(Usually…)Everyone is on the same side—OURSEveryone is bound by the success of the projectEveryone has to continue to work togetherProject management is NOT a contest.
On the field of battle, the spoken word doesnot carry far enough, hence the institution ofgongs and drums. Nor can ordinary objects beseen clearly enough: hence the institution ofbanners and flags.Ancient Chinese Book of Army Management.
1. What is a Project?• All projects have a beginning, a middle and an end.Beginning Middle End
Beginning Middle End• A definition:• “A temporary endeavor undertaken toaccomplish a unique purpose”
Projects have a common set of characteristics whichcan also be defined by what they are notA targetoutcomeA defined lifespanCrossorganisational participationNew oruniqueTime, Costandperformancerequirements
Projects have a common set of characteristicswhich can also be defined by what they are notA targetoutcomeA defined lifespanCrossorganisationalparticipationNew or uniqueTime, Cost andperformancerequirements
ExplorationsGo onindefinitelyOne team orone personworking aloneCreating thesame thingmultiple timesNo constraintson time, costorperformanceWhat a project isn’t
ExplorationsGo onindefinitelyOne team orone personworking aloneCreating thesame thingmultiple timesNo constraintson time, costorperformanceAssignment: analyse theProject sheets from theproject wall or NQ projectconcerning:10 minutes.
Process Groups• All projects typically go through these fiveprocessesPlanMonitor &ControlImplementCloseInitiate
Assignment: In what stage of the processare the projects now?10 minutesPlanMonitor &ControlImplementCloseInitiate
• A process is a series of actions directedtowards a particular result.Step 1 Step 2 Step 3 Resultactivityinputs outputs
Figure 1.1 Project Life Cycle(Gray & Larson, 2006, p6)
The Triple ConstraintAlso known as the IRON TRIANGLETimeScope Cost
QualityThe Quadruple Constraint• Warning: Quality has many definitionsTimeScope Cost
QualityAssignment: check the 4 scopes and apply it onthe projectsTimeScope Cost10 minutes
What is Project Management?Advantages of Project Management:• Better control of financial, physical,and human resources• Improved customer relations• Shorter development times• Lower costs• Higher quality and increasedreliability• Higher profit margins• Improved productivity• Better internal coordination
Remember this?• The first four knowledge areas are• Core Functions
• The next four knowledge areas are FacilitatingProcessesIntegrationManagementTimeManagementCostManagementScopeManagementQualityManagementHRManagementRiskManagementCommunicationManagementProcurementManagement
Integration Management – pulling it all togetherIntegrationManagementTimeManagementCostManagementScopeManagementQualityManagementHRManagementRiskManagementCommunicationManagementProcurementManagement
business model templateVALUEPROPOSITIONCOSTSTRUCTURECUSTOMERRELATIONSHIPTARGETCUSTOMERDISTRIBUTIONCHANNELVALUECONFIGURATIONCORECAPABILITIESPARTNERNETWORKREVENUESTREAMSINFRASTRUCTURE CUSTOMEROFFERFINANCEOsterwalder’s Business Model framework 2006http://business-model-design.blogspot.com
• Strategic Management Overview– Involves determining long-term objectives, predictingfuture trends, and projecting the need for new productsand services– Provides the theme and focus of the future direction forthe firm• respond to change• allocating scarce resources– Requires strong links among mission, goals, objectives,strategy, and implementation
Set (SMART) GoalsReview MissionDevelop StrategiesImplement Strategies through projectsAlign Strategies to goals
Financial Analysis$$$Net Present ValuePayback modelReturn onInvestment(there are more)
Net Present ValueNet Present Value (NPV) ModelUses management’s minimum desired rate-of-return (discount rate) to compute thepresent value of all net cash inflowspositive NPV: the project meets theminimum desired rate of return and iseligible for further considerationnegative NPV: project is rejectedNet Present Value (NPV) Model cont’d…NPV Calculationsdetermine estimated costs / benefits forthe life of the project and products itproducesdetermine discount rate (askorganization)calculate the NPVsome organizations consider theinvestment year as year 0, othersconsider it year 1some organizations enter costs asnegative numbers, others do not (askorganization)Example: CP829_Lecture_Week2_NPV.xlsTime toStopand turn to anewpresentationpack
Payback modelFigure 4.1 Charting the Payback Period(Schwalbe, 2006, p129)Measures the time it will take to recoverthe project investmentShorter paybacks are more desirablePayback occurs when cumulativediscounted benefits and costs aregreater than zeroLimitations of payback:• ignores the time value of money• assumes cash inflows for investmentperiod only• does not consider profitability
Return onInvestmentReturn on Investment (ROI)Calculated by subtracting projectcosts from the benefits and thendividing by the costsFormula:ROI = (total discountedbenefits –total discounted costs) /discounted costsHigher the ROI, the better. Manyorganizations have a set orminimum rate of return oninvestment projects(total discounted benefits –total discounted costs)discounted costs
$$$Weighted scoringmodelA weighted scoring model is a tool that provides asystematic process for selecting projects based onmany criteria– Steps in identifying a weighted scoring model:• identify criteria for project selection• assign weights (%) to criteria add up to (100%)• assign scores to each criteria for each project• multiply scores by weights to get total scores– The higher the weighted score, the better $$$
$$$BalancedScorecard•Balanced Scorecard– Robert Kaplan and David Norton developed thisapproach to help select and manage projects that alignwith business strategy– Methodology that converts an organization’s valuedrivers, such as customer service, innovation,efficiency, and financial performance, to a series ofdefined metrics– See http://www.balancedscorecard.org for moreinformation$$$
“The reasons for the increase in successfulprojects vary. First, the average cost of a projecthas been more than cut in half. Better tools havebeen created to monitor and control progressand better skilled project managers with bettermanagement processes are being used. The factthat there are processes is significant in itself.”(Standish Group cited in Schwalbe, 2004, p13)
“The reasons for the increase in successfulprojects vary. First, the average cost of a projecthas been more than cut in half. Better tools havebeen created to monitor and control progressand better skilled project managers with bettermanagement processes are being used. The factthat there are processes is significant in itself.”(Standish Group cited in Schwalbe, 2004, p13)SmallerprojectsBettertoolsBettertraining
Things youshould have(if you want to succeed)1. Executive support2. User involvement3. Experienced project manager4. Clear business objectives5. Minimized scope6. Standard softwareinfrastructure7. Firm basic requirements8. Formal methodology9. Reliable estimates10. Other criteria, such as smallmilestones, proper planning,competent staff, and ownership
Culture is a systemof shared norms,beliefs, values,and customs thatbind peopletogether, creatingshared meaningand a uniqueidentity
You (and I) need tomake adjustmentswhen dealing withpeople from othercultures.
Relativity of time andpunctualityCulture-relatedethical differencesPersonal andprofessionalrelationshipsAttitudes towardwork and life
Culture ShockThe naturalpsychologicaldisorientation thatpeople sufferwhen they moveinto a differentculture
Successful partner relationships begin withthe search.
And just like you have to develop a team,you have to develop partner relationships.
SelectingTeambuilding ProjectmanagersProjectstakeholdersExpand the partnershipcommitment to includeother key managers andspecialistsBuild a collaborativerelationship amongthe project managers.Voluntary, experienced,willing, with committedtop management.
Good people are hard to find.So are good business partners.
If you find goodpartners you wantto stick with them
Establish a “we” asopposed to “us and them”attitude toward the projectCo-location: employees fromdifferent organizations worktogether in same locationEstablish mechanisms that willensure the relationshipwithstands problems
Problem resolutionContinuous improvementJoint evaluationPersistent leadership
Principled Negotiationscall forSeparating the peoplefrom the problemFocusing on interests,not positionsInventing options formutual gainAnd whenever possible,use objective criteria tohelp you achieve yourgoals
If pushed, don’t push backAsk questions instead ofmaking statementsUse silence as a responseto unreasonable demandsAsk for advice andencourage others tocriticize your ideas andpositionswork toward a win/winscenarioWarnings for dealing withUnreasonable People
The negative effect ofdissatisfied customersis far greater thanpositive effect ofsatisfied customers(Richins 1983)
The negative effect ofdissatisfied customers is fargreater than positive effect ofsatisfied customers(Richins 1983)In today’s moderncommunications environmentthat message can travel fasterand wider(Hoch, 2006)
Every customer hasperformanceexpectations andperceptions(Parasuraman1991)
Satisfaction is aperceptualrelationship!Perceived performanceExpected performance
Project managers must beskilled at managing bothcustomer expectations andperceptions
Your checklist; Don’t oversell the project; better to undersell Develop a well-defined project scope statement Share significant problems and risks Keep everyone informed about the project’s progress Involve customers early on decisions about project developmentchanges Handle customer relationships and problems in an expeditious,competent, and professional manner Speak with one voice Speak the language of the customer
The strategy is simple, I think.The strategy is to have a practice, and what itmeans to have a practice is to regularly andreliably do the work in a habitual way.Seth Godin.