Chapter 1.

Introduction

Chapter Objectives
1. Describe project, programme and portfolio
management
2. Describe project life cycle
3. Describe the challenges of managing projects
4. Explain the importance of Project
Management
5. Outline Project Management Standards,
professional bodies and certification
programmes
2

What is a Project?
Examples
Give THREE examples of projects and identify the
common characteristics of these projects.

Otira Viaduct, Arthur Pass

Planning for the project began in 1986;
construction started in 1997; completed on time
in 2000, one month ahead of programme.
Budget: $25Million
The project came in under budget by several
hundred thousand dollars.

The Press
16 April 2012

Salvage operation of the Costa Concordia

The expected cost: $300 million USD.: the most expensive

salvage operation ever.

http://en.wikipedia.org/wiki/Costa_Concordia

CERA

The Press
5 April 2012

 Levi Strauss
With the help of Deloitte consultants an IT system
called SAP was implemented (2003- 08?). Budget:
$5 million (approx.).
The final outcome: $200 million loss (in 2008) +
Information officer resigned.
Why Your IT Project May Be Riskier Than You Think by Bent lyvbjerg and
Alexander Budzier , HBR, September 2011, pages 23-25

 Kmart was already losing its competitive position to

Walmart and Target when it began a $1.4 billion IT
modernization project in 2000. By 2001 it had realized
that the new system was so highly customized that
maintenance would be prohibitively expensive. So it
launched a $600 million project to update its supply
chain management software. That effort went off the rails
in 2002, and the two projects contributed to Kmarts
decision to file for bankruptcy that year. The company
later merged with Sears Holdings, shedding more than
600 stores and 67,000 employees.
Why Your IT Project May Be Riskier Than You Think by Bent lyvbjerg and
Alexander Budzier , HBR, September 2011, pages 23-25
10

What is a Project?
Project Defined
A complex, non-routine, one-time effort limited by
time, budget, resources, and performance
specifications designed to meet customer needs.
(Larson & Gray 2010)

A temporary endeavour undertaken to create a

unique product, service or result
PMBOK( Project Management Body of
Knowledge), 4th ed. 2009

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Major Characteristics of a project

Has an established objective
Has a defined life span with a beginning and an
end
Requires across-the-organisation participation.
Typically involves doing something that has
never been done before
Has specific time, cost and performance
requirements

12

Project Management
PMBOKs definition
The application of knowledge, skills, tools and
techniques to project activities to meet the project
requirements.

Managing projects typically includes

identifying and delivering requirements,
addressing the various needs, concerns and
expectation of the stakeholders as the project is
planned and carried out, and
balancing the competing project constraints such as
scope, quality, schedule, budget, resources and risk.
13

Projects Vs. Programmes

Programme Defined
A series of coordinated, related, multiple projects that
continue over an extended time and are intended to
achieve a goal.
A higher level group of projects targeted at a common
goal.

Example
Programme: an ERP package
Projects: Individual modules: Finance, Purchasing,
Materials management, etc.

14

 Example
Programme: Urban transport system: 12 year, $47
million involving 120 miles of rail lines!
Projects: Different aspects of the transport system

Project Vs. Programme

Differs in scope and time
Programme: focused on meeting strategic objectives
and project integration; risk management; cost
management; communication etc. across all projects
Projects: meeting specific project objectives

15

Projects Vs. Portfolios

Portfolio defined
Centralised management of multiple projects and
programmes (related or unrelated).
Example: A portfolio of projects may include:
Customer relations management project, ERP
programme, New product development programme,
etc.
Involved in front-end activities: Identifying, prioritising
and authorising projects and programmes to achieve
strategic objectives
Leverage economies of scale, reduce costs, improve
probability of success
16

Project Management office

Centralised unit that overseas the management
of portfolio of projects and programmes
Why PMO?
Provides support functions for projects; establishes
and maintains procedures and standards for project
management methodologies; trains employees;
manages resources; monitors projects; provides
feedback; maintains and archives project documents.

17

 Talk to the person next you and identify

examples of: routine task, project, programme
and project portfolio.

18

Project Life-Cycle
Level of Effort

Start

End

19

An useful framework for better control and the management of the

project.

 How do the following change as the project

progresses
Project cost and effort
Stakeholder influence, risk and uncertainty
Cost of changes and correcting errors

20

The Press, 8 September 2012

21

The challenges of managing projects

The project manager:
manages temporary, non-repetitive activities and
frequently acts independently of the formal
organisation
marshals

resources for the project

is linked directly to the customer interface
provides direction, coordination, and integration
to the project team
is responsible for performance and success of the
project

must induce the right people at the right time to

address the right issues and make the right decisions
22

Technical and Sociocultural dimensions of

Project Management

23

The Importance of Project Management

PMI membership growth
10,000 in 1975; 300,000 in 2010

People with PMP credentials

360,000 by end of 2009

24

 IBM
# of employees : > 300,000
# outside US
: 70%
# of Project Managers : 20,000

HP
# of employees : > 350,000
# of project managers : > 8000
# of PMPs
: > 3,500

25

Factors influencing the need for PM

Compression of the Product Life Cycle
Knowledge Explosion
Triple Bottom Line (Planet, People and Profit)
Corporate Downsizing and restructuring
Increased Customer Focus
Small Projects Represent Big Problems

26

Benefits of Accelerated Product Development

27

The changing product cost structure

The smiling curve

http://www.rieti.go.jp/en/china/04011601.html#diagram
28

Knowledge Explosion
It took from the time of Christ to the mid-eighteenth
century for knowledge to double. It doubled again 150 years
later, and then again in only 50 years. Today it doubles
every 4 or 5 years. More new information has been
produced in the last 30 years than in the previous 5,000.
David F. Linowes

29

3D Printing

30

Project Management Profession

PMI
Founded
: 1969
Membership
: over 300,000
New Zealand Chapter: PMINZ

31

Project Management Qualifications

PMP (Project Management Professional) certification
Need project management experience
Need to Pass examination
Follow PMI code of professional conduct

CAPM (Certified Associate in Project Management)

Certification
For entry level project managers
Some experience and pass examination

PRINCE2 Practitioner Qualification

UK based
Pass exam

32

Standards

PMBOK & PRINCE2

PMBOK: Project Management Body of
Knowledge
Collection of processes and knowledge areas
Provides fundamentals of project management
irrespective of the type of project
Five process groups

Initiating
Planning
Executing
Monitoring and Controlling
Closing

33

PMBOK
Nine knowledge areas:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Project Integration Management

Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communications Management
Project Risk Management
Project Procurement Management
34

Other References
The corporate jungle spawns a new
species: The project manager. By: Stewart,
Thomas A., Fortune, 00158259, 7/10/95,
Vol.132, Issue 1
Magdalena R Mejillano; Chris Lively; Stacey
Miller, The Importance of Project management,
Biopharm International, Apr 2007, pp 28-37.

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