Maintaining a Legally Sound Health Record Paper and Elect.docx

Maintaining a Legally Sound Health Record:
Paper and Electronic
The health record is the legal business record for a healthcare
organization. As such, it must be maintained in a
manner that follows applicable regulations, accreditation
standards, professional practice standards, and legal
standards. The standards may vary based on practice setting,
state statutes, and applicable case law. An attorney
should review policies related to legal documentation issues to
ensure adherence to the most current standards and
case law.
HIM professionals should fully understand the principles of
maintaining a legally sound health record and the potential
ramifications when the record’s legal integrity is questioned.
This practice brief will review the legal documentation
guidelines for entries in and maintenance of the health record—
both paper and electronic. Many of the guidelines that
originally applied to paper-based health records translate to
documentation in electronic health records (EHRs). In
addition, new guidelines and functionalities have emerged
specific to maintaining legally sound EHRs. It is of the
utmost importance to maintain EHRs in a manner that will
support a facility’s business and legal processes, otherwise
duplicate paper processes will need to be maintained.
AHIMA convened an e-HIM® work group to re-evaluate and
update the 2002 practice brief “Maintaining a
Legally Sound Health Record” to address the transition many
organizations face in the migration from paper to
hybrid to fully electronic health records. Issues unique to EHRs

are addressed specifically if they are different or
require expansion. Many organizations use a hybrid record
(which includes both paper and electronic
documentation), scanning paper documents into an electronic
document management system. Even though a scanned
document ends up in an electronic state, the documentation
principles for paper-based records still apply. If there
are unique issues for scanned records, they are specified in this
brief.
Authentication for Legal Admissibility
Generally, statements made outside the court by a party in a
lawsuit are considered hearsay and not admissible as
evidence. Documentation in the health record is technically
hearsay; however, Federal Rules of Evidence (803(6))
and the Uniform Business and Public Records Act adopted by
most states allow exception to the hearsay rule for
records maintained in the regular course of business, including
health records. All records must be identified and
authenticated prior to admissibility in court.
Four basic principles must be met for the health record to be
authenticated or deemed admissible as evidence. The
record must have been:
� Documented in the normal course of business (following
normal routines)
� Kept in the regular course of business
� Made at or near the time of the matter recorded
� Made by a person within the business with knowledge of the
acts, events, conditions, opinions, or diagnoses
appearing in it
Copyright © 2005 by The American Health Information

Management Association. All Rights Reserved.
http://www.ahima.org/copyright
EHRs are admissible if the system that produced them is shown
to be accurate and trustworthy. The Comprehensive
Guide to Electronic Health Records outlines the following facts
to support accuracy and trustworthiness:
� Type of computer used and its acceptance as standard and
efficient equipment
� The record’s method of operation
� The method and circumstances of preparation of the record,
including:
» The sources of information on which it is based
» The procedures for entering information into and retrieving
information from the computer
» The controls and checks used as well as the tests made to
ensure the accuracy and reliability of the
record
» The information has not been altered1
As EHRs become more commonplace, the federal courts are
beginning to differentiate the standards to be applied to
authenticate EHRs, based on the type of information stored. For
example, when a computer record contains the
assertions of a person, such as a progress note or dictated
report, the record must fit within the hearsay exception to
be admissible. These records are referred to as computer-stored.
In contrast, computer-generated records contain the output of
computer programs, untouched by human hands.

Examples may include decision-support alerts and machine-
generated test results. The admissibility issue here is not
whether the information in the record is hearsay, but whether
the computer program that generated the record was
reliable and functioning properly (a question of authenticity). In
most cases, the reliability of a computer program can
be established by showing that users of the program actually do
rely on it on a regular basis, such as in the ordinary
course of business.
Testifying about Admissibility
Typically, the health record custodian is called upon to
authenticate records by providing testimony about the
process or system that produced the records. An organization’s
record-keeping program should consist of policies,
procedures, and methods that support the creation and
maintenance of reliable, accurate records. If so, the records
will be admissible into evidence.
Electronic and imaged health records. Case law and the Federal
Rules of Evidence provide support to allow the
output of an EHR system to be admissible in court. The rule
states “if data are stored in a computer or similar device,
any printout or other output readable by sight, shown to reflect
the data accurately, is an ‘original.’”2 As a result, an
accurate printout of computer data satisfies the best evidence
rule, which ordinarily requires the production of an
original to prove the content of a writing, recording, or
photograph. Organizations that maintain EHRs should clearly
define those systems that contain the legal EHR or portions of
the EHR. Each of these systems should be configured
and maintained, ensuring that entries originated in a manner
consistent with HIM principles and their business rules,
content, and output meet all standards of admissibility.

An important component of this effort is to establish methods to
authenticate the electronic data stored in the EHR,
namely to verify that data has not been altered or improperly
modified consistent with Federal Rules of Evidence.
HIPAA security implementation standards require organizations
to authenticate protected electronic health
information as a means of ensuring data integrity, including
data at rest and transmitted data. Cryptographic
applications commonly used to authenticate include message
authentication codes and digital signatures.
Authorship
Authorship is the origination of recorded information. This is an
action attributed to a specific individual or entity,
acting at a particular time. Authors are responsible for the
completeness and accuracy of their entries in the health
record.
AHIMA recommends that anyone documenting in the health
record (regardless of media) have the authority and
right to document as defined by the organization’s policies and
procedures. Individuals must be trained and
competent in the fundamental documentation practices of the
organization and legal documentation standards.
Organizations should define the level of record documentation
expected of their practitioners based on the
practitioners’ licensure, certification, and professional
experience.

Authentication of Entries
Authentication shows authorship and assigns responsibility for
an act, event, condition, opinion, or diagnosis. Health
Level Seven (HL7) has defined a legally authenticated
document or entry as “a status in which a document or entry
has been signed manually or electronically by the individual
who is legally responsible for that document or entry.”3
Each organization should establish a definition of a legally
authenticated entry and establish rules to promptly
authenticate every entry in the health record by the author
responsible for ordering, providing, or evaluating the
service furnished.
Many states have regulations or rules of evidence that speak to
specific characteristics required for authenticating
entries. Before adopting any authentication method other than
written signature, the organization should consult state
statutes and regulations regarding authentication of entries. The
medical staff bylaws (where applicable) or
organizational policies should also approve computer
authentication and authentication of scanned entries and specify
the rules for use. Organizations automating health records in a
state that does not expressly permit the use of
computer keys to authenticate should seek permission from the
applicable state agency.
Types of Signatures
For paper-based records, acceptable methods to identify the
author generally include written signature, rubber
stamp signature, or initials combined with a signature legend on
the same document. Acceptable methods of
identifying the author in EHRs generally include electronic or
digital signatures or computer key. Acceptable methods

for authenticating a scanned document may follow paper or
electronic guidelines.
Signatures are the usual method to authenticate entries in a
paper-based record. The Centers for Medicare and
Medicaid Services (CMS) Interpretive Guidelines for Hospitals
482.24(c)(1) require name and discipline at a
minimum. A healthcare organization can choose a more
stringent standard requiring the author’s full name with title or
credential to assist in proper identification of the writer.
Healthcare organization policies should define the acceptable
format for signatures in the health record.
A countersignature requires a professional to review and, if
appropriate, approve action taken by another
practitioner. Countersignatures should be used as required by
state licensing or certification statutes related to
professional scope of practice. The entries of individuals who
are required to practice under the direct supervision of
another professional should be countersigned by the individual
who has authority to evaluate the entry. Once
countersigned, the entry is legally adopted by the supervising
professional as his or her own entry. For example,
licensed nurses who do not have the authority to supervise
should not countersign an entry for a graduate nurse who
is not yet licensed. Practitioners who are asked to countersign
should do so carefully. The CMS Interpretive
Guidelines for Hospitals (482.24(c)(1)(I)) require that medical
staff rules and regulations identify the types of
documents or entries nonphysicians may complete that require a
countersignature by a supervisor or attending
medical staff member.

Rubber stamp signatures are acceptable if allowed by state,
federal, and reimbursement regulations. From a
reimbursement perspective, some fiscal intermediaries have
local policies prohibiting the use of rubber stamp
signatures in the health record even though federal regulation
allows their use. Healthcare organization policies should
state if rubber stamp signatures are acceptable and define the
circumstances for their use after review of state
regulations and payer policies.
When rubber stamp signatures are used, a list of signatures
should be maintained to cross reference each signature to
an individual author. The individual whose signature the stamp
represents should sign a statement that he or she is the
only one who has the stamp and uses it. There can be no
delegation to another individual for use of the stamp.
Sanctions should be established for unauthorized or
inappropriate use of signature stamps.
Initials can be used to authenticate entries such as flow sheets,
medication records, or treatment records. They
should not be used for such entries as narrative notes or
assessments. Initials should never be used for entries where
a signature is required by law. Authentication of entries by only
initials should be avoided because of the difficulty in
positively identifying the author of an entry based on initials
alone and distinguishing that individual from others having
the same initials.
If a healthcare organization chooses to use initials in any part of
the record for authentication of an entry, there should
be corresponding full identification of the initials on the same
form or on a signature legend. A signature legend may

be used to identify the author and full signature when initials
are used to authenticate entries. Each author who initials
an entry must have a corresponding full signature on record. For
EHRs, apply recommendations for computer key
signatures.
Fax signatures. The acceptance of fax documents and signatures
is dependent on state, federal, and reimbursement
regulations. Unless specifically prohibited by state regulations
or healthcare organization policy, fax signatures are
acceptable. The Federal Rules of Evidence and the Uniform
Rules of Evidence allow for reproduced records used
during the course of business to be admissible as evidence
unless there is a genuine question about their authenticity
or circumstances dictate that the originals be admissible rather
than the reproductions. Some states have adopted the
Uniform Photographic Copies of Business and Public Records
Act, which allows for the admissibility of a
reproduced business record without the original. The Uniform
Business Records as Evidence Act also addresses the
admissibility of reproductions. When a fax document or
signature is included in the health record, the document with
the original signature should be retrievable from the original
source.
Electronic signatures are acceptable if allowed by state, federal,
and reimbursement regulations. In 2000 the US
government passed the Electronic Signatures in Global National
Commerce Act, which gives electronic signatures
the same legality as handwritten signatures for interstate
commerce. State regulations and payer policies must be
reviewed to ensure acceptability of electronic signatures when
developing healthcare organization policies. ASTM
and HL7 have standards for electronic signatures. Electronic
signature software binds a signature or other mark to a
specific electronic document. It requires user authentication

such as a unique code, biometric, or password that
verifies the identity of the signer in the system.
If electronic signatures are used in the EHR, the software
program or technology should provide message integrity—
assurance that the message sent or entry made by a user is the
same as the one received or maintained by the
system. If electronic signatures are used in the EHR, the
software program or technology should also provide for
nonrepudiation—assurance that the entry or message came from
a particular user. It will be difficult for a party to
deny the content of an entry or having created it.
A digital signature provides a digital guarantee that information
has not been modified, as if it were protected by a
tamper-proof seal that is broken if the content were altered.4
A computer key or other code is an acceptable method to
authenticate entries in an EHR if allowed by state,
federal, and reimbursement regulations. When computer codes
are used, a list of codes should be maintained that
links each code to an individual author. Authorized users should
sign a statement ensuring that they alone will use the
computer key. Sanctions should be established for unauthorized
or inappropriate use of computer key.
Digital ink or digitized signatures differ from electronic
signatures in that they use handwritten signatures on a pen
pad. The actual written signature is converted into an electronic

image. Digitized signatures are acceptable if allowed
by state, federal, and reimbursement regulations. State
regulations and payer policies must be reviewed to ensure
acceptability of digitized signature when developing healthcare
organization policies.
Specific Authentication Issues
There are a number of unique authentication scenarios and
issues that organizations must address.
Auto-authentication. The author of each entry should take
specific action to verify that the entry is his or her entry
or that he or she is responsible for the entry and that the entry is
accurate. Computer technology has provided
opportunities to improve the speed and accuracy of the
authentication process. However, authentication standards
still require that the author attest to the accuracy of the entry.
As a result, any auto-authentication technique that does
not require the author review the entry is likely to fall short of
federal and state authentication requirements and place
the organization at legal risk.
Failure to disapprove an entry within a specific time period is
not an acceptable method of authentication. A method
should be in place to ensure that authors authenticate dictated
documents after they are transcribed. Auto-
authentication methods where the dictator is deemed to have
authenticated a transcribed document if no corrections
are requested within a specified period of time are not
recommended.
Authenticating documents with multiple sections or completed
by multiple individuals. Some documentation
tools, particularly assessments, are set up to be completed by
multiple staff members at different times. As with any

entry, there must be a mechanism to determine who completed
information on the document. At a minimum, there
should be a signature area at the end of the document for staff
to sign and date. Staff who have completed sections
of the assessment should either indicate the sections they
completed at the signature line or initial the sections they
completed.
Some EHR documentation tools, particularly assessments, are
also intended to be completed by multiple staff
members at different times. Here too there must be a mechanism
to determine who completed information in the
document.
Documenting care provided by a colleague. Individuals
providing care are responsible for documenting that care.
Documentation must reflect who performed the action. Patient
care carried out by another provider, as well as
clinical information supplied by another person to the writer of
the entry, should be clearly attributed to the source.
Some EHR systems provide the capability to indicate
differences between the person who enters information and the
author of a document. In either case, documentation must reflect
who performed the action. If documentation of care
is entered for another provider, at a minimum the document
should contain the identification of the person who
entered the information along with the date the entry was made
and authentication by the actual provider of care with
the corresponding date of authentication.

Documentation Principles
Regardless of the format, text entries, canned phrases, or
templates should follow fundamental principles for the
quality of the entry. Content should be specific, objective, and
complete.
Use specific language and avoid vague or generalized language.
Do not speculate. The record should always reflect
factual information (what is known versus what is thought or
presumed), and it should be written using factual
statements. Examples of generalizations and vague words
include patient doing well, appears to be, confused,
anxious, status quo, stable, as usual. If an author must speculate
(i.e., diagnosis is undetermined), the documentation
should clearly identify speculation versus factual information.
Chart objective facts and avoid using personal opinions. By
documenting what can be seen, heard, touched, and
smelled, entries will be specific and objective. Describe signs
and symptoms, use quotation marks when quoting the
patient, and document the patient’s response to care.
Document the complete facts and pertinent information related
to an event, course of treatment, patient condition,
response to care, and deviation from standard treatment
(including the reason for it). Make sure the entry is
complete and contains all significant information. If the original
entry is incomplete, follow guidelines for making a late
entry, addendum, or clarification.
Other Documentation Issues
Organizational policies must address the use of approved
abbreviations in the health record. A second emerging

documentation issue is the cut and paste functionality in EHRs.
Organizations must consider whether they will allow
cutting and pasting and how they will handle cut-and-paste
content from one entry to another.
Use of abbreviations. Every healthcare organization should have
a goal to limit or eliminate the use of abbreviations
in medical record documentation as part of its patient safety
efforts. Healthcare organizations should set a standard
for acceptable abbreviations to be used in the health record and
develop an organization-specific abbreviation list.
Only those abbreviations approved by the organization should
be used in the health record. When there is more than
one meaning for an approved abbreviation, chose one meaning
or identify the context in which the abbreviation is to
be used. Every organization should have a list of abbreviations,
acronyms, and symbols that should not be used.
EHRs. Abbreviations should be eliminated as information is
formatted for the EHR. Electronic order sets, document
templates for point-and-click or direct charting, voice
recognition, or transcribed documents can be formatted or
programmed to eliminate abbreviations.
Cut, copy, and paste functionality is not generally regarded as
legitimately available in the paper record.
Analogous functions in paper records include photocopying a
note, cropping it, and pasting or gluing it into the
record. The primary issue with the cut, copy, and paste
functionality in the EHR is one of authorship—who is the
author and what is the date of origination for a copied entry?
Cutting and pasting saves time; however, it also poses several
risks:
� Cutting and pasting the note to the wrong encounter or the

wrong patient record
� Lack of identification of the original author and date
� The acceptability of cutting and pasting the original author’s
note without his or her knowledge or permission
Organizations should develop policy and procedures related to
cutting, copying, and pasting documentation in their
EHR systems. By following these guidelines and training
clinical staff, providers can allow cutting and pasting within
certain boundaries.
� In general, the original source author and date must be
evidenced in copied information. If users are allowed
to copy forward from a previous entry by another person, an
attribution statement referring to the original
document, date, and author should be attached or incorporated
where applicable.
� Cutting, copying, and pasting must not be perceived as “OK
unless proven otherwise” but instead should be
considered “not OK until proven otherwise.”
� Each potential function must be evaluated for policy or
procedure acceptance or rejection by a practice.
� In some settings, copy and paste may be acceptable for legal
record purposes but not for others (clinical trials
data, quality assurance data, pay-for-performance data).
� In the hybrid environment, audit tracking of copy and paste

may not be available because it involves different
systems.
� In some contexts, it is never legitimate, including settings
where the actual function takes personal health
information outside the security environment.
� Some systems have an intermediate step allowing information
to be brought forward but require another
validation step.
� As a mitigation step, boilerplate text or libraries may be
devised to describe common or routine information as
agreed upon by the organizational standards.
Linking Each Patient to a Record
Every page in the health record or computerized record screen
must identify patients by name and health record
number. Patient name and number must be on both sides of
every page as well as on every form and computerized
printout. Paper and computer-generated forms with multiple
pages must have the patient name and number on all
pages.
EHRs. Each data field in the health record must be linked to the
patient’s name and health record number. Patient
name and number must be on every page of printed, viewed, or
otherwise transmitted information. The system in use
must have a means of authenticating information reported from
other systems.
Referencing another patient in the paper record. If it is
necessary to refer to another patient to describe an
event, the patient’s name should not be used—the record

number should be referenced in its place.
Timeliness and Chronology of Entries
Timeliness of an entry is critical to the admissibility of a health
record in court as required by the Uniform Rules of
Evidence. Entries should be made as soon as possible after an
event or observation is made. An entry shall never be
made in advance. If it is necessary to summarize events that
occurred over a period of time (such as a shift), the
notation shall indicate the actual time the entry was made with
the narrative documentation identifying the time events
occurred, if time is pertinent to the situation.
Timeliness of an entry presumes that the medium to which the
entry is made is accessible. The principle of availability
has been recognized as also consistent with timeliness, with the
understanding that an entry would be made as soon
as the record or system is available.
EHRs. Facilities must define what constitutes the legal health
record in their organizational policies. Procedures must
be in place to define timeliness for each component of the EHR
system where there are no real-time automated links
between subsystems.
Chronology
The record must reflect the continuous chronology of the
patient’s healthcare. Tools should be provided for

caregivers to view episode-based information. The chronology
must be readily apparent in any given view. It is
recommended that organizations have a facility-wide standard
view. EHR systems should have the capability of
producing an output that chronicles the individual’s encounter.
Date and Time
Every entry in the health record must include a complete date
(including month, day, and year) and a time. Time must
be included in all types of narrative notes even if it may not
seem important to the type of entry.
Charting time as a block (e.g., 7 a.m.–3 p.m.) is not advised,
especially for narrative notes. Narrative documentation
should reflect the actual time the entry was made. For certain
types of flow sheets, such as a treatment record,
recording time as a block could be acceptable. For example, a
treatment that can be delivered any time during a shift
could have a block of time identified on the treatment record
with staff signing that they delivered the treatment
during that shift. For assessment forms where multiple
individuals are completing sections, the date and time of
completion should be indicated as well as who has completed
each section (Time is not required on standardized
data sets such as the MDS and OASIS).
EHR systems must have the ability to date- and time-stamp each
entry as the entry is made. Every entry in the health
record must have a system-generated date and time based on
current date and time. Date and time stamps must be
associated with the signature at the time the documentation is
finalized. For businesses operating across time zones,
the time zone must be included in the date and time stamp. The
date and time of entry must be accessible by the
reviewer. Systems must have the ability for the documenter to

enter date and time of occurrence for late entries.
Imaged records. The same standards for paper records apply to
imaged records. Additionally, all scanned
documents must be date- and time-stamped with the date
scanned.
Legibility and Display
All entries to the record should be legible. If an entry cannot be
read, the author should rewrite the entry on the next
available line, define what the entry is for, referring back to the
original documentation, and legibly rewrite the entry.
For example: “Clarified entry of [date]” and rewrite entry, date,
and sign. The rewritten entry must be the same as
the original. All entries to the record should be made in black
ink to facilitate legible photocopying of records. Entries
should not be made in pencil.
Labels should be procured from a specific vendor to ensure
adhesiveness and not placed over …
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PROJECT
MANAGEMENT
ffirs.qxd 1/3/13 3:48 PM Page i

Dr. Kerzner’s 16 Points to Project
Management Maturity
1. Adopt a project management methodology and use it
consistently.
2. Implement a philosophy that drives the company toward
project
management maturity and communicate it to everyone.
3. Commit to developing effective plans at the beginning of
each project.
4. Minimize scope changes by committing to realistic
objectives.
5. Recognize that cost and schedule management are
inseparable.
6. Select the right person as the project manager.
7. Provide executives with project sponsor information, not
project
management information.
8. Strengthen involvement and support of line management.
9. Focus on deliverables rather than resources.
10. Cultivate effective communication, cooperation, and trust to
achieve
rapid project management maturity.
11. Share recognition for project success with the entire project
team and

line management.
12. Eliminate nonproductive meetings.
13. Focus on identifying and solving problems early, quickly,
and cost
effectively.
14. Measure progress periodically.
15. Use project management software as a tool—not as a
substitute for
effective planning or interpersonal skills.
16. Institute an all-employee training program with periodic
updates based
upon documented lessons learned.
ffirs.qxd 1/3/13 3:48 PM Page ii
P RO J E C T
MANAGEMENT
A Systems Approach to
Planning, Scheduling,
and Controlling
E L E V E N T H E D I T I O N
H A R O L D K E R Z N E R , P h . D .
Senior Executive Director for Project Management
The International Institute for Learning

New York, New York
ffirs.qxd 1/3/13 3:48 PM Page iii
Cover illustration: xiaoke ma/iStockphoto
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Library of Congress Cataloging-in-Publication Data:
Kerzner, Harold.
Project management : a systems approach to planning,
scheduling, and controlling / Harold Kerzner, Ph. D. Senior
Executive
Director for Project Management, the International Institute for
Learning, New York, New York. — Eleventh edition.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-02227-6 (cloth); ISBN 978-1-118-41585-6
(ebk); ISBN 978-1-118-41855-0 (ebk); ISBN 978-1-118-43357-
7
(ebk); ISBN 978-1-118-48322-0 (ebk); ISBN 978-1-118-48323-
7 (ebk) 1. Project management. 2. Project management—Case
studies. I. Title.
HD69.P75K47 2013
658.4’04 —dc23

2012026239
Printed in the United States of America
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To
Dr. Herman Krier,
my Friend and Guru,
who taught me well the
meaning of the word “persistence”
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Contents
Preface xxiii

1 OVERVIEW 1
1.0 Introduction 1
1.1 Understanding Project Management 2
1.2 Defining Project Success 7
1.3 Success, Trade-Offs, and Competing Constraints 8
1.4 The Project Manager–Line Manager Interface 9
1.5 Defining the Project Manager’s Role 14
1.6 Defining the Functional Manager’s Role 15
1.7 Defining the Functional Employee’s Role 18
1.8 Defining the Executive’s Role 19
1.9 Working with Executives 19
1.10 Committee Sponsorship/Governance 20
1.11 The Project Manager as the Planning Agent 23
1.12 Project Champions 24
1.13 The Downside of Project Management 25
1.14 Project-Driven versus Non–Project-Driven Organizations
25
1.15 Marketing in the Project-Driven Organization 28
1.16 Classification of Projects 30
1.17 Location of the Project Manager 30
1.18 Differing Views of Project Management 32
1.19 Public-Sector Project Management 34
1.20 International Project Management 38
1.21 Concurrent Engineering: A Project Management Approach
38
1.22 Added Value 39
1.23 Studying Tips for the PMI® Project Management
Certification Exam 40
Problems 42
Case Study
Williams Machine Tool Company 44

vii
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2 PROJECT MANAGEMENT GROWTH: CONCEPTS
AND DEFINITIONS 47
2.0 Introduction 47
2.1 General Systems Management 48
2.2 Project Management: 1945–1960 48
2.5 Resistance to Change 59
2.6 Systems, Programs, and Projects: A Definition 64
2.7 Product versus Project Management: A Definition 66
2.8 Maturity and Excellence: A Definition 68
2.9 Informal Project Management: A Definition 69
2.10 The Many Faces of Success 70
2.11 The Many Faces of Failure 73
2.12 The Stage-Gate Process 76
2.13 Project Life Cycles 78
2.14 Gate Review Meetings (Project Closure) 83
2.15 Engagement Project Management 84
2.16 Project Management Methodologies: A Definition 85
2.17 Enterprise Project Management Methodologies 87
2.18 Methodologies Can Fail 91
2.19 Organizational Change Management and Corporate
Cultures 94
2.20 Project Management Intellectual Property 100
2.21 Systems Thinking 101

Problems 107
Case Study
Creating a Methodology 108
3 ORGANIZATIONAL STRUCTURES 111
3.0 Introduction 111
3.1 Organizational Work Flow 113
3.2 Traditional (Classical) Organization 114
3.3 Developing Work Integration Positions 117
3.4 Line-Staff Organization (Project Coordinator) 121
3.5 Pure Product (Projectized) Organization 122
3.6 Matrix Organizational Form 125
3.7 Modification of Matrix Structures 132
3.8 The Strong, Weak, or Balanced Matrix 136
3.9 Center for Project Management Expertise 136
3.10 Matrix Layering 137
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3.11 Selecting the Organizational Form 138
3.12 Structuring the Small Company 143
3.13 Strategic Business Unit (SBU) Project Management 146
3.14 Transitional Management 147
3.15 Barriers to Implementing Project Management in Emerging
Markets 149
3.16 Seven Fallacies that Delay Project Management Maturity
156

Problems 161
Case Studies
Jones and Shephard Accountants, Inc. 166
Coronado Communications 168
4 ORGANIZING AND STAFFING THE PROJECT OFFICE
AND TEAM 171
4.1 The Staffing Environment 172
4.2 Selecting the Project Manager: An Executive Decision 174
4.3 Skill Requirements for Project and Program Managers 178
4.4 Special Cases in Project Manager Selection 184
4.5 Selecting the Wrong Project Manager 184
4.6 Next Generation Project Managers 188
4.7 Duties and Job Descriptions 189
4.8 The Organizational Staffing Process 193
4.9 The Project Office 199
4.10 The Functional Team 204
4.11 The Project Organizational Chart 205
4.12 Special Problems 208
4.13 Selecting the Project Management Implementation Team
210
4.14 Mistakes Made by Inexperienced Project Managers 213
Problems 216
5 MANAGEMENT FUNCTIONS 223
5.1 Controlling 225
5.2 Directing 225
5.3 Project Authority 230

5.4 Interpersonal Influences 237
5.5 Barriers to Project Team Development 240
5.6 Suggestions for Handling the Newly Formed Team 243
Contents ix
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5.7 Team Building as an Ongoing Process 246
5.8 Dysfunctions of a Team 247
5.9 Leadership in a Project Environment 250
5.10 Life-Cycle Leadership 252
5.11 Value-Based Project Leadership 255
5.12 Organizational Impact 257
5.13 Employee–Manager Problems 259
5.14 Management Pitfalls 262
5.15 Communications 265
5.16 Project Review Meetings 274
5.17 Project Management Bottlenecks 275
5.18 Cross-Cutting Skills 276
5.19 Active Listening 277
5.20 Project Problem-Solving 278
5.21 Brainstorming 288
5.22 Project Decision-Making 293
5.23 Predicting the Outcome of a Decision 301
5.24 Facilitation 303
5.25 Handling Negative Team Dynamics 306
5.26 Communication Traps 307
5.27 Proverbs and Laws 309
5.28 Human Behavior Education 311
5.29 Management Policies and Procedures 312

Problems 318
Case Studies
The Trophy Project 327
Communication Failures 329
McRoy Aerospace 332
The Poor Worker 333
The Prima Donna 334
The Team Meeting 335
Leadership Effectiveness (A) 337
Leadership Effectiveness (B) 341
Motivational Questionnaire 347
6 MANAGEMENT OF YOUR TIME AND STRESS 355
6.1 Understanding Time Management 356
6.2 Time Robbers 356
6.3 Time Management Forms 358
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6.4 Effective Time Management 359
6.5 Stress and Burnout 360
Problems 363
Case Study
The Reluctant Workers 364

7 CONFLICTS 365
7.1 Objectives 366
7.2 The Conflict Environment 367
7.3 Types of Conflicts 368
7.4 Conflict Resolution 371
7.5 Understanding Superior, Subordinate, and Functional
Conflicts 372
7.6 The Management of Conflicts 374
7.7 Conflict Resolution Modes 375
Problems 379
Case Studies
Facilities Scheduling at Mayer Manufacturing 382
Telestar International 383
Handling Conflict in Project Management 384
8 SPECIAL TOPICS 391
8.1 Performance Measurement 392
8.2 Financial Compensation and Rewards 399

8.3 Critical Issues with Rewarding Project Teams 405
8.4 Effective Project Management in the Small Business
Organization 408
8.5 Mega Projects 410
8.6 Morality, Ethics, and the Corporate Culture 411
8.7 Professional Responsibilities 414
8.8 Internal Partnerships 417
8.9 External Partnerships 418
8.10 Training and Education 420
8.11 Integrated Product/Project Teams 422
8.12 Virtual Project Teams 424
8.13 Breakthrough Projects 427
Contents xi
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xii CONTENTS
8.14 Managing Innovation Projects 427
8.15 Agile Project Management 430
Problems 437
Case Study
Is It Fraud? 440
9 THE VARIABLES FOR SUCCESS 443
9.1 Predicting Project Success 444
9.2 Project Management Effectiveness 448

9.3 Expectations 449
9.4 Lessons Learned 450
9.5 Understanding Best Practices 451
9.6 Best Practices versus Proven Practices 458
Problems 460
Case Study
Radiance International 460
10 WORKING WITH EXECUTIVES 463
10.1 The Project Sponsor 464
10.2 Handling Disagreements with the Sponsor 474
10.3 The Collective Belief 475
10.4 The Exit Champion 476
10.5 The In-House Representatives 477
10.6 Stakeholder Relations Management 478
10.7 Politics 486
Problems 488
Case Studies

Corwin Corporation 491
The Prioritization of Projects 499
The Irresponsible Sponsors 500
Selling Executives on Project Management 502
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11 PLANNING 505
11.1 Validating the Assumptions 508
11.2 Validating the Objectives 509
11.3 General Planning 510
11.4 Life-Cycle Phases 513
11.5 Proposal Preparation 516
11.6 Kickoff Meetings 516
11.7 Understanding Participants’ Roles 519
11.8 Project Planning 519
11.9 The Statement of Work 521
11.10 Project Specifications 526
11.11 Milestone Schedules 528
11.12 Work Breakdown Structure 529
11.13 WBS Decomposition Problems 536
11.14 Work Breakdown Structure Dictionary 540
11.15 Role of the Executive in Project Selection 541
11.16 Role of the Executive in Planning 546
11.17 The Planning Cycle 546
11.17 Work Planning Authorization 547
11.19 Why Do Plans Fail? 548
11.20 Stopping Projects 549
11.21 Handling Project Phaseouts and Transfers 550

11.22 Detailed Schedules and Charts 551
11.23 Master Production Scheduling 554
11.24 Project Plan 556
11.25 Total Project Planning 561
11.26 The Project Charter 565
11.27 Project Baselines 566
11.28 Verification and Validation 570
11.29 Requirements Traceability Matrix 571
11.30 Management Control 572
11.31 The Project Manager–Line Manager Interface 575
11.32 Fast-Tracking 577
11.33 Configuration Management 578
11.34 Enterprise Project Management Methodologies 579
11.35 Project Audits 582
Problems 586
12 NETWORK SCHEDULING TECHNIQUES 597
12.1 Network Fundamentals 600
Contents xiii
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12.2 Graphical Evaluation and Review Technique (GERT) 604
12.3 Dependencies 605
12.4 Slack Time 606
12.5 Network Replanning 612
12.6 Estimating Activity Time 616
12.7 Estimating Total Project Time 617

12.8 Total PERT/CPM Planning 618
12.9 Crash Times 620
12.10 PERT/CPM Problem Areas 623
12.11 Alternative PERT/CPM Models 626
12.12 Precedence Networks 627
12.13 Lag 630
12.14 Scheduling Problems 632
12.15 The Myths of Schedule Compression 632
12.16 Understanding Project Management Software 634
12.17 Software Features Offered 634
12.18 Software Classification 636
12.19 Implementation Problems 637
12.20 Critical Chain 638
Problems 643
Case Studies
Crosby Manufacturing Corporation 656
The Invisible Sponsor 658
13 PROJECT GRAPHICS 661
13.1 Customer Reporting 662
13.2 Bar (Gantt) Chart 663
13.3 Other Conventional Presentation Techniques 670
13.4 Logic Diagrams/Networks 673
Problems 675
14 PRICING AND ESTIMATING 677

14.1 Global Pricing Strategies 678
14.2 Types of Estimates 679
14.3 Pricing Process 682
14.4 Organizational Input Requirements 684
14.5 Labor Distributions 686
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14.6 Overhead Rates 690
14.7 Materials/Support Costs 692
14.8 Pricing Out the Work 695
14.9 Smoothing Out Department Man-Hours 696
14.10 The Pricing Review Procedure 698
14.11 Systems Pricing 700
14.12 Developing the Supporting/Backup Costs 701
14.13 The Low-Bidder Dilemma 705
14.14 Special Problems 705
14.15 Estimating Pitfalls 706
14.16 Estimating High-Risk Projects 707
14.17 Project Risks 708
14.18 The Disaster of Applying the 10 Percent
Solution
to Project Estimates 712
14.19 Life-Cycle Costing (LCC) 714
14.20 Logistics Support 719

14.21 Economic Project Selection Criteria: Capital Budgeting
720
14.22 Payback Period 720
14.23 The Time Value of Money 721
14.24 Net Present Value (NPV) 722
14.25 Internal Rate of Return (IRR) 723
14.26 Comparing IRR, NPV, and Payback 724
14.27 Risk Analysis 724
14.28 Capital Rationing 725
14.29 Project Financing 726
Problems 730
Case Study
The Estimating Problem 734
15 COST CONTROL 737
15.1 Understanding Control 741
15.2 The Operating Cycle 744
15.3 Cost Account Codes 745
15.4 Budgets 750

15.5 The Earned Value Measurement System (EVMS) 752
15.6 Variance and Earned Value 754
15.7 The Cost Baseline 773
15.8 Justifying the Costs 775
15.9 The Cost Overrun Dilemma 778
15.10 Recording Material Costs Using Earned Value
Measurement 779
15.11 The Material Accounting Criterion 782
Contents xv
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15.12 Material Variances: Price and Usage 783
15.13 Summary Variances 784
15.14 Status Reporting 785
15.15 Cost Control Problems 792
15.16 Project Management Information Systems 793
15.17 Enterprise Resource Planning 793
15.18 Project Metrics 794
15.19 Key Performance Indicators 800
15.20 Value-Based Metrics 806
15.21 Dashboards and Scorecards 812

15.22 Business Intelligence 815
15.23 Infographics 816
Problems 820
Case Studies
The Bathtub Period 838
Franklin Electronics 839
Trouble in Paradise 841
16 TRADE-OFF ANALYSIS IN A PROJECT ENVIRONMENT
845
16.1 Methodology for Trade-Off Analysis 848
16.2 Contracts: Their Influence on Projects 865
16.3 Industry Trade-Off Preferences 866
16.4 Conclusion 869

17 RISK MANAGEMENT 871
17.1 Definition of Risk 873
17.2 Tolerance for Risk 875
17.3 Definition of Risk Management 876
17.4 Certainty, Risk, and Uncertainty 877
17.5 Risk Management Process 883
17.6 Plan Risk Management (11.1) 884
17.7 Risk Identification (11.2) 885
17.8 Risk Analysis (11.3, 11.4) 892
17.9 Qualitative Risk Analysis (11.3) 897
17.10 Quantitative Risk Analysis (11.4) 903
17.11 Probability Distributions and the Monte Carlo Process
904
17.12 Plan Risk Response (11.5) 913
xvi CONTENTS
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17.13 Monitor and Control Risks (11.6) 919

17.14 Some Implementation Considerations 920
17.15 The Use of Lessons Learned 921
17.16 Dependencies Between Risks 925
17.17 The Impact of Risk Handling Measures 930
17.18 Risk and Concurrent Engineering 933
Problems 940
Case Studies
Teloxy Engineering (A) 948
Teloxy Engineering (B) 948
The Risk Management Department 949
18 LEARNING CURVES 953
18.1 General Theory 954
18.2 The Learning Curve Concept 954
18.3 Graphic Representation 956
18.4 Key Words Associated with Learning Curves 958
18.5 The Cumulative Average Curve 958
18.6 Sources of Experience 960
18.7 Developing Slope Measures 963

18.8 Unit Costs and Use of Midpoints 964
18.9 Selection of Learning Curves 965
18.10 Follow-On Orders 966
18.11 Manufacturing Breaks 966
18.12 Learning Curve Limitations 968
18.13 Prices and Experience 968
18.14 Competitive Weapon 970
Problems 972
19 CONTRACT MANAGEMENT 975
19.1 Procurement 976
19.2 Plan Procurements 978
19.3 Conducting the Procurements 981
19.4 Conduct Procurements: Request Seller Responses 983
19.5 Conduct Procurements: Select Sellers 983
19.6 Types of Contracts 987
19.7 Incentive Contracts 991
19.8 Contract Type versus Risk 994
Contents xvii

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19.9 Contract Administration 995
19.10 Contract Closure 998
19.11 Using a Checklist 999
19.12 Proposal-Contractual Interaction 1000
19.13 Summary 1003
Case Studies
The Scheduling Dilemma 1009
To Bid or Not to Bid 1011
The Management Reserve 1012
20 QUALITY MANAGEMENT 1015
20.1 Definition of Quality 1017
20.2 The Quality Movement 1019
20.3 Comparison of the Quality Pioneers 1022
20.4 The Taguchi Approach 1023

20.5 The Malcolm Baldrige National Quality Award 1026
20.6 ISO 9000 1027
20.7 Quality Management Concepts 1029
20.8 The Cost of Quality 1032
20.9 The Seven Quality Control Tools 1035
20.10 Process Capability (CP) 1052
20.11 Acceptance Sampling 1054
20.12 Implementing Six Sigma 1054
20.13 Lean Six Sigma and DMAIC 1056
20.14 Quality Leadership 1057
20.15 Responsibility for Quality 1058
20.16 Quality Circles 1058
20.17 Just-In-Time Manufacturing (JIT) 1059
20.18 Total Quality Management (TQM) 1061
21 MODERN DEVELOPMENTS IN PROJECT MANAGEMENT
1069
21.1 The Project Management Maturity Model (PMMM) 1070
21.2 Developing Effective Procedural Documentation 1074
21.3 Project Management Methodologies 1078
21.4 Continuous Improvement 1079

21.5 Capacity Planning 1080
21.6 Competency Models 1082
21.7 Managing Multiple Projects 1084
21.8 End-of-Phase Review Meetings 1085
xviii CONTENTS
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Case Study
Honicker Corporation 1086
22 THE BUSINESS OF SCOPE CHANGES 1089
22.1 Need for Business Knowledge 1091
22.2 Timing of Scope Changes 1092
22.3 Business Need for a Scope Change 1093
22.4 Rationale for Not Approving a Scope Change 1094
Case Study
Kemko Manufacturing 1094

23 THE PROJECT OFFICE 1097
23.1 Present-Day Project Office 1098
23.2 Implementation Risks 1099
23.3 Types of Project Offices 1100
23.4 Networking Project Management Offices 1101
23.5 Project Management Information Systems 1101
23.6 Dissemination of Information 1103
23.7 Mentoring 1104
23.8 Development of Standards and Templates 1105
23.9 Project Management Benchmarking 1105
23.10 Business Case Development 1106
23.11 Customized Training (Related to Project Management)
1107
23.12 Managing Stakeholder Relations 1108
23.13 Continuous Improvement 1109
23.14 Capacity Planning 1109
23.15 Risks of Using a Project Office 1110
23.16 Project Portfolio Management 1111
Case Study
The Project Management Lawsuit 1116
24 MANAGING CRISIS PROJECTS 1119

24.1 Understanding Crisis Management 1119
24.2 Ford versus Firestone 1121
24.3 The Air France Concorde Crash 1122
24.4 Intel and the Pentium Chip 1123
24.5 The Russian Submarine Kursk 1123
24.6 The Tylenol Poisonings 1124
Contents xix
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24.7 Nestlé’s Marketing of Infant Formula 1127
24.8 The Space Shuttle Challenger Disaster 1129
24.9 The Space Shuttle Columbia Disaster 1130
24.10 Victims Versus Villains 1131
24.11 Life-Cycle Phases 1132
24.12 Project Management Implications 1133
25 FUTURE OF PROJECT MANAGEMENT 1135
25.0 Changing Times 1135

25.1 Complex Projects 1139
25.2 Complexity Theory 1144
25.3 Scope Creep 1145
25.4 Project Health Checks 1151
25.5 Managing Troubled Projects 1155
26 THE RISE, FALL, AND RESURRECTION OF IRIDIUM:
A PROJECT MANAGEMENT PERSPECTIVE 1167
26.1 Naming the Project “Iridium” 1169
26.2 Obtaining Executive Support 1170
26.3 Launching the Venture 1170
26.4 The Iridium System 1172
26.5 The Terrestrial and Space-Based Network 1172
26.6 Project Initiation: Developing the Business Case 1173
26.7 The “Hidden” Business Case 1175
26.8 Risk Management 1175
26.9 The Collective Belief 1177
26.10 The Exit Champion 1177
26.11 Iridium’s Infancy Years 1178
26.12 Debt Financing 1181
26.13 The M-Star Project 1182
26.14 A New CEO 1183
26.15 Satellite Launches 1183

26.16 An Initial Public Offering (IPO) 1184
26.17 Signing Up Customers 1184
26.18 Iridium’s Rapid Ascent 1185
26.19 Iridium’s Rapid Descent 1187
26.20 The Iridium “Flu” 1191
26.21 Searching for a White Knight 1192
26.22 The Definition of Failure (October, 1999) 1192
26.23 The Satellite Deorbiting Plan 1193
26.24 Iridium is Rescued for $25 Million 1194
26.25 Iridium Begins to Grow 1194
xx CONTENTS
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26.26 Shareholder Lawsuits 1195
26.27 The Bankruptcy Court Ruling 1195
26.28 Autopsy 1196
26.29 Financial Impact of the Bankruptcy 1197
26.30 What Really Went Wrong? 1198
26.31 Lessons Learned 1200
26.32 Conclusion 1202

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