Project Management
Business Administration 458
Enterprise IT Governance
Professor Michael J. Shaw
By: Michael Pantazis
Contents
Introduction 2
Project Management Definition 3
Triple Constraint Model 3
History 4
Project Management Life Cycle 5
Initiating Processes 5
Planning Processes 5
Executing Processes 5
Controlling Processes 6
Closing Processes 6
Project Scope 7
Product Scope 7
Project Scope 7
Scope Statement 7
Project Risk Management 8
Risk Breakdown Structure 8
Risk Response Strategies 9
Project Methodologies and Frameworks 10
Stage-Gate 11
Organizational Project Management Maturity Model 11
Critical Chain 11
Quality Assurance and Control 11
Project Management and IT Governance 12
Conclusion 14
Introduction
Project Management is a broad management discipline that spans many industries and a variety of organizations, including businesses, non profit organizations, and even government agencies. The core elements pertaining to project management, both an art and a science, are common across all of these industries.
Project Management Definition
The primary purpose of a project is to make or implement change within the organization, typically to move the organization toward the achievement of its strategic objectives.
Also, there are some key traits that distinguish a project from an operational initiative. A project is unique, it includes a temporary start and end date, and it involves progressive elaboration: it develops in steps and continues in increments.
Project management is the application of knowledge, skills, tools, and techniques to the project activities that are necessary to meet the project requirements.[1]
Triple Constraint Model
The triple constraint model can be used to best describe the limitations imposed upon a project manager: to provide quality while staying on schedule, under budget, and in scope. This is a simply put definition of the constraints in which a project manager must act.
It also should be noted that no one side of the triangle can be altered, without affecting any of the other respective sides of the triangle. [2]
History
Project management has existed, in some form or another, for hundreds of thousands of years. Any sort of end state, that requires humans to organize effectively to a plan and achieve specific objectives can be loosely defined as a project.
Primarily in the past quarter century, Information Technology (IT) project management has become an industry in and of itself.[3] As a result of this ever-expanding discipline, many project teams and organizations believe that IT must have a unique set of project management tools and techniques in order to deliver projects.
IT Projects must contend with the short life cycle of technology, extremely rapid execution and developmental requirements, and the time-to-market demands that exceed those of other industries.
In 1969, the Project Management Institute (PMI) was formed in order to fulfill the interests of the project management industry.[4] Shortly thereafter, in 1981, the Board of Directors of the PMI endorsed the development of what is now commonly referred to as the PMBOK: A Guide to the Project Management Body of Knowledge.[5] This guide contained the standards and guidelines of the practice that are mainly used today in the profession.
Although the tools and techniques necessary for project management are the same, they must be applied differently in the realm of Information Technology.
Project Management Life Cycle
In general, there are five identified process groups that make up the project management life cycle. This section will briefly discuss what is entailed in each of the five groups.
Initiating Processes
The initiation stage is the first step when beginning a project. This stage will determine the nature and the scope of the development to take place. Recognition will also take place as a process in this stage, as will authorization of the project or phase itself.
These processes are vital to a project’s success, or for that means, failure. The environment needs to be understood fully and all necessary logistics, controls, and the right team needs to be incorporated to give the project the best possible chance to deliver the business objectives.
Planning Processes
The planning stage includes processes that are involved and related to defining and refining the objectives and determining what the critical path will be in achieving the stated objectives of the project.
Planning is often revisited at later stages in the project in efforts to remain in scope, as well as make continual updates to the progress made during development.
Executing Processes
In the executing stage, the main focus is to get the work done that has been identified previously in the planning processes. This work is completed through the coordination of required resources, both human and capital. The project management plan will be followed in order to complete the activities required.
Controlling Processes
With the controlling processes, sometimes referred to as the monitoring processes, the objective is to measure the performance of the execution initiatives. Project managers should seek out, and look to resolve, potential problems in a timely manner which will control the execution of the project. A great number of variances are measured on a regular basis to observe the differences from project performance and the project management plan.
This stage also will serve as feedback between project phases, allowing corrective or preventative actions to come into play in order to maintain compliance with the project management plan.
During the evolvement of a project’s life cycle, the work scope also changes. This isn’t anything to worry about as change is expected. These changes, however, should be documented accordingly to show what was actually constructed. The process by which the project team adapts to changes and alters their development plans, is termed Change Management. As more and more changes come into play, the usefulness of a project, in whatever aspect a firm uses for evaluation, needs to be assessed again. This is an important step to ensure that the initial goals remain aligned throughout the project and the targets are still on line to be met.
Closing Processes
The closing processes signify the end state of the project. The results are formally accepted, and the end is also formally recognized. All activities should be finalized, across all of the process groups, to officially close the project, or the project phase.
Also it is sometimes necessary to have contract closure.[6] This act is done to complete a contract’s agreement, including the resolution of any open items, as well as any contractual agreements relating to the project itself, or phases within.
Project Scope
Scope is best defined as the sum of the products or services to be provided by the project.[7] There are two types of scope that will be defined in this section: Product Scope and Project Scope.
Product Scope
Product scope relates to the features and functions of the product or service that is provided by the project. The product scope is usually described in detail in requirements documentation.
Project Scope
Project scope relates to the work that is required to produce the product or service with the agreed features and functions. The project scope is what is depicted in a project document such as the Work Breakdown Structure (WBS).
Scope Statement
When typically describing the scope for a project, it is very important to distinguish what is included, and what is not included. Anything that is deemed not included in the scope description is outside of the domain of the project.
The scope statement is used to document the project justification, products, objectives, and deliverables used as a basis for future project decisions. The scope statement is not as detailed as the overall project plan, but contains adequate detail that establishes all of the work required for successful completion of the project.
Scope creep is a common term that is used to define the uncontrollable changes exerted upon a project’s scope.[8] It is more likely to have the scope of a project expand throughout the project if it is not properly defined, documented, or controlled.
Project Risk Management
Risk itself is defined by the PMBOK Guide as an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.[9] Risk management can be best summed up as the process of identifying the risks associated with important business processes and reducing them to acceptable levels.[10]
It is evident from the two aforementioned definitions that risk be one of the primary causes for project failure. The PMI suggests that proper risk management throughout the life cycle of an initiative can decrease project problems by 90%.
Risk Breakdown Structure
A Risk Breakdown Structure (RBS), is a useful approach to providing structure for identifying and categorizing risks for the project. The RBS is a hierarchical diagram that helps present and categorize high-level risks. It also stands as a tool used to jumpstart the process of risk planning.
Below is a sample image of a project’s Risk Breakdown Structure.
[11]
As one can see, the RBS can be a useful tool in organizing and managing the risk associated with a specific project.
Risk Response Strategies[12]
Risk responses are the options chosen by the project team to minimize threats and enhance opportunities for a project. The response strategies must be aligned in accordance to the importance of the risk, and must be timely, cost effective, and realistic. The risk response strategies are overviewed below:
§ Avoid: Risk avoidance strategies entail changing the project management plan or adjusting the project objectives, scope, schedule, costs, or quality to avoid the risk altogether. This strategy is typically best used early in the project or when the project team has the flexibility to change critical elements of the plan.
§ Transfer: With risk transference, the threat and its respective ownership is shifted to another party. This strategy is most effective in addressing financial related risks and usually carries a premium payment to the party accepting the risk. Examples of this type of risk response may include the use of insurance, warranties, and bonds.
§ Mitigate: Risk mitigation entails reducing the probability or impact of a risk, or enhancing the detectability of a risk to an acceptable level, or threshold. Shifting to a more reliable supplier, increasing the scope of a test plan, or incorporating a more proven technology are examples of risk mitigation.
§ Accept: Due to the fact that it is rare to eliminate all possible risks for a given project, risk acceptance may be an acceptable strategy. Risk acceptance is most often used in dealing with risks that can’t be reduced any other way, cost too much to mitigate, transfer, or avoid, or are of a low importance in relation to the project.
Contingency reserves are typically associated with potential project risks. This reserve is used as a cushion when risks arise and need to be dealt with.
Project Methodologies and Frameworks
During the last twenty years or so, the number of project management methodologies has grown at an exponential rate in the business world. There are dozens, if not hundreds, of different project management methodologies and this will overview three of the most common today.
Stage-Gate[13]
The Stage-Gate process is described as a conceptual and operation road map for moving a new project from idea to launch. This is a widely used product development method which divides the effort required into distinct time-sequenced stages that conclude with a management decision gate.
Organizational Project Management Maturity Model[14]
This model was published by the Project Management Institute in 2003. The Organizational Project Management Maturity Model, commonly referred to as OPM3, is a framework designed to allow organizations to choose best practices that specifically apply to targeted project management needs. This framework is built on the basis that specific competencies and capabilities must exist within the organization in order for it to deliver projects successfully, consistently, and predictably.
Critical Chain[15]
With this method, project team members and management alike must consistently foster an environment that advocates realistic time and cost estimates for all project activities. It is a revolutionary idea, however CCPM requires a drastic change to traditional project management that focuses on a critical path.
Quality Assurance and Control
Quality is one of the key components of the triple constraint model. Quality management involves making sure the project meets the needs that it was originally intended to meet. Essentially, in the IT project realm, quality management represents the ability of the team to meet stakeholder expectations.
The benefits of quality practices include helping to decrease the amount of rework and its associated costs, while also helping to increase productivity and stakeholder satisfaction. There are also indirect benefits associated with a quality project, such as increased team morale, enhanced credibility, and the increased potential for subsequent work.
Project Management and IT Governance
Within IT, there should be a clear definition of what each area, or department, is responsible for. By defining the roles and responsibilities associated with the IT area, then rolling them up as a part of a uniform, organization-wide structure, it will become evident where the gaps exist. This definition will also help to show what activities are being performed by IT, that are perhaps beyond the anticipated scope of the department.
The term project governance is used to depict the processes that need to exist in order for a successful project to be completed.[16] There are some formal methodologies that do exist, however, as the IT industry expands, so will the need for more uniform, and detailed methods to layout the process for project management. Project governance is useful to provide a blueprint for the relationships between all the internal and external groups that are involved in a project. Also, this will describe and document the proper flow of information regarding the project status, changes, and other project deliverables to all project stakeholders. When issues arise, project governance will be extremely useful in ensuring that the appropriate review is carried out to reach resolutions. Lastly, at the different cycles of a project, this governance will ensure that direction and the required approvals will be obtained in order to move forward.
Project Governance has nine key roles:[17]
§ “Establish the basis for project governance, approval and measurement – including defining roles and accountabilities, policies and standards and associated processes
§ Evaluate project proposals to select those that are the best investment of funds and scarce resources and are within the firm’s capability and capacity to deliver
§ Enable, through resourcing of projects with staff and consultants, harnessing and managing of business support and the provision of the governance resources
§ Define the ‘desired business outcomes’ (end states), benefits and value — the business measures of success and overall value proposition