management plan. It covers
methods for identifying potential risks and for determining which risks are big enough
to justify specific plans for either preventing the risk event from happening or dealing
effectively with risk events that do happen. Finally, in risk response planning, strategies
for dealing with both positive risks (opportunities) and negative risks (threats) are
discussed.
CHAPTER 12 Chapter 12 begins with a discussion of how modern project quality con-
cepts have evolved. Then it deals with core project quality demands of stakeholder satis-
faction, empowered performance, fact-based management, and process management.
The third topic of this chapter is developing the project quality plan. Next, the chapter
describes various quality improvement tools for projects.
Since Chapter 12 is the last planning chapter, it concludes with a method of integrating
the various sections developed in the previous chapters into a single, coherent project plan.
Conflicts that are discovered should be resolved, judgment needs to be applied to ensure
that the overall plan really makes sense, and one or more kickoff meetings are normally
held to inform all of the project stakeholders and to solicit their enthusiastic acceptance
of the plan. At this point, the project schedule and budget can be baselined in MS Project.
22 Part 1 Organizing Projects
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While bits of the project that might have caused delays if they were not started early may
already be in progress, the formal kickoff is the signal that the project is under way!
1-6d Part 4: Performing Projects
Part 3 includes three chapters that deal with performing the project.
CHAPTER 13 Chapter 13 begins by introducing relevant supply chain concepts such as
a supply chain view of projects, the components that form a supply chain, factors to con-
sider when dealing with a supply chain, and methods of improving the performance of a
supply chain. Make-or-buy analysis and contract types lead the reader through procure-
ment planning. Identifying and selecting sellers lead into managing contracts to assure
receipt of promised supplies and services according to contractual terms. The chapter
ends with advantages and requirements of effective project partnering.
CHAPTER 14 While the project work is being performed, the project manager needs
to determine that the desired results are achieved the subject of Chapter 14. Monitor
and control project work is defined as the process of tracking, reviewing, and report-
ing the progress to meet the performance objectives defined in the project management
plan. 19 This starts with gathering performance data already identified during project
initiating and planning. The actual performance data are then compared to the desired
performance data so that both corrective and preventive actions can be used to ensure
that the amount and quality of the project work meet expectations. MS Project can be
used for this progress reporting and for making adjustments. Earned value analysis is
used to determine exactly how actual cost and schedule progress are compared with
planned progress. Overcoming obstacles, managing changes, resolving conflicts, repri-
oritizing work, and creating a transition plan all lead up to customer acceptance of the
project deliverables.
CHAPTER 15 Chapter 15 deals with finishing projects and realizing benefits. Close
project or phase is defined as all the work needed to formally close a project or phase.
This chapter includes a section on terminating projects early, in case either the project is
not doing well or conditions have changed and the project results are no longer needed,
and a section on timely termination of successful projects. Topics include how to secure
customer feedback and use it along with the team s experiences to create lessons learned
for the organization; reassign workers and reward those participants who deserve recog-
nition; celebrate success; perform a variety of closure activities; and provide ongoing sup-
port for the organization that is using the results of the project. Finally, after the project
deliverables have been used for some time, an assessment should determine if the prom-
ised benefits are being realized.
PMP/CAPM Study Ideas
Everything in this book is designed to mirror and explain the content in the latest
edition the sixth of the Guide to the Project Management Body of Knowledge
(PMBOK), the international standard produced by the Project Management Institute
(PMI). Not only will the content and questions in this book help you learn the best prac-
tices for managing and executing projects, but they will also help you prepare for one of
the licensing exams if you choose to pursue a project management credential such as the
CAPM or PMP. More information on these and other PMI certifications can be found at
www.pmi.org/certifications/types.
Chapter 1 Introduction to Project Management 23
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While either of these credentials can open doors for you professionally, the effort
needed to acquire them should not be underestimated. In addition to work and educa-
tion requirements (specified at the website noted above), you will need to pass an online
test consisting of 150 (CAPM) or 200 (PMP) questions, respectively. PMI does not pub-
lish the exact pass rates of either of these tests, but they are designed to be difficult. It
will not be enough for you to just memorize knowledge areas, process groups, and inputs
and outputs; rather, you will need a solid understanding of each of these in order to
answer higher-level thinking questions of a wide variety. In this book, we will provide
dozens of questions in each chapter for you to use as a guide.
Summary
A project is an organized set of work efforts undertaken
to produce a unique output subject to limitations of
time and resources such as materials, equipment,
tools, and people. Since the world is changing more
rapidly than in the past, many people spend an increas-
ing amount of their working time on projects. Project
management includes work processes that initiate,
plan, execute, monitor, control, and close project
work. During these processes, trade-offs must be
made among the scope, quality, cost, and schedule, so
that the project results meet the agreed-upon require-
ments, are useful to the customers, and promote the
organization.
All projects, regardless of size, complexity, or appli-
cation, need to be planned and managed. While the
level of detail and specific methods vary widely, all pro-
jects need to follow generally accepted methods. PMI is
a large professional organization devoted to promoting
and standardizing project management understanding
and methods. One of PMI s standards, A Guide to the
Project Management Body of Knowledge (PMBOK®
Guide), is composed of five process groups: initiating,
planning, executing, monitoring and controlling, and
closing; along with ten knowledge areas: integration,
scope, schedule, cost, quality, resources, communica-
tions, risk, procurement, and stakeholders.
To successfully initiate, plan, and execute projects,
two more things are needed. One is to understand what
project success is and what drives it, along with what
project failure is and its major causes. The other is an
understanding of the various executive-, managerial-,
and associate-level roles in project management. This
book is organized to be useful to students who will
enter a variety of industries and be assigned to projects
of all sizes and levels of complexity. Students will learn
how to understand and effectively manage each of
these process groups and knowledge areas. Microsoft
Project 2016 is used in eight chapters to illustrate
how to automate various planning, scheduling, resour-
cing, budgeting, and controlling activities. All defini-
tions used are from the PMBOK Guide, sixth edition.
This book follows a chronological approach through-
out a project s life cycle, emphasizing knowledge and
skills that lead to project success.
Key Terms Consistent with PMI Standards and Guides
The glossary in this book uses terms as defined in various Project Management Institute guides and standards
where they are distinct. The glossary also uses commonly understood definitions where terms are standard.
project, 4
stakeholders, 4
project management, 4
soft skills, 7
hard skills, 7
functional manager, 7
project life cycle, 7
project management process group, 10
initiating processes, 10
planning processes, 10
executing processes, 10
monitoring and controlling processes, 10
closing processes, 10
integration management, 11
scope management, 11
schedule management, 11
cost management, 11
quality management, 11
resources management, 11
communications management, 11
24 Part 1 Organizing Projects
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risk management, 11
procurement management, 11
stakeholder management, 11
deliverable, 12
scope, 13
product scope, 13
project scope, 13
quality, 13
sponsor, 16
project management office (PMO), 17
customer, 17
steering or leadership team, 17
project manager, 18
project team, 18
project charter, 19
work breakdown structure (WBS), 20
project schedule, 20
project budget, 20
monitor and control project work, 21
close project or phase, 21
Chapter Review Questions
1. What is a project?
2. What is project management?
3. How are projects different from ongoing
operations?
4. What types of constraints are common to most
projects?
5. What are the three components of the Talent
Triangle?
6. At what stage of a project life cycle are the major-
ity of the hands-on tasks completed?
7. During which stage of the project life cycle are
loose ends tied up?
8. What are the five process groups of project
management?
9. Which process group defines a new project or
phase by obtaining authorization?
10. What are the 10 project management knowledge
areas?
11. What two project dimensions are components of
project performance?
12. How do you define project success?
13. How do you define project failure?
14. List four common causes of project failure.
15. What are three common ways of classifying
projects?
16. What is predictive or plan-driven planning, and
when should it be used?
17. What is adaptive or change-driven planning, and
when should it be used?
18. What makes someone a project stakeholder?
19. What are the three project executive-level roles?
20. List and describe each of the managerial and
associate project roles.
Discussion Questions
1. Using an example of your own, describe a project
in terms that are common to most projects.
2. Why are more organizations using project man-
agement? If you were an executive, how would
you justify your decision to use project manage-
ment to the board of trustees?
3. Explain how to scale up or down the complexity
of project planning and management tools and
what effect, if any, this might have on the project
life cycle.
4. List and describe several issues that pertain to
each stage of the project life cycle.
5. Put the five project management process groups
in order from the one that generally requires the
least work to the one that requires the most.
6. Name the 10 project management knowledge
areas, and briefly summarize each.
7. Discuss how a project could be successful in
terms of some measures yet unsuccessful by
others.
8. What does project failure mean? What are some
examples?
9. Compare and contrast advantages and disadvan-
tages of predictive/plan-driven and adaptive/
change-driven project life cycle approaches.
10. You are given a project to manage. How do you
decide whether to use a predictive or adaptive
approach?
11. Contrast project managers and functional managers.
12. List as many project roles as you can, and iden-
tify what each one is responsible for in terms of
the project.
Chapter 1 Introduction to Project Management 25
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PMBOK ® Guide Questions
The purpose of these questions is to help visualize the type of questions on PMP and CAPM exams.
1. Which project role provides resources or support
for the project, promotes and protects the project
at higher levels of management, and takes an
active role in the project from the chartering
stage through project closure?
a. functional manager
b. project manager
c. project team member
d. project sponsor
2. Which PMBOK® Guide Knowledge Area
includes those processes required to ensure that
the project includes all the work required, and
only the work required, to complete the project
successfully?
a. cost management
b. scope management
c. risk management
d. quality management
3. In order to be successful, the project team must
be able to assess the needs of stakeholders and
manage their expectations through effective
communications. At the same time, they must
balance competing demands among project
scope, schedule, budget, risk, quality, and
resources, which are also known as project
.
a. plan elements
b. deliverables
c. constraints
d. targets
4. Projects pass through a series of phases as they
move from initiation to project closure. The
names and number of these phases can vary sig-
nificantly depending on the organization, the
type of application, industry, or technology
employed. These phases create the framework
for the project, and are referred to collectively
as the .
a. project life cycle
b. project management information system
(PMIS)
c. product life cycle
d. Talent Triangle
5. Based on PMI s definition, which of these is a
good example of a project?
a. manufacturing a standard commodity
b. following policies and procedures for procur-
ing an item
c. designing and launching a new website
d. using a checklist to perform quality control
6. When would a predictive project life cycle be the
preferred approach?
a. when the high-level vision has been devel-
oped, but the product scope is not well
defined
b. when the environment is changing rapidly
c. when the product to be delivered is well
understood
d. when the product will be created through a
series of repeated cycles
7. To be effective, a project manager needs to pos-
sess all of the following competencies except
.
a. personal effectiveness attitudes, core per-
sonality traits, leadership
b. authority power or right granted by the
organization
c. performance what project managers can
accomplish while applying their project man-
agement knowledge
d. knowledge of project management
understanding of project management
tools and techniques
8. In Adaptive Life Cycles (change-driven or Agile
methods), .
a. the overall scope of the project is fixed, and
the time and cost are developed
incrementally
b. the overall cost is fixed, and the project scope
and schedule are developed iteratively
c. the time and cost are fixed, but the scope is
developed iteratively
d. change control is very important
9. The two traditional project management
associate-level roles are different in each of the
following ways except .
a. duration of time spent on project
b. ability to work within project constraints
c. degree of input contributed to project planning
d. skill set
26 Part 1 Organizing Projects
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10. A freelance project manager is brought in by
Company X to lead a large, expensive project.
This project manager has excellent leadership
skills and a strong technical understanding of
the project. In order for her to optimize every
component of the Talent Triangle, what might
be a good activity for the project manager at
the start of her time with Company X?
a. familiarize herself with the long-term objec-
tives of Company X
b. host an icebreaker for all team members
c. attend a seminar on advanced leadership
techniques
d. send an email including her résumé to all
SMEs to ensure they are aware of her techni-
cal background
I N T E G R A T E D E X A M P L E P R O J E C T S
We will use two example projects throughout all 15 chapters
of this book. One will be a construction project suited to
mostly traditional project planning and management. The
other will be a development project suited more toward
Agile project planning and management. In this chapter, we
will introduce both of them. In subsequent chapters, we will
choose one to demonstrate techniques and concepts from
the chapter and ask leading questions of the other one. We
will alternate chapters so professors can choose to use the
questions as assignments if they wish.
SUBURBAN HOMES CONSTRUCTION PROJECT
Purchasing a new home is the single largest investment most
of us will make in our lifetime. You can either purchase the
home from a reputed real estate building company or manage
the construction of your home using project management
principles that you have mastered. The latter approach can
save significant amounts of money over the life of a typical
30-year mortgage. Additionally, it is likely to provide you with
one of the most satisfying experiences in your life because
you will get an opportunity to see the results of choices you
made in building your home.1 However, on the downside, if
you manage the project poorly, it also has the potential on
many levels to be a disaster.
The experience of managing the construction of a
single-family home provides a coherent account of costs,
benefits, other considerations related to construction,
risks, hazards, and critical decisions. The experience also
has the potential for joy if the project is a successful
endeavor.
Suburban Homes is a medium-sized, fast-growing con-
struction company in the Midwest region of the United
States. Due to its significant growth and good reputation for
building quality single-family homes and townhomes, the
company decided to expand its business to several Southern
states in the United States. However, Suburban Homes rec-
ognized the scope for managing resources effectively and
efficiently to increase profits. It has decided to formalize proj-
ect management practices by developing and implementing
standard and promising processes, tools, and techniques.
For this purpose, the company was looking for a competent
project manager to manage its projects. They hired Adam
Smith as their new project manager.
Adam Smith had worked for several years in the construc-
tion industry and supplemented his experience with project
management education. Consequently, he gained considerable
experience and developed expertise in managing construction
projects. Adam believes in managing projects by adhering to
various project management processes, tools, and techniques.
In his new position as the project manager, Adam s primary
task is to improve the performance of project management
and increase the project success rate.
What advice would you offer to Adam Smith?
1Suprick J. and Anantatmula V. (2010).
Chapter 1 Introduction to Project Management 27
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Semester Project Instructions
This book is designed to give your professors the option
to have you practice the concepts and techniques from
each chapter on a real project. Often, the project chosen
will be for a nonprofit group of some kind such as a
United Way agency, a church, or a school. The project
could, however, be for a company or a part of the uni-
versity. The semester project can often be one that sev-
eral students will be assigned to work on as a team.
Each chapter provides suggested assignments to
practice project management skills on the real or
potential project you are using. Depending on the
emphasis your professor chooses, you may need to per-
form some, most, or all of these assignments. At a min-
imum, your professor will probably assign the charter,
work breakdown structure, and schedule.
In any case, each of the following chapters prompts
you to perform various activities to plan and execute
the project. At some point in the first couple of weeks,
your professor will probably invite at least one repre-
sentative from each organization to your class to intro-
duce their project and to meet you. We will call these
persons sponsors and define their role more fully in
Chapter 3. Since this first chapter is a broad introduc-
tion to project management, your task for the
Chapter 1 sample project may be just to familiarize
yourself with your new student team, your sponsor,
your sponsor s organization, and the overall direction
of your project. If you have enough input from your
sponsor, your professor may also ask you to create a
customer trade-off matrix, as shown in Exhibit 1.6
and/or a definition of success for your project, as in
Exhibit 1.7. Your professor also may ask you to answer
certain specific and/or open-ended questions concern-
ing your newly assigned project.
Subsequent chapters give you more in-depth tools to
acclimate you to your project, the organization you will
be working for, and the various stakeholders who have
an interest in the project. For example, in the next chap-
ter, you learn how project selection flows from an orga-
nization s strategic planning, and you should seek to
learn why this project was chosen and how it supports
the strategic goals of the organization.
CASA DE PAZ DEVELOPMENT PROJECT
Casa de Paz is an intentional community supporting the trans-
formative journey of recovery for Latina women and their chil-
dren. It is a 501(c)(3) nonprofit organization that is just starting.
The vision is to create a communal living space for multiple
Latina women and their children. The women and their chil-
dren also would have access to a variety of service providers
in the form of graduate students living in the same building.
Two possible buildings have been identified. Some of the
many things that need to take place for this vision to become
a reality are board and working group structuring, fundraising,
accountancy, promotion, website development, community
relations development, building purchase and renovation, pro-
gram development, legal services, educational advocacy, and
English as a Second Language (ESL) tutoring, among others.
While every project has trade-offs, success on this project will
be measured more on the creation of a safe environment with
needed services than on cost and schedule.
Casadepazcinci.org
Why Is This Project So Important?
Hundreds of thousands of people are fleeing violence in
their home countries. In the United States, many of them
come from Latin America. Often, they lack communities
for support and integration as they transition from their
countries of origin. In addition, many face many obsta-
cles to stability and flourishing. How would you put
your life back together if you were a mother fleeing vio-
lence in your country of origin, and once in a new coun-
try, that same violence continues in your new home?
Few spaces offer stability and encouragement in such
circumstances, much less cultural sensitivities and pro-
fessional services to facilitate the transformation to self-
sufficiency and success. Casa de Paz/House of Peace is
an intentional community that encourages and draws out
women s resilience both by meeting them where they
are and providing time and space to heal, recover, and
grow. Most shelters for women and children are tempo-
rary; the average stay is seven to twelve days. Casa de
Paz provides up to six months of stability, community,
and professional services to support women s growth
along a continuum of self-sufficiency matrixes. It is a
community that recognizes women s dignity and cele-
brates each step toward the realization of their gifts as
human beings.
28 Part 1 Organizing Projects
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PROJECT M ANAGEM ENT IN ACTION
Using Appreciative Inquiry to Understand Project Management
Each project creates a unique product, service,
or result that certain stakeholders desire. Project
success requires understanding stakeholder require-
ments, clarifying project expectations, and agreeing
upon project scope. As such, it is imperative to iden-
tify relevant stakeholders and to have a constructive
engagement with them. One tool that is helpful for
allowing such engagement and for navigating through
complexities is appreciative inquiry (Al).
What Is Appreciative Inquiry?
The principles: Appreciative inquiry (AI) is a positive
philosophy for change, wherein whole systems
convene to inquire for change (Cooperrider, 2003).
AI recognizes the power of the whole and builds on
conversational learning that emerges out of the whole.
It operates on the belief that human systems move in
the direction of their shared image and idea of the
future, and that change is based on intentional and
positive inquiry into what has worked best in the past.
In this sense, AI suggests that human organizing and
change are a relational process of inquiry that is
grounded in affirmation and appreciation. Typically, the
process works its way through the four phases of Dis-
covery, Dream, Design, and Delivery (Conklin, 2009).
Implications of AI on Defining
Project Scope
Project success partially depends upon identifying key
stakeholders: eliciting their true wants and needs to
determine project scope; and keeping them appropri-
ately engaged throughout the entire project. The early
involvement is critical because it lays out clear goals
and boundaries of project scope. However, eliciting
accurate responses may be difficult, especially since
many projects may be planned and conducted in an
atmosphere of uncertainty. The ongoing involvement
helps to ensure stakeholders know what they will get
from the project and will be pleased.
Appreciative inquiry is a tool that may assist proj-
ect stakeholders to navigate through their inquiries via
positive conversations. For example, a typical process
may look like this:
Discovery (What has been?): This phase inquires
into and discovers the positive capacity of a group,
organization, or community. People are encouraged to
use stories to describe their strengths, assets, peak
experiences, and successes to understand the unique
conditions that made their moments of excellence
possible. In this step, stakeholders reflect on the past
to recollect instances when they believed they could
clearly articulate their true needs and wants; and
when their needs and wants were folded into the
project scope. Through storytelling, they collectively
discover the process of project selection and prioriti-
zation and articulate a gauge of project success. As
they discuss, they start generating a dense web of
understanding an understanding and an apprecia-
tion of all their capacities that make moments of
excellence possible. Agile projects use a similar
method of storytelling to understand user require-
ments and ultimately define project scope.
Dreaming (What could be?): Building on the
moments of excellence of the participants, this phase
encourages the participants to imagine what would
happen if their moments of excellence were to
become a norm. Participants dream for the ideal con-
ditions and build hope and possibility of an ideal
future. As people share their stories, the focus of the
process now shifts to dreaming of a perfect, desirable
state for the stakeholders. Through this journey, the
goal should be to enable the participants to build
positive energy around their strengths and also to
dream about the direction in which they feel comfort-
able moving.
Delivery:
What will
be?
Discovery:
What has
been?
Design:
What
should be?
Dream:
What
could be?
Chapter 1 Introduction to Project Management 29
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References
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Cooper, Robert G., Winning at New Products: Path-
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https://asq.org/quality-resources/quality-glossary/q,
accessed February 6, 2017.
Designing (What should be?): This phase creates
design principles that will help the participants real-
ize their dream. Participants are encouraged to
stretch their imagination to move the system from
where it currently is to where the participants want it
to be. At this stage, the participants should be
encouraged to imagine a perfect world without any
constraints. Therefore, if there were no resource
constraints, what would the scope of the project look
like?
Delivery (What will be?): In this phase, participants
are encouraged to think of the various subsystems
that should take the responsibility of the design phase
to sustain the design from the dream that it discov-
ered (Cooperrider et al., 2003, p. 182). In this phase,
various stakeholders are encouraged to decide what
they will be committing themselves to.
Key Outcome
Going through this entire process allows stakeholders
to elicit and articulate their expectations from the
project. Stakeholders also have a better understand-
ing of how their needs and wants link to and lead
them to a desirable future state. Finally, in order to
sustain their dream, their commitment is clearly artic-
ulated. As stakeholders commit themselves to specific
endeavors on the project, they will implicitly revisit the
opportunities and cost that lay ahead of them, which
allows stakeholders to draw a realistic boundary
around their commitment to the project.
Projects are temporary and unique and may have
shifting boundaries over time. The process of engag-
ing stakeholders via appreciative inquiry (AI) is an
effective way to address the ambiguity and uncer-
tainty in project management.
Source: Rashmi Assudani, Associate Professor and Chair, Department of Management and Entrepreneurship, Williams College of Business, Xavier Uni-
versity. Adapted from Conklin, T. A., Creating Classrooms of Preference: An Exercise in Appreciative Inquiry. Journal of Management Education 33 (6)
(2009): 772 792. Cooperrider, D. L., D. Whitney, and J. M. Stavros, Appreciative Inquiry Handbook (Bedford Heights, OH: Lakeshore, 2003).
30 Part 1 Organizing Projects
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Endnotes
1. https://www.smartsheet.com/comprehensive-guide
-values-principles-agile-manifesto, accessed Decem-
ber 1, 2016.
2. Wikipedia https://en.wikipedia.org/wiki/Functional_
manager, accessed February 6, 2017.
3. PMI Lexicon of Project Management Terms
Version 3.0, 2015 (Newtown Square, PA): 9.
4. Robert G. Cooper, Winning at New Products:
Pathways to Profitable Innovation, Proceedings
(2006).
5. http://www.pmi.org/pmbok-guide-standards/
foundational, accessed February 6, 2017.
6. Project Management Institute, A Guide to
the Project Management Body of Knowledge
(PMBOK® Guide), 6th ed. Exposure Draft.
(Newtown Square, PA: Project Management
Institute, 2017): 15.
7. Ibid.
8. PMI Lexicon of Project Management Terms
Version 3.0, 2015 (Newtown Square, PA): 7.
9. PMI Lexicon of Project Management Terms
Version 3.0, 2015 (Newtown Square, PA): 7.
10. https://asq.org/quality-resources/quality-glossary/q,
accessed February 6, 2017.
11. Dawne E. Chandler and Payson Hall, Improving
Executive Sponsorship of Projects: A Holistic
Approach, 2017 (New York: Business Expert
Press): 1.
12. PMI Lexicon of Project Management Terms
Version 3.0, 2015 (Newtown Square, PA): 13.
13. Ibid.
14. Vittal S. Anantatmula, Project Teams: A Structured
Developmental Approach, 2016, New York: Business
Expert Press, 9.
15. PMI Lexicon of Project Management Terms
Version 3.0, 2015 (Newtown Square, PA): 5.
16. Project Management Institute, Practice Standard
for Work Breakdown Structures 2nd ed., 2006
(Newtown Square, PA): 121.
17. Project Management Institute, Practice Standard
for Scheduling 2nd ed., 2011 (Newtown Square,
PA): 138.
18. PMI Lexicon of Project Management Terms
Version 3.0, 2015 (Newtown Square, PA): 8.
19. Project Management Institute, A Guide to the Proj-
ect Management Body of Knowledge (PMBOK®
Guide), 6th ed. Exposure Draft. (Newtown Square,
PA: Project Management Institute, 2017): 15.
Chapter 1 Introduction to Project Management 31
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C H A P T E R 2
Project Selection and Prioritization
With the development of a new five-year strategic plan, significant financial growth,
and a major reorganization, Living Arrangements for the Developmentally Disabled
(LADD) found itself overwhelmed with tasks and at a point that required the thought-
ful selection and prioritization of projects. Prior strategic plans were largely dictated
by the former executive director, created in a silo of sorts. It was through the intro-
duction of a new executive director to LADD and complete new leadership at the
management level that an opportunity presented itself for new, cross-department
collaboration, innovative methods to carry out established practices, and the ability
to identify and draw on the strengths of the individual members of the team.
LADD is a medium-sized nonprofit corporation that is mission focused and
considered a leader in the field of supporting individuals with developmental dis-
abilities. Its efforts reach beyond day-to-day functions and extend in large part to
awareness, advocacy, and action. With the sponsorship of a national film festival
focused on disabilities and its work in the civic and government sectors at local
and national levels, LADD has been able to influence positive change in legisla-
tion and the inclusion of people with disabilities at all levels of society.
CHAPTER OBJECTIVES
After completing this
chapter, you should
be able to:
CORE OBJECTIVES:
Explain in your own
words the strategic
planning and portfolio
management
processes.
Describe how to
select, prioritize, and
resource projects
as an outgrowth of
strategic planning.
From a contractor s
viewpoint, describe
how to secure
projects.
TECHNICAL OBJECTIVES:
Compare the
strengths and weak-
nesses of using
financial and scoring
models to select
projects.
Given organizational
priorities and several
projects, demonstrate
how to select and
prioritize projects
using a scoring
model.
BEHAVIORAL OBJECTIVES:
Explain the strengths
an organization might
possess that could
improve its ability to
perform projects.
M
on
ke
y
Bu
si
ne
ss
Im
ag
es
/S
hu
tte
rs
to
ck
.c
om
32
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Project selection and prioritization were exactly what LADD needed because
they were trying to maintain pace with a large program and revenue growth
curve, new leadership at the helm, and federal changes in the way services
were to be delivered to those with developmental disabilities. Projects from the
strategic plan were scored based on established value sets that included criteria
such as if the project met the mission, was financially feasible, or strengthened
personal or community relationships.
LADD s strategic plan contains 32 primary goals and many more objectives.
The project selection and prioritization process was a key tool to build a frame-
work that would inspire agency success over the next five years. It is also
anticipated to be a method to reduce program competition and increase under-
standing within the management team as occasions for team development
and departmental collaboration occur. In the end, each step of the process
will lead the agency to achieve its vision of propelling the inclusion and suc-
cess of people with disabilities forward with a positive impact throughout the
community.
Amy Harpenau, Vice President, Living Arrangements
for the Developmentally Disabled.
2-1 Strategic Planning Process
One of the tasks of a company s senior leadership is to set the firm s strategic direction.
Some of this direction setting occurs when an organization is young or is being
revamped, but some needs to occur repeatedly. Exhibit 2.1 depicts the steps in strategic
planning and how portfolio management should be an integral part.
2-1a Strategic Analysis
The first part of setting strategic direction is to analyze both the external and internal
environments and determine how they will enhance or limit the organization s ability
to perform. This strategic analysis is often called strengths, weaknesses, opportunities,
and threats (SWOT). The internal analysis (elements within the project team s control)
consists of asking what strengths and weaknesses the organization possesses. The exter-
nal analysis (elements over which the project team has little or no control) consists of
asking what opportunities and threats are posed by competitors, suppliers, customers,
regulatory agencies, technologies, and so on. The leaders of an organization often need
to be humble and open to ideas that are unpleasant and contradictory to their beliefs
when conducting this analysis. Performed correctly, a strategic analysis can be very illu-
minating and can suggest direction for an organization. An example of SWOT analysis
PMBOK ® 6E COVERAGE
PMBOK ® 6E OUTPUTS
1.2 Foundational Elements Elevator Pitch
Selecting Projects Project Selection and Prioritization Matrix
Project Resource Assignment Matrix
PMBOK® GUIDE
Topics:
1.2 Foundational
Elements
Selecting Projects
CHAPTER OUTPUTS
Elevator Pitch
Project Selection and
Prioritization Matrix
Project Resource
Assignment Matrix
33
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for the Built Green Home at Suncadia is shown in Exhibit 2.2. The Built Green Home at
Suncadia, Washington, was developed using advanced sustainability concepts and a large
degree of stakeholder involvement.
2-1b Guiding Principles
Once the SWOT analysis is complete, the organization s leadership should establish
guiding principles such as the vision and mission. Some organizations break this step
into more parts by adding separate statements concerning purpose and/or values.
Often, these sections are included in the mission. For simplicity s sake, they will be trea-
ted as part of the mission in this book. It is more important to understand the intent of
each portion and achieve it rather than worry about the exact format or names of indi-
vidual portions.
VISION The vision is a one-sentence statement describing the clear and inspirational
long-term, desired change resulting from an organization or program s work.1 A clear
and compelling vision will help all members and all stakeholders of an organization
understand and desire to achieve it. Visions often require extra effort to achieve but are
considered to be worth the effort. Visions are often multiyear goals that, once achieved,
suggest the need for a new vision.
One of the visions most often cited, because it was so clear and compelling, was Pres-
ident John F. Kennedy s goal of placing a man on the moon before the end of the 1960s.
Kennedy set this goal after Russia launched Sputnik and the United States found itself
behind in the space race. His vision was very effective in mobilizing people to achieve
it; further, it rapidly transformed a huge suburban area near Houston into a developed
and sustainable economic and technology zone.
EXHIBIT 2.1
STRATEGIC PLANNING AND PORTFOLIO ALIGNMENT
34 Part 1 Organizing Projects
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A more recent example was in 2009 when hundreds of community leaders in Cleve-
land, Ohio, decided to use a systems approach to guide many interrelated social and eco-
nomic efforts in their region. The vision they stated is, Cleveland and other cities
throughout Northeast Ohio should be green cities on a blue lake. 2 They continue to
use this vision to guide regional leaders as they choose where to invest their time and
resources in bettering the region and life for its residents. They also are currently plan-
ning their 2019 Sustainable Cleveland Summit.3
Increasingly, companies are incorporating the triple bottom line into their vision
statements. This approach emphasizes the social, environmental, and economic health
of the company s stakeholders rather than a narrow emphasis only on the economic
return for shareholders. This stated desire to be a good corporate citizen with a long-
term view of the world can motivate efforts that achieve both economic return for share-
holders and other positive benefits for many other stakeholders.
MISSION STATEMENT The vision should lead into the mission statement, which is
a way to accomplish the vision. The mission statement includes the organization s core
purpose, core values, beliefs, culture, primary business, and primary customers. 3 Several
of these sections may flow together in the mission statement and, sometimes, an overall
statement is formed with expanded definitions of portions for illustration. The rationale
for including each section (either as one unified statement or as separate statements) is
as follows:
By including the organization s purpose, the mission statement communicates why
the organization exists.
By including the organization s core values, a mission statement communicates how
decisions will be made and the way people will be treated. True organizational
EXHIBIT 2.2
SWOT ANALYSIS FOR THE BUILT GREEN HOME AT SUNCADIA
STRENGTHS WEAKNESSES
Green building has a buzz
Seattle has a strong green building community
support
Strong community support
Growth in green building projects that demon-
strate value
Need to provide numbers on green building value
Committed developer and builder
Green building has not reached mainstream
Limited project resources community Distance
away from Seattle Green building is perceived
to be costly
High cost of green projects
OPPORTUNITIES THREATS
Uniqueness of product
Location
Existing thinking on green building and its
niche focus
Community surrounding house Building schedule
Lack of data on green building (wealth) value Community (location)
Rumors
Source: Brenda Nunes, developer, Built Green Home at Suncadia.
Chapter 2 Project Selection and Prioritization 35
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values describe deeply held views concerning how everyone should act especially
when adhering to those values is difficult.
By including beliefs, a mission statement communicates the ideals for which its lea-
ders and members are expected to stand. Beliefs are deeply held and slow to change,
so it is quite useful to recognize them, as they can either help or hinder an organiza-
tion s attempt to achieve its vision.
By including the organization s culture, the mission statement instructs and expects
members to act in the desired manner.
By including the primary business areas, everyone will know in what business the
organization wishes to engage.
By identifying the primary customers, everyone will understand which groups of
people need to be satisfied and who is counting on the organization. The mission
needs to be specific enough in describing the business areas and customers to set
direction, but not so specific that the organization lacks imagination.
An example of a vision and mission statement from Cincinnati Children s Hospital
Medical Center is shown in Exhibit 2.3.
2-1c Strategic Objectives
With the strategic analysis, mission, and vision in place, leaders turn to setting strategic
objectives, which should be the means of achieving the mission and vision. For most
organizations, this strategic alignment of objective setting occurs annually, but some
organizations may review objectives and make minor revisions at three- or six-month
intervals. While the planning is normally performed annually, many of the strategic
objectives identified will take well over one year to achieve. The objectives describe both
short- and long-term results that are desired, along with measures to determine achieve-
ment. Organizations that embrace a triple bottom line in their guiding values will have
objectives promoting each bottom line, and projects that are selected will contribute
toward each. These objectives should provide focus on decisions regarding which
EXHIBIT 2.3
CINCINNATI CHILDREN S HOSPITAL MEDICAL CENTER VISION AND MISSION
Cincinnati Children’s Hospital Medical Center will be the leader
in improving child health.
Cincinnati Children’s will improve child health and transform delivery of care
through fully integrated, globally recognized research, education, and
innovation. For patients from our community, the nation and the world,
the care we provide will achieve the best:
• Medical and quality of life
• Patient and family and
•
today and in the future.
Source: Cincinnati Children s Hospital Medical Center, http://www.cincinnatichildrens.org/about/mission/, accessed
January 9, 2017.
36 Part 1 Organizing Projects
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projects to select and how to prioritize them, since they are an expression of the organi-
zational focus. Many writers have stated that for objectives to be effective, they should be
SMART that is, specific, measurable, achievable, results based, and time specific. 4 An
example of strategic objectives from The Internet Society is shown in Exhibit 2.4.
2-1d Flow-Down Objectives
Once an organization s strategic objectives are identified, they must be enforced. Some
objectives may be implemented by work in ongoing operations. However, projects tend
to be the primary method for implementing many objectives. If the organization is rela-
tively small, leaders may proceed directly to selecting projects at this point. Larger orga-
nizations may elect a different route. If the organization is so large that it is impractical
for the overall leaders to make all project selection decisions, they might delegate those
decisions to various divisions or functions with the stipulation that the decisions should
be aligned with the organization s strategic planning that has taken place to this point.
Regardless of whether the organization is small and the top leaders make all project
selection decisions or whether the organization is large and some of the decisions are
cascaded one or more levels down, several methods of project selection may be used.
2-2 Portfolio Management
Companies that use a strategic project selection process to carefully align projects with
their organizational goals will find they tend to be more successful at completing their pro-
jects and deriving the expected benefits from them. Portfolio management is the central-
ized management of one or more portfolios to achieve strategic objectives.5 The goal of
portfolio management is to achieve the maximum benefit toward the strategic goals of
the company. To accomplish this, executives need to identify, select, prioritize, resource,
and govern an appropriate portfolio of projects and other work. 6 Governing will be cov-
ered in Chapter 14, and all other portfolio management topics will be covered here. Project
success at these companies is measured by how much the project contributes to the orga-
nization s objectives (business needs) as well as the traditional measures of staying within
budget and schedule and achieving the specific technical goals promised at the start of the
project to obtain a desired return on investment.
For ease of understanding how various work is related, many organizations utilize an
approach of classifying portfolios, programs, projects, and subprojects. Not all companies
use all four classifications, but understanding how they are related helps one see where
any particular portion of work fits in the organization.
PORTFOLIO EXAMPLE We are a major national health insurance company. Our
planning approach starts with creating an inventory of project initiatives, which has
been identified by the key business areas. We separate the projects into foundational pillars
EXHIBIT 2.4
INTERNET SOCIETY STRATEGIC OBJECTIVES FOR 2012 2014 PLANNING CYCLE
1. Facilitate and promote policy environments that enable the continued evolution of an open and trusted Internet.
2. Increase the global relevance of collaborative, bottom-up, technical, consensus-based, open standards development.
3. Strengthen Internet Society leadership in Internet Development.
4. Build the visibility and influence of the Internet Society as the trusted source on global Internet issues.
Source: http://www.internetsociety.org/who-we-are/organization-reports-and-policies/internet-society-2015-action-plan, accessed February 7, 2017.
Chapter 2 Project Selection and Prioritization 37
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(operation functions) and develop roadmaps of activities going out six quarters (18
months) as can be seen in Exhibit 2.5. Priority and timing of business need determine
which quarter(s) the project initiatives are developed and implemented. The roadmaps
also include smaller activities called capabilities that are integrated with the project activi-
ties. Each of these foundational pillars aligns with the supporting agile sprint teams and
the backlog of activities gets translated into stories within the sprints. A key role is the
Product Owner who represents the business area and determines which activities (stories)
go into each sprint. There is one Product Owner for each pillar and they are at a Director
level within the organization. The product owner must have a complete understanding of
the organizations strategy and short-term goals of their respective business area.
2-2a Portfolios
Organizations require many work activities to be performed, including both ongoing
operational work and temporary project work. Large organizations often have many pro-
jects underway at the same time. A portfolio is projects, programs, subportfolios, and
operations managed as a group to achieve strategic business objectives. 7 Project portfo-
lios are similar to financial portfolios. In a financial portfolio, efforts are made to diver-
sify investments as a means of limiting risk. However, every investment is selected with
the hope that it will yield a positive return. The returns on each investment are evaluated
individually, and the entire portfolio is evaluated as a whole.
Each project in the portfolio should have a direct impact on the organization. Put
another way, an organization s leaders should identify the organization s future direction
through strategic planning. Then multiple possible initiatives (or projects) can be identi-
fied that might help further the organization s goals. The leaders need to sort through
the various possible projects and prioritize them. Projects with the highest priority
EXHIBIT 2.5
2017 PROJECT & ROADMAP PLANNING
Carry Over – 121 Projects
New Business
Care4U
Claims
Consumer Exp.
Finance, Billing and Enroll.
Provider
Reg/Complince
23
64
9
6
3
10
6
Backlog – 75 Projects
New Business
Care4U
Claims
Consumer Exp.
Finance, Billing and Enroll.
Provider
Reg/Complince
n/a
37
9
3
11
13
2
Dashboard
Initial Draft
Complete
Dashboard
Initial Draft
Complete
Dashboard
In Progress
Dashboard
In Progress
Dashboard
Not Started
Source: Mark Heitkamp, PMP, MBA and appear after the words business area
38 Part 1 Organizing Projects
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should be undertaken first. Organizations typically try to have a sense of balance in their
portfolios; that is, an organization includes in its portfolio:
Some large and some small projects
Some high-risk, high-reward projects, and some low-risk projects
Some projects that can be completed quickly and some that take substantial time to finish
Some projects that serve as efforts to enter new markets and new products or
services and some to improve current products
2-2b Programs
A program is a group of related projects, subprograms, and program activities managed
in a coordinated way to obtain benefits not available from managing them individually. 8
This group of related projects or the program often shares the same goal and requires
similar resources.
Program management is defined as applying knowledge, skills, tools, and techniques
to meet requirements and to obtain predetermined benefits. It is a systematic approach
of aligning multiple components of the program to achieve the program goals while
optimizing the integrated cost, schedule, and effort required to execute the program.
Programs and program management are of great importance, specifically for the govern-
ment and large and multinational corporations.
Programs often last as long as the organization lasts, even though specific projects
within a program are of limited duration. For example, the U.S. Air Force has an engine
procurement program. As long as the Air Force intends to fly aircraft, it will need to
acquire engines. Within the engine program are many individual projects. Some of
these projects are for basic research, some are for development of engines, some are for
purchasing engines, and a few others are for maintaining and improving the perfor-
mance of engines in use. Each project has a project manager, and the entire program
has a program manager. While the project managers are primarily concerned with the
trade-offs associated with cost, schedule, scope, and quality on their individual projects,
the program manager is concerned with making trade-offs between projects for the max-
imum benefit of the entire program. To avoid confusion, programs deal with a specific
group of related projects, while a portfolio deals with all of an organization s projects.
A portfolio can include multiple programs as well as multiple projects.
A program may include components such as portfolios, projects, and subprograms. It
is important to understand comparative analysis of projects, programs, and portfolios.
While the leadership group of a company may make portfolio decisions and delegate
the program management decisions to a program manager, both portfolios and programs
are managed at a level above the typical project manager. For practical purposes, project
managers should attempt to understand how both portfolio and program decisions
impact their projects and then spend most of their efforts focused on their project.
Some of the unique responsibilities of a program manager are leading program activi-
ties in a coordinated way, communicating with internal and external stakeholders, resolv-
ing cost, scope, schedule, risk, and quality across all projects with shared governance, and
managing external and internal factors such as culture and socioeconomic issues. See
Exhibit 2.6 for a comparison of projects, programs and portfolios.
2-2c Projects and Subprojects
Just as a program is made up of multiple projects, a large project may be composed of
multiple subprojects. A subproject is a part of a larger project organized as a project
Chapter 2 Project Selection and Prioritization 39
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itself to make it easier to plan and manage. If the project is quite large, individuals may
be assigned as subproject managers and asked to manage their subproject as a project.
Some of those subproject managers may even work for another company. The project
manager needs to coordinate the various subprojects and make decisions that are best
for the overall project. Sometimes this may require that a particular subproject be sacri-
ficed for the greater good of the project. The relationships among a portfolio, programs,
projects, and subprojects are illustrated in Exhibit 2.7.
EXHIBIT 2.6
COMPARISON OF PROJECTS, PROGRAMS, AND PORTFOLIOS
PROJECTS PROGRAMS PORTFOLIOS
Scope Defined scope
Progressive elaboration
Larger scope
Significant benefits
Organizational scope
Changes with strategic goals
Change Change is norm
Change management
Internal and external
changes
Changes due to external and
internal environment
Plan Detailed plans High-level program plan
Detailed component plan
Create processes
Maintain processes
Monitor Project deliverables Progress of program
components
Strategic changes, risk
Resource allocation
Success Scope quality, cost, time
Customer satisfaction
Needs and benefits
of the program
Investment performance
Benefit realization
Manage Project deliverables
Project team
Program staff and PM
Vision and leadership
Portfolio staff
Adopted from PMI, Standard for Program Management, 3rd ed. (2013): p. 8.
EXHIBIT 2.7
PORTFOLIO, PROGRAM, PROJECT, AND SUBPROJECT RELATIONSHIPS
Company Portfolio
Program Alpha Program Beta
Project
A1
Project
A2
Project 3
Subproject 3.1
Subproject 3.2
40 Part 1 Organizing Projects
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Because projects are frequently performed in a fast-paced environment, it is helpful if
they can be guided by organizational priorities.
The first step is to carefully align potential projects with the parent organization s goals.
While many companies are motivated to align projects with organizational goals for these
benefits, an additional reason for companies that sell to the government is that the Federal
CIO Roadmap states, CIOs are responsible for maintaining and facilitating the imple-
mentation of a sound and integrated IT architecture; monitoring performance of IT pro-
grams; using metrics to evaluate the performance of those programs; and modifying or
terminating programs or projects. 9 This was introduced in the Sarbanes-Oxley require-
ments. All publicly traded companies must now follow certain guidelines that require
some sort of financial decision model for selecting projects for execution.
When managers assess the organization s ability to perform projects and then iden-
tify, select, prioritize, resource, and govern a portfolio of projects and other work that
they believe will help the organization achieve its strategic goals, they are performing
portfolio management. While a team of senior executives may conduct many of the port-
folio management activities, project managers should understand how their specific pro-
jects are aligned with the organization s objectives since they will need to either make or
provide input on many decisions.
When organizations consider their entire portfolio of work, they sometimes envision pro-
jects as means of developing knowledge that can be capitalized upon in ongoing work pro-
cesses to provide profit, as shown in Exhibit 2.8. Furthermore, new knowledge encourages
organizations to be creative and develop new project ideas and knowledge-building projects.
In times when the economy is poor, many companies struggle to get enough business. In
such an environment, some firms might accept almost any work they can get. Even during
bleak economic times, however, one should be careful how internal projects are selected,
since selecting one project limits resources (money, people, etc.) available to other projects.
EXHIBIT 2.8
PORTFOLIO OF PROJECTS AND OPERATIONAL WORK PROCESSES
Little Kn Reliable Kn
Knowledge ContinuumKnowledge Continuum
Examples:
Basic R&D;
Customer Research;
M&A Due Diligence
Examples:
Competitive Strategy;
Product Development;
Market Entry;
Channel Strategy
Inbound Logistics
Operations
Outbound Logistics
Sales and Marketing
Customer Service
Manufacturing
Procurement
Human Resources
Both projects and processes are intertwined to create sustainable value.
Source: Chinta, Ravi, and Timothy J. Kloppenborg, Projects and Processes for Sustainable Organizational Growth,
SAM Advanced Management Journal 75 (3) (Spring 2010): 24.
Chapter 2 Project Selection and Prioritization 41
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During good or bad economic times, people should take the same care and prudence with
external projects and ensure that they are consistent with the organization s goals.
2-2d Assessing an Organization s Ability to Perform Projects
Assessing an organization s strengths and weaknesses is an essential part of aligning projects
with the organization. If an organization does not have the right capabilities, a project that
may otherwise support organizational goals may be too difficult to successfully complete.
Some questions to ask regarding a firm s ability to support projects are as follows:
Do we have the right skills, capabilities, technical knowledge, and resources that are
required for potential projects? If we do not have them, can we acquire them easily?
Do we have a teamwork attitude, free and open communication, creativity, and
empowered decision making?
Do we have a clearly defined project management process?
Do our associates have the right attitudes, skills, and competencies to use the project
management process?
Are our leaders at each level willing to take appropriate personal risk?
Does senior leadership establish a strong leadership foundation?
Do individuals and teams exhibit leadership at their respective levels?
Do we monitor and understand our external environment?
2-2e Identifying Potential Projects
The second part of aligning projects with the firm s goals is to identify potential projects. In
general, some potential projects can be to capitalize upon a strategic opportunity or techno-
logical advance. Others may serve a social need, an environmental consideration, a customer
request, or a legal requirement. Ideally, this is accomplished in a systematic manner not
just by chance. Some opportunities will present themselves to the organization. Other good
opportunities will need to be discovered. All divisions of the organization should be involved.
This means people at all levels, from frontline workers to senior executives and people from
all functional areas need to help identify potential projects. For example, salespeople can
uncover many opportunities by maintaining open discussions with existing and potential
customers, and operations staff may identify potential productivity-enhancing opportunities
as projects. Everyone in the firm should be aware of industry trends. Many industries have
trade journals such as Elevator World or Aviation Week and Space Technology that can be
reviewed regularly for potential project ideas. One reasonable goal is to identify approxi-
mately twice as many potential projects as the organization has time and resources to per-
form. The reason is simple: under close examination, some potential projects may not be a
good fit. Any company that accepts practically every potential project will probably waste
some of its resources on projects that do not support its organizational goals.
Once potential projects are identified, the next step is to develop a brief description of
each. The leadership team that will select and prioritize projects needs to understand the
nature of the projects they are considering. While the level of documentation different
firms require varies greatly, a bare minimum can be called the elevator pitch. This is
when a person meets another waiting for an elevator and asks, I hear you are on XYZ
Project. What is it all about? The responder may have only a brief time to give a reply
before the elevator arrives and must be prepared to answer quickly with simple state-
ments about the project work and why it is important to the organization.
The work is often summarized in a brief statement of work, which is a narrative
description of products, services, or results to be supplied. 10 Why the project is important
42 Part 1 Organizing Projects
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is often summarized as a business case, which is the benefits of a selected component
used as a basis for the authorization of further project management activities. 11
The business case generally includes both why the project is needed and, if the firm
uses financial justification as part of project selection, an estimate of costs and benefits.
Armed with this elevator pitch, the series of processes that collectively are used to select,
prioritize, and initiate projects begins. Selecting and prioritizing are covered next, and
chartering is covered in Chapter 3.
METHODS FOR SELECTING PROJECTS The people in charge of selecting projects
need to ensure overall organizational priorities are understood, agreed upon, and com-
municated. Once this common understanding is in place, it is much easier to prioritize
potential projects. The degree of formality used in selecting projects varies widely. In a
smaller organization, it can be straightforward. The prioritization should consider criteria
derived from project management, finance, and strategic aspects and should include ask-
ing questions such as these:
What value does each potential project bring to the organization?
Are the demands of performing each project understood?
Are the resources needed to perform the project available?
Is it feasible to complete the project within the expected time and at the projected
cost while managing associated risks?
Is the project financially beneficial and compatible with other investment decisions?
Is there enthusiastic support both from external customers and from one or more
internal champions?
Which projects will best help the organization achieve its strategic goals?
There are several different methods of systematically selecting projects. The methods
include both financial and scoring models. The primary reason for including financial
analysis either to make the project selection decisions directly or to at least assist in
the decision making is that, from management s perspective, projects are investments.
Therefore, proper selection should yield a portfolio of projects that collectively contribute
to organizational success.
Three different approaches are commonly used to ensure both financial and nonfi-
nancial factors are considered when selecting projects. First, some organizations use
financial analysis as the primary means of determining which projects are selected, and
management merely tempers this with informal inclusion of nonfinancial factors. Sec-
ond, some organizations use financial models as screening devices to qualify projects or
even just to offer perspective; qualified projects then go through a selection process using
a scoring model. Third, at still other organizations, financial justification is one factor
used in a multifactor scoring model. The common thread in all three of these approaches
is that both financial and nonfinancial factors are considered when selecting projects. Let
us consider both financial and scoring models. Financial models will be covered in con-
cept, but the calculations will not be shown since they are explained in depth in most
required finance courses. Scoring models will be covered in both concept and calculation
since many students might not have them in another course.
2-2f Using a Cost-Benefit Analysis Model to Select Projects
Cost-benefit analysis is a financial analysis tool used to determine the benefits provided
by a project against its costs. 12 These models compare expected project costs to expected
project benefits. Several models can be used in making project selection decisions.
Chapter 2 Project Selection and Prioritization 43
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NET PRESENT VALUE (NPV) Net present value (NPV) is the most widely accepted
model and will be covered first. When using net present value, the analyst first discounts
the expected future value of both the project costs and benefits, recognizing that a dollar
in the future is worth less than a dollar today. Then the analyst subtracts the stream of
discounted project costs from the stream of discounted project benefits. The result is the
net present value of the potential project. If the net present value is positive, then the
organization can expect to make money from the project. Higher net present values pre-
dict higher profits. See the summary in Exhibit 2.9.
BENEFIT-COST RATIO (BCR) A second financial model sometimes used is benefit-
cost ratio (BCR). The ratio is obtained by dividing the cash flow by the initial cash out-
lay. A ratio above 1.0 means the project expects to make a profit, and a higher ratio than
1.0 is better. The cash flow can be determined for the life of the project using net present
or discounted value principles.
INTERNAL RATE OF RETURN (IRR) The third financial model is internal rate of
return (IRR). In this model, the analyst calculates the percentage return expected on the
project investment. A ratio above the current cost of capital is considered positive, and a
higher expected return is more favorable.
PAYBACK PERIOD (PP) The fourth financial model that is sometimes used is the
payback period (PP). In this analysis, a person calculates how many years would be
required to pay back or recover the initial project investment. The organization would
normally have a stated period that projects should be paid back within, and shorter pay-
back periods are more desirable.
ADVANTAGES AND DISADVANTAGES OF EACH METHOD Financial models are
useful in ensuring that selected projects make sense from both cost and return-
on-investment perspectives. These models have weaknesses that need to be understood
before they are used. For example, payback period models do not consider the amount of
profit that may be generated after the costs are paid. Thus, two projects with a similar pay-
back period could look equal, but if one has substantially higher revenue after the payback
period, it would clearly be superior. BCR would not be acceptable unless all costs and bene-
fits were calculated in present dollars (in which case it is similar to NPV except it is a ratio
of benefits to cost instead of the difference between revenue and cost). However, there
EXHIBIT 2.9
FINANCIAL MODELS FOR PROJECT SELECTION
NET PRESENT
VALUE (NPV)
BENEFIT-COST
RATIO (BCR)
INTERNAL RATE
OF RETURN (IRR)
PAYBACK PERIOD
(PP)
Calculation PV revenue PV cost Cash flow/Project
investment
Percentage return on
project investment
Project costs/Annual
cash flows
Neutral Result NPV $0 Ratio 1 0 IRR Cost of capital Payback period
Accepted length
If used to screen projects or
to select projects outright
NPV > Acceptable
amount
Ratio > Acceptable
amount
IRR > Acceptable
amount
Payback period <
Acceptable length
If used to compare projects Higher NPV better Higher ratio better Higher IRR better Shorter payback period
better
44 Part 1 Organizing Projects
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are benefits and costs that are intangible and cannot be determined in financial terms.
IRR and BCRs have problems if used for choosing between mutually exclusive projects
because they can favor smaller projects that create less total value for the firm but have
high percentage returns. For example, a huge project with a medium rate of return
would create a lot of value for a firm but might not be chosen over a smaller project
with a higher return if only one can be chosen. Additionally, it is sometimes quite dif-
ficult to calculate an IRR if a project has nonconventional cash flows. For the most part,
the finance discipline recommends using net present value. The other measures can be
calculated to provide perspective on whether a project meets a minimum financial
return threshold or to communicate with people who might not understand NPV.
However, none of the financial models ensure alignment with an organization s stra-
tegic goals. Therefore, financial analysis, while very useful, is normally not enough.
2-2g Using a Scoring Model to Select Projects
In addition to ensuring that selected projects make sense financially, other criteria often
need to be considered. A tool called a scoring model helps to select and prioritize poten-
tial projects. It is useful whenever there are multiple projects and several criteria to be
considered. A few organizations use more complex models such as analytical hierarchy
process (AHP) to compare projects, but since many more organizations keep things sim-
ple with variations of scoring models, that is what we will cover.
IDENTIFYING POTENTIAL CRITERIA These criteria should include how well each
potential project fits with the organization s strategic planning. The criteria may also
include such items as risk, timing, resources needed, and so on. A normal practice is
for the company s leadership team to jointly determine what criteria will be used to
select projects. A list of questions executives may use to develop their list of criteria is
shown in Exhibit 2.10.
DETERMINING MANDATORY CRITERIA Once the leadership team agrees on a list of
criteria that are important, the next step is to determine whether any of the criteria are man-
datory. That is, are there any situations that dictate a project must be chosen regardless of
any other considerations? Examples of this include government mandates and clear safety or
EXHIBIT 2.10
EXAMPLES OF PROJECT SELECTION CRITERIA
How well does this project fit with at least one organizational objective?
How many customers are there for the expected results?
How competitively can the company price the project results?
What unique advantages will this project provide?
Does the company have the resources needed?
What is the probability of success?
Are the data needed to perform the project available or easily collected?
Do the key stakeholders agree that the project is needed?
What is the expected return on investment?
How sustainable will the project results be?
How does this project promote (or hinder) our corporate social responsibility?
What risks are there if we do not perform this project?
Chapter 2 Project Selection and Prioritization 45
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security situations. This list of must-do projects should be kept as small as possible since
these projects automatically get selected and can crowd out other worthwhile projects.
WEIGHTING CRITERIA Next, the leadership team determines the relative importance
or weight of each decision criteria. While more complex methods of determining criteria
weights and project evaluations have been used in the past, many firms now use the sim-
ple methods described here for determining criteria weights. See Exhibit 2.11 for an
example of project evaluations. First, executives determine which criterion is most
important and give that a weight of 10. Then they ask how important in comparison
each of the other criteria is. For example, if the executives in a consumer products com-
pany thought development of new products was most important, it would be assigned a
weight of 10. If the customer relations factor was deemed almost as important as new
product development, maybe it would be assigned 8. If the factors of supplier relations
and probability of project success were each deemed to be half as important as new
product development, each would be assigned 5. Perhaps other criteria such as cost
reduction, safely, and so forth were also considered but determined to not be as impor-
tant. The resulting criteria with weights are shown in Exhibit 2.11 in the top row of the
selection and prioritization matrix. Most organizations will decide to use about three to
five criteria. Lesser-rated criteria can be used as tiebreakers if needed.
EVALUATING PROJECTS BASED ON CRITERIA Now the leadership team evaluates
each project on each criterion. The most efficient and accurate method is to concentrate
on one criterion at a time, going down each column in turn. An easy method for this is
to rate each project on that specific criterion, with scores ranging from 1 (potential proj-
ect has very little or even negative impact on this criterion) to 5 (project has excellent
impact on this criterion). The upper-left portion of each cell in the matrix can display
the rating, representing how well that project satisfies that criterion.
Once a project has been rated on a specific criterion, that rating should be multiplied
by the weight assigned to that criterion and displayed as the weighted score in the main
body of each cell. The total for each project should be added across the row. The highest-
scoring projects would ordinarily be selected. If several projects have close scores (virtual
ties), other criteria or discussion can be used to break the tie. For example, in Exhibit 2.12,
there is a virtual tie between Projects A and B.
EXHIBIT 2.11
PROJECT SELECTION AND PRIORITIZATION MATRIX
Project A
Project B
Project C
Project D
55810
46 Part 1 Organizing Projects
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SENSITIVITY ANALYSES Scoring models allow leadership teams to perform sensitiv-
ity analyses that is, to examine what would happen to the decision if factors affecting it
were to change. Selection criteria may be added or altered. Participants may decide that
some criteria are more important than others and weight them accordingly. Missing cri-
teria or new alternatives can be added and the decision revisited. For example, if the
executive team evaluating the projects in Exhibit 2.12 had a bad experience with an
unsuccessful project and decided to reevaluate their decisions with success probability
now weighted a 9 for very important, the new project selection and priority matrix
would be calculated as shown in Exhibit 2.14.
Decision makers can ensure that they use very solid ratings for each potential project.
For example, if one criterion was the number of customers, the marketing department
could interview some potential customers to gauge their level of interest.
A company might want to select several projects. If so, the scores from the selection
matrix could serve as one method of prioritizing the projects.
EXHIBIT 2.12
COMPLETED PROJECT SELECTION AND PRIORITIZATION MATRIX
Project A
Project B
Project C
Project D
55810
10252450
25151650
15154010
1053220
5
5
1
2
3
2
5
4
5
3
3
1
2
5
3
2
109
106
80
67
EXHIBIT 2.13
REVISED PROJECT SELECTION AND PRIORITIZATION MATRIX
Project B
Project A
Project C
Project D
95810
45151650
18252450
27154010
1853220
5
5
1
2
2
3
5
4
3
5
3
1
5
2
3
2
126
117
92
75
Source: Chris Bridges.
Chapter 2 Project Selection and Prioritization 47
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Selection of projects based on certain criteria is a decision-making process that varies
geographically as priorities and thinking styles tend to be different.
Due to cultural differences, learning, and education principles, people think and
approach a problem differently; therefore, they also adopt different decision-making styles.
This aspect assumes importance due to increased diversity in workplaces that provides an
opportunity to work with people from different cultures and countries. Due to these
factors, someone might rely more on inductive, deductive, or a combination of these
approaches in making decisions. This diversity would influence how people look at a scor-
ing model or any other decision-making tool in selecting projects and making project port-
folio management decisions. These issues are discussed further in Chapter 15.
2-2h Prioritizing Projects
Once all projects have been selected, they will need to be prioritized that is, the deci-
sion makers will need to determine which ones will get assigned resources and be sched-
uled to begin first. If a company selects several projects for a year (or even for a fiscal
quarter), it cannot expect to start all of them at the same time. The scoring models are
useful in providing input into the starting order of projects. Most leadership teams will
consider the weighted scores of each project as a starting point in assigning resources to
projects and determining their start dates. The leadership team members, however, also
generally discuss other issues, such as:
The urgency of each project
The cost of delaying the expected benefits from various projects
Practical details concerning the timing
Opportunity costs associated with the project
For example, an important process improvement project may be far less disruptive
to perform when the factory is shut down for routine maintenance. One more discus-
sion frequently occurs in the prioritizing process if there is a conflict between
resource needs for two projects, which one gets the needed resources first? Often, this
is left to the project sponsors to iron out; especially for important projects, it may be
formally decided by the leadership team. In that way, the probability of the critical
project being held up by a misunderstanding is greatly decreased.
Exhibit 2.14 shows how the Alternative Breaks (AB) planning committee at a university
ranked spring break projects. This exhibit shows four of the twenty-six projects that were
selected for trips. This book will include multiple examples of the AB project to illustrate
how various project-planning tools work together. Each trip is a small or subproject, while
the combination of all twenty-six trips forms the overall project.
2-2i Resourcing Projects
Once all projects have been prioritized, it is time to assign resources to each. Resources can
include key personnel such as sponsors, project managers, core team members, and subject
matter experts. Resources can also include space, materials, equipment that may be in
short supply, and the funds necessary to acquire these resources. The easiest way is to
use a resource assignment matrix and begin by assigning resources to the highest-priority
projects. Once an individual resource is no longer available, the organization is limited in
the number of projects that it can take on during a particular time.
Assigning resources like this requires a prioritized project list such as shown in Exhibit
2.13, a list of resources and how much of each is available, and an estimate of how much
of each key resource each project will need. For simplicity s sake, organizations often plan
for a fiscal quarter. Exhibit 2.15 shows the same four projects and choices of project
48 Part 1 Organizing Projects
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managers, team members, and the budget for each. Note that while there is enough project
manager time to start all four projects, there is neither enough team member time nor
enough cash. Therefore, only three projects can be started.
2-3 Securing Projects
The discussion above pertains to projects that are internal to an organization. This section
deals with projects a company (called the client) wants performed, but for which it may hire
external resources (called contractors) to execute significant parts or all of the work. External
projects can be viewed either from the perspective of the client company that wants the project
to be executed or from the perspective of the contractor company that wants to perform the
EXHIBIT 2.14
ALTERNATIVE BREAKS PROJECT SELECTION AND PRIORITIZATION MATRIX
PROJECT/SELECTION
CRITERIA
ACTIVE SERVICE
OPPORTUNITY ISSUE ITSELF
ORGANIZATION
TO WORK WITH COST
9 10 6 5 Total
New York Vegan Farm 5
45
4
40
3
18
4
20
123
West Virginia Sustainability 4
36
3
30
4
24
5
25
115
Chicago Halfway House 2
18
4
40
4
24
4
20
102
El Salvador Cultural
Immersion
1
9
5
50
5
30
1
5
94
EXHIBIT 2.15
RESOURCE ASSIGNMENT MATRIX
PROJECT/RESOURCE PM/DEJI PM/BUD PM/CORY
TEAM/
BRADLEY
TEAM/
RAJEEV
TEAM/
LARRY MONEY
Maximum Availability 200 400 300 300 150 150 $30 million
Project List
Project B: PM 240,
Team 200, $5M
240 200 $5M
Project A: PM 200,
Team 150, $10M
200 150 $10M
Project C: PM 300,
Team 150, $14M
300 150 $14M
Project D: PM 150,
Team 180, $4M
Remaining Availability 0 160 0 100 0 0 $1M
Chapter 2 Project Selection and Prioritization 49
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work. Client companies may first put prospective external projects through a selection and
prioritization process as described above and, if selected, then decide whether to perform the
work internally (make) or hire the project to be performed by others (buy). If the decision is to
buy, then the client company needs to plan and conduct the procurement.
Contractor companies need to identify potential project opportunities, determine
which they will pursue, submit proposals, and be prepared to either bid or negotiate to
secure the work. We consider the client company s perspective in Chapter 12, Project
Supply Chain Management. We consider the contractor s perspective next.
2-3a Identify Potential Project Opportunities
Contractors seeking external projects to perform should pursue this in a fashion similar to
that of any company considering internal projects, as described earlier in this chapter in
the portfolio alignment section on identifying potential projects. Additionally, since they
need to look for projects externally, contractor companies should have representatives at
trade shows, professional conferences, and anywhere information on the intentions of
potential customers and competitors may surface. Contractor companies should also
actively practice customer relationship management by establishing and nurturing per-
sonal contacts at various levels and functions. Contractor companies can also practice cus-
tomer relationship management by linking information systems to the extent practical so
as to identify any useful information concerning potential future projects and improve
management of current projects.
2-3b Determine Which Opportunities to Pursue
Just as all companies should decide which internal projects to select, as previously
described in the methods for selecting projects, most contractor companies are best
served by targeting the projects they wish to pursue. Some companies have a policy
that they will bid on every potential project, knowing that if they do not bid, they will
not be awarded the project. More companies find that if they target their opportunities,
their hit rate or probability of securing the work on any given proposal increases. It
takes time and resources to put together a good proposal, so it makes sense to increase
the acceptance rate by developing a bid/no-bid decision strategy.
Each company has strengths and weaknesses compared to its competitors. Hence, a
quick SWOT analysis could be used to decide whether to pursue a potential project,
N
ap
pi
ne
ss
/p
ix
ab
ay
.c
om
50 Part 1 Organizing Projects
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just as a more involved version of SWOT analysis was described earlier and depicted in
Exhibit 2.2. Decision makers can also ask how well a potential project will help achieve
their objectives. If they determine a project will help achieve their objectives, the next
considerations are the cost to pursue the work and the probability of successfully secur-
ing the project given the likely competition. A company frequently considers risks both
of pursuing and not pursuing a potential project13 Finally, does the company have the
capability to perform the work if it is awarded?
2-3c Prepare and Submit a Project Proposal
When a firm prepares to submit a proposal, it is really conducting a small project with the
primary deliverable of the project being a compelling and complete proposal. The contrac-
tor should understand the project s source selection criteria, the basic minimum criteria
the sellers have to be fulfilled to get shortlisted. 14 While criteria will vary extensively from
one project to another, generally a client will likely want to be convinced that the potential
contractor is technically, managerially, financially, and operationally competent. Successful
project managers try hard to convince potential clients that they are capable on all four
dimensions. A short list of these factors is shown in Exhibit 2.16.
2-3d Negotiate to Secure the Project
Negotiation is an approach to redefine an old relationship that is not working effectively
or to establish a new relationship. Negotiations should aim at a win-win solution, and
the outcome must benefit both the parties involved in negotiations.
Once all proposals have been delivered and evaluated, the client company may elect
to either award the project or enter into negotiations with one or more potential contrac-
tors. On more routine projects, the contract may be awarded at this point. Further clar-
ifications and negotiations may follow for complex projects.
A client company and a contractor company may negotiate the amount of money to
be paid for a project. They may also negotiate the contractual terms, schedule, specific
personnel to be assigned to work on the contract, quality standards, reporting mechan-
isms, and various other items. A project manager may need to make arrangements with
potential suppliers to secure the products and services needed to perform the project. All
these considerations will be covered in subsequent chapters.
Successful project managers understand that they need to prepare well for negotiations.
This starts with a clear understanding of what is most important to their management.
Often, it includes fact finding with the client company to understand its needs and abili-
ties. Armed with an understanding of both perspectives, a project manager attempts to
find a solution that allows the organization to secure the project work with enough profit
potential and with the start of a good working relationship with the client. In the end, the
client company will select the contractor(s) and award the contract(s).
EXHIBIT 2.16
TYPICAL SOURCE SELECTION CRITERIA
TECHNICAL MANAGEMENT FINANCIAL OPERATIONAL
Technical experience Management experience Financial capacity Production capacity
Needs understanding Project charter Life cycle cost Business size and type
Technical approach Planning and scheduling Cost basis and assumptions Past performance
Risk mitigation Project control Warranties References
Chapter 2 Project Selection and Prioritization 51
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PMP/CAPM Study Ideas
You won t see a whole lot of questions on either of these tests pertaining to portfolio or pro-
gram management, since these happen at an executive level, beyond the purview of individual
projects or project managers. At the same time, it is imperative that you understand the inter-
relationship of portfolio and project management, as well as how they relate to an organiza-
tion s mission: the mission leads to strategic objectives, and projects are the primary vehicle
through which these objectives are achieved.
As with other chapters, make sure you are familiar with the PMBOK terms
especially statement of work and business case and be prepared to put them into context
with real projects. You will ultimately need to know how to calculate net present value.
Finally, be familiar with the common causes of project failure and how to prevent them.
Summary
Project selection does not occur in isolation. Ideally, it
begins with the organization s strategic planning. This
planning begins with a strategic analysis of the organi-
zation s internal strengths and weaknesses as well as
the external threats and opportunities it faces. The
organization should then develop its guiding principles
such as mission and vision statements. Most companies
will have an annual planning session in which strategic
objectives are developed. Larger organizations will con-
tinue this effort with one or more levels of planning in
which the overall objectives are flowed down to deter-
mine objectives that are appropriate for each organiza-
tional level.
Once the strategic planning is accomplished, the
organization s leadership team engages in portfolio
management. The first part is an open and honest
assessment of the organization s ability to perform
projects. The decision makers need to understand
how many resources are available, the organization s
overall capabilities, and the capabilities of the indivi-
duals who will be assigned to projects. An ongoing
portfolio management activity is for everyone in the
firm to identify possible opportunities that they feel
might help the organization achieve its goals. Each
potential project should be described at least by stat-
ing in a sentence or two what work is involved and
how it would help the organization achieve one or
more of its goals.
Once potential projects are identified and briefly
described with statements of work and business cases,
they should be put through a process to determine which
will be selected and what their relative priorities are. Both
financial and scoring models are frequently used to evalu-
ate potential projects. Net present value is the preferred
financial method, although others are sometimes used.
Financial analysis tells the leadership team how much
each potential project is worth from a benefits-
versus-cost comparison, but it does not tell how each
potential project may help to achieve the organization s
goals. Scoring models can incorporate various goals and
should also be used. Once a project list is selected, the
projects need to be prioritized so some can start right
away and others can start later.
Contractor companies need to be constantly on the
lookout for potential project opportunities. Once
potential projects are identified, companies need to
decide which ones they pursue. Just as for internal pro-
jects, some external projects will be better at helping an
organization reach its goals because they are a better fit.
The contractor needs to prepare and submit proposals
for desired projects and be prepared to follow up and
often negotiate in order to secure them.
Key Terms Consistent with PMI Standards and Guides
portfolio management, 38
portfolio, 38
program, 38
vision, 38
mission statement, 38
strategic objectives, 38
program management, 38
cost benefit analysis, 38
subproject, 39
statement of work, 42
business case, 42
source selection criteria, 50
52 Part 1 Organizing Projects
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Chapter Review Questions
1. List and describe each step in the strategic plan-
ning process.
2. Name at least four things that a mission state-
ment should include.
3. What does the strategic analysis acronym SWOT
stand for?
4. What is the most widely accepted financial model
for selecting projects?
5. What are some advantages and disadvantages
of using a financial model for selecting
projects?
6. What are some advantages and disadvantages of
using a scoring model for selecting projects?
7. What are some common reasons for project
failure?
8. Who should be involved in identifying potential
projects?
9. If there is a conflict between resource needs for
two projects, who decides which one gets the
needed resources first?
10. In a project scoring model, why is each decision
criteria given a weight?
11. What purpose do sensitivity analyses serve in
using scoring models to choose projects?
12. If several projects have close scores as the result of a
scoring model, what can be done to break the vir-
tual tie?
13. Why might a contractor company perform a SWOT
analysis prior to bidding on a potential project?
14. Why is it important for a contractor to under-
stand the source selection criteria a client uses
to decide to whom they will award a project?
15. Name five things that may be negotiated between
a client company and a contractor company.
Discussion Questions
1. How might the internal and external parts of a
SWOT analysis affect one another?
2. Describe the interaction between vision and
mission statements.
3. How is a company s portfolio similar to and
different from a financial portfolio?
4. What is the best way for an organization to
prioritize among selected projects? Does it vary
among organizations?
5. Why is aligning potential projects with the parent
organization s goals the first step in avoiding
project failure?
6. Why is it a good practice for organizations to
identify twice as many potential projects as they
plan to implement?
7. Suppose you are purchasing a new car, and you
decide to use a scoring model to decide among
four options. What would be your top three criteria,
and what would be each criterion s relative weight?
8. Under what circumstances should a selected
project take precedence over other selected
projects?
9. If you are a contractor looking for project work,
why might you decide not to pursue a particular
project opportunity?
10. What are the four main areas of competency a
client company is looking for in a project man-
ager? How can you best demonstrate these com-
petencies to a potential client?
PMBOK ® Guide Questions
1. A collection of projects, programs, and opera-
tions managed as a group to achieve strategic
objectives is called a:
a. process
b. portfolio
c. subprogram
d. life cycle
2. Projects may be undertaken as a result of any of
the following strategic reasons except:
a. social need
b. market demand
c. need to keep workers busy during slow times
d. environmental considerations
3. A narrative description of products, services, or
results to be delivered by the project is a/an:
a. request for information
b. business case
c. project statement of work
d. elevator pitch
4. All of the following statements are true except:
a. A portfolio may contain multiple programs
and projects.
Chapter 2 Project Selection and Prioritization 53
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b. A project manager has the discretion to make
trade-offs in regard to which programs to
pursue.
c. A program manager has the discretion to
make trade-offs in regard to which projects to
pursue.
d. Projects have a finite timeline, while programs
may exist as long as the parent organization
does.
5. Which of the following is a financial analysis tool
that an organization may use to determine the
cost-value of potential projects?
a. Payback period (PP)
b. Internal rate of return (IRR)
c. Net present value (NPV)
d. All of the above
6. All projects should be aligned with their organi-
zation s strategic plan, which includes the organi-
zation s vision, goals, and objectives. Which of
these describes an organization s vision?
a. Conveys a larger sense of organizational pur-
pose, and is both inspiring and guiding
b. Describes short- and long-term results along
with measures to determine if they have been
achieved
c. Includes the organization s core purpose, core
values, beliefs, culture, primary business, and
primary customers
d. Is SMART: specific, measurable, achievable,
results-based, and time-specific
7. The best describe(s) why a project is
being undertaken.
a. statement of work
b. business case
c. subprojects
d. source selection criteria
8. The document that includes the necessary
information to determine whether a project
is worth the required investment, and is used
for decision making by upper management, is
called the:
a. project scope statement
b. project charter
c. business case
d. case study
9. An organization s vision often includes reference
to its social, environmental, and economic health,
collectively referred to as the:
a. triple bottom line
b. business case
c. statement of work (SOW)
d. net present value (NPV)
10. A business case typically contains information
regarding the business need and a financial anal-
ysis. Which model divides the cash flow by the
initial cash outlay?
a. Benefit-cost ratio (BCR)
b. Internal rate of return (IRR)
c. Net present value (NPV)
d. Payback period (PP)
Exercises
1. Complete the following scoring model. Show all
your work. Tell which project you would pick first,
second, third, and last. How confident are you with
each choice? If you lack confidence regarding any of
your choices, what would you prefer to do about it?
2. Complete the following scoring model. Show all
your work. Tell which project you would pick first,
second, third, and last. How confident are you with
each choice? If you lack confidence regarding any of
your choices, what would you prefer to do about it?
Project A
Project B
Project C
Project D
4610
4
3
2
1
3
2
4
3
5
3
3
4
Project A
Project B
Project C
Project D
3710
1
3
5
2
3
5
4
3
4
3
3
1
54 Part 1 Organizing Projects
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3. Pretend you are on the leadership team for a phar-
maceutical company that is in a difficult financial
situation due to patents that have expired on two
of your most profitable drugs. Brainstorm a list of
criteria by which you would select and prioritize
projects. Weight the criteria.
4. Pretend you are on the leadership team of a
manufacturing company that is currently chal-
lenged by low-cost competition. Brainstorm a
list of criteria by which you would select and pri-
oritize projects. Weight the criteria.
I N T E G R A T E D E X A M P L E P R O J E C T S
SUBURBAN HOMES CONSTRUCTION PROJECT
Suburban Homes, like any other real estate company, has many
strategic directions to pursue to expand the company operation
and increase revenue and profits. To explore and pursue various
investment opportunities that would eventually translate into
projects, the company developed strategic directions to suc-
cessfully invest in real estate. It identified six options for portfolio
project management. They are investments in purchasing land
for future development, communities for single-family homes,
multifamily properties, small-scale apartment buildings, large-
scale apartment complexes, and commercial investments.
1. Purchasing land in areas that have potential for future
growth makes sense, as the cost of land tends to be sub-
stantially cheaper 10 20 years before it is turned into a
developed suburban area. At an appropriate opportunity,
the land can be improved to add value, or it can be leased
or rented to create cash flow. Further, the land can be
divided and parts of it can be sold for a profit. However,
this option requires a vision for future growth and devel-
opment and consequently, risks are also associated with
this strategic direction.
2. Building single-family homes in suburban areas is one of
the best and most popular strategic directions for growth
for companies like Suburban Homes. Most of the clients
who are interested in a quality life and view their home as
an investment prefer buying single-family homes. Clients
realize that it is easy to rent, sell, and finance.
3. Small multifamily properties usually consist of two to four
units. They also present similar advantages that are asso-
ciated with a single-family home such as easy financing
and being a wise investment option for clients while pro-
viding a good residence for their family.
4. Small apartment buildings usually consist of 5 to 50 units
for clients to reside in. They are more popular among
those who prefer urban areas and a busy social life.
Clients are usually unmarried or married with no children.
These properties can be more difficult to finance because
they rely on commercial lending standards. For this invest-
ment option, Suburban Homes must look for investment
opportunities closer to densely populated areas, and the
investor must provide parking areas.
5. Large apartment complexes require that you include pools,
a gym, tennis courts, and parking facilities, in addition to
other attractions that lure people to choose the complex
as a residence. Such a complex requires full-time staff to
manage the property, provide safety and security, and pro-
vide good customer service. These properties can be very
expensive to purchase. However, this investment option
provides steady revenue flow.
6. Commercial investment, in its truest sense, is an invest-
ment for growth and diversity in a portfolio. The aim of
this investment is to lease the property for business.
Size, style, and purpose also vary. Clients could range
from small business owners to large malls and mega
office complexes. This investment option offers a consis-
tent cash flow. However, occupancy would depend largely
on the local economy and could prove to be risky. Further,
investments are of higher magnitude and Suburban
Homes is seriously considering this option after establish-
ing steady growth in the residential market and improving
their financial stability and growth.
Given these six options, Suburban Homes has approached
you to develop a project selection model to maintain a
balanced portfolio.
Reference
https://www.biggerpockets.com/real-estate-investing/strate-
gies-niches
Chapter 2 Project Selection and Prioritization 55
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Semester Project Instructions
Your instructor may bring example projects to class
and facilitate the assignment of students to the vari-
ous project teams. Alternatively, your instructor may
ask you to identify potential projects. Therefore, you
may or may not be involved in project selection. If
your instructor has each student bring in a project
idea, you will first need to create your elevator
pitch to describe tersely what work is involved in
your project and why it is important. Then you and
a small team will likely need to select one of the
potential projects using a scoring model. Unlike the
criteria for selecting among projects in a typical
organization, for your class, you may use criteria
that will help you learn. You may want to include
size and complexity criteria so the project is involved
enough for you to benefit by using many of the
techniques in this book, but small enough so you
can do the work in a reasonable amount of time.
Finally, you may need to identify resources to accom-
plish the project using a resource matrix.
Regardless of whether your project is student or fac-
ulty generated, one of the first things you should do
when assigned to a project is to learn about the company
or other organization that wants the project to be com-
pleted. Why did they select this project? Is it a must-
do project or did it get chosen over other competing
projects? By understanding what makes the project so
important, you will make better decisions and will be
more motivated through the term. If your project is a
must-do project, explain why. If it is not a must-do
project, explain how it was selected. Explain where it fits
in priority with other work of the organization.
CASA DE PAZ DEVELOPMENT PROJECT
Casa de Paz is an ambitious project with several dimensions
to it. There is a shelter that provides six-month housing for
families, along with professional services to support a process
of healing and transformation. There is a support group for
women that serves residents and nonresidents alike.
The early meetings for Casa de Paz include seeking volun-
teers to serve on the board and the three main working
groups. Then a facilitated meeting is being held to determine
the minimal viable product (MVP) to build. This is an open
and operating facility. Some of the features that are needed
include a director, staff, a building, remodeling the building,
funding, a website, programming, and volunteers. Organiza-
tional responsibilities also must be defined. An important
question is: What can Casa de Paz do quickly without waiting
for other things to happen? What are some of the things they
need to do concurrently? How many projects can each of the
groups (the board and the three working groups) realistically
begin right away?
Armed with the answers to these questions, each of
the probable projects should have an elevator pitch:
What is included and why is it important? Then the
most critical few projects can be selected, resourced,
and chartered.
An example of an elevator pitch is: There is a need to
acquire a building and there is competition for both buildings
under consideration. One building is more attractive than the
other as the cost is considerably less although the number
of families served would be less.
Another elevator pitch is the need for website develop-
ment. A fledgling website exists, but there are so many
communication, fundraising, volunteer soliciting, and other
possible uses of the website that early development is
attractive. The elevator pitch could answer the following
questions:
Why is enhancing the website so important?
How can the website help us do other work we desire to
perform?
Where are we now?
What do we want?
56 Part 1 Organizing Projects
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PROJECT M ANAGEM ENT IN ACTION
Prioritizing Projects at LADD
LADD s project prioritization process introduced at
the start of this chapter brought along a few sur-
prises. It was not a clean and quick process. With a
staff of seven directors in the room, all with varying
levels of experience and understanding, many con-
versations transpired requesting clarification and
explanation on why peers used criteria to rank pro-
jects higher or lower than the overall average. The
wall of the board room was covered with paper that
contained projects, numbers, and many markings
that could be deciphered only by those involved in
the process. Some directors provided unsolicited
advice as to why their program s project deserved
higher marks. Such requests were generally met with
equal banter, advocacy for one s own project, and
ultimately ended in a fruitful discussion that resolved
any discord.
As projects were scored and then ranked, the
outcomes were not always predictable. A project
such as the film festival emerged as the top priority
because it was so closely linked with the scored cri-
teria of generating revenue and having a large com-
munity impact. Creating an infrastructure for IT
needs was last because it would cost a significant
amount of money and have no direct return for the
individuals LADD supports. From the process, it was
evident that a small handful of projects were nonne-
gotiable and would require completion in order to
establish a base for other larger, more impactful
projects.
Ultimately, the leadership team was able to create
a plan of action that is scheduled to accomplish all of
the objectives outlined in the strategic plan in a delib-
erate, organized manner within the five-year timeline.
LADD s leadership team members assumed the title of
project manager for the majority of projects. They will
work across departments, employing the strengths of
many and be held accountable to their peers weekly
when the prioritization plan is reviewed at the direc-
tor s meeting.
Although in its infancy, LADD has taken the top-
ranked 12 projects and broken down quarterly
expected outcomes for each. The outcomes may be
revenue based and focused on generating income
for the organization or task based with a method of
planning and implementation. Whatever the method,
program managers are held responsible for the
project being supervised, and project progress will
be reported directly to LADD s board of directors.
Such a framework allows for accountability all the
way through the organizational structure and a con-
clusively better service provision for those who
LADD supports.Exhibit 2.16 illustrates the prioritiza-
tion process with the highest ranked projects
selected by LADD and shows the five criteria used to
do so.
Re
el
A
bi
lit
ie
s
Fi
lm
Fe
st
iv
al
,
Ci
nc
in
na
ti
Chapter 2 Project Selection and Prioritization 57
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Brache, Alan P., and Sam Bodley-Scott, Which Impera-
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EXHIBIT 2.16
LADD PROJECT SELECTION AND PRIORITIZATION MATRIX
PROJECT
MISSION
(10)
FINANCE
(9)
WORKFORCE
(8)
RELATIONSHIPS
(8)
COMMUNITY
(7) TOTAL
Film Festival 40 36 32 32 35 175
Expand meaningful
community-inclusion
activities
50 27 32 40 21 170
Develop Victory
Parkway site
50 36 16 40 28 170
Implement vacation/
respite services
40 36 24 24 35 168
Health and Wellness
Program
50 18 40 32 21 161
58 Part 1 Organizing Projects
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The Standard for Program Management, 3rd ed. (New-
town Square, PA: Project Management Institute, 2013).
Steffey W. R., and V. Anantatmula, International
Projects Proposal Analysis: Risk Assessment Using
Radial Maps, Project Management Journal 42 (3)
(2011): 62 74.
Wheatley, Malcolm, Beyond the Numbers
PMNetwork 23 (8) (August 2009): 38 43.
Zhang, Weiyong, Arthur V. Hill, Roger G. Schroeder,
and Keyin W. Linderman, Project Management
Infrastructure: The Key to Operational Performance
Improvement, Operations Management Research
1 (1) (September 2008): 40 52.
http://en.wikipedia.org/wiki/Triple_bottom_line,
accessed February 2, 2010.
http://www.gcbl.org/about, accessed March 12, 2013.
http://www.bia.ca/vision.htm, accessed March 5, 2013.
http://ocio.os .gov/s/groups/public/@doc/@os/
accessed February 7, 2017.
@ocio/@oitpp/documents/content/prod01_002082 ,
accessed March 6, 2013.
https://topnonprofits.com/examples/vision-statements/,
accessed January 9, 2017.
http://www.sustainablecleveland.org accessed February
7, 2017.
http://www.ecowatch.com/cleveland-a-green-city-on-a-
blue-lake-1882095827.html, accessed January 9, 2017.
http://www.internetsociety.org/who-we-are/organiza-
tion-reports-and-policies/internet-society-2015-
action-plan, accessed February 7, 2017.
http://pmzilla.com/proposal-evaluation-techniques-
source-selection-criteria accessed February 7, 2017.
Endnotes
1. https://topnonprofits.com/examples/vision-statem
ents/, accessed January 9, 2017.
2. http://www.sustainablecleveland.org accessed Feb-
ruary 7, 2017.
3. http://www.ecowatch.com/cleveland-a-green-city-on
-a-blue-lake-1882095827.html, accessed January 9,
2017.
4. Lussier, Robert N., and Christopher F. Achua, Lead-
ership: Theory, Application, Skill Development, 4th ed.
(Mason, OH: Thomson South-Western, 2010): 425.
5. PMI Standard for Portfolio Management, 3rd ed.
(2013): 190.
6. Kloppenborg, Timothy J., and Laurence J. Laning,
Strategic Leadership of Portfolio and Project Manage-
ment (New York: Business Expert Press, 2012): 21.
7. PMI Standard for Portfolio Management, 3rd ed.
(2013): 190.
8. PMI Standard for Program Management, 3rd ed.
(2013): 178.
9. Federal_CIO_Roadmap-[2010.07.02] , p. 4,
accessed February 7, 2017.
10. PMI Practice Standard for Work Breakdown
Structures, 2nd ed. (2006): 121.
11. PMI Requirements Management: A Practice Guide
(2016): 77.
12. PMI Business Analysis for Practitioners: A Prac-
tice Guide (2015): 207.
13. Steffey, W. R., and V. Anantatmula, Interna-
tional Projects Proposal Analysis: Risk Assess-
ment Using Radial Maps, Project Management
Journal 42 (3) (2011): 62 74.
14. http://pmzilla.com/proposal-evaluation-techniques
-source-selection-criteria, accessed February 7,
2017.
Chapter 2 Project Selection and Prioritization 59
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C H A P T E R 3
Chartering Projects
Planning a project is similar to putting together a large puzzle. If you were to
dump a 1,000-piece puzzle on a table, you would probably not start the detailed
planning right away by comparing two pieces randomly to see if they fit. You
would likely take several preliminary steps. Some of these steps might include
turning the pieces so the picture side was visible on each, sorting outside pieces
so you could form the boundaries, studying the picture on the box, and sorting by
color so you could match pieces more easily. (A few more-organized people may
like to count and make sure that there are, indeed, 1,000 pieces.) These prelimi-
nary steps make the detailed planning of the puzzle much easier and more effi-
cient. If completing projects is analogous to putting puzzles together, then project
charters are the initial steps. Initiating a project requires some preliminary
actions, including understanding the needs and concerns of stakeholders, most
critically the project sponsor.
Ball Aerospace & Technologies Corp., Systems Engineering Solutions provides
a wide range of air, space, and counterspace engineering and professional ana-
lytic services. At Ball, we increase stakeholder buy-in by addressing and thinking
about things up front; with an agreed-upon charter, this gives the project team
CHAPTER OBJECTIVES
After completing this
chapter, you should
be able to:
CORE OBJECTIVES:
Describe what a
project charter is and
why it is critical to
project success.
List the various ele-
ments of a charter
and why each is used.
Create each section
of a charter for a
small sample project
using given project
information.
TECHNICAL OBJECTIVES:
Initialize a project in
Microsoft Project and
set up a milestone
schedule.
BEHAVIORAL OBJECTIVES:
Work with a team to
create a complete
charter for a real
project and present
it to a sponsor for
ratification.
Negotiate with the
project sponsor to
develop a realistic
and achievable
project charter.
A
Lo
t
O
f
Pe
op
le
/S
hu
tte
rs
to
ck
.c
om
60
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some guidance to effectively plan and execute the effort. In addition, by going
through the chartering process, stakeholders take ownership in the project.
At Ball, our project sponsors are typically U.S. government customers, and we
provide work for them on a contractual basis. They provide funding and broad
direction for our efforts, and we go through a formal proposal process for all our
projects. Project sponsors provide initial statements of work or objectives defin-
ing their goals for the task and then select among several proposals from inter-
ested companies such as Ball to fulfill their requirements. The chosen company
is then under an official formal contract to complete the project. This is, in effect,
a pre-chartering process.
Typically, after an effort is under contract, a kickoff meeting is scheduled to
review the objectives of the project between the project sponsor and the chosen
company. This is part of the initiating stage, where stakeholders review and
approve the following as part of the project s charter:
Overall project objectives
Contrast between technical approach as written in the company s proposal
for execution and sponsor expectations
Milestones, checkpoints, and potential payment plans
Success criteria and schedule
Identification of key stakeholders and risks
Processes for executing, monitoring, controlling, and overall management of
the project
There are a number of things to consider when initiating a project and generat-
ing a project charter. These serve as pieces of the overall puzzle of managing and
executing a project. A little pre-work in initiating the project goes a long way, with
increased goodwill and understanding from the project sponsor, clear tasks and
goals for the project team, and a single way forward toward achieving the pro-
ducts and services of the project.
Lydia Lavigne, Ball Aerospace
This chapter describes what a project sponsor, manager, and team need to understandto quickly initiate a project. The project then proceeds into planning, and the ele-
ments of a charter are planned in as much detail as needed. Chapters 5 through 11
describe project planning.
11.2 Identify
Risks
11.3 Perform
Qualitative
Risk Analysis
6.5 Develop
Schedule
13.1 Identify
Stakeholders
Stakeholder
Register
11.5 Plan
Risk
Responses
4.4 Manage Project
Knowledge
Lessons Learned
Register
4.1 Develop
Project Charter
Project Charter
Assumptions Log
PMBOK® GUIDE
Topics:
4.1 Develop project
charter
4.4 Manage project
knowledge
6.5 Develop schedule
13.1 Identify
stakeholders
11.2 Identify risks
11.3 Perform qualitative
risk analysis
11.5 Plan risk responses
MAJOR
DELIVERABLES
Project Charter
Assumptions Log
Stakeholder Register
Lessons Learned
Register
61
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3-1 What Is a Project Charter?
For a project manager, team member, or project sponsor, one of the first and most
important project management concerns is a project charter. This short document (usu-
ally about three pages) serves as an informal contract between the project team and the
sponsor (who represents both senior management of the organization and the outside
customer, if there is one).
From a behavioral perspective, the project charter reflects a common understanding
and collaboration between the project sponsor and the project manager. Negotiation skills
of the project manager also play an important role in developing the project charter.
Since a charter is like a contract, it is helpful to remember what a contract is. First, it
is an agreement entered into freely by two or more parties. Second, one party cannot
arbitrarily change it. Third, there is something of value in it for each party. Finally, it is
a living document that can evolve with changing conditions if both parties agree and
receive something of value for making the change. The charter signing represents the
transition from the high-level project initiation stage into the more detailed project plan-
ning stage. See Exhibit 3.1 for a review of the project life cycle.
The project charter is the deliverable that grants a project manager the right to con-
tinue into the more detailed planning stage of a project. This may include only permis-
sion to plan the project, permission to make decisions that would slow the project if
delayed (such as ordering long-lead materials or hiring special workers), or permission
to plan and perform the entire project in the case of a small, simple project. Officially,
a charter is drafted by either project manager or sponsor and then negotiated; however,
as projects are often conducted in a more collaborative fashion, some organizations are
assigning core team members early enough that they can help draft the charter. Also,
early input from key stakeholders may be considered.
While either party (the sponsor or the project manager) can write the rough draft,
more often than not, the project manager writes the draft charter. Ideally, then, the proj-
ect manager and the sponsor candidly discuss each part of the charter. Like a contract,
the people who sign a charter are wise to ensure that they understand and agree to all of
it. Unlike a contract, however, both parties feel obligated to the spirit (as opposed to the
letter) of the charter since the project details have not yet been worked out and specifics
will certainly change.
Thinking of a charter like a contract means that both the project manager and the sponsor
sign the charter willingly and strive to make the project successful. When core team members
have helped write the charter rough draft, they may also sign the charter. If the project man-
ager feels bullied into making a change, it is not a free choice. However, the sponsor may
legitimately need to insist on receiving the project results more quickly or make some other
EXHIBIT 3.1
PROJECT LIFE CYCLE
Approval: CharterSelection Kickoff Project BenefitsAdministrative
closure realizedresultTo proceed
62 Part 1 Organizing Projects
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change to the project. In the spirit that one party cannot arbitrarily change a contract, the
sponsor would not just tell the project team, I need the project a month sooner and you get
no more resources and no relief from any other work responsibilities. Rather, if the project
must change, the sponsor needs to consider herself or himself to be a partner with the project
team in determining how to accomplish the change.
3-2 Why Is a Project Charter Used?
The four major purposes for a charter are to:
1. Authorize the project manager to proceed
2. Help the project manager, sponsor, and team members, if any are already assigned,
develop a common understanding
3. Help the project manager, sponsor, and team members commit to the spirit of the project
4. Quickly screen out obviously poor projects
First, a project charter is a document that formally authorizes the existence of a
project and provides the project manager with the authority to apply organizational
resources to project activities. 1 Many project managers do not have the authority to
commit resources without a charter. This gives the project and the project manager offi-
cial status within the parent organization.
Second, everyone involved in the upcoming project needs to develop a common
understanding of what the project entails. This includes at least the broad justification
for the project, how it aligns with the goals of the parent organization, determination of
what is included and excluded in the project scope, rough schedule, success measures,
major risks, rough estimate of resource needs, and stakeholders. On larger and more
complex projects, additional understanding may be required at this point. Small, simple
projects may use a simplified single-page charter. Once everyone has a common under-
standing of clear project goals, several additional benefits occur:
Teamwork develops.
Agreement, trust, communication, collaboration, and commitment among the spon-
sor, project manager, and project team develop.
The project team does not worry if management will accept a decision and can focus
on the project plan.
The sponsor is less likely to unilaterally change the original agreement.2
Third, each person needs to personally and formally commit to doing their level best
to achieve the agreed-upon project results even when things do not go as planned. It is
a moral duty of all the project team members to commit to the shared goals articulated
in the charter. This formal commitment often helps a person decide to keep working
hard on a project when things are not going well.
Fourth, a charter is used to quickly screen potential projects to determine which appear
to be poor choices. Needless to say, a charter is much quicker to put together than a full,
detailed project plan and schedule. If by constructing a charter it is determined that the
project is likely to fail, much planning time (and therefore money) will be saved.
Remember, the charter helps all project stakeholders. Charters are often publicly
shown to many individuals beyond the project team and sponsor for communication.
The culture of some companies is more trusting, competitive, focused on time, preoccu-
pied with details, and so on than at other companies. Therefore, charters used in differ-
ent industries and companies have somewhat different elements and formats.
Chapter 3 Chartering Projects 63
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3-3 When Is a Charter Needed?
Project methods can be scaled from very simple to very detailed. Consequently, a project
charter can vary in its length from one-page to multiple pages. A project manager wants
to use details that are adequate enough to develop a common understanding and agree-
ment between the project manager and the project sponsor.
TriHealth has developed both full and mini charters, for large and small projects,
respectively. They have also developed the decision matrix shown in Exhibit 3.2 to help
people determine if a full charter, mini charter, or no charter is needed.
EXHIBIT 3.2
PROJECT CHARTER DECISION MATRIX
Project Name
Date
When an improvement, change, or new program is going to be implemented, it is important to first determine whether or not it
is a project. If it is a project, TriHealth has specific tools that should be used to guide the planning and implementation.
In general, a project is a temporary endeavor undertaken to create a unique product, service, or result. If your project impacts
more than one department, requires expertise or resources beyond your own department, or could affect the operations in another
area, the standardized templates should be used. Answering the questions below with a check will help you determine what types
of tools are needed for your project. Evaluate where the majority of your checks lie and use the most appropriate tool.
Resources Little or no monies,
supplies, or change in
resources
Requires moderate
resources
Requires significant
and/or additional FTEs
Multidisciplinary 1 discipline involved/
impacted
2 3 disciplines involved/
impacted or more than
one site
More than 3 disciplines
involved/impacted
Complexity Little complexity Moderate complexity;
affects care delivery
Very complex
Technology
Involvement
No technology changes IS consult needed IS resources assigned
Approvals None needed Approval by immediate
supervisor
Executive-level approval
Potential
Risk Level
Minimal impact on
customer
Moderate impact on
customer
Significant impact on
customer
Staff Commitment Involvement of
2 3 people for
solution
Small team needed
to generate solutions
Requires large team of
multiple departments for
improvement
Communication
and Education
Simple communication
plan or unit-based educa-
tion only
Moderate communication
plan; requires education
across departments
Complex communication/
education plan with
various media
Metrics Requires at least a one-time
follow-up check
Improvement will be
tracked
Baseline and ongoing
tracking of data
If the majority of
your checks lie
in this area:
No charter needed Complete a mini charter Complete a full project
charter
Source: TriHealth.
64 Part 1 Organizing Projects
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3-4 Typical Elements in a Project Charter
The following sections list some of the typical key elements in a project charter. While the
intent of most of these sections is included in many charters, some project teams combine
sections or leave out a few of them. Furthermore, while the term charter is a widely used stan-
dard, some organizations use other names such as project request, project submission form, or
project preplanning form. As long as the four purposes of a charter (authorization, understand-
ing, commitment, and screening) are accomplished, the exact format and title are negotiable.
Typical charter elements and the question each element answers are shown in Exhibit 3.3.
The charter should be short enough so that the project team and sponsor (and any
other interested stakeholder) can examine it carefully to ensure they understand and
agree. One to four pages in total is generally about the right length.
3-4a Title
The existence of a meaningful project title is critical. In an organization with a number
of projects, the title can be used to quickly identify which project is being referenced.
3-4b Scope Overview
The scope overview and business case sections are the high-level what and why of the
project. They are sometimes considered to be the elevator speech that a person would
use if given a very short amount of time, such as a one-floor elevator ride, to describe
their project. Sometimes, an additional background statement is helpful.
The scope overview is the project in a nutshell: a high-level description of what needs
to be accomplished and how it will be done. What needs to be accomplished can be
described as the product scope, all the characteristics that must be present in the actual
project deliverables or as requirements, each of which is an attribute that needs to be
present in order to satisfy a contract, client, or other stakeholder. How it will be done
is the project scope, the entirety of what will and will not be done to meet the specified
EXHIBIT 3.3
CHARTER ELEMENTS AND QUESTIONS ANSWERED
CHARTER ELEMENT ANSWERS THE QUESTION
Scope overview What?
Business case Why?
Background Why?
Milestone schedule When?
Success criteria What?
Risks, assumptions, and constraints Whoa!
Resources How much?
Stakeholders Who?
Team operating principles How?
Lessons learned How?
Signatures and commitment Who?
Chapter 3 Chartering Projects 65
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requirements. The scope overview quickly describes the project work and results. The
scope overview is used to distinguish between what the project will and will not do. It
is used to help prevent scope creep, which is an incremental increase in the work of a
project without corresponding adjustments to resources, budget, or schedule. The scope
overview can be considered to define project boundaries. It states what is included and
what is not at least at a fairly high level.
Quantifying the scope, such as 15 touch points will be included, helps everyone to better
understand the project s size. If a project could be compared to an animal, the scope overview
briefly describes both the size and features so one can tell if it is a rabbit or an elephant. By
understanding what is included and what is not, the project team is more likely to accurately
estimate cost, resource, and schedule needs and to understand and handle project risks.
3-4c Business Case
The business case is the project purpose or justification statement. It answers the ques-
tion why? and helps all parties understand the purpose of the project. A business case
is used to justify the necessity of the project. It should clearly tie the project to the orga-
nization s strategy and explain the benefits the organization hopes to achieve by autho-
rizing the project or the strategic goals it meets.
Depending on the organization, a business case can either be just the rationale for the
project, or it can also include high-level estimates of the costs and benefits of the project.
A business case may also include emotional and ethical reasons for performing the proj-
ect. A well-written business case should persuade decision makers to support the project
and inspire the project team members and key stakeholders to work hard toward suc-
cessful completion of the project.
3-4d Background
Many people are quite busy and prefer short statements that can be quickly reviewed.
Key project stakeholders should know enough about the project after reviewing the
short scope overview and business case statements, as these statements will provide all
of the information they need to know. Some other stakeholders may need more details
to understand the rationale and purpose behind these statements. A more detailed back-
ground statement may be helpful in these cases.
Unlike the first two statements, which should be limited to about two to four sen-
tences each, the background statement can be any length. The background statement is
purely optional develop one only when it is necessary.
3-4e Milestone Schedule with Acceptance Criteria
The milestone schedule is a high-level plan that indicates a few significant accomplish-
ments that are anticipated over the life of the project. It divides the project into a few
(about three to eight) intermediate points or milestones whose completion can be veri-
fied. The team estimates a date when they expect to complete each milestone. A mile-
stone schedule should list major milestones and deliverables that the project team
especially wants to ensure are completed both on time and to the satisfaction of key deci-
sion makers. The milestone schedule is considered very useful for communicating with
the key stakeholders who are not actively involved with the project.
A deliverable as defined in Chapter 1 is a unique and verifiable product, result, or capabil-
ity to perform a service that is required to be produced to complete a process, phase, or
project. 3 Requirements of a deliverable are often translated into specifications so that the
deliverable can be validated, qualified by measurable conditions, and bounded by constraints.
Sometimes, milestones occur right before the approval of a large expenditure. At
other times, they occur at completion of a critical design, a key deliverable, or a major
66 Part 1 Organizing Projects
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AGILE
accomplishment of the scope. It is helpful to identify the relatively few milestones and key
deliverables in the project that the team and sponsor wish to check closely.
Adding a column for acceptance criteria factors to the milestone schedule helps the
project team understand who will judge the quality of the deliverable associated with
each milestone and what criteria will be used for that determination. Acceptance criteria
stipulate which conditions must be met in order for the deliverables to be approved.
Acceptance criteria are like the project s vital signs. A paramedic would check pulse, breath-
ing, maybe skin color, and body temperature immediately when answering a 911 call. Other
tests are not as critical and may be performed, just not immediately. It is important to identify
the vital signs for the project. Project success is easy to measure after the project is complete.
The equally important, but often more challenging, decision is how to measure success while
the project is progressing so there is still time to make changes if necessary.
Another way to understand acceptance criteria is to understand how a key stakeholder
such as the sponsor, customer, or end-user is going to determine if the deliverables created
are of good enough quality to accept. Since some of the milestones are often preliminary
(drafts, prototypes, concepts, outlines, etc.), it is helpful to have the same person who will
judge the final project deliverables judge them at the intermediate milestones. By doing
this, the decision maker is much less likely to state at the end of the project, No, that is
not what I meant. Including advance understanding of criteria is similar to the old saying
that a trial lawyer never asks a question without knowing how the witness will answer. An
astute project manager never turns in a deliverable without knowing how it will be judged.
An example of a milestone schedule is shown in Exhibit 3.4.
One key concept in Agile projects is that something of value will be delivered at each
iteration. Something of value for IT projects means working software. For other projects,
it still refers to something the user can use not just documentation. An agreement is
reached during iteration planning on the definition of done meaning exactly how
each feature and function must perform. This is comparable to deliverables with accep-
tance criteria for each milestone as just described.
3-4f Risks, Assumptions, and Constraints
A risk is an uncertain situation that could negatively or positively affect the project if it
occurs. Assumptions are suppositions made during project planning that are treated as
correct or factual, though they have not been proven. Project teams frequently identify,
document, and validate assumptions as part of their planning process. Assumptions
EXHIBIT 3.4
MILESTONE SCHEDULE EXAMPLE
MILESTONE DATE WHO JUDGES ACCEPTANCE
1. Existing facility 9-19-16
2. Site visit/audit 9-22-16 PM/Customer Site data verified
3. Design and approval 10-22-16 Customer Customer approval
4. Equipment deliverables 12-2-16 Engineering & Manufacturing B.O.M. check
5. Project execution 1-6-17 Installation & Customer Commissioned
6. System turnover 1-13-17 Customer System throughout of
35,000 cases per day
Chapter 3 Chartering Projects 67
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generally involve a degree of risk. A constraint is anything that limits the implementa-
tion of a project.
Taken together, assumptions and constraints are what could cause project problems. They
are included with risks so that all of the key participants sponsor, project manager, and
core team are aware in advance of what could prevent them from successfully completing
the project. While it is unrealistic to believe that the team can think of every single thing that
could go wrong, the more comprehensive this section is, the more likely the team is to
uncover problems before they occur and while there is time to easily deal with them.
If an assumption turns out to be false, it becomes a risk. A constraint that limits
the amount of money, time, or resources needed to successfully complete a project
is also a risk. Some organizations, especially for small projects, group all risks,
assumptions, and constraints together, while others handle each as a separate char-
ter section. The most important point is not how each is managed, but that each is
managed.
Project managers and teams should look at risks for three reasons. First, any negative
risk that is a threat that may inhibit successful project completion (to the satisfaction of
stakeholders, on time, and on budget) needs to be identified. And, if it is a major risk, a
plan must be developed to overcome it. Second, a positive risk is an opportunity to com-
plete the project better, faster, and/or at lower cost or to capitalize upon the project in
additional ways, and a plan should be developed to capitalize upon it. Third, sometimes
there is more risk to the organization if the project is not undertaken and this provides
additional rationale for doing the project.
For each major negative risk identified, an owner is assigned responsibility. Then
one or more response plans are normally developed to either lessen the probability of
the risk event from happening in the first place and/or to reduce the impact if the risk
event should materialize. Sometimes, transferring the risk to a third party makes sense.
The goal is not to eliminate all risk, but to reduce the risk to a level that decision makers
deem acceptable.
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68 Part 1 Organizing Projects
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3-4g Resource Estimates
Remember that executives consider projects to be investments. The scope overview and busi-
ness case sections of the charter describe the return expected, while the resources section
describes what will be invested. These sections collectively help decision makers determine if
the project is worth approving. Resources include the workers, tools, equipment, and anything
else needed in order to execute your project. Since executives consider projects to be invest-
ments of resources, they will want a rough estimate. This can be an estimate of the amount
of staff time, equipment, or materials that are in short supply, and/or the amount of money
that is required. Since there is only very general understanding of the project at this point, any
budget will also be approximate and should be stated as such by calling it a preliminary budget
and including the level of confidence one has in the estimate; this is often expressed in per-
centage terms (such as plus or minus 50 percent) regarding the accuracy of the estimate.
On some internal projects, the pay for the associates who work on the project often
comprises much of the expense. Frequently, however, at least a few expenses are
incurred. It is helpful to identify which expenses the project manager can authorize and
which the sponsor needs to control.
3-4h Stakeholder List
Project success is partially dictated by identifying and prioritizing stakeholders, managing
robust relationships with them, and making decisions that satisfy stakeholder objectives.
Therefore, it is good practice to identify and prioritize stakeholders early in a project.
3-4i Team Operating Principles
Team operating rules or principles are sometimes established to enhance team perfor-
mance. The goal is to increase team effectiveness and ensure that all parties are aware
of what is expected. Team operating principles that are especially useful are those that
The key players of a project show their commitment to the project by signing the commitment
section of the charter.
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Chapter 3 Chartering Projects 69
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deal with conducting meetings, making decisions, accomplishing work, and treating each
other with respect. This concept is further elaborated on as a Team Charter in Chapter 5
because some organizations will choose to create a separate team charter instead of
including team operating principles in their project charter.
3-4j Lessons Learned
While every project is unique, a great deal can be learned from the successes and failures of
previous projects and turned into practical advice. Lessons learned represent the knowledge
acquired by the project team throughout the project planning and execution, including
things that should be replicated and things that should be avoided on future projects. To
ensure that lessons learned are used, a sponsor should only sign a charter authorizing the
project to begin when at least one or two good, specific lessons from the successes and/or
failures of recently completed projects are included. This essentially forces the new project
manager and team to look at the organization s lessons learned repository to find applicable
learnings. A lessons learned register is an accumulation of the knowledge gained during
previous projects selection, planning, and executing that can be easily referenced to help
with planning and executing future projects. These lessons could be stored in a dedicated
database, on a shared drive, or in a less formal manner. The database should be intuitive to
use, and it should be easy to retrieve relevant information. It is important for new project
teams to learn together; otherwise, they risk repeating mistakes from previous projects.
3-4k Signatures and Commitment
The commitment section of the charter lists who is involved and sometimes describes the
extent to which each person can make decisions and/or the expected time commitment for
each person. This is where the project sponsor, project manager, and perhaps core team
members publicly and personally show their commitment to the project by signing the char-
ter. By formally committing to the project, the key players are more likely to keep working
hard during difficult periods and see the project through to a successful conclusion.
3-5 Constructing a Project Charter
It is wonderful if the sponsor can work with the project manager and possibly core team
members who have been preassigned to construct the charter. The sponsor, however, as a
busy executive, often does not have time to be present for the entire chartering period. In
those cases, it is very helpful if the sponsor can create the first draft however crude of
the scope overview and business case. A sponsor s ability to tell the project manager and
core team concisely what the project is and why it is important gets the team off to a good
start. If the sponsor wants the team to consider any important constraints, assumptions,
risks, or other factors, she can help the team by pointing that out up front.
Sometimes, on an especially important project, the organization s leadership team may
draft more than just the business case and scope overview statements. If the leadership team
feels something is very important, they can save everyone time by just stating it up front. Like-
wise, if the sponsor knows he or she will only approve a charter with one of the elements writ-
ten a particular way, he or she should tell the team that up front. Otherwise, the project
manager, possibly with the core team, most frequently writes much of the rough draft.
3-5a Scope Overview and Business Case Instructions
When possible, the first draft of these two sections should be provided by the sponsor or
the leadership team. One to four sentences for each is enough but it needs to be in
70 Part 1 Organizing Projects
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writing. Many teams find that, because these are the what and why of the project, it is
easier to work on them at the same time. Teams often brainstorm key ideas and then
craft the parts on which they agree into smooth-flowing statements. If the sponsor pro-
vides a first draft of these sections, the project manager and core team carefully dissect it
to ensure they both understand and agree. The project manager and team frequently
propose refinements on the original draft.
Scope overview and business case examples are depicted in Exhibit 3.5.
3-5b Background Instructions
The project manager and team decide whether this optional section is necessary for their
project as they construct the scope overview and business case. If the scope overview and
EXHIBIT 3.5
SCOPE OVERVIEW AND BUSINESS CASE EXAMPLES
PHASE II MULTICENTER TRIAL SCOPE OVERVIEW
This project will initiate a Phase II multicenter clinical trial at Cincinnati Children s Hospital Medical Center (CCHMC). The trial
will be conducted at five medical centers in the United States to investigate the safety and efficacy of an investigational drug s abil-
ity to improve cognitive functioning and quality of life in pediatric patients with Tuberous Sclerosis Complex. The project is a
follow-up study of a Phase I clinical trial conducted at CCHMC.
ONLINE TUITION REIMBURSEMENT PROJECT SCOPE OVERVIEW
This project will design, develop, and implement an online tuition reimbursement system that will provide employees with a self-
service tool to submit a request for tuition reimbursement payment. This project will incorporate a workflow process that will do
the following:
Move the request to the appropriate personnel for approval.
Alert the employee of any additional items necessary for processing the request/
Upon approval, send the request to payroll for final processing.
Notify the employee of payment processing.
DEVELOPMENT OF A BIOLOGICAL RESEARCH SPECIMEN SHIPPING CENTER PROJECT BUSINESS CASE
The purpose of this shipping center is to provide professional shipping services and supplies for CCHMC employees who are
responsible for shipping biological specimens as part of research. This shipping center will improve compliance, streamline ship-
ping processes, enhance research productivity, reduce time and money invested in employee training, and reduce potential liability
for noncompliance.
ESTABLISHING A SECOND PULMONARY FUNCTION TESTING (PTF) LAB PROJECT BUSINESS CASE
An additional PTF lab will enhance patient access by:
Decreasing wait times and
Providing a convenient location close to primary care appointments.
It will also improve patient outcomes by assisting in:
Diagnosis,
Accurate assessment, and
Chronic management of pediatric lung disease.
In addition, establishing a PFT lab will increase revenue by:
Increasing availability of PTF and
Increasing community referrals for PFT.
Source: Cincinnati Children s Hospital Medical Center.
Chapter 3 Chartering Projects 71
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business case seem detailed enough for all important stakeholders, an extra background
section may not be needed. If necessary, the team probably brainstorms ideas and then
combines them into a single smooth statement. An example of a background statement
for a project to start a new co-op business is shown in Exhibit 3.6.
3-5c Milestone Schedule with Acceptance Criteria Instructions
The first step in the iterative process of developing a project schedule is to define major
milestones. This section of the charter can be developed most effectively by focusing on
why you are doing a project before diving into all of the details. A method of depicting all
of this information so it is simple to understand is to set up a four-column table with Mile-
stone, Completion Date, Stakeholder Judge, and Acceptance Criteria heading the columns.
An example of a milestone schedule with acceptance criteria for a project converting to a
centralized electronic record system for a major research hospital is shown in Exhibit 3.7.
SIX STEPS IN CONSTRUCTING A MILESTONE SCHEDULE The most effective way
to construct the milestone schedule with acceptance criteria is to use the six-step proce-
dure described below. Identifying the end points first (Steps 1 and 2) helps project teams
avoid the problem of sinking into too much detail too quickly. Note that dates are the
final item to be identified. It is unethical for a project manager to agree to unrealistic
dates. Even though the milestone schedule is not very detailed, it is the first time a
team thinks through how the project will be performed and how long it will take at
each point. This allows a bit of realism in the schedule.
Step 1 The first task is to briefly describe (in three or four words) the current situa-
tion that requires the project and place this description in the first row of the milestone
column. The current state may be a shortened version of the business case. The starting
point for many projects is either something that exists, but does not work as well as
desired, or a desire exists for something completely new. However, the starting point
for some projects is the ending point of a previous project. Keep the description very
short, and it will form an effective starting place. In Exhibit 3.7, the problem was paper
records that were not centralized.
Step 2 Once the current state is agreed upon by the project manager and team, skip to
the desired future state. Describe the project (or phase if there will be future phases) at its
successful completion in three or four words. Put this description in the last row of the
milestone column. It is hard for many core teams to distill this to the ideal three or four
words, but keeping it concise helps the team develop a better understanding of what is
EXHIBIT 3.6
BACKGROUND SECTION EXAMPLE
Interfaith Business Builders is an organization of diverse Cincinnatians that develops and promotes
community-based, employee-owned and -operated cooperative businesses (co-ops). Our co-ops cre-
ate new jobs and ownership opportunities for low-income people in sustainable local businesses.
Members of IBB come from a variety of faith and social backgrounds, share a passion for social jus-
tice and the empowerment of people, and value community, cooperation, opportunity, and solidar-
ity. Our cooperatives are businesses that follow these seven principles: voluntary and open
membership; democratic member control; members economic participation; autonomy and inde-
pendence; education, training, and information; cooperation among cooperatives; and concern for
community.
72 Part 1 Organizing Projects
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truly most important. If the current project is a phase of a larger project, also write briefly
what the final successful result of the last future stage will be. In Exhibit 3.7, the desired
future state is to have records centralized and available in electronic form, and the ultimate
goal is for seamless information flow throughout the organization. More work will need to
be completed beyond this project to reach that ultimate goal. Since contemporary project
management is often iterative, many projects are part of a larger goal.
Step 3 Next, describe the acceptance criteria for the final project deliverables (at the
future state). What stakeholder(s) will judge the deliverables, and on what basis? Exactly
how will they become confident that the project results will work as desired? These sta-
keholders will almost always demand a demonstration of project results. The project
team wants to understand what that demonstration will be at this early point so they
can plan to achieve it. Note that there very well could be multiple stakeholders and mul-
tiple methods of ensuring the project results are satisfactory. At this point, strive to iden-
tify the most important stakeholders and acceptance criteria. Place these in the bottom
row of the third and fourth columns. In Exhibit 3.7, the sponsor wants a representative
from each department to show they can enter and retrieve pertinent data.
Step 4 Now, go back to the milestone column. Determine the few key points where
quality needs to be verified. On most small to medium-sized projects, approximately three
to eight intermediate points are satisfactory. Start by identifying the three most important
EXHIBIT 3.7
MILESTONE SCHEDULE WITH ACCEPTANCE CRITERIA EXAMPLE
COMPLETION DATE MILESTONE STAKEHOLDER JUDGE ACCEPTANCE CRITERIA
Current state:
Paper, noncentralized records
Needs assessment 28-Feb Ops management List of needed features
Hardware selection 15-Apr Ops management, CIO Hardware choice with contract
Vendor selection 30-May Ops management Vendor choice with contract
Installation and configuration 15-Jul Application specialist,
IS department head
Functional software in test
environment
Conversion 31-Aug Application specialist,
IS department head
All files converted
Testing 15-Oct Application specialist,
IS department head
Sign off on test
Training 30-Nov Ops management, HR Sign off on training
Future state:
Electronic, centralized records
30-Nov Sponsor Ability to enter and retrieve information
from all departments
Ultimate goal
Seamless information flow throughout
organization
Chapter 3 Chartering Projects 73
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AGILE
intermediate points, and add more if necessary. If you need to identify considerably more
major deliverables at this point, you might consider splitting your project into phases and
concentrate on the first phase for now. Satisfactory completion of each milestone will be
determined by how the sponsor and other stakeholders will judge your performance. They
should be in enough detail so stakeholders are comfortable with your progress, yet not so
detailed that you feel micromanaged. The project in Exhibit 3.7 has seven milestones.
On Agile projects, the first iteration is planned as a milestone with acceptance criteria
just as described above. Rather than have a defined set of milestones, an agile charter
after the first milestone is more of a general roadmap of the product. Subsequent mile-
stones and acceptance criteria are determined on a just-in-time (JIT) basis.
Step 5 Now, for each milestone, determine who the primary stakeholder(s) is and
how he or she will judge the resulting deliverable. Remember, these are intermediate
deliverables, and often it is not as easy to determine desired performance. One idea to
keep in mind: if practical, ask the person who will judge the overall project results at
the end to judge the intermediate deliverables also to make sure you are on the right
track. Quite a few different stakeholders will judge various milestones in the project in
Exhibit 3.7.
Step 6 Finally, determine expected completion dates for each milestone. Do not be
overly optimistic or pessimistic. You will be at approximately the right level of detail if
you have a milestone somewhere between every one and six weeks on many projects.
Obviously, there will be exceptions for especially large or small projects. Most of the
milestones in the project in Exhibit 3.7 are about six weeks apart.
Some companies that perform many projects use templates to guide their project
teams through chartering and other activities. An example of a template for the mile-
stone schedule and acceptance criteria for a Six Sigma project is shown in Exhibit 3.8.
EXHIBIT 3.8
SIX SIGMA MILESTONE SCHEDULE AND ACCEPTANCE CRITERIA TEMPLATE
Measure
Analyze
Improve
Control
Future State
Current Situation
Define Problem in operational terms
Customers and metrics identified
Project schedule and assignments
Causal relationships defined
Data gathering procedures approved
Sufficient data gathered
Potential variables identified;
Root causes statistically proven
Problem resolution ideas gathered
Solution evaluated and confirmed
Solution implemented
Standards, procedures, training in place
74 Part 1 Organizing Projects
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3-5d Risks, Assumptions, and Constraints Instructions
First, the project manager (possibly with core team members, sponsor, and/or key stake-
holders if available) should brainstorm all the things that could pose a risk to the project
schedule, budget, usefulness of any project deliverables, or satisfaction of any project
stakeholder. This is the process of risk identification. All of the risk processes will be
covered in more detail in the risk planning chapter. Constraints that limit choices and
unproven assumptions can be identified. Assumptions are especially important when a
cross-functional team is performing the project because some team members may make
vastly different assumptions based upon the manner in which work is normally accom-
plished in their respective departments. The brainstorming often works very well with
each team member writing one risk, constraint, or assumption per Post-it Note. On
large, complicated projects, risks, assumptions, and constraints may form separate sec-
tions of a charter. An assumptions log is often created as a living document to record
all assumptions and the findings of whether they proved to be true or false. However, in
this book, we deal with them together. From this point forward, all risks, assumptions,
and constraints are simply referred to as risks.
Either the project manager or one of the team members can then act as a facilitator
and assess one risk at a time. Risks can be assessed on probability of occurring and
impact if realized. Both dimensions can be shown with a simple continuum of low to
high using a flip chart or marker board. The team can agree to assess each risk at any
point on the continuum. It works best if one dimension is considered at a time. For
example, first ask how likely the risk event is to occur. Only after this is answered, ask
how big the impact will be if it happens.
After all risks are assessed, the team needs to decide which of the risks should be con-
sidered major risks. That is, which are important enough to require a formal response
plan with someone assigned responsibility? The other, more minor risks are not formally
considered further in the charter, but they very well may get more attention in the plan-
ning and executing stages. This is the process of qualitative risk analysis.
The project team constructs a table depicting each major risk, with its contingency
plan and owner. This is the process of planning risk responses.
Examples of risk assessment and major risk response planning for a hardware
upgrade project in an Irish factory are shown in Exhibits 3.9 and 3.10, respectively.
3-5e Resources Needed Instructions
Armed with the milestone schedule, the project manager and team may be prepared to
make crude estimates of the project budget and other resource needs such as people,
equipment, or space. It is imperative to describe how the estimates were developed and
the level of confidence the team has in them, such as this is a rough order of magnitude
estimate only based upon the milestones, and the true project cost could range from 25
percent below this to 75 percent above it. On many projects, especially those with cus-
tomers internal to the organization, a budget is not established. However, a limit of
spending authority for the project manager is often developed. An example of resources
needed for a project is shown in Exhibit 3.11.
3-5f Stakeholder List Instructions
Stakeholders are all the people who have an interest in a project. They can be internal or
external to the organization, be for or against the project, and have an interest in the
project process and/or the project results. The project manager and team begin by iden-
tifying all stakeholders and determining which are most important. They next ask what
Chapter 3 Chartering Projects 75
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EXHIBIT 3.10
RISK RESPONSE PLANNING EXAMPLE
RISK EVENT RISK OWNER RISK RESPONSE PLAN(S)
Hardware inadequate Edie 1. Techs revise existing hardware
2. Replace hardware
Associates do not have skills
to perform key functions
Padraig 1. Train existing associates
2. Hire additional people
Key resource not available Ute 1. Identify external resources to fill need
EXHIBIT 3.9
RISK ASSESSMENT EXAMPLE
Minor risks below the line
Major risks above the line
Hardware
inadequate
Associates do not
have the skills to
perform key functions
Key resource
not available
EXHIBIT 3.11
RESOURCES NEEDED ESTIMATE
MONEY PEOPLE OTHER
Marketing $10,000 Project Manager, 250 hours 1 Dedicated Conference Room
Core Team Members, 500 hours
AV and Communica-
tions $5,000
Internal Consultant, 100 hours
Miscellaneous $5,000 Data Analyst, 100 hours
Focus Group Participants, 50 hours
Total $20,000 Total 1,000 hours 1 Room
76 Part 1 Organizing Projects
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interest each stakeholder has in the project. A stakeholder list example for a clinical
research project is shown in Exhibit 3.12. This is the process of identifying stakeholders,
and the resulting list is the start of a stakeholder register. Both will be described in more
detail in the stakeholder chapter.
3-5g Team Operating Principles Instructions
The project manager and team will decide what project team operating principles they
will use. The operating principles establish how meetings will be conducted, how deci-
sions will be made, how work will get done, and how everyone will treat each other
with respect. Exhibit 3.13 is an example of team operating principles.
3-5h Lessons Learned Instructions
Each project by definition is at least somewhat different from any other project. That
said, there are many commonalities in how projects can be planned and managed. A
project manager and team need to consider what has worked well and what has worked
EXHIBIT 3.12
STAKEHOLDER LIST EXAMPLE
STAKEHOLDER PRIORITY INTEREST IN PROJECT
Institutional Review Board Key Unexpected problems, progress
Food and Drug Administration Key Serious adverse events, progress
Site Principal Investigators Key Protocol, safety reports, changes
Pharmaceutical Company (Customer) Other Serious adverse events, progress
Research Subjects (Patients) Other Purpose of study, risks and benefits,
protocol
EXHIBIT 3.13
TEAM OPERATING PRINCIPLES EXAMPLE
1. Team members will be prepared with minutes from previous meeting, agenda,
and project updates.
2. Meetings will normally last for up to 90 minutes.
3. Team members will rotate the role of recorder.
4. Each team member will be responsible for setting his or her own deadline.
5. In the event that a team member cannot have his or her assignment complete by
the expected date, he or she must notify the team leader prior to the due date.
6. The team leader will be responsible for drafting the minutes from the previous
meeting and the agenda for the next meeting within 48 hours.
7. Decisions will be made by:
Team leader on ____ issues.
Consensus on ____ issues.
Delegation on ____ issues.
Chapter 3 Chartering Projects 77
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poorly on previous projects when starting a new one. A sponsor is wise not to sign a
project charter authorizing work until the project manager and team show they have
learned lessons from recently completed projects. One easy way to accomplish this is to
have each project report lessons learned at key reviews and at project completion and to
have the lessons available to all in a lessons learned knowledge base. The project man-
ager and team can then look at the lessons until they find at least a couple that can help
them on their project. These lessons are included in the charter. The more specific the
lessons, the more likely the team will find them useful. Exhibit 3.14 is an example of
project lessons learned.
3-5i Signatures and Commitment Instructions
The project sponsor, manager, and team members sign the charter to publicly acknowl-
edge their commitment. Sometimes other key stakeholders also sign. An example of a
charter signature section is shown in Exhibit 3.15.
EXHIBIT 3.14
PROJECT LESSONS LEARNED EXAMPLE
All parties are responsible for defining and following the project scope to avoid scope creep.
All parties should share good and bad previous experiences.
Aligning team roles to sponsor expectations is critical.
Keep sponsor informed so sponsor stays committed.
Identify any possible changes as soon as possible.
Use weekly updates on project progress to avoid unpleasant schedule surprises. Review previous
events for specific lessons.
EXHIBIT 3.15
CHARTER SIGNATURE EXAMPLE
Anne E., Sponsor
Signature Date
Signature Date
Karen H., Project Leader
Signature Date
Jim B., Team Member
Signature Date
Charlie H., Team Member
Signature Date
Mitch N., Team Member
Signature Date
Katie S., Team Member
78 Part 1 Organizing Projects
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3-6 Ratifying the Project Charter
The project manager and team formally present the project charter to the sponsor for
approval. In some organizations, the leadership team is also present for this meeting.
The sponsor (and leadership team members, if present) ideally is supportive, but also
ready to ask questions regarding any part of the charter. These questions are for both
clarification and agreement. Once all questions are satisfactorily answered including
any agreements regarding changes the sponsor, project manager, and core team all
sign the project charter and feel bound by it.
Project managers are generally held more accountable for performance than they have
the responsibility to direct people to perform. Because of this, project managers must
negotiate. Here, we discuss how they need to negotiate a project charter with their spon-
sor. Later in the book, we discuss how they often need to negotiate with functional man-
agers for the particular people they wish to have work on the project; with customers
concerning schedule, budget, scope, and a myriad of details; and with sponsors, suppli-
ers, SMEs, and core team members.
Nobody loves a project as much as the project manager does. However, a project
manager must remember that negotiations will be smoother if she realizes that everyone
with whom she negotiates has their own set of issues and goals.
Regardless of the negotiation size or complexity, the six-step process shown in Exhibit 3.16
can serve as a guide.
The negotiation process is based on the project manager and the sponsor attempting
in good faith to reach a solution that benefits both useful deliverables for the sponsor
and a manageable process for the project manager.
Step 1 involves advance fact finding to determine what is needed from the negotia-
tion. This includes seeking to understand both what the sponsor is likely to want and
how he or she may act during the negotiations.
Step 2 is for the project manager to understand the bottom line. What is the mini-
mum acceptable result? Just as when buying a car, a project manager needs to under-
stand when to walk away. This can vary a great deal depending on how much power
each party has. The sponsor is likely to have more power. However, project managers
need to understand that if they have the power and take advantage of their negotiation
partner, that partner may not work with them on a future project. Therefore, the goal is
not to always drive the hardest bargain, but to drive a fair bargain.
Step 3 is for the project manager to understand the underlying needs of the sponsor
and to share his or her own needs. This is not a 10-second political sound bite that says
take it or leave it. This is developing a real understanding of each other s needs. Once
both parties understand what the other really needs, various creative solutions can be
developed. This is the essence of Step 4.
Step 5 consists of the process and strategies of the negotiation itself. It is helpful to
keep in mind the ultimate goal while focusing on the many details of information sharing,
trading of concessions, and exploring possible solutions. Step 6 is actually a reminder to
reach an agreement and then to document that agreement.
3-7 Starting a Project Using Microsoft Project
Microsoft (MS) Project is a software application designed to aid project managers in the
planning, execution, and assessment of projects. It allows the project manager to track
project tasks, set milestones, create corresponding schedules, and administer resources
and budgets. Throughout the text (Exhibit 3.16), various MS Project processes will be
demonstrated in a series of tutorials using the textbook s running Suburban Homes
Chapter 3 Chartering Projects 79
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Construction Project as a basis. A fully functioning demonstration version of MS Project
2016 is available for download from Microsoft.
3-7a MS Project 2016 Introduction
MS Project 2016 is part of the Microsoft Office family; therefore, much of the basic
interface and interaction with the software should seem familiar. You will find the
unique aspects of the application in the project-specific tools and visuals the software
provides the project manager. When you first open MS Project, you have the option to
create a new (blank) plan, open a recently used or saved plan, or start a plan based on a
template. The following overview showcases the visible features of the main MS Project
interface once a blank project has been created.
1. Ribbon As with other Microsoft Office applications, the ribbon bar along the top
of the interface contains the controls (or access to controls) used to develop and
manipulate your project data. Controls are logically grouped in the following tabs:
FILE includes familiar commands such as Open, Save, Print, and Options.
TASK, RESOURCE, and PROJECT tabs allow task, resource, and project data
entry and adjustment.
REPORT offers a variety of customizable visual and print reports of project data.
VIEW offers multiple ways to visualize your project data, including Calendar,
Gantt Chart, Network Diagram, Resources, and Teams. A split (or combina-
tion ) view is also available, providing two different types of data displays at once.
FORMAT displays formatting controls that apply to the current active view. The For-
mat tab header (above the tab) identifies the currently active view (e.g., Gantt Chart).
2. Quick Access Toolbar As with other Microsoft Office applications, this customizable
area allows you to create shortcuts to regularly used commands.
3. Project Schedule Details View Pane(s) Below the ribbon is the project data view
pane that displays information about the project. MS Project offers several different
views, but the default setting is a split, dual display of the project Timeline and Gantt
EXHIBIT 3.16
NEGOTIATION PROCESS
STEP EXPLANATION
1. Prepare for negotiation. Know what you want and who you will negotiate with.
2. Know your walk-away point. Determine in advance the minimum you need from the
negotiation.
3. Clarify both parties interests. Learn what the other party really wants and share your true
interests to determine a common goal.
4. Consider multiple options. Brainstorm multiple approaches even approaches that solve
only part of the issue.
5. Work toward a common goal. Keep the common goal in mind: seek and share information,
make concessions, and search for possible settlements.
6. Clarify and confirm agreements. Agree on key points, summarize, and record all agreements.
Source: Adapted from Aldag, Ramon J., and Loren W. Kuzuhara, Mastering Management Skills: A Manager s Toolkit
(Mason, OH: Thomson South-Western, 2005): 129 132; and Baldwin, Timothy T., William H. Bommer, and Robert
S. Rubin, Developing Management Skills: What Great Managers Know and Do (Boston: McGraw-Hill, 2008): 307 318.
80 Part 1 Organizing Projects
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Chart views in an upper and lower pane. Although both are visible, only one view is
active (indicated by a colored view name label on the far-left end of the view pane).
The active view can be changed in the View tab or with the View Shortcut buttons.
Timeline View: The Timeline View shows you the big picture of your project
schedule. Milestones or other key activities can be marked and highlighted in
the timeline to help better visualize the project.
Gantt Chart View: The Gantt Chart is a commonly used tool to represent a proj-
ect schedule. Once a list of project task details is inputted into the table on the
left-hand side of the view, horizontal bars populate the right side to graphically
represent each task against a calendar along the top of the view.
4. Zoom Slider The zoom slider is useful in any view that contains calendar data. It
quickly changes the timescale by sliding left or right.
5. View Shortcuts View Shortcuts provides a quick switch from the active view to five
different views: Gantt Chart, Task Usage, Team Planner, Resource Sheet, and Report.
6. Scheduling Mode selector Scheduling Mode reports the default scheduling mode
(manual or automatic) for each new task. To change it, click Control and choose the
desired setting from the list (a change only applies to the active schedule). See the
next section for more on Scheduling Mode.
3-7b Setting up Your First Project
There are two scheduling modes in MS Project 2016: Auto Scheduled and Manually
Scheduled. Auto scheduling calculates the project s running schedule based on task start
and finish dates, as well as other changes you might make in the future. Manually Sched-
uled is the default setting, but we will change that immediately to take advantage of the
EXHIBIT 3.17
CHAPTER CHAPTER TITLE MS PROJECT PROCESS
3 Chartering Projects Introduce MS Project 2016;
Set up a project;
Create a milestone schedule
7 Scope Planning Set up a work breakdown structure (WBS)
8 Scheduling Projects Set up schedule;
Build logical network diagram;
Understand the critical path;
Display and print schedules
9 Resourcing Projects Define resources with calendars;
Assign resources, including modifications;
Find and resolve over-allocations
10 Budgeting Projects Develop project budget
12 Project Quality Planning and Project
Kickoff
Baseline the project plan
14 Determining Project Progress and
Results
Update and report on project schedule
15 Finishing Projects and Realizing Benefits Close projects
Chapter 3 Chartering Projects 81
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program s automatic scheduling powers. To change the scheduling mode, do the follow-
ing (Exhibit 3.18):
7. With a blank, new project open, click File tab>>Options>>Schedule.
8. In the Scheduling options for this project section:
Change the dropdown to All New Projects
Change the New tasks created option to Auto Scheduled
9. Click OK.
Note: This action sets all future projects you may start in MS Project to Auto Sched-
uled. These options allow you to change this setting on a project-by-project basis, or you
can simply click the Scheduling Mode Selector shortcut on the left-hand side of the
bottom status bar and choose your desired scheduling method.
3-7c Define Your Project
Next, you need to define your project by entering the following information:
1. Set the project start date (Exhibit 3.19)
Click Project tab>>Project Information
In the dialog box, enter your project s start date (e.g., Mon 10/16/17)
Click OK; you ll notice Timeline View has updated with your start date!
2. Enter identifying information about the project (Exhibit 3.20).
Click File tab
EXHIBIT 3.18
SET AUTO SCHEDULE
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
82 Part 1 Organizing Projects
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On the right-hand side of the screen, click Project Information>>Advanced
Properties.
In the Summary tab, enter Suburban Park Homes in the Title box
Add other information as needed for future reports
Click OK
3. Generate a Project Summary task row (Exhibit 3.21)
Creating a Project Summary task row gives you another overview of the entire
project in the top row of the Gantt Chart view
Click File tab>>Options>>Advanced
On the Advanced page, scroll to the Display options for this project section
Click the checkbox for Show project summary task
Click OK; you ll notice a new summary row at the top of the Gantt Chart table!
3-7d Create a Milestone Schedule
You will now create a milestone schedule that will capture significant deliverable comple-
tion dates and be viewable in your Gantt Chart view.
Click the Gantt Chart view to make it active
Enter the milestone names from the Suburban Park Homes project in the Task
Name cells below the Project Summary row (You can find milestone information
from the project on page 91.)
In the Duration cells, use the up/down arrows to set each milestone s value to zero
EXHIBIT 3.19
SET PROJECT START DATE
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
Chapter 3 Chartering Projects 83
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For each milestone row:
a. Double-click the milestone name to activate the Task Information dialog box
(Exhibit 3.22)
b. Click the Advanced tab; change the Constraint type to Must Finish On
c. In the Constraint date box, enter the milestone date
d. Click OK
Your milestone schedule in the Gantt Chart view should now look like the example in
Exhibit 3.23.
Now, we will add milestone markers to the summary row so the key project dates will
remain easily visible as the Gantt Chart task list expands.
Right-click the Suburban Park Homes summary task row>>Information
On the General tab, check the Hide Bar and Rollup boxes
Click OK (Exhibit 3.24)
Hold the Shift key and click your first task row>>click the last task row
Now all tasks should be selected
Right-click on the selected group>>Information
On the General tab, check the Rollup box until a checkmark appears
Click OK (Exhibit 3.25)
EXHIBIT 3.20
ENTER IDENTIFYING INFORMATION
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
84 Part 1 Organizing Projects
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EXHIBIT 3.21
CREATE A SUMMARY ROW
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
EXHIBIT 3.22
TASK INFORMATION DIALOGUE
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
Chapter 3 Chartering Projects 85
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You will now see that the summary row bar has disappeared and been replaced with mile-
stone markers. We need to make them stand out a bit more and have the date (Exhibit 3.26).
Select the Suburban Park Homes summary task row
Click Format Tab>>Format>>Bar Styles
In the Bar Styles dialog box, click the Rolled Up Milestone style
In the Bars tab, change the Type to solid; change the color to blue (or your choice!)
Click the Text tab, click Right (or Left if you prefer!), choose Finish from the
drop-down
Click OK
EXHIBIT 3.23
SUBURBAN PARK HOMES MILESTONE SCHEDULE
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
EXHIBIT 3.24
SUMMARY TASK DIALOGUE
Source: Microsoft product screenshots reprinted with permission from Microsoft Corporation.
86 Part 1 Organizing Projects
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Your milestone schedule in the Gantt Chart view should now look like the example in
Exhibit 3.27.
EXHIBIT 3.25
MULTIPLE TASK INFORMATION DIALOGUE
EXHIBIT 3.26
BAR STYLES DIALOGUE
Chapter 3 Chartering Projects 87
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PMP/CAPM Study Ideas
Whether you are studying for the CAPM or PMP exam, you will likely see many questions
pertaining to the order in which processes occur and deliverables are produced throughout
the lifecycle of a project. In this chapter about the project charter, it is important to remem-
ber that the various subdeliverables and processes are all encompassed within the Initiating
phase. In fact, it is the ratification of the project charter that allows us to proceed from the
Initiating to the Planning phase.
In other words, even though the charter and its components represent a high-level project
plan, you should think of this as the preplanning because it is still in rough-draft form and
will be significantly expanded upon during the Planning phase. So, if you plan to sit for one of
these tests, make sure you know the logical order of the steps involved in creating a charter, but
also keep in mind that every single one of these precedes the more-detailed processes to come.
EXHIBIT 3.27
UPDATED SUBURBAN PARK HOMES MILESTONE SCHEDULE
Summary
The project charter is a vital document since it enables
the project sponsor and project manager to reach
mutual understanding and agreement on the project at
a high level. Often, core team members who have been
preassigned and sometimes a key stakeholder or two
sign also sign the charter. All parties can commit to
the intent of the charter with confidence. Charters typi-
cally include sections such as a scope overview, business
case, milestone schedule, acceptance criteria, risks, and
signatures. Many charters include additional sections.
The sponsor or leadership team might write the
rough draft of the business case and scope overview,
but the project manager and core team typically write
the rough draft of the majority of the charter. Once the
draft is written, the sponsor meets with the project
manager and core team to go over the charter in detail
both to ensure understanding and to reach agreement.
The charter, by signaling commitment on the part
of the team and authorization on the part of the spon-
sor, is the document that completes the project initiat-
ing stage. Once the charter is complete, the project
team can usually turn their attention to planning the
details of the project. The first detailed behavioral plan-
ning topics that deal with the project team, other sta-
keholders, communication, and leadership form the
next book module: Leading Projects. The other detailed
planning topics tend to be more technical and form the
third book module: Planning Projects.
Key Terms Consistent with PMI Standards and Guides
project charter, 63
requirements, 65
scope creep, 66
milestone schedule, 66
acceptance criteria, 67
risk, 68
88 Part 1 Organizing Projects
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assumptions, 68
constraint, 68
resources, 68
lessons learned, 70
assumptions log, 75
lessons learned register, 70
Chapter Review Questions
1. What is a charter?
2. Describe what an effective charter should
accomplish.
3. How is a charter like a contract? How is it different
from a contract?
4. How long should a typical charter be?
5. Signing the charter marks the transition between
which two project stages?
6. Who generally writes the rough draft of a
charter?
7. Give three reasons for using a charter.
8. What are some typical elements of a charter?
9. What is scope creep and how can it be prevented?
10. When would a background section be helpful?
11. On most small to medium-sized projects, how
many intermediate milestones should be identi-
fied in the charter?
12. What types of resources might be included in a
resources-needed section of a charter?
13. Name three reasons project managers and teams
should look at risk.
14. Why should each contingency plan have an
owner who is responsible for it?
15. What are the four columns of the milestone
schedule?
16. With whom might the project manager and project
team need to negotiate when creating the charter?
17. What is the primary difference between Auto and
Manually scheduled settings in Microsoft Project?
Discussion Questions
1. Identify the purpose of each element in a project
charter.
2. Explain how a charter helps secure both formal
and informal commitment.
3. How are risks, assumptions, and constraints related?
4. If you are a project manager and have the choice
of forming your core team before or after charter
approval, which would you do and why?
5. List and describe at least four lessons you have
learned from previous projects. Relate how each
is valuable in planning a new project.
6. In your opinion, what are the three most impor-
tant items in your project charter? How did each
help you initiate your project better?
7. Give an example of how an incorrect assumption
could become a risk.
8. Briefly summarize the process of creating a mile-
stone schedule.
9. How are project scope and product scope similar
and different?
10. Upon seeing the rough draft of your charter,
your project sponsor asks you to move the finish
date up by two months. What do you do?
11. What are the greatest advantages to using a com-
puterized scheduling program like Microsoft
Project?
PMBOK ® Guide Questions
1. Which of the following is not a purpose of an
approved project charter?
a. formally authorizes the existence of a project
b. provides detailed information about financial
resources
c. helps the team and sponsor develop a founda-
tional understanding of project requirements
d. provides project manager with authority to
apply organizational resources to the project
2. Adding to the project after it has already begun
without making adjustments to time, cost, or
resources, is known as:
a. scope creep
b. risk
c. milestones
d. acceptance criteria
3. It is inconvenient and time consuming for
employees to walk across campus every day to
Chapter 3 Chartering Projects 89
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eat lunch, which is why we need an employee
lunchroom in our building is an example of:
a. project scope
b. business case
c. milestone schedule
d. constraint
4. What information does the project charter con-
tain that signifies how the customer or user of the
final product, service, or result will judge the deli-
verables, in order to determine that they have
been completed satisfactorily?
a. high-level project risks
b. measurable objectives and acceptance criteria
c. high-level project boundaries
d. project assumptions
5. The project charter should include factors that
are considered to be true, real, or certain without
proof or demonstration. These are known
as .
a. risks
b. assumptions
c. high-level requirements
d. objectives
6. The signing of the project charter represents all
of these except:
a. a formal acknowledgment of the sponsor s
commitment to the project
b. the formal approval of the detailed project
schedule
c. authorization to transition from the high-level
project initiation stage into the more detailed
project planning stage
d. the organization s commitment to apply
resources to the project
7. What project charter component documents sig-
nificant points or events in the project and, per
the author, may be developed most effectively
when combined with other information such as
acceptance criteria?
a. network diagram
b. Gantt chart
c. stakeholder management strategy
d. summary milestone schedule
8. You are the project manager. Upon presenting
your charter to your sponsor, she requests several
changes. What do you do?
a. Agree to all the changes in order to make your
sponsor happy.
b. Refuse to change the charter, since that would
be unfair to your team.
c. Have your team vote on whether or not to
make the changes and go with the will of the
majority.
d. Negotiate with your sponsor to see how you
can best accommodate her requests without
agreeing to unreasonable expectations.
9. The charter is the primary deliverable of a pro-
ject s phase.
a. Selecting
b. Initiating
c. Planning
d. Executing
10. According to the PMBOK, the rough order of
magnitude for the summary budget within the
project charter is .
a. 100% to 200% accuracy
b. 25% to 75% accuracy
c. 5% to 10% accuracy
d. none of the above
11. After identifying potential project risks, the proj-
ect team should then .
a. develop risk response plans for all identified
risks.
b. wait for the sponsor to conduct a risk
assessment.
c. move on to other components of the charter,
since identifying risks is the only risk-related
activity in the initiating phase.
d. assess each risk based on probability and likely
impact, and then create a risk response plan
for each major risk.
Exercises
1. Consider a major team project for a class. Write
the scope overview and business case sections of
a charter.
2. Write the business case and scope overview sections
of a project charter for a project in which your com-
pany is considering buying out another company.
3. You are part of a student team that is going to
host a picnic-style party as a fundraiser event for
a deserving local nonprofit. Develop a milestone
schedule with acceptance criteria for this event.
Include between four and eight milestones.
90 Part 1 Organizing Projects
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4. You are part of a student team that has volun-
teered to host an alumni event at a recently reo-
pened museum in the downtown part of your
city. The event has the twin purposes of estab-
lishing contacts with long-lost alumni and raising
awareness of the newly reopened museum. Brain-
storm the potential risks for this, quantify them
both according to probability and impact, assign
responsibility for each major risk, and create one
or more contingency plans for each major risk.
5. You are part of a student team that is hosting a
number of inner-city junior high and high school
students from several nearby cities at your campus
for a weekend. The primary purpose is to encour-
age them to attend college and, second, to attend
your college. Identify as many stakeholders as pos-
sible for this project, prioritize them, and list the
interests each has in your project.
6. You have started a project working with your
peers at your rival college to create a cross-
town help-out. You want to encourage many
people in the community to contribute a day s
work on a Saturday for various community pro-
jects. You have a rather heated rivalry with this
other college. Create a comprehensive set of team
operating principles to use on this project. Which
of these principles is most important and why?
Do you expect any of them to be difficult to
enforce and why? What do you plan to do if
some of them do not work?
I N T E G R A T E D E X A M P L E P R O J E C T S
SUBURBAN HOMES CONSTRUCTION PROJECT
Scope Overview
Building a single-family, partially custom-designed home as
required by Mrs. and Mr. John Thomas on Strath Dr., Alpharetta,
Georgia. The single-family home will have the following features:
3,200 square-feet home with 4 bedrooms and 2.5
bathrooms
Flooring hard wood in the first floor, tiles in the kitchen
and bathrooms, carpet in bedrooms
Granite kitchen countertops, GE appliances in the kitchen
3-car garage and external landscaping
Ceiling 10 in first floor and vaulted 9 ceilings in
bedrooms
Business Case
Suburban Homes is in the business of constructing high-
quality homes at an affordable cost with luxury options to pro-
vide quality of life for families. The business strategy is to use
the best construction technologies and practices to enhance
productivity and increase profits, while offering cost-effective
and best-value homes for all its customers simultaneously.
The current project, Suburban Park Homes, is aimed to
expand business operations in Georgia.
Milestone Schedule and Deliverables
CM Construction Manager; PM Project Manager
Milestone Completion Date Stakeholder Judge Acceptance Criteria
Approval of final drawing and all the options 2nd January Client PM and the client to approve
Land preparation, landscape, and foundation 15th January CM PM and CM approval
External work completion and utilities hookup 3rd April CM PM and CM approval
Internal and external finish work and painting 10th May CM PM and CM approval
County clearance and Certificate of Occupancy 30th May CM County Inspectors and PM
Financial settlement and handover of home 21st June PM, Client Design Specifications approval
by PM and the client
Chapter 3 Chartering Projects 91
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Risks
Project Risks Risk Owner Contingency Plans
County approval
and permissions
Suburban Homes,
PM
None
County Property
Taxes hike
Client, Suburban
Homes
Document as con-
tract clause
Traffic congestion Client, County,
DMV
None
Resources Required
Funding: the client, underwriters, and Suburban Homes
People: Suburban project management team, contractors,
subcontractors, and skilled labor
Equipment: construction equipment, tools, and machinery
Material: building materials, appliances, landscaping, shrubs,
and trees
Stakeholders
Stakeholders Interest in Project
Primary:
The client
Suburban Homes
County Officers
Overall project cost, time, quality
Overall project cost, time, quality,
success criteria
Adherence to the county standards
Others:
Contractors
Suppliers
Utility companies
Timely payment of invoices
Business expansion, profits
Adherence to laws, business
expansion
Team Operating Principles
Commitment to project schedule: Project team and contrac-
tors will complete their assigned work as per schedule.
Progress Meetings: Construction team meetings sched-
uled on Mondays at 8 a.m. every week and as demanded
by work progress. Members should prepare for these
meetings with information required for review.
Communication: Regular updates of status, reporting
issues, and weekly progress reports.
Lessons Learned
Team participation in developing project schedule is critical.
Transparent communication is encouraged for resolving
issues.
Conflicts must be reported to the construction manager
immediately.
County laws and utility standards must not be
compromised.
Commitment
Sponsor Department/Organization Signature
Project Manager Department/Organization Signature
Core Team Members Department/Organization Signature
92 Part 1 Organizing Projects
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Semester Project Instructions
Determine one member of your student project team to
be the primary contact with the project sponsor (the
manager or executive who came to class when projects
were announced). The sponsor is also the customer
representative. This sponsor was encouraged by your
professor to come with a draft of the business case
and scope overview sections of the charter, but some
sponsors probably did a better job than others. You
need to ensure that you understand these statements
and how they fit with the organization s goals.
Then, your student team needs to draft the remain-
der of the charter with as much help as you can get from
the sponsor and/or other people at the organization.
Once the charter is in rough-draft form, submit it for
comments to your professor. Armed with the professor s
suggestions, you can present it to your sponsor and any
other people your sponsor chooses. Often, this may
involve a leadership team, department heads (functional
managers), and/or project team members. One differ-
ence on this project is that your student team will likely
do most of the planning and only part of the execution,
while members of the organization for whom you are
planning the project will need to complete the execution.
Therefore, you need to consider how you will transition
responsibility over to the parent organization near the
end of the class.
CASA DE PAZ DEVELOPMENT PROJECT
Questions for Students to Answer:
1. Given the information provided in Chapter 2 on how
this project was selected, create scope overview and
business case sections for a charter.
2. If you were the project manager, what expertise would
you like from the sponsor, stakeholders, or core team
members to create a milestone schedule with accep-
tance criteria?
3. Work with at least two other people and brainstorm
pertinent risks. Assess them to determine which you
believe are major risks, and develop at least one
response for each major risk.
4. Who are the key stakeholders for this project and what
is the interest of each? Which stakeholders have the
most power?
PROJECT M ANAGEM ENT IN ACTION
Information Systems Enhancement Project Charter
The following charter was used when a nonprofit
agency formed a project team to upgrade its informa-
tion systems. Comments on the left side give advice
from a communications perspective regarding how to
write a project charter, and comments on the right side
offer suggestions regarding the content of each section.
Chapter 3 Chartering Projects 93
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DESIGN PRINCIPLES
Headings:
Headings facilitate scanning
by identifying information
covered in each section.
Heading descriptions
should accurately indicate
the information that
follows.
Lists:
Listing techniques help
readers remember key
details of a message.
Numbers, bullets, and other
ordering devices promote
retention and improve
visual design.
Lists are best limited to five
points so they do not look
overwhelming to readers.
Lists are written in parallel
structure, with the first word
of each item having the
same grammatical form,
such as all nouns, all
verbs, or all -ing words.
CONTENT PRINCIPLES
Scope Overview:
The scope overview defines
the major deliverables. It
sets project boundaries by
clarifying what is included
and, sometimes, what is not
included.
Business Case:
The business case defines
project objectives and why
they are important to the
parent organization.
Milestone Schedule:
The milestone schedule
shows the project starting
point, a few major mile-
stones, and the ending point.
Acceptance Criteria
Factors:
These identify which
stakeholder will judge
the acceptability of each
milestone and what
criteria they will use.
PROJECT CHARTER: INFORMATION
SYSTEMS ENHANCEMENT PLAN
Scope Overview
This team will implement a new information
system based on a needs assessment of person-
nel of the agency. The project team will detail
technological issues, as well as upward, down-
ward, and lateral communications issues within
each department and recommend software pack-
age options for each program area. The sponsor
will select a vendor, and the project team will
oversee implementation.
Business Case Objective
The agency needs to overhaul its information
systems to increase productivity for staff, and
create additional learning opportunities for clients.
It is estimated that 20 percent more clients will be
served with the new system.
MILESTONE
COM-
PLETION
DATE
STAKE-
HOLD-
ER
JUDGE
ACCEP-
TANCE
CRITERIA
Outdated
facility, poor
productivity
Start
1/6/18
Staff survey 1/31/18 Sponsor Discussion
with depart-
ment heads
Software
recomm-
endations
3/14/18 Opera-
tions
Manager
All areas
included,
pilot results
Vendor
selected
3/28/18 Sponsor Best meets
qualifications
Technology
in place
5/9/18 Project
Manager
System test
demonstration
Updated
facility,
productivity
improved
5/30/18 Sponsor Two-week
data reports
from
department
heads
94 Part 1 Organizing Projects
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DESIGN PRINCIPLES
Tables:
Use tables to organize
complex information into
an easy-to-follow column
and row format.
Design tables so they
make sense when read
independently of the text.
Use table headings that
reflect logical groupings
of information.
Phrase column language
so it is in parallel structure.
Character Formatting:
Use character formatting,
including boldface, italics,
underlines, and centering
to highlight headings.
Use character formatting
hierarchically. Boldface,
underlines, and all caps
are best for major headings.
Use fewer or less dramatic
techniques for subheadings.
Type Size and Face:
Use 10-, 11-, or 12-point type
for most documents. People
who have poor vision often
prefer larger type.
Use a conventional
typeface, such as Arial,
Times Roman, or Palatino.
White Space:
Use white space to separate
document sections
attractively and to improve
readability.
Page Breaks:
When possible, complete
entire sections on the same
page. Redesign documents
where one or two lines of
text from a section run onto
the next page.
Major Risks
Resources Needed
This project will require the project manager
to spend 50% of her time and the lead user
and 3 core team members 25% of their time
for 5 months. The budget estimate is $45,000.
Stakeholder List
CONTENT PRINCIPLES
Project Risks and
Assumptions:
This section identifies major
risks and how the team
will either reduce their
probability of happening
and/or their impact if they
do occur. One person is
assigned responsibility
for each risk.
Resources Needed:
This is an estimate of the
money, personnel, and
other resources expected
to be needed.
Stakeholder List:
Identifies those individuals
and groups who have an
interest in either the project
process and/or results.
RISK
RISK
OWNER RESPONSE PLANS
System may
not work
properly
Technical
lead
Define top defect and
focus on it exclusively
until fixed.
Implementa-
tion may
cost too much
Accountant Identify areas of cost
reduction and added
funding.
Lack of
sponsor
buy-in
Project
Manager
1. Conduct staff survey
to identify most-
needed capabilities.
2. Understand sponsor
requirements.
STAKEHOLDER INTEREST IN PROJECT
Board
Sponsor
Department
Heads
Overall cost and overall project
success Overall project success,
resource needs; Impact on their
department, resource needs
Lead user New work methods, productivity
increases
Chapter 3 Chartering Projects 95
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References
A Guide to the Project Management Body of Knowledge
(PMBOK® Guide), 6th ed. (Newtown Square, PA:
Project Management Institute, Inc., 2017).
Altwies, Diane, and Frank Reynolds, Achieve CAPM
Exam Success: A Concise Study Guide and Desk Ref-
erence (Ft. Lauderdale, FL: J. Ross Publishing, 2010).
Assudani, Rashmi, and Timothy J. Kloppenborg,
Managing Stakeholders for Project Management
Success: An Emergent Model of Stakeholders,
Journal of General Management 35 (3) (Spring
2010): 67 80.
Evans, James R., and William M. Lindsay, The Man-
agement and Control of Quality, 8th ed. (Mason,
OH: Cengage, 2011).
Johnson, Craig E., Meeting the Ethical Challenges of
Leadership (Los Angeles: Sage, 2009).
CONTENT PRINCIPLES
Operating Principles:
Operating principles
indicate agreement on
deadlines, meetings,
decision making, and how
participants will treat each
other with respect.
Lessons Learned:
This section highlights
specific learnings from
previous similar projects
that will help the team copy
good practices and avoid
problems.
Commitment:
Project principals signal
agreement in principle to
the project, recognizing that
some of the specifics will
probably change when the
detailed planning is
complete.
DESIGN PRINCIPLES
Sentences:
To express complex ideas
effectively and to make
ideas easy for readers to
understand, compose most
sentences to be 15 25
words long.
Simple Language:
So all readers understand
your language easily,
substitute short, action-
oriented, easily understood
words for long, unfamiliar,
and unpronounceable
words.
Team Operating Principles
Commitment to timetable. The project manage-
ment team members will complete their
assigned work on time.
Regularly scheduled project team and sponsor-
ship meetings. Project team meetings will be
held every Saturday at 4:15 p.m. The team will
also communicate via e-mail as required. Spon-
sorship meetings with the agency staff will be
held bimonthly and as-needed.
Timely communication. The project manage-
ment team will communicate status, issues, and
questions with agency via e-mail or conference
call weekly. Project actions will be distributed to
the team every Monday.
Majority rule. The project management team will
negotiate and resolve issues on a majority-rule
basis.
Lessons Learned
Agreeing on project scope is a key preliminary
project planning activity.
Maintaining project goals and timeline requires
open communication and quick issue resolution.
Understanding roles and responsibilities facil-
itates smooth teamwork and timely project
completion.
Commitment
Sponsor Project Manager
Lead User Core Team Member
Core Team Member Core Team Member
96 Part 1 Organizing Projects
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Kloppenborg, Timothy J., and Laurence J. Laning,
Strategic Leadership of Portfolio and Project Man-
agement (New York: Business Expert Press, 2012).
Kloppenborg, Timothy J., and Joseph A. Petrick,
Managing Project Quality (Vienna, VA: Manage-
ment Concepts, Inc., 2002).
PMI Lexicon of Project Management Terms Version 3.0
(Newtown Square, PA: Project Management Insti-
tute, Inc., 2015).
Skilton, Paul F., and Kevin J. Dooley, The Effects of
Repeat Collaboration on Creative Abrasion, Acad-
emy of Management Review 35 (1) (2010): 118 134.
Endnotes
1. PMI Lexicon of Project Management Terms
Version 3.0, 2015: 13.
2. Kloppenborg, Timothy J., and Joseph A. Petrick,
Managing Project Quality (Vienna, VA: Manage-
ment Concepts, Inc., 2002): 39.
3. PMI Lexicon of Project Management Terms Ver-
sion 3.0 (Newtown Square, PA, 2015): 7.
Chapter 3 Chartering Projects 97
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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2
ORGANIZE LEAD PERFORMPLAN
P A R T 2
LEADING PROJECTS
Chapter 4
Organizational Capability:
Structure, Culture, and Roles
Chapter 5
Leading and Managing
Project Teams
Chapter 6
Stakeholder Analysis and
Communication Planning
Leading for success in project management includes
leading the parent organization that is conducting the
project, leading the project team, and leading the various
stakeholders who care about the project in one way or
another. Chapter 4 deals with the parent organization
giving ideas about how the organizational structure,
organizational culture, project life cycle model, and roles
of various players impact a project. Chapter 5 includes
acquiring, developing, and leading the project team.
Chapter 6 includes engaging stakeholders, managing
communications, and running project meetings.
99
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C H A P T E R 4
Organizational Capability: Structure,
Culture, and Roles
We implement project management best practices for the purpose of increasing
the likelihood for project success. Formerly, as an executive, I was responsible
for establishing, operating, and evolving a national project management office
(PMO) for one of the nation s largest print/mail and electronic outsourcing firms.
Organizational structure, culture, roles and responsibilities of project partici-
pants, and project life cycle standard processes and tools were critical influen-
cers to achieving project success. As there is no single way to implement project
management, how we chose to address each influencer shaped the way projects
were managed. A snapshot of our approach follows:
From an operations perspective, there was a strategic need to implement a
centralized approach to project management. Through a number of mergers and
acquisitions, 10 geographically dispersed operation centers were servicing a
broad range of expanding customer needs. As a result, two key factors were at
play. One: the customer base was growing from regionally based to nationally
based customers. Two: the best-of-the-best operations technology needed to be
leveraged across all centers. Structurally, the decision was made to consolidate
CHAPTER OBJECTIVES
After completing this
chapter, you should
be able to:
CORE OBJECTIVES:
Compare and contrast the
advantages and disad-
vantages of the functional,
project, strong matrix,
balanced matrix, and
weak matrix methods of
organization; describe
how each operates and
when to use each.
Relate how an organiza-
tion s structure influ-
ences the implementa-
tion of its strategic plan.
Describe organizational
culture elements that are
helpful in planning and
managing projects and
demonstrate how to
overcome organizational
culture elements that
hinder project success.
Describe different proj-
ect life cycle models and
distinguish when each is
appropriate.
BEHAVIORAL OBJECTIVES:
Describe the duties,
motivations, and chal-
lenges of each of the
executive, managerial,
and team roles in projects
and list important attri-
butes for selecting each.
Given a project situation,
explain ethical behavior
consistent with PMI s
Code of Ethics and
Professional Conduct.
Predict the impact of orga-
nizational structure and
associated culture on indi-
vidual and team behaviors.
Predict the impact of
organizational structure
and associated culture
on individual and team
performance.
M
on
ke
y
Bu
si
ne
ss
Im
ag
es
/S
hu
tte
rs
to
ck
.c
om
100
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operation centers to three, geographically in the East, Central, and West. This
meant that internal and external projects that applied nationally could no longer
be managed at a regional level using only regional resources. A new type of proj-
ect manager was needed to manage national resources using a standardized set
of practices. Creating a matrixed project organization to serve the functional orga-
nization was the first phase.
PMBOK ® 6E PRIMARY OUTPUTS
1.2 Foundational elements Life Cycle and Development Approach
2.4 Organizational systems
3.4 Project manager competencies Leader Roles and Responsibilities
4.2 Develop Project
Management Plan
4.7 Close Project
or Phase
4.1 Develop
Project Charter
4.3 Direct and Manage
Project Work
4.4 Direct and Manage
Project Work
4.6 Perform Integrated
Change Control
4.5 Monitor and
Control Project Work
PMBOK® GUIDE
Topics:
1.2 Foundational
elements
2.4 Organizational
systems
3.3 The project man-
ager s sphere of
influence
3.4 Project manager
competencies
4.1 Develop project
charter
4.2 Develop project
management plan
4.3 Direct and manage
project work
4.4 Manage project
knowledge
4.5 Monitor and control
project work
4.6 Perform integrated
change control
4.7 Close project or
phase
CHAPTER OUTPUTS
Life Cycle and Devel-
opment Approach
Leader Roles and
Responsibilities
M
on
ke
y
Bu
si
ne
ss
Im
ag
es
/S
hu
tte
rs
to
ck
.c
om
101
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Ensuring the culture would accept and support these changes was critical
to success as change is not easy and resistance was anticipated. Senior manage-
ment buy-in was essential and plans were implemented to dialogue, collaborate,
and communicate the benefits of a PMO throughout the organization. The PMO s
first mission was to establish national project management standards and manage
a select few strategic national projects with a limited set of project managers.
Proof of concept was key to continued buy-in. Clear roles and responsibilities for
executive sponsors, project managers, and project team members were collabora-
tively established. Standard processes and tools used by the project teams were
jointly developed. Training occurred from the executive suite to project managers
and project team members. As time progressed, project success rates increased
and the PMO responsibilities were expanded to include the project management
of all strategic operational projects and new customer implementations. Career
paths for regional project managers were established. Selected regional project
managers were promoted and trained to be national project managers. The organi-
zational structure changed with selected regional project managers reporting to the
national PMO. The executive sponsorship roles continued to evolve along with
standard processes and practices to facilitate new responsibilities. In Improving
Executive Sponsorship of Projects: A Holistic Approach, additional insight on each
influencer, considerations, pitfalls, and tips for project management implementa-
tion approaches can be found.1
Dawne E. Chandler, PhD, PMP
C hapter 2 dealt with organizational issues of strategic planning, selecting, and resour-cing projects. Chapter 3 details how to initiate a project usually by composing and
ratifying a charter. This chapter introduces both project leadership and project planning.
Leadership in this chapter includes organizational structure and culture along with roles
of all key project participants. Planning is introduced in the selection of the project life
cycle approach and introduction to the concept of a project plan. Both project leadership
and planning lead to project success, as shown in Exhibit 4.1. Effectively leading project
team members and other stakeholders leads to a foundation of respect and trust, which,
in turn leads to project success. Effective project planning lays the groundwork for effective
project execution, monitoring, control, and closeout, which also lead to project success.
EXHIBIT 4.1
DETERMINANTS OF PROJECT SUCCESS
102 Part 2 Leading Projects
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4-1 Types of Organizational Structures
Contemporary companies choose among various methods for establishing their organi-
zational structure. Organization structure is often developed by grouping people together
based on criteria such as functional or technical skills or long-term activities. The struc-
ture size and complexity increase with the increase in the number of employees. The
structure is the way in which an organization divides its people into distinct tasks to
achieve coordination among all these groups. Organizational structure can be considered
to include work assignments, reporting relationships, and decision-making responsibility.
Each method of structuring organizations has strengths and weaknesses. In this section,
we will investigate various organizational methods and the impact of each on managing
projects. The advantages and disadvantages of each organizational form are discussed in
the following sections and then summarized in Exhibit 4.5.
4-1a Functional
A functional organization is an organizational structure in which staff is grouped by
areas of specialization and the project manager has limited authority to assign work
and apply resources. 2 This is the traditional approach in which there are clear lines of
authority according to type of work. For example, all accountants might report to a head
of accounting, all marketers report to a head of marketing, and so on. An organizational
chart for a functional organization is shown in Exhibit 4.2. Note that everyone in the
organization reports up through one and only one supervisor. That supervisor is the
head of a discipline or function (such as marketing).
The functional manager generally controls the project budget, makes most project
decisions, and is the primary person who coordinates project communications outside
the functional areas by contacting his or her peer functional managers.
ADVANTAGES One advantage of the functional form of organization is called unity of
command all workers understand clearly what they need to do because only one boss is
EXHIBIT 4.2
FUNCTIONAL ORGANIZATION
Marketing VP Operations VP Finance VP Services VP
Chapter 4 Organizat