bài giảng Quản trị dự án Project management harold kerzner

bài giảng Quản trị dự án Project management harold kerzner bài giảng Quản trị dự án Project management harold kerzner bài giảng Quản trị dự án Project management harold kerzner bài giảng Quản trị dự án Project management harold kerzner bài giảng Quản trị dự án Project management harold kerzner bài giảng Quản trị dự án Project management harold kerzner bài giảng Quản trị dự án Project management harold kerzner

Project Management a System approach to Planning

Scheduling &

Controlling

- Harold Kerzner

Chapter

Introduction to Project Management

History of Project Management

 One of the first examples of project management was the construction of the pyramids in Egypt

 Henry L Gantt (1861-1919) added an important

visualization tool around 1917 with the Gantt Chart

 In the late 1950s, DuPont Company developed the

Critical Path Method (CPM)

 Also in the late 1950s, Booz Allen Hamilton developed the Program Evaluation and Review Technique (PERT), which models uncertainty in project management

Importance of Project Management

organizational change, allowing organizations

to introduce new products, new processes,

and new programs effectively

them more difficult to control without a

formal management structure

characteristics, especially in IT, are emerging

teams to become more effective

Comment on the Importance of Project Management

“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.”

Richard Pharro, author and consultant (2003)

Still, many organizations underappreciate the

What is a Project?

undertaken to create a unique product or

service” (PMBOK, 2000)

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 technological sequence.

Examples of Projects

Project management spans both the

manufacturing and service sectors

Manufacturing Perspective

operations is used to create each product

or service

through centers which are required to

create it

Characteristics of Flowshop, Job Shop and Project

Flowshop Job Shop Project

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

See coursepack article: Oltra, Maroto and Segura

“Lean” Principles in Project Management

flow

“supplier push” to initiate work

 Using principles of continuous

improvement

See coursepack article: Brown et al.

Measures of Project Success

projects in the organization

problems that arose in the project

R.J Might and W.A Fischer (1985)

Question: Was the movie Titanic successful?

See coursepack article: The Chaos Report

Nine Factors Critical to

the Success of Many Projects

J Pinto and D Slevin (1987)

See coursepack article: Czuchry and Yasin

Famous Project Failures

 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

development jobs.

 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 continued to unload bags even though they were jammed on the

conveyor belt The system also loaded bags into telecarts that were already full Hence, some bags fell onto the

tracks, causing the telecarts to jam The timing between the conveyor belts and the moving telecarts was not

properly synchronized, causing bags to fall between the

conveyor belt and the telecarts Then the bags became

wedged under the telecarts, which were bumping into each other near the load point

Famous Project Failures (cont.)

 Disney's shipbuilder was six months late in delivering its new cruise ships in 1998 Thousands of Disney customers who had purchased tickets had to be compensated for

making different plans

 In 1997-99, Universal Studios in Orlando, Florida, built a new restaurant and entertainment complex, a two year project The opening was delayed by three months.

 The “Big Dig” road construction project in Boston 2007) was budgeted at $5.8b but cost over $15b The

(1987-project resulted in criminal arrests, thousands of water

leaks, death of a motorist from a tunnel collapse, and

hundreds of millions of dollars in lawsuits

 In 2005, UK grocery chain J Sainsbury wrote off its $526m investment in an automated supply chain management system They hired 3000 additional workers to stock their

Reasons why Projects Fail

system, e.g on low level details

management software

See coursepack article: Mulder

Common Excuses for Project Failures

meetings interrupted actual work

Management of IT Projects

 More than $250 billion is spent in

the US each year on approximately 175,000 information technology

projects.

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.

IT Projects are Different

“[in IT projects], if you ask people what’s done and what remains to be done there

is nothing to see In an IT project, you go from zero to 100 percent in the last

second unlike building a brick wall where you can see when you’re halfway done.”

Engineering projects are measured by tasks completed

IT projects are measured by resources used

J Vowler (2001)

Example: building construction

IT Project Outcomes

26%: On time 29%:

Cancellation

6%: Less than 20% late

Standish Group Survey, 1999

(from a survey of 8000 business systems projects)

Why do IT Projects Fail?

software fails to complete computing task

Construx Software Builders, Inc., 2005.

Why are IT projects more difficult?

Wheelwright and Clark’s Classification

of Projects

Project Life Cycle

Design (Scope), Cost, Time Tradeoffs

Optimal Time-Cost Tradeoff

Required Performance

“You can have your job done cheap, quick, or

right; pick two.” [Sign in local copy center.]

Project Management Maturity Model

(PMMM)

to measure an organization's project

management maturity

areas for improvement are identified, the

PMMM outlines the steps to take toward

project management excellence

research that defines a “best practice”

database, as well as a plan for improving

the project management process

Project Management Maturity Model

1 Ad-Hoc: The project management

process is disorganized or even chaotic

Systems and processes are not defined

Chronic cost and schedule problems exist

2 Abbreviated: Some project

management processes exist, but

underlying principles are not consistently

followed Project success is largely

unpredictable Cost and schedule

problems are common

Project Management Maturity Model

3 Organized: Project management

processes and systems are

documented and and integrated

Project success rates, and cost and

schedule performance, are improved

4 Managed: Projects are effectively

controlled by management Project

success is usually routine Cost and

schedule performance usually

conform to plan.

Project Management Maturity Model

5 Adaptive: Continuous

improvement of the project

management process occurs through feedback and testing of innovative

ideas and technologies Project

success rates, and cost and schedule performance, are continuously

improving

Source: The Project Management Institute PM Network

1997 Micro Frame Technologies, Inc and Project

Management Technologies, Inc.

Chapter

Project Initiation, Selection, and Planning

“There are two ways for a

business to succeed at new

products: doing projects right,

and doing the right projects.”

R.G Cooper, S Edgett, E Kleinschmidt 2000 Research and Technology Management.

Importance of Project Initiation &

Selection

Good project selection makes the later job of

running projects much easier

Also, some poorly selected projects are

doomed from the start

Project Selection - Overview

1 Strategic factors

Competitive necessity: keep a foothold in the

market, not get left behind

Market expansion opportunities: not yet

profitable, but need to establish a presence

Consistency: in line with overall

organization’s mission statement

Image: potential impact of project on

corporate image

Project Selection - Overview

2 Project portfolio factors

Diversification: reduce market and other

risks by maintaining a mix of projects

Cash flow constraints: balance available cash

over time and across projects

Resource constraints: plan available

resources (facility, personnel) over time

Analyzing Project Portfolios:

Low High

Bubble diagrams are useful for representing a set of

projects and visualizing a project portfolio.

Shapes Shading Color Size

Analyzing Project Portfolios:

Source: S.C Wheelwright and K.B Clark, 1992,

Creating Project Plans to Focus, Harvard Business Review

Shape represents the production resource used

Size represents the resource

requirement

Project Selection - Overview

3 Project risk factors

Probability of research being successful

Probability of development being successfulProbability of project success w.r.t scope

Probability of commercial success

Overall risk of project

Competitors in market and their reactions

Project Selection - Overview

4 Quantitative factors

Payback period

Net present value / internal rate of return

Expected commercial value

Real options

Multifactor scoring

Payback Period Analysis

Number of years needed for the

project to repay its initial fixed

investment.

Example:

A project costs $100,000 and is

expected to save the company

$20,000 per year

Payback Period =

$100,000 / $20,000 = 5 years

Comments on Payback Period

sometimes can be used to achieve a common purpose throughout an

organization.

including interest rates and inflation.

payback period.

Net Present Value (NPV)

Let F t = net cash flow in period t

(t = 0, 1, , T), where F 0 = initial cash

investment at time t = 0 and

r = discount rate of return (hurdle

Internal Rate of Return (IRR)

equal to 0 (but this value may not

be unique)

Example (with T = 2):

Find r such that

0)

1(

F F

Note that, in a typical project, early cash flows are

negative.

NPV Example

 Phase I Research and Product

Development: $18 million annual

research cost for 2 years.

 Phase II Market Development: $10

million annual expenditure for 2 years to develop marketing and distribution

channels.

 Phase III Sales: All cash flows are tax and occur at year's end

after-NPV Example

The results of Phase II (available at the end of year 4) identify the product's market potential

as indicated below:

If the discount rate is 5 percent, the

discounted expected cash flow at the end of

the 4th year is $114.62m

NPV Example

The internal rate of return is 49.12%

Expected cash flows (with sale of product at end of year 4)

Cash Outflow Cash Inflow NPV

Criticisms of NPV Analysis

accurate; ignores the “human bias” effect

decisions (and therefore cash flows) may

adapt to changing circumstances over time

project is problematic, since risk is typically reduced as the project evolves

See coursepack article: Hodder and Riggs

Expected Commercial Value (ECV)

D e ve lo p

N e w

P ro d u c t

Technical Failure

Technical Success

P ro b a b ilit y

= pc

P ro b a b ilit y = 1 -

pc

Risk class 1 Risk class 2

ECV is the expected NPV of the project, calculated by using

the probabilities of the various alternatives.

ECV Example

take 3 years, at a cost of $6m/year

be technically feasible

year 4 with an estimated cost of $5.5M

commercial success with probability 0.6,

earning gross revenues of $15M per year

for 5 years

revenue is only $2M per year for 5 years

P ro b a b ilit y =

0 8

Development Fails

P ro b a b ilit y =

0 2

Launch New Product

One-time cost of $5.5M

3 Years

5 Years

Drop Product

Annual

Cost: $6M

Commercial Success Revenue $15M/yr

P ro b a b ilit y =

0 6

Commercial Failure Revenue $2M/yr

P ro b a b ilit y =

0 4

No Cost

ECV Example

Year What’s

Happening

Commercial Success

Commercial Failure

Expected Annual Cash Flow

Discounted Cash Flow

Criticisms of ECV Analysis

 The possibility of changing decisions

in the future changes the risk

characteristics of the project.

discount rate may be inappropriate.

discount rate should be used.

 That’s where the idea of real options analysis can (possibly) help.

Real Options Analysis

financial options can be applied to other

investments

expressing the cash flows in the project as a combination of flows whose cost of capital

is supposedly known

evaluation of projects than ECV

analysis for evaluating projects is unclear

Real Options Analysis

 A leader in the application of real options analysis is Hewlett-Packard But they mainly use it for

procurement and other low risk, contract-protected

decisions, not to evaluate projects.

 Real options analysis is probably not useful in high risk industries, such as pharmaceuticals.

 Real options analysis may also not be useful if a

company lacks the discipline to end a project without delay if the initial investment doesn’t work out.

 Real options author N Kulatilaka says, “Although you can make any project look good if you build in enough options, a real world approach must address two

questions: when exactly do you shut it down, and is there a good mechanism in sight to do that?”

Multifactor Project Scoring Example

Will the project

Multifactor Project Scoring Example

measurement scales to a [0,1]

L

x x

i i





 ) (

) (

) (

1

1 )

x L i

i

e

e x

“excellence”.

Multifactor Project Scoring Example

Weight 0.30 0.15 0.10 0.20 0.25 Project

score (V j ) Attribute #1 #2 #3 #4 #5

Project A 5 Yes (2) Likely (1) 4 2

Project Selection as a Portfolio

Problem

problem

resources to different product lines (e.g.,

compact cars, high-end sedans)

necessarily independent) market segments

should produce which products) may

change frequently

uncertain from period to period due to

competition and changing customer

preferences

Project Selection Example

0-1 Program for Project Selection

See coursepack article: Hall et al (1992)

Maximize 0.581a + 0.845b

Subject to

40a + 65b ≤ 90 (Year 1) -10a + 25b ≤ 20 (Year 2) -20a – 50b ≤ 40 (Year 3) -20a – 50b ≤ 55 (Year 4)

a, b = 0 or 1

where a = 1 if project A is selected

0 if not

and b similarly.

Project Planning Information

1 Project overview and organization Summary statement, work breakdown

structure, organization plan, subcontracting

plan

2 Project scheduling

Time and schedule, budget, resource allocation

plan

3 Project monitoring and control

Cost control system, contingency plans

4 Project termination

Evaluation, benchmarking and archiving

Work Breakdown Structure (WBS)

 Specifies the end-item “deliverables”

 Divides the work, reducing the dollars and

complexity with each additional division

 Stop dividing when the tasks are manageable “work packages”, which will depend on:

 Skill levels of group(s) involved

 Managerial responsibility

 Length of time

 Value of task

 Rules of thumb for tasks: small enough for

estimation, large enough for measurability

 For example, the 1969 Apollo moon landing project had about 500,000 tasks