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Project Management

Project Management. BP Oil Spill Response. Glastonbury Festival. How many events? How many participants? Where are the events located? How should the events be scheduled? What infrastructure needs to be built? When to build? Completion time?. What is a Project?.

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Project Management

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  1. Project Management

  2. BP Oil Spill Response Glastonbury Festival How many events? How many participants? Where are the events located? How should the events be scheduled? What infrastructure needs to be built? When to build? Completion time? SEEM 3530

  3. What is a Project? • A project is a “temporary endeavor undertaken to create a unique product or service”. • A project is a well-defined set of tasks or activities that must all be completed in order to meet the project’s goals. Two prevalent characteristics: • Each task may be started or stopped independently of other tasks; • Tasks are ordered such that they must be performed in a given sequence. SEEM 3530

  4. Examples of Projects • Building the pyramids • Apollo moon landing mission • Developing MS Windows • Making The Lord of the Rings • Organizing the Olympics Games • Developing and marketing a new drug • Implementing a new company wide IT system • Designing this course Project management spans both the manufacturing and service sectors. SEEM 3530

  5. Other examples of “projects" • Construction of dams, warehouse, freeways, railways, etc. • Design of new models of products, such as new cars, ships, and aircraft. • Development of computer systems, software, etc. • New product marketing, advertising campaigns, global mergers, capital acquisitions, etc. • Set-up of a new enterprise, organization, department, office, etc. • Performing major maintenance or repair. SEEM 3530

  6. SEEM 3530

  7. Definition of a “project" • A project is an organized endeavoraimed at accomplishing a specific non-routine set of tasks within a certain time and under a certain resource constraint. • Time required and costs are usually significant. SEEM 3530

  8. Characteristics of projects • There is a set of well-defined goals. • There is a specific start and a specific end point. • The endeavor is unique and not repetitious. • A project usually contains costs and time schedules to produce a specified product or result. • A project often cuts across many organizational and functional lines, and thus there are requirements for specific expertise, and sometimes conflicts with within the project team. SEEM 3530

  9. Project management • The means, techniques, and the concepts used to run a project and achieve its objectives subject to various constraints and limits on time, resources, technology, and personnel. • Planning • Organising resources • Directing and Controlling SEEM 3530

  10. Project management • The main components : • Project initiation, selection, and definition. • Project organization • Analysis of activities/tasks • Project scheduling • Project budgeting • Resource management • Project execution and control • Project termination SEEM 3530

  11. What is a Project Manager? Acknowledgment: Ms. Colleen White, Project Manager, Cardinal Health, Dublin, Ohio, USA SEEM 3530

  12. Characteristics Needed as a Project Manager • During planning:Detail oriented, organized, logical thinker, can deal with uncertainty, creative. • During execution: Effective communicator, problem solver, quick thinker, good memory. • During assessment: Analytic, sensitive, continuous improver. • During collaboration: Effective communicator, facilitator, motivator, team builder. Acknowledgment: Ms. Sally Stark, Director of Program Management, New Product Innovations, Powell, Ohio, USA SEEM 3530

  13. History of Project Management • Some early examples of project management was the construction of the pyramids in Egypt, building the Great Wall of China • Henry L. Gantt (1861-1919) added an important visualization tool around 1917 with the Gantt Chart SEEM 3530

  14. Example—Gantt Chart for building a house SEEM 3530

  15. History of Project Management • In 1957, J.E. Kelly of Remington-Rand and M.R. Walker of DuPont Company developed the Critical Path Method (CPM) for project scheduling, • i.e. the basic algorithm used in MS Project • scheduling maintenance shutdown of chemical plants • Also in the late 1950s, Booz Allen Hamilton developed the Program Evaluation and Review Technique (PERT), which models uncertainty in project management • Lockheed Aircraft, US Navy Special Projects Office: • Polaris Missile Project • New directions since 1995: critical chains, agile and extreme project management SEEM 3530

  16. Polaris A3T missile (Submarine-launched ballistic missile) SEEM 3530

  17. Importance of Project Management • Project management effectively controls organizational change, allowing organizations to introduce new products, new processes, and new programs effectively. • Projects are becoming more complex, making them more difficult to control without a formal management structure. • Projects with substantially different characteristics, especially in IT, are emerging. • Project management helps cross-functional teams to become more effective. SEEM 3530

  18. “At last we are beginning to see research which proves how important project management is ... without well-trained and capable project managers the percentage of GDP spent through projects is inflated due to many exceeding their budget through poor management.” Importance of Project Management Richard Pharro, author and consultant (2003) SEEM 3530

  19. Project Management versus Process Management “Ultimately, the parallels between process and project management give way to a fundamental difference: process management seeks to eliminate variability whereas project management must accept variability because each project is unique.” J. Elton, J. Roe. 1998. Bringing Discipline to Project Management. Harvard Business Review. SEEM 3530

  20. Measures of Project Success • Overall perception • Cost • Completion time • Technical goals, compared to initial specifications (“scope”) • Technical goals, compared to other projects in the organization • Technical goals, taking into account the problems that arose in the project R.J. Might and W.A. Fischer (1985) SEEM 3530

  21. Nine Factors Critical to the Success of Many Projects • Clearly defined goals • Competent project manager • Top management support • Competent project team members • Sufficient resource allocation • Adequate communication channels • Effective control mechanisms • Use of feedback for improvement • Responsiveness to clients J. Pinto and D. Slevin (1987) SEEM 3530

  22. Challenges of Project Management • Initiation:Over-commitment - management commits to a schedule, budget, or deliverable that is unrealistic. • Planning:Outsourced contributors present problems which can affect client satisfaction and delivery. • Execution: Resource competition / unfocused resources result in missed estimates. • Controlling: Change control is good, but apparently not nearly as good as apathy. • Closing: “We need project managers, not historians!” Acknowledgment: Mr. Carl Long, Medical IT Portfolio Manager, Cardinal Health, Dublin, Ohio SEEM 3530

  23. Famous Project Failures (1 of 5) • In 1988, Westpac Banking Corporation initiated a 5-year, $85m project to improve its information system. Three years later, after spending $150m with nothing to show for it, they cancelled the project and eliminated 500 IT development jobs. SEEM 3530

  24. Famous Project Failures (2 of 5) The computerized baggage handling system at the Denver International Airport delayed the opening of the airport from March 1994 to February 1995 and added $85 million to the original budget. The baggage system tried to unload bags that were jammed on the conveyor belt. The system also loaded bags into telecarts that were already full. Hence, many bags fell onto the tracks, jamming the telecarts… SEEM 3530

  25. Hong Kong Airport Changeover: 7 July, 1998 SEEM 3530

  26. Lack of preparations behind H.K. airport opening chaos Asian Economic News, Jan 25, 1999 A Hong Kong government commission Friday attributed last July's chaotic systems operations at the opening of the territory's new airport to overconfidence by the authorities and lack of coordination. The government-appointed Commission of Inquiry led by Justice Woo Kwok-hing said in a report that the chaos at the Chek Lap Kok airport could have been avoided by postponing operations by about two months. The report said the Airport Authority and the major cargo operator, Hong Kong Air Cargo Terminals Ltd. (HACTL), were overconfident in assessing the risks involved in compressing the testing and training time for the new systems at the airport. SEEM 3530

  27. London Heathrow Terminal 5 Opening (2008) SEEM 3530

  28. Famous Project Failures (3 of 5) • Disney's shipbuilder was six months late in delivering its new cruise ships in 1998. Thousands of tourists who had purchased tickets had to be compensated for making different plans. SEEM 3530

  29. Famous Project Failures (4 of 5) The “Big Dig” road construction project in Boston (1987-2007) was budgeted at $5.8b but eventually cost over $15b. The project resulted in criminal arrests, thousands of water leaks, the death of a motorist from a tunnel collapse, and hundreds of millions of dollars in lawsuits. SEEM 3530

  30. Famous Project Failures (5 of 5) In 2005, UK grocery chain J. Sainsbury wrote off its $526m investment in an automated supply chain management system. They hired 3,000 additional workers to stock their shelves manually. SEEM 3530

  31. Reasons Why Projects Fail • Improper focus of the project management system, e.g. too much focus on low level details • Fixation on first budget estimates • Too much reliance on inaccurate project management software • Too many people on the project team • Poor communication within the project team • Incentives that reward the wrong actions SEEM 3530

  32. Common Excuses for Project Failures • Unexpectedly poor weather delayed construction • Unforeseeable poor performance by contractors • Senior management imposed an unrealistic schedule • Instructions by senior management were unclear • Many wasteful “synchronization” meetings interrupted actual work SEEM 3530

  33. Management of IT Projects • More than $250 billion is spent in the US each year on approximately 175,000 information technology projects. • IT project management is an $850 million industry and is expected to grow by as much as 20 percent per year. Gene Bounds, “The Last Word on Project Management”, IIE Solutions, 1998. SEEM 3530

  34. IT Project Outcomes Standish Group Survey, 1999. (from a survey of 8000 business systems projects) SEEM 3530

  35. Why Do IT Projects Fail? • Ill-defined or changing requirements • Poor project planning/management • Uncontrolled quality problems, e.g. software fails to complete computing task in time • Unrealistic expectations/inaccurate estimates • Adoption of new technology without fully understanding it Why are IT projects apparently more difficult than traditional projects? SEEM 3530

  36. DESIGN Required Performance QUALITY Target COST Budget Constraint TIME (SCHEDULE) Due Date Optimal Time-Cost Tradeoff Design (Scope), Cost, Time Tradeoffs This is sometimes called the “triple constraint” of project management “You can have your job done cheap, quick, or right; pick two.” [Sign in local copy center.] SEEM 3530

  37. Project management • The main components : • Project initiation, selection, and definition. • Project organization • Analysis of activities/tasks • Project scheduling • Project budgeting • Resource management • Project execution and control • Project termination SEEM 3530

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