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Lecture notes Project management

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Fundamentals of Project Management Fourth EditionThis page intentionally left blank Fundamentals of Project Management Fourth Edition JOSEPH HEAGNEY American Management Association New York • Atlanta • Brussels • Chicago • Mexico City • San Francisco Shanghai • Tokyo • Toronto • Washington, D.C.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. Tel: 800–250–5308. Fax: 518–891–2372. E-mail: specialslsamanet.org Website: www.amacombooks.org/go/specialsales To view all AMACOM titles go to: www.amacombooks.org 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 Heagney, Joseph. Fundamentals of project management / Joseph Heagney.—4th ed. p. cm. Includes bibliographical references and index. ISBN-13: 978-0-8144-1748-5 ISBN-10: 0-8144-1748-5 1. Project management. I. Title. HD69.P75L488 2011 658.4'04—dc22 2011012421 © 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 1To the memory of Mackenzie Joseph Heagney, sleeping with the angels.This page intentionally left blank CONTENTS CONTENTS Figure List ix Preface to the Fourth Edition xi Acknowledgments xv Chapter 1 An Overview of Project Management 1 Chapter 2 The Role of the Project Manager 24 Chapter 3 Planning the Project 32 Chapter 4 Developing a Mission, Vision, Goals, 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 Value Analysis 141 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 Index 189 About the Authors 201 viiThis page intentionally left blank FIGURE LIST FIGURE LIST 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. 5–1. Risk matrix. 5–2. Risk register. 6–1. WBS diagram to clean a room. 6–2. WBS level names. 6–3. Partial WBS. 6–4. Responsibility chart. 7–1. Bar chart. 7–2. Arrow diagrams. 7–3. WBS to do yard project. 7–4. CPM diagram for yard project. 7–5. WBS to clean room. 8–1. Network to illustrate computation methods. 8–2. Diagram with EF times filled in. 8–3. Diagram showing critical path. ixx 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. 11–1. BCWS curve. 11–2. Bar chart schedule illustrating cumulative spending. 11–3. Cumulative spending for the sample bar chart. 11–4. Plot showing project behind schedule and overspent. 11–5. Project ahead of schedule, spending correctly. 11–6. Project is behind schedule but spending correctly 11–7. Project is ahead of schedule and underspent. 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.Preface to the Fourth Edition Sending a satellite to Mars? Planning a conference or implement- ing new software? You have chosen the right book. The great value 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 or not your title says project manager, you can benefit from the prac- tical applications presented in this book, which is intended as a brief overview of the tools, techniques, and discipline of project management 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 control process. Although each topic is important individually, together they can establish the basis for project success or failure. Projects are often accomplished by teams, teams are made up of people, and people are driven by . . . project leaders. Conspic- uously absent from the preceding is the term “manager,” as in “project manager.” If project managers manage projects, what do they 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 xixii Preface to the Fourth Edition enhanced performance. They combine a command of project tools and technical savvy with a real understanding of leadership and team performance. Consistently successful projects depend on both. It is a balancing act of execution and skilled people man- agement. Ignoring one or the other is inviting project failure and organizational inconsistency regarding project performance. Risk is an element inherent in every project. The project manager must consider several variables when determining how much to invest in the mitigation and management of that risk. How experienced is my team or support personnel? Do I have the appropriate skill sets available? Can I count on reliable data from previous projects, or am I wandering in the wilderness? Whatever the assessment, project risk is something that needs to be addressed early in the life of the project. As with any other process 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 to wait 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 that project. Death, taxes, and change. Project managers need to expand the list of certainties in life. To paraphrase James P. Lewis, author of the first three editions of this book, in Chapter 3, project failures are caused primarily by the failure to plan properly. I often tell my seminar attendees that planning is everything and that most proj - ects succeed or fail up front. This is not an overstatement. But what often gets lost in project execution is the absolute necessity to keep the plan current based on the changes that have affected the project from day one. Have the changes affected the scope of the 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 readerPreface to the Fourth Edition xiii with a practical change control process that can help ensure proj- ect success. As a former Global Practice Leader for project management at the American Management Association, I had the luxury of benchmarking multiple organizations worldwide and identified several project-related best practices. The applications discussed here 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 bud- get with an excellent deliverable—every time. Joseph J. Heagney Sayville, NY February 2011This page intentionally left blank Acknowledgments 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 his soccer games. xvThis page intentionally left blank Fundamentals of Project Management Fourth EditionThis page intentionally left blank CHAPTER 1 CHAPTER 1 An Overview of Project Management hat’s all the fuss about, anyway? Since the first edition of this book was published, in 1997, the Project Management ® Institute (PMI ) has grown from a few thousand members to nearly 450,000 in 2011. For those of you who don’t know, W W PMI is the professional organization for people who manage projects. 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 project management 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 five thousand 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’t project management just a variant on general management? Yes and no. There are a lot of similarities, but there are enough differences to justify treating project management as a discipline separate from general management. For one thing, proj - ects are more schedule-intensive than most of the activities that 1 American Management Association • www.amanet.org