Fundamentals of Project Management Worksmart by James P. Lewis_1 doc

If legal advice or other expert assis- tance is required, the services of a competent professional person should be sought.“PMI” and the PMI logo are service and trademarks of the Projec

Fundamentals of Project Management

Fourth Edition

This page intentionally left blank

American Management Association

New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco

Shanghai • Tokyo • Toronto • Washington, D.C.

Fundamentals of Project Management

Fourth Edition

JOSEPH HEAGNEY

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service If legal advice or other expert assis- tance is required, the services of a competent professional person should be sought.

“PMI” and the PMI logo are service and trademarks of the Project Management Institute, Inc which are registered in the United States of America and other nations; “PMP” and the PMP logo are certification marks of the Project Management Institute, Inc which are registered in the United States of America and other nations; “PMBOK”, “PM Network”, and “PMI Today” are trademarks of the Project Management Institute, Inc which are registered in the United States

of America and other nations; “ building professionalism in project management ” is a trade and service mark of the Project Management Institute, Inc which is registered in the United States of America and other nations; and the Project Management Journal logo is a trade- mark of the Project Management Institute, Inc.

PMI did not participate in the development of this publication and has not reviewed the content for accuracy PMI does not endorse or otherwise sponsor this publication and makes no warranty, guarantee, or representation, expressed or implied, as to its accuracy or content PMI does not have any financial interest in this publication, and has not contributed any financial resources Additionally, PMI makes no warranty, guarantee, or representation, express or implied, that the successful completion of any activity or program, or the use of any product or publication, de- signed to prepare candidates for the PMP® Certification Examination, will result in the com- pletion or satisfaction of any PMP® Certification eligibility requirement or standard.

Library of Congress Cataloging-in-Publication Data

© 2012 American Management Association.

All rights reserved.

Printed in the United States of America.

This publication may not be reproduced, stored in a retrieval system,

or transmitted in whole or in part, in any form or by any means,

electronic, mechanical, photocopying, recording, or otherwise,

without the prior written permission of AMACOM, a division of

American Management Association, 1601 Broadway, New York, NY 10019.

Printing number

10 9 8 7 6 5 4 3 2 1

Special discounts on bulk quantities of AMACOM books are available

to corporations, professional associations, and other organizations

For details, contact Special Sales Department, AMACOM, a division of

American Management Association, 1601 Broadway, New York, NY 10019.

To the memory of Mackenzie Joseph Heagney,

sleeping with the angels.

This page intentionally left blank

and Objectives for the Project 45 Chapter 5 Creating the Project Risk Plan 55 Chapter 6 Using the Work Breakdown

Structure to Plan a Project 68 Chapter 7 Scheduling Project Work 81 Chapter 8 Producing a Workable Schedule 93 Chapter 9 Project Control and Evaluation 112 Chapter 10 The Change Control Process 125 Chapter 11 Project Control Using Earned

Chapter 12 Managing the Project Team 156 Chapter 13 The Project Manager as Leader 168 Chapter 14 How to Make Project Management

Work in Your Company 180 Answers to Chapter Questions 185

CONTENTS

This page intentionally left blank

1–1 Triangles showing the relationship between P, C, T, and S.1–2 Life cycle of a troubled project

1–3 Appropriate project life cycle

1–4 The steps in managing a project

3–1 Two pain curves in a project over time

3–2 Planning is answering questions

4–1 Chevron showing mission, vision, and problem statement.4–2 Risk analysis example

8–1 Network to illustrate computation methods

8–2 Diagram with EF times filled in

8–3 Diagram showing critical path

FIGURE LIST

8–4 Bar chart schedule for yard project.

8–5 Schedule with resources overloaded

8–6 Schedule using float to level resources

8–7 Schedule with inadequate float on C to permit leveling.8–8 Schedule under resource-critical conditions

8–9 Network for exercise

10–1 Triple constraints triangle

10–2 Project change control form

10–3 Project change control log

11–8 Percentage complete curve

11–9 Earned value report

13–1 Leadership style and alignment

A-1 WBS for the camping trip

A-2 Solution to the WBS exercise

A-3 Solution to the scheduling exercise

Sending a satellite to Mars? Planning a conference or ing new software? You have chosen the right book The greatvalue of project management is that it can be applied across in-dustries and situations alike, on multiple levels It would be diffi-cult to find a more nimble organizational discipline Whether ornot your title says project manager, you can benefit from the prac-tical applications presented in this book, which is intended as abrief overview of the tools, techniques, and discipline of projectmanagement as a whole Three notable topics have been ex-panded for this edition, with new chapters on the project man-ager as leader, managing project risk, and the change controlprocess Although each topic is important individually, togetherthey can establish the basis for project success or failure

implement-Projects are often accomplished by teams, teams are made up

of people, and people are driven by project leaders uously absent from the preceding is the term “manager,” as in

Conspic-“project manager.” If project managers manage projects, what dothey do with the people who make up their teams or support net-works in the absence of a formal team? Successful project leaders

lead the people on their teams to consistent goal attainment and

Preface to the

Fourth Edition

enhanced performance They combine a command of projecttools and technical savvy with a real understanding of leadershipand team performance Consistently successful projects depend

on both It is a balancing act of execution and skilled people agement Ignoring one or the other is inviting project failure andorganizational inconsistency regarding project performance.Risk is an element inherent in every project The projectmanager must consider several variables when determining howmuch to invest in the mitigation and management of that risk.How experienced is my team or support personnel? Do I havethe appropriate skill sets available? Can I count on reliable datafrom previous projects, or am I wandering in the wilderness?Whatever the assessment, project risk is something that needs

man-to be addressed early in the life of the project As with any otherprocess you will be introduced to in this book, risk must be man-aged formally, with little deviation from the template, while al-lowing for some flexibility Project managers cannot afford towait for bad things to happen and then fix them Reactive man-agement is too costly The practical Six-Step process presented

on pages 57–62 can and should be applied to any project How

it is applied directly depends on the variables that confront thatproject

Death, taxes, and change Project managers need to expandthe list of certainties in life To paraphrase James P Lewis, author

of the first three editions of this book, in Chapter 3, project failuresare caused primarily by the failure to plan properly I often tell myseminar attendees that planning is everything and that most proj -ects succeed or fail up front This is not an overstatement Butwhat often gets lost in project execution is the absolute necessity

to keep the plan current based on the changes that have affectedthe project from day one Have the changes affected the scope ofthe project? Has the schedule or budget been impacted in any sig-nificant way? These are the questions that must be asked and an-swered when applying effective change control to the project.Failure to manage and communicate change results in serious mis-alignment and probably failure Chapter 10 presents the reader

xii Preface to the Fourth Edition

with a practical change control process that can help ensure ect success.

proj-As a former Global Practice Leader for project management

at the American Management Association, I had the luxury ofbenchmarking multiple organizations worldwide and identifiedseveral project-related best practices The applications discussedhere represent some of those practices, as well as those pre-

sented in the latest version of the PMBOK ® Guide With this

ex-panded edition of Fundamentals of Project Management, I hope

to enhance your chances of bringing projects in on time, on get with an excellent deliverable—every time

bud-Joseph J HeagneySayville, NYFebruary 2011

Preface to the Fourth Edition xiii

This page intentionally left blank

A special thanks to Nicolle Heagney for her technical assistance

in creating many of the figures and charts presented in the book.Her expertise and diligence made my life a lot easier

Thanks to Kyle Heagney for allowing me to miss some of hissoccer games

Acknowledgments

This page intentionally left blank

Fundamentals of Project Management

Fourth Edition

This page intentionally left blank

hat’s all the fuss about, anyway? Since the first edition ofthis book was published, in 1997, the Project ManagementInstitute (PMI®) has grown from a few thousand members tonearly 450,000 in 2011 For those of you who don’t know,PMI is the professional organization for people who manageprojects You can get more information from the institute’s

website, www.pmi.org In addition to providing a variety of

member services, a major objective of PMI is to advance projectmanagement as a profession To do so, it has established a certi-fication process whereby qualifying individuals receive the Proj-ect Management Professional (PMP®) designation To do so,such individuals must have work experience (approximately fivethousand hours) and pass an online exam that is based on the

Project Management Body of Knowledge, or the PMBOK ® Guide.

A professional association? Just for project management? Isn’tproject management just a variant on general management?

Yes and no There are a lot of similarities, but there areenough differences to justify treating project management as adiscipline separate from general management For one thing, proj -ects are more schedule-intensive than most of the activities that

general managers handle And the people in a project team oftendon’t report directly to the project manager, whereas they do re-port to most general managers.

So just what is project management, and, for that matter,what is a project? PMI defines a project

as “a temporary endeavor undertaken to

produce a unique product, service, or

result” (PMBOK ® Guide, Project

Man-agement Institute, 2008, p 5) This

means that a project is done only one

time If it is repetitive, it’s not a project

A project should have definite starting

and ending points (time), a budget

(cost), a clearly defined scope—or

mag-nitude—of work to be done, and specific

performance requirements that must be

met I say “should” because seldom does

a project conform to the desired definition These constraints on

a project, by the way, are referred to throughout this book asthe PCTS targets

Dr J M Juran, the quality guru, also defines a project as a

problem scheduled for solution I like this definition because it minds me that every project is conducted

re-to solve some kind of problem for a

com-pany However, I must caution that the

word “problem” typically has a negative

meaning, and projects deal with both

positive and negative kinds of problems

For example, developing a new product is

a problem, but a positive one, while an environmental cleanupproject deals with a negative kind of problem

Project Failures

In fact, the Standish Group (www.standishgroup.com) has found

that only about 17 percent of all software projects done in the

2 Fundamentals of Project Management

PMI defines a proj ect as “ a tem- porary endeavor undertaken to produce a unique product, service,

-or result.”

A project is a problem scheduled for solution.

—J M Juran

United States meet the original PCTS targets, 50 percent musthave the targets changed—meaning they are usually late or over-spent and must have their performance requirements reduced—and the remaining 33 percent are actually canceled One year,U.S companies spent more than $250 billion on software devel-opment nationwide, so this means that $80 billion was com-pletely lost on canceled projects What is truly astonishing is that

83 percent of all software projects get into trouble!

Now, lest you think I am picking on software companies, let

me say that these statistics apply to many different kinds of proj ects Product development, for example, shares similar dismalrates of failure, waste, and cancellation Experts on product devel-opment estimate that about 30 percent of the cost to develop anew product is rework That means that one of every three engi-neers assigned to a project is working full time just redoing whattwo other engineers did wrong in the first place!

-I also have a colleague, Bob Dudley, who has been involved

in construction projects for thirty-five years He tells me thatthese jobs also tend to have about 30 percent rework, a fact that

I found difficult to believe, because I have always thought of struction as being fairly well defined and thus easier to controlthan might be the case for research projects, for example Never-theless, several colleagues of mine confirm Bob’s statistics.The reason for these failures is consistently found to be inad-equate project planning People adopt a ready-fire-aim approach

con-in an effort to get a job done really fast and end up spendcon-ing farmore time than necessary by reworking errors, recovering fromdiversions down “blind alleys,” and so on

I am frequently asked how to justify formal project ment to senior managers in companies, and I always cite these sta-tistics However, they want to know whether using good projectmanagement really reduces the failures and the rework, and I canonly say you will have to try it and see for yourself If you canachieve levels of rework of only a few percent using a seat-of-the-pants approach to managing projects, then keep doing what you’redoing! However, I don’t believe you will find this to be true

manage-An Overview of Project Management 3

The question I would ask is whether general management

makes a difference If we locked up all the managers in a company

for a couple of months, would business

continue at the same levels of

perfor-mance, or would those levels decline? If

they decline, then we could argue that

management must have been doing

something positive, and vice versa I

doubt that many general managers

would want to say that what they do

doesn’t matter However, we all know

that there are effective and ineffective

general managers, and this is true of

proj-ect managers, as well

What Is Project

Management?

The PMBOK ® Guide definition of

proj-ect management is “application of

knowledge, skills, tools, and techniques

to project activities to meet the project

requirements Project management is

ac-complished through the application and

integration of the 42 logically grouped

project management processes

compris-ing the 5 Process Groups: initiatcompris-ing,

planning, executing, monitoring and

con-trolling, and closing” (PMBOK ® Guide,

Project Management Institute, 2008,

p 6) Project requirements include the

PCTS targets mentioned previously

The various processes of initiating,

planning, and so on are addressed later

in this chapter, and the bulk of this book is devoted to

explain-ing how these processes are accomplished

4 Fundamentals of Project Management

Project ment is application

manage-of knowledge, skills, tools, and tech- niques to project activities to achieve project require- ments Project management is ac- complished through the application and integration of the project manage- ment processes of initiating, planning, executing, monitor- ing and controlling, and closing.