Project Management Overview The Project Management Institute (PMI)® has updated its Project Management Body of Knowledge (PMBOK® Guide) in a Fourth Edition. The PMBOK ® Guide and many other first-rate project management publications are available through PMI’s bookstore at http://www.pmi.org. PMI’s Project Management Professional (PMP)® Certification is an excellent step towards becoming a great project manager. We give a five-day class, “PMP® Certification Prep Course Plus,” worth 37.5 contact hours or Professional Development Units (PDUs) but the following is a quick overview using the PMBOK ® Guide’s WBS (Knowledge Areas or Chapters). There is some great material in the first two chapters of the PMBOK® Guide. The figures, definitions and bullets are very important throughout the guide. Definitions and acronyms are spelled out in the Glossary at the back of the Guide. 1.0 INTRODUCTION See Chapter 1 in the PMBOK ® Guide, starting on Page 3. Page 5 - “What is a Project?” is very important. We often see confusion on this issue and have to reverse-negotiate with resources on our projects. If you ask Mary how much time she is available on our project, she will tell you 60%. If Mary is doing non-project work 40% of the time and is working on three equal projects, she is available on our project only 20% of the time. If she is working simultaneously on three activities on our project, she can work only approximately 7% of her time on each activity. Page 5 - Projects are temporary and unique and therefore are often risky. These definitions are fundamental. Page 6 - Note that the infamous “triple constraints” have been replaced by “competing project constraints” of scope, quality, schedule, budget, resources, and risk. You need to balance these, often competing, constraints. In negotiations you may sometimes have to ascertain which constraint your boss or client cares about the least. Page 9, Table 1-1 gives a comparative overview of Project, Program and Portfolio management. Pages 10-14 address Projects and Strategic Planning, Project Management Office (PMO), Project Management and Operations Management, Role of Project Manager, the PMBOK® Guide, and Enterprise Environmental Factors. This material is increasingly significant as Project Management moves from single projects (a bridge construction project 500 miles away from head office) to include more-complex situations in head office.

pm overview pmbok guide 4th ed

b.docx

1 29 April, 2011 © TWG

Page 22 - You must make the distinction between designing a new car, which is a project, and producing them each day after that, which is operations. 2.0 PROJECT LIFE CYCLE AND ORGANIZATION Page 18 - The concept of life cycle is essential to understand. The project to build a bridge may take three years. The bridge may be in use for hundreds of years. (Some of them just look this way.) Everyone will remember lousy quality long after you were a hero for bringing the project in on time and on budget. There is often an opportunity for negotiation early in the life cycle. If you have a boss or a client with unrealistic expectations about having software ready for a big trade show, when he came to you months late, you should ask how much more money the company will make if you make the deadline. You then should negotiate for a large chunk of this money to allow you to fast-track your project. You must negotiate for more and better resources, less scope, and so on. Pages 16 and 17 - In our classes, we demonstrate the importance of histograms (Figure 21), Cumulative or S-curves, and Go/No-Go decisions. You generally don’t have a realistic schedule until you use the total float to resource level and you should kill or postpone less-worthy projects at the first opportunity, before you waste resources. The figures on pp. 16 and 17 of the PMBOK ® Guide Second Edition, make a great Level 1 schedule for your project management software. We always try to break out projects by Phase and Deliverable at Level 1, rather than by functional group. We take a team approach to get everyone focused on the deliverables. The functional approach generally builds silos of people who misunderstand people in other silos and often is the kiss of death for a project. See our Project Management Using Microsoft Project®, (PMMP) Checklist. Page 28 - It is important to realize where your company is on the continuum between Functional and Projectized in Table 2-1. Functional organizations often are adequate at performing operations but lousy at performing projects. Projectized organizations often are superb at projects but may struggle to remain good at operations, which often are seen as less exciting or rewarding. It can be extremely difficult for older companies to make the transition from Functional to Projectized work partly because the people in the nosebleed section of the organization chart are good at working their way up the organization chart and distrust project management. Many companies are both functional and project oriented. A prestige-car manufacturer used to be proud of the fact that it took seven years to produce a new model. Arguably they were wearing just their functional hat. Now they wear both hats. TWG is lucky to do projects only. We use Critical Path Method (CPM) schedules for just about everything. In our world, Organization charts are an instrument of the devil and lead to functional silos, lack of originality, poor communications and teamwork, and slow the project down. Many of you have to wear two hats, though, so various organization pm overview pmbok guide 4th ed

b.docx

2 29 April, 2011 © TWG

charts are discussed on pp. 29-31. The organization chart is pretty simple for the Projectized organization. The project manager is king or queen and everyone else is an equal subject. The critical path, not the person in the corner office with the biggest rubber tree and the fancy title, rules. Project Management, A Systems Approach to Planning, Scheduling, and Controlling, by Harold Kerzner, PhD, has some great material and perspective on these issues. 3.0 PROJECT MANAGEMENT PROCESSES FOR A PROJECT The earliest editions of the PMBOK® Guide broke out the work by Knowledge Areas and paid little attention to processes or integration. In our opinion, p. 11 in the PMBOK® Guide, Third Edition, was so important that our students used it as a bookmark when studying. The WBS was PMI eating its own dog food. You still can see the information in Table 3-1 on p. 43 of the Fourth Edition, but it is not as clear. Work Breakdown Structure (WBS) Level 1 is Project Management. Note the definition of WBS in the Glossary. WBS Level 2 is the information in the nine PM Knowledge Areas - Chapters 4 to 12. WBS Level 3 contains the processes for each Knowledge Area, ranging from 3 to 6 processes, for a total of 42 processes. WBS Level 4 is Inputs, Tools and Techniques, and Outputs (ITTOs) for each Chapter. For an example, see p.131. WBS Level 5 contains the detail specific to each chapter. The PMBOK® Guide, Second Edition, drew a distinction between Core and Facilitating Processes from a historical perspective. Scope, Time, Resource Planning, Cost and Integration were the Core Planning processes while the other processes facilitated these. We still find this distinction useful although PMI has dropped it.

pm overview pmbok guide 4th ed

b.docx

3 29 April, 2011 © TWG

In the exam, it will help to remember that much of this chapter duplicates subsequent chapters to emphasize the material from a process perspective. Page 41 - Note the bold statement – “The Process Groups are not project phases. When large or complex projects are separated into distinct phases or sub-projects such as feasibility study, concept development, design, prototype, build, test, all of the Process Group processes normally would be repeated for each phase or subproject.” These phases are very useful as a Level 1 schedule in your project management software. Please note that in p. 40, Figure 3-1, the diagram is repeated for each phase. Do not try to use Figure 3-2 as Level 1 in your schedule. You then will end up with summary bars that run the length of the phase and that will not be very useful. See our PMMP Checklist. Page 43 is particularly important. Use it as a bookmark when studying the PMBOK® Guide. Note the mapping between the five Process Groups and nine Knowledge Areas and that there are 42 Processes in the PMBOK® Guide, Fourth Edition, versus 44 in the Third Edition. Note also the heavy emphasis on Planning (20 processes) although planning may run against every fiber of your being. Fortunately, if you wear two hats and you plan thoroughly up front, the amount of project management work may drop off rapidly when you start your “real work.” The Initiating Process Group has three processes, Executing has eight, Monitoring and Controlling, ten, and Closing, two. Total the processes across the bottom of p. 43 and note that the verbs will help you remember which process belongs in which group. Page 47, Figure 3-8 shows the twenty processes in the Planning Process Group. This figure actually is simpler than in the previous edition, although it still will require a great deal of thought and memorization. The other process groups are easy by comparison because they have fewer processes. Note that all the groups start out with Integration as the central hub. Note also the emphasis on Project Time Management, which has five of the twenty processes. pm overview pmbok guide 4th ed

b.docx

4 29 April, 2011 © TWG

TWG Note: We believe that Time Management and Critical Path Method (CPM) are the foundation of project management. PMI’s College of Scheduling celebrated the 50 year anniversary of CPM in early 2007. Doing project management without CPM is like playing tennis without a racquet. See “Planning a Career in a World without Managers” Fortune Magazine March 20, 1995. CPM revolutionized our whole way of doing business and helped create the profession of project management. It gave us a tool that allowed us to flatten organization charts and do away with bureaucracy and irrelevant and out-of-date processes. It allowed us to put the project and team, rather than the person with the fancy title, first. We think of project management as being the antithesis of bureaucracy and mammoth procedural manuals. We find that a company’s success at projects is often in inverse proportion to the size of its procedural manuals and monthly reports. We believe the emphasis should be on critical path, who is the most qualified person to do the critical activities, how we can use float on less critical activities to resource level, how we can use Earned Value to manage-by-exception just the activities that are close to critical and behind schedule, which projects we should kill, and which processes are unnecessary. We are concerned about any trend that dilutes the importance of CPM. In our world, many people see flow charts as emasculated CPMs. A good CPM schedule tells you so much about the project -- how long it will take, what it will cost, how many resources it will soak up, and how much scope you may have to cut. More about CPM can be found in Chapter 6 – Project Time Management. 4.0 PROJECT INTEGRATION MANAGEMENT We address Chapter 4 later as a summary. 5.0 PROJECT SCOPE MANAGEMENT Many students find Chapter 5 boring, but it receives a great deal of attention in the exam. The IT industry has had a lot of difficulties with “creeping scope” and as more IT people come to PMI the emphasis may well increase. In the construction industry, the scope is generally well-defined in the contract specifications and drawings, and the contractor will often use his CPM schedule to define and manage scope. It is important to understand this chapter as well as what we consider the more exciting material in the Time section. The Scope WBS is on p. 104. 5.1 Collect Requirements 5.2 Define Scope 5.3 Create WBS 5.4 Verify Scope pm overview pmbok guide 4th ed

b.docx

5 29 April, 2011 © TWG

5.5 Control Scope Comments: 1. Note the verb/noun format in this edition of the PMBOK® Guide, e.g., Collect Requirements. 2. Note the outputs of 5.3, Create WBS, and 5.5, Control Scope, in the PMBOK® Guide, p. 104. 3. The material in Section 5.3.2, starting on p. 118, is particularly valuable. We always try to break out by phase and deliverable, as shown in Fig 5-9; however, we do not put project management in its own silo. We assign project management to each of the other phases to keep the whole team focused on the next deliverable and to get a good waterfall from left to right in the schedule. We believe it is essential to avoid breaking out by functional groups, at least until you get down to lower levels in the WBS. Doing this helps you to get one integrated team rather than multiple teams. 4. We put the scope statements and assumptions in the Notes field of the project management software and cross-reference to other documents. 5. We insert new activities into our schedules to demonstrate impacts and scope changes. We also are great believers in performance reporting. See our PMMP Checklist and TWG Templates.

pm overview pmbok guide 4th ed

b.docx

6 29 April, 2011 © TWG

6.0 PROJECT TIME MANAGEMENT See Chapter 6 in the PMBOK® Guide. The whole chapter is excellent. If you follow the WBS on p. 131 and do the six processes in the order suggested, you will save a great deal of iteration, time and frustration. 6.1 Define Activities 6.2 Sequence Activities 6.3 Estimate Activity Resources – new starting in Third Edition. 6.4 Estimate Activity Durations 6.5 Develop Schedule 6.6 Control Schedule Comments: 6.1 Use a strong verb and noun to define your activities in step 1 and keep descriptions short. Scope statements, notes, cross-references, etc., should be put in the notes field for each activity, not in the activity description. (Note that the PMBOK® Guide, Fourth Edition, has adopted this approach for all WBS headings, e.g., “Define Activities,” instead of “Activity Definition,” as in the Third Edition.) 6.2 Use Post-it notes with the whole senior team to come up with the Level 1 (Summary) schedule. Keep it simple. If you work top-down, you can put in the detail later. Think logic and duration, NOT dates! See details in our PMMP Checklist in the Planning section. 6.3 “Estimate Activity Resources” has been moved here from Project Cost Management. We prefer to do much of it AFTER we know where our critical path is. Assign people, equipment and materials to the activities in your schedule. Typically, we assign senior people at a lower percentage, e.g., 10%, and junior people at a higher percentage. You have to take other projects and non-project work into account and there often is a considerable amount of negotiation required. Use templates loaded with generic resources. See our PMMP Checklist. 6.4 Stick to this approach. Do not work with person-hours. Activity (task) durations should be shorter than the reporting period. If you plan to report weekly, no activity at the lowest level in the WBS should be longer than five days. If you plan to report every four hours on a shut-down project, no activity at the lowest level in the WBS should be longer than four hours. See our PMMP Checklist – Planning, Point 4. 6.5 Here is the fun part. Ensure that you have a well-defined, practical, critical path. Use discretionary as well as mandatory logic. At TWG, this is where we fine-tune our Estimates for Activity Resources. Use the Total Float (TF) sort to check for missing logic on activities with excessive float. Then use the corrected Total Float to resource level. Remember that you don’t have a realistic schedule if the resource demands are pm overview pmbok guide 4th ed

b.docx

7 29 April, 2011 © TWG

not realistic. Your Planned Value also will be hopelessly unrealistic and embarrassing. Save your Baseline schedule at the end of Step 4. 6.6 “Control Schedule” should be relatively easy now. Update your schedule regularly. Manage- by-exception just the handful of activities that have problems, rather than the thousands that go well. Catch up activities on the critical path that are behind schedule by assigning more or better resources. Often you can borrow resources from activities that have large amounts of total float. Use Earned Value. See the Schedule Control section in our PMMP Checklist for further details. Find a project management software package that will fit your needs. Such software is the ultimate time-management tool. The new tools make this section easy and rewarding by comparison to just a few years ago. If you keep your project on schedule, generally it will stay on budget (or the budget was unrealistic to start with). Don’t cheat yourself by using the tools to manage time only. With a little more work, you can leverage the new tools to help you with resources, cost, risk, and communications. 7.0 PROJECT COST MANAGEMENT See Chapter 7 in the PMBOK® Guide. Project Management, A Systems Approach to Planning, Scheduling, and Controlling, Seventh Edition by Harold Kerzner, PhD, also has some excellent additional material on cost/benefit analysis, depreciation, and NPV. The WBS on PMBOK® Guide, p.167, is as follows: 7.1 Estimate Costs 7.2 Determine Budget 7.3 Control Costs Comments: 7.1 There is something magical about getting “free” cost estimates using the new project management tools when you resource load the schedule. You even get “free” cash-flow curves. 7.2 In the bad old days you generally bid the job on the basis of your cost estimate and did the schedule if you won the job. Budgeting was a big job because of the different Work Breakdown Structures (WBS) used in the cost estimate (high-level) and in the schedule (detailed). These days this approach is almost heresy. How can you know what a project is going to cost if you don’t know how long it will take? Today, it is easy and fast to do the schedule first, particularly if you have schedule templates from previous similar projects. Remember, too, that the cost baseline may

pm overview pmbok guide 4th ed

b.docx

8 29 April, 2011 © TWG

not be realistic until the schedule has been resource leveled. The initial Planned Value (PV) and projected cash flow often is hopelessly skewed and unrealistic. 7.3 “Control Costs” remains a challenge for many companies. It is difficult to collect actual cost information at the activity level in time to correct a problem. See Project Communication Management, Chapter 10 in the PMBOK® Guide, and our PMMP Checklist. In our classes, we find that many people still have problems with Performance Reporting and Earned Value. This section is crucial both in real life and in the exam. In real life, it allows you to manage-by-exception just the problem activities. In the exam, you need to memorize the PMBOK® Guide definitions from the Glossary, starting on p. 423, and the formulae in Section 7.3.2. It is easy to remember the formulae if you understand the following definitions and ideas: Earned Value, EV (formerly Budgeted Cost of Work Planned) – What’s in the baseline budget * % Complete. (Once you update your schedule, the project management software will calculate Earned Value for you and give you a free invoice. Many sophisticated clients and banks now insist that the invoice be prepared this way. It doesn’t make sense to do it twice, once for time and once for cost!) Planned Value, PV (formerly Budgeted Cost of Work Scheduled) – the physical work scheduled (Project management software will calculate Planned Value for you but don’t forget to resource level your schedule first or this may be hopelessly optimistic!) Actual Cost, AC (formerly Actual Cost of Work Performed) – obtained from invoices and timesheets (This can be a lot of work.) Schedule Variance:

SV = EV-PV (negative $ = trouble)

Cost Variance:

CV = EV-AC (negative $ = trouble)

Schedule Performance Index: SPI = EV/PV (