Project Management Framework: Project Manager - Skill Set

A Project Manger should:

• Know the PMBOK guide.
• Have the knowledge of the project and the industry that you’re working in. 
• Have performance knowledge from past project experience.
• Have personal skills.
• Have project management skills. 

Project Management Framework: Program & Portfolio Management

• Programs
• Collection of related projects
• Controls are implemented and managed in a coordinated way
• Collective benefits are realised
• Each project has a project manager
• Projects share resources and depends on the outcomes of other projects

• Portfolios
• Collection of programs and projects
• Projects meet a specific business goal or objective
• Includes weighing the value of each project against the portfolios strategic objective
• Ensures efficient use of resources

Project Management Framework: Project Management Process Framework

Project Management Process Groups

   * Initiating process group authorises the project
   * Planning process group plans the course of action to achieve objectives
   * Executing process group uses the resources to carry out project tasks
   * Monitoring process group measures progress to identify variances
   * Closing process group formalises product acceptance and closure
   * Concept of PLAN-DO-CHECK-ACT cycle
   * Determine what processes within the process groups are applicable
   * The Process Groups are not Project Phases
   * The result of one process becomes input to another


Process Groups Interaction

This diagram depicts how the Process Group interact:

   * The yellow and green light represents the monitoring and controlling processes.
   * The monitoring and controlling process is ongoing and runs parallel to the other process groups throughout the length of the project.


Initiating Process Group

   * Conduct cost-benefit analysis
   * Determine and define the business needs and the project scope
   * Know the project boundaries and constraints
   * Identify high level risks
   * Understand the required project organisation structure
   * Estimate budget and resource requirements
   * Assign a project manager
   * Obtain the project charter approval
   * Formally authorise to start a new project or phase

Planning Process Group

   * Determine how to plan and develop the project management plan
   * Develop the project requirements in detail and agree the final scope
   * Determine the required project activities and their sequencing
   * Develop schedule using estimated resources and costs
   * Agree what quality standards will be met by the project and how
   * Define how project staffing will be done
   * Establish the communication requirements and how it will be fulfilled
   * Identify what can go wrong and the plans to deal with them
   * Document what products or services will be acquired from outside the project
   * Gain formal approval and buy-in from everybody involved in the project

Executing Process Group

   * Execute activities in the project plan
   * Procure required project resources
   * Complete work packages
   * Document lesson learnt
   * Implement approved changes, corrective and preventive actions
   * Ensure processes are followed
   * Hold team building activities and boost morale and effeciency
   * Manage resource allocation and utilization
   * Hold progress review meetings and distribute progress reports
   * Keep everyone focused on the project goals

Monitoring & Control Process Group

   * Measure project performance using the documented technique in the plan
   * Identify variances and recommend corrective actions to get back on track
   * Approve changes, defect repair, corrective and preventive actions
   * Resolve conflicts and issues
   * Manage changes to scope, time and cost
   * Perform impact analysis to approve or reject changes
   * Obtain formal acceptance of deliverables from the customer
   * Monitor the status of risks and identify new risks have emerged
   * Measure team member performance

Closing Process Group

   * Confirm all project requirements are met
   * Obtain formal acceptance of products from the customer
   * Hand over the completed deliverables to the operations team
   * Compile lesson learnt
   * Measure customer satisfaction
   * Archive project data and information for future reference
   * Release resources

Project Management Framework: Knowledge Areas

• Project Integration Management
• Project Scope Management
• Project Time Management
• Project Cost Management
• Project Quality Management
• Project Human Resource Management
• Project Communication Management
• Project Risk Management
• Project Procurement Management
• Project Stakeholder Management

Project Management Framework: PMO - Project Management Office

What is PMO?

• Centralized and coordinated management of projects
• Key stakeholder and decision maker
• Primary functions of PMO:
• Manage shared resources
• Maintain project management best practices and standards
• Policies, procedures, templates, etc.
• Coordinated communication
• Coaching, mentoring, training, oversight, and monitoring
• Governance organization

Types of PMO

	Functional Organization	Weak Matrix Organization	Balanced Matrix Organization	Strong Matrix Organization	Projectized Organization
PM’s Title	Expediter	Expediter / Coordinator	Project Manager	Project Manager	Project Manager
Decision Making Power	Functional Manager	Functional Manager plays a major role, but PM will make decisions.	PM and the Functional Manager will have equal power.	Project Manager	Project Manager
Resources	From within a Dept.	Project members are from different departments	Project members are from different departments	Project members are from different departments	Project based only
Resource Allocation	As needed	Only 20% will be assigned to the projects	About 50% will be assigned to the projects	About 80% will be assigned to the projects	About 100% will be assigned to the projects
Resources Reports to	Functional Manager	Functional Manger	Two manager (FM and PM)	Project Manager	Project Manager
PM Reports to	Functional Manager	Functional Manager	Functional manager and his/her senior manager	Company Senior Manager	Company Senior Manager / higher authority
After Project Completion	Team go back to their Dept. (home)	Team go back to their Dept. (home)	Team go back to their Dept. (home)	Team go back to their Dept. (home)	No home - move to different project or get laid off

Advantages & Disadvantages of different Organisation Types

Org. Type	Advantages	Disadvantages
Matrix	Highly visible project objectives	No cost effective because of extra administrative personnel
Matrix	Better Project Manager control over resources	More than ONE boss for project teams
Matrix	Better coordination	More complex to monitor and control
Matrix	Team members maintain “a home"	Higher potential for conflict and duplication of effort and functional managers have different priorities
Functional	Team members report to one supervisor and clearly defined career paths	No career path in Project Management
Functional	Easier management specialists	People place more emphasis on their functional specialty to the determent of the project
Projectized	Efficient project organization	No “Home” when project is completed
Projectized	More effective communication than functional	Duplication of facilities and job functions
Projectized	Loyalty to the project	Lack of professionalism in disciplines and less efficient use of resources

Project Management Framework: Project Selection Method

Overall

• Mathematical Approach (Constrained Optimization Methods)
• Linear Programming
• Integer Programming
• Dynamic Programming
• Multi-Objective Programming
• Cooperative Approach (Benefit Measurement Method)
• Peer review
• Murder Boards (panel that tries to poke holes in your argument)
• Economic models
• Scoring Models
• Benefit-Cost Analysis
• Payback period
• Discounted cash flows
• Net Present Value
• Internal Rate of Return (IRR)

Definition and Sample

1. Benefit-Cost Analysis 

Compares the project benefit to the costs to derive a ratio from which a decision can be made.Ex: If a project generates $125,000 in profits and costs $50,000, the benefit-cost ratio would be 2.5 (also written as 5:2)

2. Payback Period 

Number of periods to pay back a project’s cost.Ex: if a project cost $1 million and will generate revenue of $100,000 per year, then the payback period would be 10 years.

3. Discounted Cash Flows 

Calculates in today’s (discounted) terms what the value of a project would be given cash inflows and/or outflows over a period of time. 

4. Net Present Value (NPV) 

A formula that calculates the value today of a future cash flow. Ex: If you receive a future cash flow in 3 years of $1,157.62, what would that be worth today if the interest rate is 5%?PV = FV / (1+i)ⁿPV = 1157.62 / (1+0.05)³PV = $1000Important: Always choose projects with the biggest positive NPV, reject negative NPV. 

5. Internal Rate of Return (IRR) 

The discounted interest rate when NPV equals zero. Always choose the project with the highest IRR.Assumes that cash flows are reinvested at the IRR value. 

Example / Case Scenario
A project costs $10,000 today and will return $2,500 per year for 5 years. Assume your required return on investment is 10%. Should you do the project? 

Benefit-Cost Ratio 

(5 x $2,500) / $10,000 = 1.25 or 5:4

Payback Period 

$10,000 / $2,500 = 4 years

Net Present Value 

NPV p = Sum of [Future Cash Flows / (1 + i) n]-$10,000 + [$2,500 / (1.10)¹] + [$2,500 / (1.10)²] + [$2,500 / (1.10)³] + [$2,500 / (1.10)⁴] + [$2,500 / (1.10)⁵] = -$523.03

IRR 

The value of I where NPV equals zero = 7.93%

Other Terminology

• Opportunity Costs: the opportunity given up by choosing another project
• Sunk Cost: costs spent to date, these costs are already spent
• Law of Diminishing Returns: adding more resources doesn’t proportionately increase productivity
• Working Capital: current assents minus current liabilities
• Depreciation: straight-line (same amount each year), accelerated (ex. Double-declining balance and sum of years digits)
• Assumptions: something that is believed to be true or something that is taken for granted. *Needs to be continually evaluated throughout the project
• Constraints: a factor that limits the project team’s options; any restriction placed on the project.

Project Management Framework: Business Case / Why Do a Project?

• Market Demand
• Strategic opportunity or business need
• Customer request
• Technological advance
• Legal requirement
• Ecological impact
• Social need

Project Management Framework: Project Stakeholders

• Individuals and organisations involved in the project
• Those who will be directy and indirectly impacted
• Stakeholders should be identified throughout the project
• They may have a positive or negative influence on the outcome
• Stakeholder influence goes down as the project progresses
• Key stakeholders include
• Project Manager
• Customer / User
• Performing Organization
• Project team members
• Project management team
• Sponsor
• Influencers
• PMO

Project Management Framework: Project Life Cycle / Project Phase

Typical Project Life Cycle

• Projects are divided into phases.
• The project will have at least a beginning, intermediate and ending phase.
• Number of phases depends on complexity and size of the project. Phase Examples - Analysis, Development.
• Reviews are conducted at the end of each phase to measure performance.
• Phase end reviews allows to decide if the project should continue.
• The collection of phases is called project life cycle.
• The project life cycle defines the beginning and end of project.
• Fast tracking is running the project phases concurrently. Example of phases - Analysis, Design etc. 

Characteristics of Project Phase

• Project Phase are marked by completion of one or more deliverables.
• Deliverables are reviewed and formally accepted by customer at phase end. 
• Phase end reviews are also called phase exits, stage gates or kill points. 
• Rolling wave planning summarizes the future phases at high level. 
• Project phases are collectively called project life cycle.

Project Phase Relationships

• Sequential: a phase can only start once the previous phase has completed. 
• Overlapping: a phase starts prior to the completion of the previous phase.
• Iterative: only one phase is planned out at any given time and the planning for the next phase is carried out as work progresses on the current phase.

Project Management Framework: The Triple Constraint Theory

The Triple Constraint Theory

• The Triple Constraints are scope, time and resources, with it all centred around quality. 
• If you take away from one of these three areas, it affects the other two, in addition to quality of the deliverable. Thus the name - The Triple Constraint Theory. 
• For example:
• If you need to make the schedule shorter, you may need more resources to accomplish this and the quality of the end project may decrease.
• If you need to add this to the scope of the project, then your schedule and resources will be affected because you’ll need more time to complete the new scope and possibly more resources to do the task. 
• If you lose resources on a project, it will affect your schedule and scope because you may not be able to get all the anticipated tasks completed in the given time with less resources. 

Project Management Framework: Project vs Operation

Project	Operation
Temporary	Ongoing
Unique	Repetitive
Closes after attaining the objectives	Objective is to sustain business
Prototyping the new Car Model	Assembly line production

What is Project Management?

• Project Management is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements. 
• Accomplished through the application and integration of PM processes - Initiating, Planning, Execution, Monitoring and Controlling and Closing
• Establishing clear project objectives and requirements
• Balancing the competing demands of scope, time, cost and quality 
• Manage uncertain events

Project Management Framework: Definition of Project

A project is a temporary endeavor undertaken to create a unique product or service.

• A temporary endeavor - means that every project has a definite beginning and end.
• Unique means that the product or service or result is different from other product or service or result. 
• Progressively elaborated - proceeding in steps.

Examples of Projects

• Designing a new bridge / highway
• Developing a new Drug
• Conduct Elections for the State / Country
• Managing Marriage
• Designing a new Automobile
• Building hospital for the community