Chapter 1: Project Management Overview

Study Tips

• Understand the characteristics of a project. You'll be asked to identify projects and operations, and the difference between them.
• Know the relationship between projects, programs, and portfolios.
• Know and study the processes, but first, understand the process groups (initiating, planning, executing, monitoring and controlling, and closing) and how they relate to each other.
• Understand the relationship between project management and organizational strategy.
• The business value of a project is a key element you should understand for the exam. Know the types of benefits, including tangible and intangible, and the processes to determine and attain business value realization.
• Understand the roles of and relationship between the project manager and functional manager.
• Know the various organizational influences and how they can positively or negatively impact projects.
• Organizational process assets and enterprise environmental factors are common inputs to most of the processes. Be sure to know what they are and how they can impact the project.
• Know and understand the different organizational structures and how they affect the authority and influence of the project manager.

Characteristics of a project

• Projects are a temporary endeavor undertaken to create a unique product, service, or result.
• projects drive change
• projects enable business value creation
• organizational leaders initiate projects in response to factors acting upon their organizations
• meet regulatory, legal, or social requirements
• satisfy stakeholder requests or needs
• implement change, or change business or technological strategies
• create, improve or fix products, processes, or services
• Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements. It is accomplished through the appropriate application and integration of the project management processes identified for the project. it enables organizations to execute projects effectively and efficiently.
• Operations management is concerned with the ongoing production of goods and/or services. It ensures that business operations continue efficiently by using optimal resources needed to meet customer demands. It is concerned with managing processes that transform inputs (e.g. materials, components, energy, and labor) into outputs (e.g. products, goods, and/or services).

Projects, programs, and portfolios

• A project may be managed in three separate scenarios:
• As a standalone project (outside of a portfolio or program),
• Within a program, or
• Within a portfolio.
• Project managers interact with program managers when a project is within a program or portfolio.
• Program: a group of related projects, subsidiary programs, and program activities managed in a coordinated manner to obtain benefits not available from managing them individually.
• Portfolio: projects, programs, subsidiary portfolios, and operations managed as a group to achieve strategic objectives.
• Program management and portfolio management differ from project management in their life cycles, activities, objectives, focus, and benefits. However, portfolios, programs, projects, and operations often engage with the same stakeholders and may need to use the same resources, which may result in a conflict in the organization.
• Looking at project, program, and portfolio management from an organizational perspective:
• Program and project management focus on doing programs and projects the "right" way
• Portfolio management focuses on doing the "right" programs and projects

Process groups

• Initiating: those processes performed to define a new project or a new phase of an existing project by obtaining authorization to start the project or phase.
• Planning: those processes required to establish the scope of the project, refine the objectives, and define the course of action required to attain the objectives that the project was undertaken to achieve.
• Executing: those processes performed to complete the work defined in the project management plan to satisfy the project requirements.
• Monitoring and controlling: those processes required to track, review, and regulate the progress and performance of the project; identify any areas in which changes to the plan are required; initiate the corresponding changes.
• Closing: those processes performed to formally complete or close the project, phrase, or contract.

Processes

• The project life cycle is managed by executing a series of project management activities known as project management processes. Every project process produces one or more outputs from one or more inputs by using appropriate project management tools and techniques.
• Outputs are an end result of aa process and can be either a deliverable or an outcome. Project management processes are logically linked by the outputs they produce. Processes may contain overlapping activities that occur throughout the project. the output of one process generally results in either:
• an input to another process, or
• a deliverable of the project or project phase.
• Processes generally fall into one of three categories:
• Processes used once or at predefined points in the project. EX: 'Develop Project Charter' and 'Close Project or Phase' processes
• Processes that are performed periodically as needed. EX: 'Acquire Resources' is performed as resources are needed; 'Conduct Procurements' is performed prior to needing the procured item.
• Processes that are performed continuously throughout the project. Many of the Monitor and Control processes are ongoing from the start of the project until it is closed out. EX: 'Define Activities' may occur throughout the project life cycle, especially if the project uses rolling wave planning or an adaptive development approach.

Project management/organizational strategy

• Portfolios, programs, and projects are aligned with or driven by organizational strategies and differ in the way each contributes to the achievement of strategic goals.
• Portfolio management aligns with organizational strategies by selecting the right programs or projects, prioritizing the work, and providing the needed resources.
• Program management harmonizes its program components and controls interdependencies in order to realize specified benefits.
• Project management enables the achievement of organizational goals and objectives.
• Within portfolios or programs, projects are a means of achieving organizational goals and objectives. this is often accomplished in the context of a strategic plan that is the primary guiding investment in projects.
• Alignment with the organization's strategic business goals can be achieved through the systematic management of portfolios, programs, and projects through the application of organizational project management (OPM).
• OPM: a framework in which portfolio, program, and project management are integrated with organizational enablers in order to achieve strategic objectives.
• The purpose of OPM is to ensure that the organization undertakes the right projects and allocates critical resources appropriately.
• OPM helps to ensure that all levels in the organization understand the strategic vision, the initiatives that support the vision, the objectives, and the deliverables.

Business value

• Business value: the net quantifiable benefit derived from a business endeavor, whether that benefit is tangible, intangible, or both.
• Tangible elements:
• monetary assets
• stockholder equity
• utility
• fixtures
• tools
• market share
• Intangible elements:
• goodwill
• brand recognition
• public benefit
• trademarks
• strategic alignment
• reputation

Business case

• Project business case: a documented economic feasibility study used to establish the validity of the benefits of a selected component lacking sufficient definition and that is used as the basis for the authorization of further project management activities.
• It lists the objectives and reasons for project initiation and helps measure the project's success at the end of the project against those objectives.
• Used throughout the project life cycle, and may be used before the project initiation, possibly resulting in a go/no-go decision for the project.
• A needs assessment often proceeds the business case, with its results possibly summarized in the business case document. Involves understanding business goals, objectives, issues, and opportunities, and recommending proposals to address them.

Business case may document:

• Business needs -
• determination of what is prompting the need for action
• situational statement documenting the business problem or opportunity to be addressed, including the value to be delivered to the organization
• identification of stakeholders
• identification of scope
• Analysis of the situation -
• identification of organizational strategies, goals, and objectives
• identification of root cause(s) fo the problem or contributors of an opportunity
• gap analysis of capabilities needed for the project versus existing capabilities of the organization
• identification of critical success factors
• identification of decision criteria by which the various courses of action may be assessed
• required: a criterion that is "required" to be fulfilled to address the problem or opportunity
• desired: a criterion that is "desired" to be fulfilled to address the problem or opportunity
• optional: a criterion that isn't essential; fulfillment of this criterion may become a differentiator between alternative courses of action
• identification of a set of options or business scenarios (alternative courses of action that may be taken by the organization) to be considered for addressing the business problem or opportunity
• do nothing/business or usual - selection of this option results in the project not being authorized
• do the minimum work possible to address the problem or opportunity - the minimum may be established by identifying the set of documented criteria that are key in addressing the problem or opportunity
• do more than the minimum work possible to address the problem or opportunity - this option meets the minimum set of criteria and some or all of the other documented criteria (there may be one or more of these options documented in the business case)
• Recommendation -
• a statement of the recommended option to pursue in the project
• items to include in the statement; may include:
• analysis results for the potential option
• constraints, assumptions, risks, and dependencies for the potential options
• success measures
• an implementation approach; may include:
• milestones
• dependencies
• roles and responsibilities
• evaluation: statement describing the plan for measuring benefits the project will deliver
• should include any ongoing operational aspects of the recommended option beyond initial implementation

Project benefits management plan

• Project benefits management plan: the document that describes how and when the benefits of the project will be delivered and describe the mechanisms that should be in place to measure those benefits.
• Project benefit: an outcome of actions, behaviors, products, services, or results that provide value to the sponsoring organization, as well as to the project's intended beneficiaries.
• Project benefits management plan is developed early in the project life cycle with the definition of the target benefits to be realized. It describes key elements of the benefits and may include documenting:
• Target benefits: the expected tangible and intangible value to be gained by the implementations of the project (financial value is expressed as net present value.
• Strategic alignment: how well the project benefits align with the business strategies of the organization.
• Timeframe of realizing benefits - benefits by phase, short-term, long-term, and ongoing
• Benefits owner: the accountable person to monitor, record, and report realized benefits throughout the timeframe established in the plan
• Metrics: the measures used to show benefits realized, direct and indirect
• Assumptions: factors expected to be in place or to be in evidence
• Risks: risks for the realization of benefit
• Developing the project benefits management plan makes use of the data and information documented in the business case and needs assessment.
• The cost-benefit analysis recorded in the documents illustrates the estimate of costs compared to the value of the benefits realized by the project.
• Benefits management plan and project management plan include a description of how the business value resulting from the project becomes part of the organization's ongoing operations, including the metrics to be used. The metrics provide verification of the business value and validation of the project's success.

Project success measures

• Traditional measures: time, scope, cost, and quality.
• Recent measures - should be measured with consideration toward the achievement of the project objectives.
• It is critical to clearly document the project objectives and to select objectives that are measurable.
• Questions to answer:
• What does success look like for this project?
• How will success be measured?
• What factors may impact success?
• It is possible for a project to be successful from a scope/schedule/budget viewpoint, and to be unsuccessful from a business viewpoint. This can occur when there is a change in business needs or the market environment before a project is completed.
• Project success may include additional criteria linked to the organizational strategy and to the delivery of business results, including, but not limited to:
• completing the project benefits management plan
• meeting the agreed-upon financial measures documented in the business case:
• net present value (NPV)
• return on investment (ROI)
• internal rate of return (IRR)
• payback period (PBP)
• benefit-cost ration (BCR)
• meeting business case non-financial objectives
• completing the movement of an organization from its current state to its desired future state
• fulfilling contract terms and conditions
• meeting organizational strategy, goals, and objectives
• achieving stakeholder satisfaction
• acceptable customer/end-user adoption
• integration of deliverables into the organization's operating environment
• achieving other agreed-upon success measures or criteria (e.g. process throughput)

Project manager vs. functional manager

• Project manager: the person assigned by the performing organization to lead the team responsible for achieving the project objectives.
• Reporting relationships are based on organizational structure and project governance.
• Project managers should have the following attributes (in addition to specific technical skills and general management proficiencies):
• knowledge about project management, the business environment, technical aspects, and other information needed to manage the project efficiently
• skills needed to effectively lead the project team, coordinate the work, collaborate with stakeholders, solve problems, and make decisions
• abilities to develop and manage scope, schedules, budgets, resources, risks, plans, presentations, and reports
• other attributes required to successfully manage the project, such as personality, attitude, ethics, and leadership
• Project managers accomplish work through the project team and other stakeholders.
• They rely on important interpersonal skills such as:
• leadership
• team building
• motivating
• communicating
• influencing
• decision making
• political and cultural awareness
• negotiating
• facilitating
• managing conflict
• coaching
• A project manager is successful when:
• project objectives have been achieved
• stakeholder needs, concerns, and expectations have been addressed to satisfy relevant stakeholders
• the project approach, life cycle, and project management processes have been tailored to meet the project and product requirements

Project manager vs. functional manager

• Functional manager: the individual(s) who have management authority (or serve in that capacity) over the organizational unit within a functional group (the hierarchical structure that allocates the entire team into roles based on their strengths and weaknesses, with a leader at the top), company, or organization.
• Can also refer to that particular manager who serves the role of leading a group that is charged with the actual production of a product, or performs a specific and real service.
• Traditionally not associated with the project team, and is often, and more likely, a colleague who may have some involvement with the project, but is not directly involved in its day-to-day management.

Organizational influences

• Organizational influences: the characteristics or attributes of an organization and how they impact the people and the work completed within, including project management.
• Values and mission: what an organization strives to be and what it wants to accomplish
• Most relevant where there are constraints, typically between scope, cost, and time - there is usually a tradeoff between these when accomplishing a project, and the values and mission of a company help determine what those tradeoffs should be.
• Structure - there are typically three types than an organization could have, ranging from low to high emphasis on projects.
• Functional: organization is divided into specialized groups (sales, operations, finance, technology, etc.) and employees are focused on their specialized function, as is management. If project work is taken on, it is secondary, and the project manager has no authority.
• Projectized: groups within the organization are divided by specific projects, focused on project work and managed by project managers.
• Matrix: the work is a mix of specialized function and project structures, and both functional and project managers have authority. This structure is a spectrum.
• Strong matrix - more project-focused
• Weak matrix - more functional-focused
• Balanced matrix - truly in the middle
• Culture: the degree to which a company is entrepreneurial or conservative, how motivation occurs.
• Entrepreneurial: risk is acceptable
• Conservative: risk-averse

OPAs and EEFs

• Organizational process assets (OPAs): plans, processes, policies, procedures, and knowledge bases specific to and used by the performing organization.
• Internal to the enterprise - may arise from the enterprise itself, a portfolio, a program, another project, or a combination of these.
• These assets influence the management of the project.
• EX: change control procedures, templates, information from previous projects, and lessons learned repositories.
• Environmental enterprise factors (EEFs): conditions that are not under the control of the project team and that influence, constrain or direct the project; originate from outside of the project, and, often, outside of the enterprise.
• May have an impact at the enterprise, portfolio, program, or project level.
• Internal organizational culture, structure, and governance is one of these factors.
• EX: vision, mission, values, beliefs, cultural norms, hierarchy and authority relationships.

Organizational structures

• Determination of the appropriate organizational structure type is a result of the study of tradeoffs between two key variables - the organizational structure types available for use and how to optimize them for a given organization.
• Factors to consider with these two variables:
• management elements
• governance frameworks
• organizational structure types
• Organizational structures take many forms or types.
• Factors to consider when selecting an organizational structure:
• degree of alignment with organizational objectives
• span of control, efficiency, effectiveness
• clear path for escalation of decisions
• clear line and scope of authority
• delegation capabilities
• accountability assignment
• responsibility assignment
• adaptability of design
• simplicity of design
• efficiency of performance
• cost considerations
• physical locations (e.g. colocated, regional and virtual)
• clear communication (e.g. policies, status of work, and organizational vision)

Organizational structures

• Organic or simple
• Work groups arranged by: flexible; people working side-by-side
• Project manager's authority: little or none
• Project manager's role: part-time; may not be a designated job role like coordinator
• Resource availability: little or none
• Who manages the project budget: owner or operator
• Project management administrative staff: little or none
• Functional (centralized)
• Work groups arranged by: job being done
• Project manager's authority: little or none
• Project manager's role: part-time; may not be a designated job role like coordinator
• Resource availability: little or none
• Who manages the project budget: functional manager
• Project management administrative staff: part-time
• Multi-divisional
• May replicate functions for each division with little centralization.
• Work groups arranged by: one of - product, production processes, portfolio, program, geographic region, customer type
• Project manager's authority: little or none
• Project manager's role: part-time; may not be a designated job role like coordinator
• Resource availability: little or none
• Who manages the project budget: functional manager
• Project management administrative staff: part-time
• Matrix - strong
• Work groups arranged by: job function with project manager as a function
• Project manager's authority: moderate to high
• Project manager's role: full-time designated job role
• Resource availability: moderate to high
• Who manages the project budget: project manager
• Project management administrative staff: full-time
• Matrix - weak
• Work groups arranged by: job function
• Project manager's authority: low
• Project manager's role: part-time; done as part of another job and not a designated job role like coordinator
• Resource availability: low
• Who manages the project budget: functional manager
• Project management administrative staff: part-time
• Matrix - balanced
• Work groups arranged by: job function
• Project manager's authority: low to moderate
• Project manager's role: part-time; embedded in the functions as a skill and may not be designated job role like coordinator
• Resource availability: low to moderate
• Who manages the project budget: mixed
• Project management administrative staff: part-time
• Project-oriented (composite, hybrid)
• Work groups arranged by: project
• Project manager's authority: high to almost total
• Project manager's role: full-time or part-time
• Resource availability: high to almost total
• Who manages the project budget: project manager
• Project management administrative staff: full-time
• Virtual
• Work groups arranged by: network structure with nodes at points of contact with other people
• Project manager's authority: low to moderate
• Project manager's role: full-time or part-time
• Resource availability: low to moderate
• Who manages the project budget: mixed
• Project management administrative staff: full-time
• Hybrid
• Work groups arranged by: mix of other types
• Project manager's authority: mixed
• Project manager's role: mixed
• Resource availability: mixed
• Who manages the project budget: mixed
• Project management administrative staff: mixed
• PMO - portfolio, program, project management office
• Work groups arranged by: mix of other types
• Project manager's authority: high to almost total
• Project manager's role: full-time designated joob role
• Resource availability: high to almost total
• Who manages the project budget: project manager
• Project management administrative staff: full-time

Project management office (PMO)

• Project management office: an organizational structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.
• Responsibilities can range from providing project management support functions to the direct management of one or more projects.
• Types of PMOs in organizations (varying in the degree of control and influence on projects):
• Supportive- provide a consultative role to projects by supplying templates, best practices, training, access to information, and lessons learned from other projects.
• Serves as a project repository.
• Degree of control provided is low.
• Controlling - provide support and require compliance through various means.
• Degree of control provided is moderate.
• Compliance may involve:
• adoption of project management frameworks or methodologies
• use of specific templates, forms, and tools
• Directive: take control of the projects directly by directly managing the projects.
• Project managers are assigned by and report to the PMO.
• The degree of control provided is high.
• The PMO may have organization-wide responsibility, and it may play a role in supporting strategic alignment and delivering organizational value.
• The PMO integrates data and information from organizational strategic projects and evaluates how higher-level strategic objectives are being fulfilled.
• Natural liaison between the organization's portfolios, programs, projects, and the organizational measurement systems (e.g. balanced scorecard).
• Projects managed may not be related other than by being managed together.
• The specific form, function, and structure of a PMO are dependent upon the needs of the organization it supports.
• A PMO may have the authority to act as an integral stakeholder and a key decision-maker throughout the life of each project in order to keep it aligned with the business objectives. The PMO may:
• make recommendations
• lead knowledge transfer
• terminate projects
• take other actions
• A primary function of a PMO is to support project managers in a variety of ways:
• managing shared resources across all projects administered by the PMO
• identifying and developing project management methodology, best practices, and standards
• monitoring compliance with project management standards, policies, procedures, and templates by means of project audits
• developing and managing project policies, procedures, templates, and other shared documentation (OPAs)
• coordinating communication across projects