project management, program management, or portfolio management.
Project Management can be used for training and educational
purposes, and as a handbook when executing projects or during a certification process. The book’s disposition follows a project’s flow. Sections on project methodology are mixed with chapters on leadership and personal development. Content and terminology are adapted to match PMI’s and IPMA’s view on project management.
Project Management covers all areas a project manager should
command to professionally execute projects and manage programs. Thanks to the book’s pedagogic and unambiguous disposition, no previous knowledge in project management is needed to take advantage of the contents. The book has also received honors, which confirms the high standard.
Project Management also deals with change management, project maturity and the project office, which should appeal to any business executive and decision maker who holds responsibility for the develop- ment of the organization and how resources are utilized.
Project Management
Project Management is aimed at everyone who works with
Bo Tonnquist
Project Management has a homepage, with exercises, presentation
material and templates supporting a general project model which is available to universities, other learning institutions and training providers that are using this book. www.bonnierutbildning.se/project Bo Tonnquist, MS EE, senior partner of Baseline Management Scandinavia, is a consultant in project management, marketing and business development. He has extensive experience from assignments in international corporations and public organizations. Bo has published several books in project management and was involved in the implementation of IPMA certifications in Sweden.
A Guide to the Theory of Project, and Practice Program and Portfolio Management, and Business Change
He was previously a member of the local IPMA Certification Board.
ISBN 978-91-622-8916-4
9 789162 289164 www.bonnierutbildning.se
Best nr 622- 8916-4
bonniers
Contents Process Chart – Contents of the Book
1. Project Management Structure
The Purpose of the Organization ............................................. 1
Project Organization . .......................................................................... 5 Projects Have to Achieve Results .......................................... 10 Project Flow ................................................................................................ 15
2. Project Initiation
Defining a Project. ................................................................................. 17 Background, Objective and Goal............................................ 23 The Sponsor’s Request..................................................................... 29 The Contractor’s Proposal............................................................ 32 Agreement................................................................................................... 33
3. Pre-study
Project or Not?. ......................................................................................... 35 Pre-study as a Project.........................................................................39 The Project’s Scope.............................................................................. 40 The Project’s Pros and Cons......................................................... 43 Stakeholders................................................................................................ 47 Business Value.......................................................................................... 50 The Solution. ............................................................................................... 55 Requirement Specification..........................................................60 Requirements on the Client........................................................ 69 Outline of the Milestone Plan..................................................... 71
4. Establish the Project Group
The Project’s Organization. ......................................................... 77 The Group’s Composition.............................................................. 83 Development Phases within the Group.......................... 91 Norms and Rules................................................................................... 94 Values and Attitudes........................................................................ 96 Team Rules.................................................................................................. 98 Kick-off. ....................................................................................................... 100 Expectations and Demands. ................................................... 103
10. To Manage and Work in Projects
15. Project Maturity
6. Budgeting, Risks and Quality
11. Project Result
16. Program and Portfolio
7. Communication
12. Project Termination
5. Project Planning
Organize the Planning.................................................................... 105 The Project Plan. ................................................................................... 107 Planning Methods............................................................................. 108
Network Diagramming................................................................. 114 Activity Planning.................................................................................. 116 Estimate Resource Requirement.......................................... 120 The Schedule............................................................................................ 125 Project Tools............................................................................................. 136
Project Budgeting................................................................................ 141 Project Risk Management........................................................... 148 Project Quality Management Plan..................................... 154 Change Management...................................................................... 157
Communication Strategy............................................................. 161 Communication Plan....................................................................... 166 Reports. ..........................................................................................................167 Meetings...................................................................................................... 169 Project Office. ......................................................................................... 170 Project Portal............................................................................................. 171
8. Initiating the Execution
Guiding the Project Group. ......................................................... 175 Planning Review. ................................................................................... 177 Project Review Model. .....................................................................179 Resource Procurement....................................................................182 Procurement. ............................................................................................ 185 Negotiation Techniques............................................................... 189 Initiate the Execution Phase. .................................................... 191
9. Project on Track
Continuous Project Review. .......................................................193 Earned Value Management. ......................................................197 20 Percent Performance Verification.............................. 201 Cash Flow................................................................................................... 203 Risk Response......................................................................................... 204 Quality Review......................................................................................206 To Initiate Changes........................................................................... 208
Self-knowledge. ................................................................................209 Feedback.................................................................................................... 213 Self-leadership..................................................................................... 217 Leadership Management. ....................................................... 220 Situational Leadership. ...............................................................224 Motivation.............................................................................................. 227 Conflicts. .................................................................................................... 231 Conflict Resolution......................................................................... 237
Implementation................................................................................239 Plan the Implementation......................................................... 243 Handover.................................................................................................. 247 Administration. ..................................................................................250
Termination – the Task Has Been Completed. ..... 253 Evaluating the Project................................................................. 254 Final Report............................................................................................ 259 Handling the Termination.......................................................262 Premature Project Termination. ........................................265
13. Follow up the Benefit Impact
Follow up the Result...................................................................... 267 Evaluate the Business Impact............................................. 268 Measuring the Impact................................................................ 270 New Projects – an Effect!......................................................... 272
14. Business Change Management
A Need for Change.......................................................................... 273 Change Management Leader...............................................276 Evaluating the Success Rate................................................. 280 Mobilization.......................................................................................... 283 Securing the Result........................................................................ 286
Collective Memory......................................................................... 289 Knowledge Management.......................................................290 Tacit and Explicit Knowledge...............................................292 Learning.................................................................................................... 294 The Learning Organization.................................................... 296 Maturity Analysis.............................................................................297 Balanced Scorecard....................................................................... 304 Learn from Others.......................................................................... 308
Enterprise Project Management......................................309 Projects, Program and Portfolio......................................... 312 Resource Management.............................................................. 316 Selection and Prioritization.................................................... 317 Portfolio Review............................................................................... 320 Implement IT-support................................................................. 322 Business Systems. ............................................................................ 325 Administering Portfolio Tools............................................. 326
17. Project Management Office and Models
Project Management Office.................................................. 327 Project Management Models. ............................................ 330 Development Models. ................................................................ 337 Project Anatomy. ............................................................................. 340
18. Certifications
Project Manager Certification............................................. 343 My Own Experience....................................................................... 353 Career Ladder for Project Managers. ............................ 354
Projectbase........................................................................................................ 356 Glossary................................................................................................................ 372 Index....................................................................................................................... 378 Bibliography................................................................................................... 392 Photographs ................................................................................................. 397
www.bonnierutbildning.se/project
Contents Process Chart – Contents of the Book
1. Project Management Structure
The Purpose of the Organization ............................................. 1
Project Organization . .......................................................................... 5 Projects Have to Achieve Results .......................................... 10 Project Flow ................................................................................................ 15
2. Project Initiation
Defining a Project. ................................................................................. 17 Background, Objective and Goal............................................ 23 The Sponsor’s Request..................................................................... 29 The Contractor’s Proposal............................................................ 32 Agreement................................................................................................... 33
3. Pre-study
Project or Not?. ......................................................................................... 35 Pre-study as a Project.........................................................................39 The Project’s Scope.............................................................................. 40 The Project’s Pros and Cons......................................................... 43 Stakeholders................................................................................................ 47 Business Value.......................................................................................... 50 The Solution. ............................................................................................... 55 Requirement Specification..........................................................60 Requirements on the Client........................................................ 69 Outline of the Milestone Plan..................................................... 71
4. Establish the Project Group
The Project’s Organization. ......................................................... 77 The Group’s Composition.............................................................. 83 Development Phases within the Group.......................... 91 Norms and Rules................................................................................... 94 Values and Attitudes........................................................................ 96 Team Rules.................................................................................................. 98 Kick-off. ....................................................................................................... 100 Expectations and Demands. ................................................... 103
10. To Manage and Work in Projects
15. Project Maturity
6. Budgeting, Risks and Quality
11. Project Result
16. Program and Portfolio
7. Communication
12. Project Termination
5. Project Planning
Organize the Planning.................................................................... 105 The Project Plan. ................................................................................... 107 Planning Methods............................................................................. 108
Network Diagramming................................................................. 114 Activity Planning.................................................................................. 116 Estimate Resource Requirement.......................................... 120 The Schedule............................................................................................ 125 Project Tools............................................................................................. 136
Project Budgeting................................................................................ 141 Project Risk Management........................................................... 148 Project Quality Management Plan..................................... 154 Change Management...................................................................... 157
Communication Strategy............................................................. 161 Communication Plan....................................................................... 166 Reports. ..........................................................................................................167 Meetings...................................................................................................... 169 Project Office. ......................................................................................... 170 Project Portal............................................................................................. 171
8. Initiating the Execution
Guiding the Project Group. ......................................................... 175 Planning Review. ................................................................................... 177 Project Review Model. .....................................................................179 Resource Procurement....................................................................182 Procurement. ............................................................................................ 185 Negotiation Techniques............................................................... 189 Initiate the Execution Phase. .................................................... 191
9. Project on Track
Continuous Project Review. .......................................................193 Earned Value Management. ......................................................197 20 Percent Performance Verification.............................. 201 Cash Flow................................................................................................... 203 Risk Response......................................................................................... 204 Quality Review......................................................................................206 To Initiate Changes........................................................................... 208
Self-knowledge. ................................................................................209 Feedback.................................................................................................... 213 Self-leadership..................................................................................... 217 Leadership Management. ....................................................... 220 Situational Leadership. ...............................................................224 Motivation.............................................................................................. 227 Conflicts. .................................................................................................... 231 Conflict Resolution......................................................................... 237
Implementation................................................................................239 Plan the Implementation......................................................... 243 Handover.................................................................................................. 247 Administration. ..................................................................................250
Termination – the Task Has Been Completed. ..... 253 Evaluating the Project................................................................. 254 Final Report............................................................................................ 259 Handling the Termination.......................................................262 Premature Project Termination. ........................................265
13. Follow up the Benefit Impact
Follow up the Result...................................................................... 267 Evaluate the Business Impact............................................. 268 Measuring the Impact................................................................ 270 New Projects – an Effect!......................................................... 272
14. Business Change Management
A Need for Change.......................................................................... 273 Change Management Leader...............................................276 Evaluating the Success Rate................................................. 280 Mobilization.......................................................................................... 283 Securing the Result........................................................................ 286
Collective Memory......................................................................... 289 Knowledge Management.......................................................290 Tacit and Explicit Knowledge...............................................292 Learning.................................................................................................... 294 The Learning Organization.................................................... 296 Maturity Analysis.............................................................................297 Balanced Scorecard....................................................................... 304 Learn from Others.......................................................................... 308
Enterprise Project Management......................................309 Projects, Program and Portfolio......................................... 312 Resource Management.............................................................. 316 Selection and Prioritization.................................................... 317 Portfolio Review............................................................................... 320 Implement IT-support................................................................. 322 Business Systems. ............................................................................ 325 Administering Portfolio Tools............................................. 326
17. Project Management Office and Models
Project Management Office.................................................. 327 Project Management Models. ............................................ 330 Development Models. ................................................................ 337 Project Anatomy. ............................................................................. 340
18. Certifications
Project Manager Certification............................................. 343 My Own Experience....................................................................... 353 Career Ladder for Project Managers. ............................ 354
Projectbase........................................................................................................ 356 Glossary................................................................................................................ 372 Index....................................................................................................................... 378 Bibliography................................................................................................... 392 Photographs ................................................................................................. 397
www.bonnierutbildning.se/project
Process Chart – Contents of the Book
This chart supports the structure in the standard ISO 10 006 ” Guidelines for quality management in projects”, The Guide to PMBOK by PMI and ICB 3.0 by IPMA.
1 Project Management Structure
2 Project Initiation
3 Pre-study
4 Establish the Project Group
5 Project Planning
6 Budgeting, Risks and Quality
7 Communication
8 Initiating the Execution
9 Project on Track
Integration
Management model Project flow Project model
Defining a project Project initiation Objective and goal
Project preparation guideline Pre-study process Choosing a method
The project organization Project roles
The planning process Project tools The baseline
Project budgeting Risk management Quality management
Communication strategy Project office
Initiate the execution phase Project management maturity
Project review
Scope
Projects - a tool Vision and business goals
Background description The goal Project boundaries Goal setting
WBS - Work Breakdown Structure The solution PBS – Product Breakdown Structure The triple constraint Use cases
Planning methods Sub projects
Time
Project’s phases Tollgates Milestones
Work package Milestone plan
Network diagramming Activity planning Duration estimates Resource requirement Schedule The critical path Schedule adjustment
Change management process Deviations
Cost
Business value Financial analysis ROI
Resource histogram
Activity calculation Preliminary estimate Available funds
Quality
Requirement specification Product- and project requirements
Expectations and demands
Organize the planning
Quality planning Change management Act-plan-do-check cycle
The group’s composition Team roles The FIRO theory The corporate culture Values and attitudes Norms and rules
Resources share allocation
Change control board
Influencing stakeholders Rhetoric
Project group staffing Competence
Kick-off
The project plan Analyze and reporting
Change request Project budget The mini risk method
Communication plan Reports Meetings Project portal Project log
Start meeting Contract agreement Negotiations techniques
Revised documents Reports
Project risk assessment
Risk response Expected monetary value
Human Resources
Project organization Project v.s. line Roles and responsibilities
Communications
The sponsor Contractor
Project charter
Risk
Stakeholders Project scope statement Pre-study report
Prerequisites SWOT analysis Project assessment
Procurement
Project review
Planning review
Milestone diagram Progress line Executed activities
Earned value management Remaining work Cash flow Project review Project quality assessment
Risk identification Risk analysis Response planning Contingency reserve
Request for proposal Tender Proposal Agreements
Client competency
10 To Manage and Work in Projects
11 Project Result
12 Project Termination
13 Follow Up the Benefit Impact
14 Business Change Management
15 Project Maturity
16 Program and Portfolio
17 Project Management Office and Models
18 Certifications
Leadership management
Implementation Hand over
Closure Termination Premature project termination
Business impact
Project – tool when making changes Linking the changes
Knowledge management Project management maturity
Enterprise project management Selection and prioritization
Project Management Office Project management models Development models
Project manager certification PMI IPMA Contextual competence
Deliveries Administration
Evaluating the project Evaluate the result
Follow up the result Evaluate the business impact goal
Establish a vision Success factors
The project’s characteristics The project group’s competence
Portfolio management Program management Resource management
Level of control Project anatomy
PMBOK® Guide ICB – International Competence baseline
Plan the implementation
Time consumption
Portfolio tools
Project lifecycle
Certification process Technical competence
Cost
Life cycle budget
Actual cost
Impact realization
Quality
Assessment
Quality follow-up Terminate project Exit-criteria
Measure the impact Reference measurement
Standard terminology methodology
Quality assurance
New project group Encounter resistance Reference group
Analyze cooperation Terminate the project group Kick-out
Expectations
Roles
Behavioral competence Self-assessment Career and competence ladder
Delivery acceptance protocol Administration model
Final report Protocol when terminating the project
Integration
Scope
Time
Human Resources
Communications
ABC method
Self knowledge Feedback Self leadership Situational leadership Delegating Motivation Conflict resolution
Risk Procurement
Contract closure
Implement a project tool
Quality review Continuous improvements Initiate changes The theory of constraints
Resource procurement Make-or-buy decision Procurement process Selecting contractors
Balanced scorecards
Financial benefits
Measurement - PPI Securing the result
BSC for projects Benchmarking
Administrating portfolio tools Portfolio review
Change management leader Social capital Mobilization Stakeholders management Think Drop
Collective memory Career paths Mentorship Apprenticeship The learning organization
A3 Report Open space technology
Learning styles Tactic knowledge Explicit knowledge
Communication and cooperation Status meetings
Situational analysis Evaluating the chance
Maturity analysis OPM3
Business risk Implement IT support
Templates Documents Project complexity Implement a project model
Process Chart – Contents of the Book
This chart supports the structure in the standard ISO 10 006 ” Guidelines for quality management in projects”, The Guide to PMBOK by PMI and ICB 3.0 by IPMA.
1 Project Management Structure
2 Project Initiation
3 Pre-study
4 Establish the Project Group
5 Project Planning
6 Budgeting, Risks and Quality
7 Communication
8 Initiating the Execution
9 Project on Track
Integration
Management model Project flow Project model
Defining a project Project initiation Objective and goal
Project preparation guideline Pre-study process Choosing a method
The project organization Project roles
The planning process Project tools The baseline
Project budgeting Risk management Quality management
Communication strategy Project office
Initiate the execution phase Project management maturity
Project review
Scope
Projects - a tool Vision and business goals
Background description The goal Project boundaries Goal setting
WBS - Work Breakdown Structure The solution PBS – Product Breakdown Structure The triple constraint Use cases
Planning methods Sub projects
Time
Project’s phases Tollgates Milestones
Work package Milestone plan
Network diagramming Activity planning Duration estimates Resource requirement Schedule The critical path Schedule adjustment
Change management process Deviations
Cost
Business value Financial analysis ROI
Resource histogram
Activity calculation Preliminary estimate Available funds
Quality
Requirement specification Product- and project requirements
Expectations and demands
Organize the planning
Quality planning Change management Act-plan-do-check cycle
The group’s composition Team roles The FIRO theory The corporate culture Values and attitudes Norms and rules
Resources share allocation
Change control board
Influencing stakeholders Rhetoric
Project group staffing Competence
Kick-off
The project plan Analyze and reporting
Change request Project budget The mini risk method
Communication plan Reports Meetings Project portal Project log
Start meeting Contract agreement Negotiations techniques
Revised documents Reports
Project risk assessment
Risk response Expected monetary value
Human Resources
Project organization Project v.s. line Roles and responsibilities
Communications
The sponsor Contractor
Project charter
Risk
Stakeholders Project scope statement Pre-study report
Prerequisites SWOT analysis Project assessment
Procurement
Project review
Planning review
Milestone diagram Progress line Executed activities
Earned value management Remaining work Cash flow Project review Project quality assessment
Risk identification Risk analysis Response planning Contingency reserve
Request for proposal Tender Proposal Agreements
Client competency
10 To Manage and Work in Projects
11 Project Result
12 Project Termination
13 Follow Up the Benefit Impact
14 Business Change Management
15 Project Maturity
16 Program and Portfolio
17 Project Management Office and Models
18 Certifications
Leadership management
Implementation Hand over
Closure Termination Premature project termination
Business impact
Project – tool when making changes Linking the changes
Knowledge management Project management maturity
Enterprise project management Selection and prioritization
Project Management Office Project management models Development models
Project manager certification PMI IPMA Contextual competence
Deliveries Administration
Evaluating the project Evaluate the result
Follow up the result Evaluate the business impact goal
Establish a vision Success factors
The project’s characteristics The project group’s competence
Portfolio management Program management Resource management
Level of control Project anatomy
PMBOK® Guide ICB – International Competence baseline
Plan the implementation
Time consumption
Portfolio tools
Project lifecycle
Certification process Technical competence
Cost
Life cycle budget
Actual cost
Impact realization
Quality
Assessment
Quality follow-up Terminate project Exit-criteria
Measure the impact Reference measurement
Standard terminology methodology
Quality assurance
New project group Encounter resistance Reference group
Analyze cooperation Terminate the project group Kick-out
Expectations
Roles
Behavioral competence Self-assessment Career and competence ladder
Delivery acceptance protocol Administration model
Final report Protocol when terminating the project
Integration
Scope
Time
Human Resources
Communications
ABC method
Self knowledge Feedback Self leadership Situational leadership Delegating Motivation Conflict resolution
Risk Procurement
Contract closure
Implement a project tool
Quality review Continuous improvements Initiate changes The theory of constraints
Resource procurement Make-or-buy decision Procurement process Selecting contractors
Balanced scorecards
Financial benefits
Measurement - PPI Securing the result
BSC for projects Benchmarking
Administrating portfolio tools Portfolio review
Change management leader Social capital Mobilization Stakeholders management Think Drop
Collective memory Career paths Mentorship Apprenticeship The learning organization
A3 Report Open space technology
Learning styles Tactic knowledge Explicit knowledge
Communication and cooperation Status meetings
Situational analysis Evaluating the chance
Maturity analysis OPM3
Business risk Implement IT support
Templates Documents Project complexity Implement a project model
2
1 : project management structure
”One of the most important responsibilities for the management is to build an efficient organization, through which the business goals best can be reached. This means that the most suitable organizational structure has to be established, and that every position needs to be filled by a relevant individual. Creating the organizational structure first and foremost necessitate identifying the various tasks that needs to be done in order to reach the organization’s goals, but also a horizontal delegation of these tasks to local departments and individuals.” (Tarras Sällfors, The Royal Institute of Technology, 1945)
Organizations can be likened to organisms which need a steady supply of energy to survive. It is important to ensure that the will to service the customers is the business goal, not the survival of the organization. The strategies chosen by the management to reach visions and goals must be reflected in the framework of the organization. One could say that an organization is essentially formalized group building which is coordinated to achieve common goals. As a consequence of this organizational structure, it is possible to allocate labor, responsibility and authority. The organization is also a tool which regulates the relations between superiors and employees. All this is part of the process to, in the most effective way, control and coordinate resources internally and externally in the organization, towards the goals which are predefined. This is irrespectively of whether the organization is a private, public or a non-profit making business.
Structure, Processes and Culture
bWords in italics are explained in the glossary on page 372.
Research within Organizational Theory concentrates around three main topics; namely structure, processes and culture. The structure of the organization contains visible components e.g. functions, positions, hierarchies, titles and ranking orders, while the processes deals with actions and events. The organiza-
1 : project management structure
tion’s culture touch upon work ethics, values and norms, beliefs, languages, symbols, leadership and motivation. It is the processes which constitute the organization’s vital operations while structure and culture indicate how the individuals within the organization work, collaborate and obstruct one another, how systems are built up or broken down and how decision levels and authorities are shared. Modern organizational theory increasingly concentrates around the business processes, since these originate in the business plan. A process is a chain of interconnected activities both internally and externally of the company, which creates an added value the customer is ready to pay for. Every activity in the chain has a supplier and a customer. The purpose of identifying the business processes is to eliminate any unnecessary work which does not generate customer added value. The business has to be shaped after the needs of the processes. Today’s organizational structures will with all probability be succeeded by other alternatives. There are several reasons for this. Firstly, all businesses are constantly affected by continues changes in society, new technology, new knowledge in employees and changing living conditions. Secondly, we have greater knowledge about businesses and understand more about people’s behavior in organizations. Lastly, employees and citizens of today place larger demands on the businesses they want to work in; e.g environmentally and gender-wise. The development of the organizational structures of today has a historic and a cultural dimension. Therefore organizational structures in one culture do not necessarily apply in another culture. The informal Swedish way of managing a business does not work in all countries. Consensus decision-making and involving employees on all levels does not work in more hierarchical business cultures. Here, the boss is expected to make decisions without consulting the employees.
3
2
1 : project management structure
”One of the most important responsibilities for the management is to build an efficient organization, through which the business goals best can be reached. This means that the most suitable organizational structure has to be established, and that every position needs to be filled by a relevant individual. Creating the organizational structure first and foremost necessitate identifying the various tasks that needs to be done in order to reach the organization’s goals, but also a horizontal delegation of these tasks to local departments and individuals.” (Tarras Sällfors, The Royal Institute of Technology, 1945)
Organizations can be likened to organisms which need a steady supply of energy to survive. It is important to ensure that the will to service the customers is the business goal, not the survival of the organization. The strategies chosen by the management to reach visions and goals must be reflected in the framework of the organization. One could say that an organization is essentially formalized group building which is coordinated to achieve common goals. As a consequence of this organizational structure, it is possible to allocate labor, responsibility and authority. The organization is also a tool which regulates the relations between superiors and employees. All this is part of the process to, in the most effective way, control and coordinate resources internally and externally in the organization, towards the goals which are predefined. This is irrespectively of whether the organization is a private, public or a non-profit making business.
Structure, Processes and Culture
bWords in italics are explained in the glossary on page 372.
Research within Organizational Theory concentrates around three main topics; namely structure, processes and culture. The structure of the organization contains visible components e.g. functions, positions, hierarchies, titles and ranking orders, while the processes deals with actions and events. The organiza-
1 : project management structure
tion’s culture touch upon work ethics, values and norms, beliefs, languages, symbols, leadership and motivation. It is the processes which constitute the organization’s vital operations while structure and culture indicate how the individuals within the organization work, collaborate and obstruct one another, how systems are built up or broken down and how decision levels and authorities are shared. Modern organizational theory increasingly concentrates around the business processes, since these originate in the business plan. A process is a chain of interconnected activities both internally and externally of the company, which creates an added value the customer is ready to pay for. Every activity in the chain has a supplier and a customer. The purpose of identifying the business processes is to eliminate any unnecessary work which does not generate customer added value. The business has to be shaped after the needs of the processes. Today’s organizational structures will with all probability be succeeded by other alternatives. There are several reasons for this. Firstly, all businesses are constantly affected by continues changes in society, new technology, new knowledge in employees and changing living conditions. Secondly, we have greater knowledge about businesses and understand more about people’s behavior in organizations. Lastly, employees and citizens of today place larger demands on the businesses they want to work in; e.g environmentally and gender-wise. The development of the organizational structures of today has a historic and a cultural dimension. Therefore organizational structures in one culture do not necessarily apply in another culture. The informal Swedish way of managing a business does not work in all countries. Consensus decision-making and involving employees on all levels does not work in more hierarchical business cultures. Here, the boss is expected to make decisions without consulting the employees.
3
4
1 : project management structure
Organize and Delegate
project organization
The most common way of illustrating a company’s formal organization is through hierarchy with superior and inferior divisions. This is typically called an organizational plan or chart. This chart shows how the organization is meant to work and how labor, responsibility and authority are distributed. With the organizational chart as a starting point it is easy for the employees to picture their roles in the organization. It is easy to follow the decision-making process and identify managers and subordinates. Responsibility is definite and straightforward. On the other hand the organizational chart does not specify the informal ties between the different individuals in the different departments. This can be a problem today when more and more tasks are completed in cross functional networks and project groups, with members from different parts of the organization.
1 : project management structure
More than ever nowadays people want to be able to influence their situation and feel involved in the company they work for. Increased competition and uncertainty on the job market forces companies to act fast. It is easier to define and start projects than setting up new departments in a company. Projects generally have a shorter run-time which in turn entails lower risks, lower costs, and better management. Since projects must always have specific goals, focus on customer value becomes very apparent. The new-fangled ways of running a business in networks also demand a new form of cooperation which is adjusted to solve a specific assignment, irrespectively of whether the members belong in a workgroup from their own organization or different companies. This is valid irrespectively of whether it is smaller companies cooperating, or major companies which outsource part of their operations on subcontractors. Traditional decision- and delegation methods do not work in networks. The project structure with an integrated project manager is in these cases much better adapted to manage different detached activities with a common goal. Networking can also be involuntary. The development in the labor market, where an increasing number of people are found without the security of steady employment, thus being forced to accept temporary work as self-employed, put new demands on flexibility.
A Project – a Temporary Organization The project organization is appropriate when there is a need for coordination between various parts of the company. In principle, the project manager is allowed to “skip” the line organization’s decision- and responsibility processes to create an optimal organization. It is, through this, possible to keep a strong focus on customer value through goal management, reaching down to each individual in the project organization.
5
4
1 : project management structure
Organize and Delegate
project organization
The most common way of illustrating a company’s formal organization is through hierarchy with superior and inferior divisions. This is typically called an organizational plan or chart. This chart shows how the organization is meant to work and how labor, responsibility and authority are distributed. With the organizational chart as a starting point it is easy for the employees to picture their roles in the organization. It is easy to follow the decision-making process and identify managers and subordinates. Responsibility is definite and straightforward. On the other hand the organizational chart does not specify the informal ties between the different individuals in the different departments. This can be a problem today when more and more tasks are completed in cross functional networks and project groups, with members from different parts of the organization.
1 : project management structure
More than ever nowadays people want to be able to influence their situation and feel involved in the company they work for. Increased competition and uncertainty on the job market forces companies to act fast. It is easier to define and start projects than setting up new departments in a company. Projects generally have a shorter run-time which in turn entails lower risks, lower costs, and better management. Since projects must always have specific goals, focus on customer value becomes very apparent. The new-fangled ways of running a business in networks also demand a new form of cooperation which is adjusted to solve a specific assignment, irrespectively of whether the members belong in a workgroup from their own organization or different companies. This is valid irrespectively of whether it is smaller companies cooperating, or major companies which outsource part of their operations on subcontractors. Traditional decision- and delegation methods do not work in networks. The project structure with an integrated project manager is in these cases much better adapted to manage different detached activities with a common goal. Networking can also be involuntary. The development in the labor market, where an increasing number of people are found without the security of steady employment, thus being forced to accept temporary work as self-employed, put new demands on flexibility.
A Project – a Temporary Organization The project organization is appropriate when there is a need for coordination between various parts of the company. In principle, the project manager is allowed to “skip” the line organization’s decision- and responsibility processes to create an optimal organization. It is, through this, possible to keep a strong focus on customer value through goal management, reaching down to each individual in the project organization.
5
6
1 : project management structure
1 : project management structure
Project vs. Line
CEO
Department level
Section/group level
Project managers
It is important that delimitation between the project and the ordinary business, the line organization, is unambiguous. In a projectized organization the project is completely detached from the ordinary business. The project manager has full authority over his resources and does not face the risk of project members with imperative competence being stuck with ordinary work assignments or on loan to other projects. This, unfortunately, could happen if the project does not own resources, but share them with other projects or the ordinary business. The latter is more often than not, though, the reality for most project managers. Often different organizational structures exist parallely alongside within the same organization. A common form of coexistence is between hierarchy and matrix. In the hierarchical organization work assignments and decision-making processes are arranged in lines from the top to the bottom. Most power and authority is found higher up in the organization.
pBy carrying out work
assignments in projects, in cross functional work groups and networks, the traditional line organization’s decision-making process is bypassed.
The project organization is temporary and this even applies to the project manager’s mandate as a leader. When the project is closed the organization is disbanded. Just like most manufacturing companies carrying out their own research and development, the car industry uses project management when they develop new models. It requires strong focus and tough management to develop a new car model program while keeping the costs down. The Swedish car manufacturer Volvo uses a method called “Modulteam” which entails start-up of a project group which consists of specialists from different departments within the organization, e.g. engine, body components, transmission, interior and electronics. They are on loan to the project and are part of the group as long as the project is running. After that the group and its members return to their ordinary responsibilities or join new project groups.
The weakness facing the hierarchical organization is that the individual’s sphere of influence is diminutive, and that it is difficult to adapt to the changing external factors. In addition, the hierarchical organization tends to engender passive employees.
100 % Share working in a project 50%
Hierarchical organization
Matrix organization
Projectized organization
7
6
1 : project management structure
1 : project management structure
Project vs. Line
CEO
Department level
Section/group level
Project managers
It is important that delimitation between the project and the ordinary business, the line organization, is unambiguous. In a projectized organization the project is completely detached from the ordinary business. The project manager has full authority over his resources and does not face the risk of project members with imperative competence being stuck with ordinary work assignments or on loan to other projects. This, unfortunately, could happen if the project does not own resources, but share them with other projects or the ordinary business. The latter is more often than not, though, the reality for most project managers. Often different organizational structures exist parallely alongside within the same organization. A common form of coexistence is between hierarchy and matrix. In the hierarchical organization work assignments and decision-making processes are arranged in lines from the top to the bottom. Most power and authority is found higher up in the organization.
pBy carrying out work
assignments in projects, in cross functional work groups and networks, the traditional line organization’s decision-making process is bypassed.
The project organization is temporary and this even applies to the project manager’s mandate as a leader. When the project is closed the organization is disbanded. Just like most manufacturing companies carrying out their own research and development, the car industry uses project management when they develop new models. It requires strong focus and tough management to develop a new car model program while keeping the costs down. The Swedish car manufacturer Volvo uses a method called “Modulteam” which entails start-up of a project group which consists of specialists from different departments within the organization, e.g. engine, body components, transmission, interior and electronics. They are on loan to the project and are part of the group as long as the project is running. After that the group and its members return to their ordinary responsibilities or join new project groups.
The weakness facing the hierarchical organization is that the individual’s sphere of influence is diminutive, and that it is difficult to adapt to the changing external factors. In addition, the hierarchical organization tends to engender passive employees.
100 % Share working in a project 50%
Hierarchical organization
Matrix organization
Projectized organization
7
8
1 : project management structure
The matrix organization is on the contrary very flexible in its structure. Employees are working vertically whilst the business is run cross-functionally. The management’s responsibility is to put together functional groups which purpose is to solve specific tasks. This organizational structure’s weakness is the two-way decision-making process, which puts high demand on managers to formulate goals and prioritize tasks. For organizations where the hierarchical decision-making processes are dominating we speak of a weak matrix, in case of the contrary we speak of a strong matrix. Projects run in a weak respectively strong matrix face different circumstances. In a weak matrix a small part of the employees work in projects. Most hold positions in the line organization where the better part of all work in the organization is executed. Consequently, the line managers make most of the decisions, even those which concern the projects. The project manager has a weak position in this kind of organization. In organizational structures where more people tend to work in projects, the project manager’s possibility to control the project will increase. In the strong matrix the line managers only make overarching decisions on goal, scope and resources. Details are left to the project manager. Generally the organization use projects as their corporate business approach. It is important for the project manager to be familiar with and adapt to the organizational structure.
Loyalty Towards Several Managers The employee with a position in the line production, but who is also a part of a project, has in effect two managers. The line manager, where he is employed and who most probably settles his salary, and the project manager who hopefully dispense interesting and challenging work assignments. If the prioritization between the line work and project work is unclear an employee might have a loyalty problem. It is the management’s responsibility to see to it that both line managers, project managers and the project group members know what is
1 : project management structure
Company Management
Project Manager
Line Manager
Employee
most important and what to focus on. An unclear prioritization results in the employee prioritizing and working on what benefits him or her primarily. A successful project result is dependable on the cooperation between the line production and projects. Line managers create value through improving individuals’ skills and processes. Project managers create value through delivering results and changes. To succeed with a project, line managers’ motivation and enthusiasm is needed, but they seldom want to offer resources since this on a short-term basis generate more problems than benefits for them. Few rewards systems promote crossorganizational cooperation. In too many organizations there is a built-in aversion between line managers and project managers. Line managers often see project managers as competitors, while project managers see line managers as encumbers. They do not see the mutual benefits, nor that they are depended on each other to make the organization work. The top management can never abjure the responsibility in making cooperation in the organization successful. The understanding of the fact that projects need realistic prerequisites to succeed, has reached top management level within organizations and businesses. It is a natural consequence that more labor is done by way of projects, which increase the need to handle projects and resources in the most advantageous way. To master project management is no longer something which
9
8
1 : project management structure
The matrix organization is on the contrary very flexible in its structure. Employees are working vertically whilst the business is run cross-functionally. The management’s responsibility is to put together functional groups which purpose is to solve specific tasks. This organizational structure’s weakness is the two-way decision-making process, which puts high demand on managers to formulate goals and prioritize tasks. For organizations where the hierarchical decision-making processes are dominating we speak of a weak matrix, in case of the contrary we speak of a strong matrix. Projects run in a weak respectively strong matrix face different circumstances. In a weak matrix a small part of the employees work in projects. Most hold positions in the line organization where the better part of all work in the organization is executed. Consequently, the line managers make most of the decisions, even those which concern the projects. The project manager has a weak position in this kind of organization. In organizational structures where more people tend to work in projects, the project manager’s possibility to control the project will increase. In the strong matrix the line managers only make overarching decisions on goal, scope and resources. Details are left to the project manager. Generally the organization use projects as their corporate business approach. It is important for the project manager to be familiar with and adapt to the organizational structure.
Loyalty Towards Several Managers The employee with a position in the line production, but who is also a part of a project, has in effect two managers. The line manager, where he is employed and who most probably settles his salary, and the project manager who hopefully dispense interesting and challenging work assignments. If the prioritization between the line work and project work is unclear an employee might have a loyalty problem. It is the management’s responsibility to see to it that both line managers, project managers and the project group members know what is
1 : project management structure
Company Management
Project Manager
Line Manager
Employee
most important and what to focus on. An unclear prioritization results in the employee prioritizing and working on what benefits him or her primarily. A successful project result is dependable on the cooperation between the line production and projects. Line managers create value through improving individuals’ skills and processes. Project managers create value through delivering results and changes. To succeed with a project, line managers’ motivation and enthusiasm is needed, but they seldom want to offer resources since this on a short-term basis generate more problems than benefits for them. Few rewards systems promote crossorganizational cooperation. In too many organizations there is a built-in aversion between line managers and project managers. Line managers often see project managers as competitors, while project managers see line managers as encumbers. They do not see the mutual benefits, nor that they are depended on each other to make the organization work. The top management can never abjure the responsibility in making cooperation in the organization successful. The understanding of the fact that projects need realistic prerequisites to succeed, has reached top management level within organizations and businesses. It is a natural consequence that more labor is done by way of projects, which increase the need to handle projects and resources in the most advantageous way. To master project management is no longer something which
9
10
1 : project management structure
only concern technicians and developers, but something everyone in an organization should be able to do. Every employee is expected to understand what a project is, and how to work goal-oriented in temporarily assembled groups.
The organization’s vision and goals should lead and determine all endeavors. The overall goals will influence both the work activities and the organizational structure. The company management operates the organization by defining strategies and tactics. This is a given part of all business and operational planning.
The project manager role consists of two elements. Project Control is mastering project methodologies, i.e. structuring, time and resource allocation, risk assessment and evaluations and follow-ups. Project Management is leadership and making things happen by influencing project groups and surroundings. Usually both roles are involved when the term Project Management is used.
projects have to achieve results Projectized work is a methodology that suits many different types of assignments. It is an effective way of realizing visions and business goals, but individuals can also use projects as a means of reaching personal goals. Primarily, this book will deal with projects carried out within companies and organizations. For this reason we will start by going through how projects are connected to the organizations’ management and goals. Projects can be carried out externally for a client, or internally within the organization, with internal or sourced resources. There are no limits which tell us how small or how large a project can be when it comes to the number of individuals involved, or the time it takes to complete.
1 : project management structure
The strategies guide the way to the business goals, which are long-term and therefore need to be broken down in more tangible action plans which regulate daily work. An action plan is best described as a process with specified work elements in a flow. Certain processes are permanent and repetitive, while others are temporary. The permanent processes are routines in the line operation, while the temporary usually are projects. The management can make use of projects to execute tasks of temporary nature. Working in a projectized structure makes it possible to gather resources from different parts of the organization and to focus on a specific goal. Through initiation, starting and finishing projects the management can guide operations towards the business goals, or initiate investments in new ventures. It is therefore the management’s responsibility to ensure every single project has realistic prerequisites to be realized. It is by and large about well-defined goals, visible clients, and access to resources and support from the organization.
Business Level and Project Level The connection between the management’s modus operandi and the work which is done in the project can with advantage be described in a model with two levels:
Visions and business goals
Pr oj ec Pr oj ec
t
t
P t roje c
Pr oj ec
St
A project is a tool to promote change. p
ra
te
gi
es
t
Pr oj ec
t
• Business level:
• Project level:
Coordinate and manage the project organization
G
Manage projects
pManagement model. (Execution)
source: ipma national competencies in project management, 2005
11
10
1 : project management structure
only concern technicians and developers, but something everyone in an organization should be able to do. Every employee is expected to understand what a project is, and how to work goal-oriented in temporarily assembled groups.
The organization’s vision and goals should lead and determine all endeavors. The overall goals will influence both the work activities and the organizational structure. The company management operates the organization by defining strategies and tactics. This is a given part of all business and operational planning.
The project manager role consists of two elements. Project Control is mastering project methodologies, i.e. structuring, time and resource allocation, risk assessment and evaluations and follow-ups. Project Management is leadership and making things happen by influencing project groups and surroundings. Usually both roles are involved when the term Project Management is used.
projects have to achieve results Projectized work is a methodology that suits many different types of assignments. It is an effective way of realizing visions and business goals, but individuals can also use projects as a means of reaching personal goals. Primarily, this book will deal with projects carried out within companies and organizations. For this reason we will start by going through how projects are connected to the organizations’ management and goals. Projects can be carried out externally for a client, or internally within the organization, with internal or sourced resources. There are no limits which tell us how small or how large a project can be when it comes to the number of individuals involved, or the time it takes to complete.
1 : project management structure
The strategies guide the way to the business goals, which are long-term and therefore need to be broken down in more tangible action plans which regulate daily work. An action plan is best described as a process with specified work elements in a flow. Certain processes are permanent and repetitive, while others are temporary. The permanent processes are routines in the line operation, while the temporary usually are projects. The management can make use of projects to execute tasks of temporary nature. Working in a projectized structure makes it possible to gather resources from different parts of the organization and to focus on a specific goal. Through initiation, starting and finishing projects the management can guide operations towards the business goals, or initiate investments in new ventures. It is therefore the management’s responsibility to ensure every single project has realistic prerequisites to be realized. It is by and large about well-defined goals, visible clients, and access to resources and support from the organization.
Business Level and Project Level The connection between the management’s modus operandi and the work which is done in the project can with advantage be described in a model with two levels:
Visions and business goals
Pr oj ec Pr oj ec
t
t
P t roje c
Pr oj ec
St
A project is a tool to promote change. p
ra
te
gi
es
t
Pr oj ec
t
• Business level:
• Project level:
Coordinate and manage the project organization
G
Manage projects
pManagement model. (Execution)
source: ipma national competencies in project management, 2005
11
12
1 : project management structure
The business’ long-term development rests on the organizational level. On this level all projects in the business are managed and prioritized. This is where the responsibility for all project methodologies and management systems lie, and that these are adapted to the businesses and the projects needs.
q proposing enhancements of solutions, processes and plans.
The company management manages projects by: q initiation, follow-up and closure of projects. q confirming that projects are in line with the strategic goals of the company. q allocating resources. q coordinating projects within the organization.
q advising on possibilities and risks as they appear.
The Management Manages through Tollgates Tollgates are the sponsor’s tool to monitor and manage the project. A tollgate is usually a meeting where reached goals are evaluated and the project’s future destiny is determined. The sponsor has, in terms of being the owner of the project, responsibility for the tollgates. The project manager’s responsibility is to deliver the promised end-result.
q managing business opportunities and assessing and controlling risks.
On the project level the project is managed and executed by applying the project methodology. The project manager’s responsibility is to deliver results through organizing and managing, while the project group plan and execute the project tasks.
13
q communicating status.
q supplying management tools, project models and methodologies.
q placing demands on project managers.
1 : project management structure
Tollgate examples 1. Project initiated and pre-study phase to commence 2. Pre-study completed and planning to start 3. Project planning completed 4. Project execution commenced 5. Project verified 6. End-result delivered and goal verified 7. Project closed 8. Business impact verified
The project manager manages projects through: q securing project goals are reached. q communicating and delegating tasks. q engaging and motivating project group members. q applying management tools and project models and methodologies. q communicating results and managing changes. q managing business opportunities and risks. The project group executes projects through: q performing activities and tasks accordingly. q following the standard processes, quality systems, methodologies and routines of the organization.
After tollgate assessment one of the following three outcomes might ensue: 1. Continue according to original or revised plan. 2. Go back and postpone the decision until part of the project has been changed or additional information has been collected, or until external factors are more favorable. 3. Terminate the project and document end-result. Complete final report, close accounts and close project group.
Go back Continue
Terminate
pTollgate assessment.
12
1 : project management structure
The business’ long-term development rests on the organizational level. On this level all projects in the business are managed and prioritized. This is where the responsibility for all project methodologies and management systems lie, and that these are adapted to the businesses and the projects needs.
q proposing enhancements of solutions, processes and plans.
The company management manages projects by: q initiation, follow-up and closure of projects. q confirming that projects are in line with the strategic goals of the company. q allocating resources. q coordinating projects within the organization.
q advising on possibilities and risks as they appear.
The Management Manages through Tollgates Tollgates are the sponsor’s tool to monitor and manage the project. A tollgate is usually a meeting where reached goals are evaluated and the project’s future destiny is determined. The sponsor has, in terms of being the owner of the project, responsibility for the tollgates. The project manager’s responsibility is to deliver the promised end-result.
q managing business opportunities and assessing and controlling risks.
On the project level the project is managed and executed by applying the project methodology. The project manager’s responsibility is to deliver results through organizing and managing, while the project group plan and execute the project tasks.
13
q communicating status.
q supplying management tools, project models and methodologies.
q placing demands on project managers.
1 : project management structure
Tollgate examples 1. Project initiated and pre-study phase to commence 2. Pre-study completed and planning to start 3. Project planning completed 4. Project execution commenced 5. Project verified 6. End-result delivered and goal verified 7. Project closed 8. Business impact verified
The project manager manages projects through: q securing project goals are reached. q communicating and delegating tasks. q engaging and motivating project group members. q applying management tools and project models and methodologies. q communicating results and managing changes. q managing business opportunities and risks. The project group executes projects through: q performing activities and tasks accordingly. q following the standard processes, quality systems, methodologies and routines of the organization.
After tollgate assessment one of the following three outcomes might ensue: 1. Continue according to original or revised plan. 2. Go back and postpone the decision until part of the project has been changed or additional information has been collected, or until external factors are more favorable. 3. Terminate the project and document end-result. Complete final report, close accounts and close project group.
Go back Continue
Terminate
pTollgate assessment.
Index 80/20 rule 206 A A3 report 275 ABC method 218 AC 199, 203, 256, 257 acceptance test 248 accrual-basis accounting 146 activity 116, 118, 127 activity cost estimate 145 activity list 119 activity planning 116 act-plan-do-check cycle 155 actual cost 197, 199, 203, 256 actual delivery 258 Adizes characters 183 Adizes, Ichak 85 ADM 114 administration 250 administration model 251 administration plan 252 administrative organization 250 agreement 33 alliances 234 allocating resources 328 ambassador 279 ambiguous project 299 apprenticeship 293 Arrow Diagramming Method 114 assessment 193, 248 assessment criteria 187 assigning roles 183 assignment 18 available funds 147, 204 B BAC 257 back loaded project 135 back-casting 74 background description 24 balance of interest 48
index
balanced scorecard 289, 304, 306 bar chart 125 baseline 106, 135 baseline plan 135 behavioral competence 350 Belbin Team Role Inventory 84 Belbin’s team roles 84, 183 benchmarking 308 benefit effects 53 benefit impact 267 bottom-up 143 brainstorming 42 BSC 304 budget 141, 147 budget at completion 257 burning platform 284 business change management 273 business goal 10 business impact goal 16, 26, 268, 270 business level 11 business objectives 54 business perspective 291 business process 3 business risk 318 business systems 325 business unit 312 business value 24, 50 C calculated mean value 123 calculation 143 calendar time 58 CAPM 345, 348 career ladder 354 career path 291, 354 cash flow 203 cause and effect diagram 157 certification 343 certification process 347, 351 Certified Associate in Project Management 345
Certified Project Director 349 Certified Project Management Associate 349 Certified Project Manager 349 Certified Senior Project Manager 349 change 208, 274, 279 change administration 329 change control board 160 change management 157 change management environment 278 change management leader 276 change management plan 247 change management process 160, 278, 280 change management project 273, 279 change management value 282 change request 160 checklist 251, 339 client 24 client competency 69 closing phase 253, 268 closure 15 coaching 329 collective memory 289 communication 161, 176 communication and cooperation 311 communication model 162 communication plan 166 communication profile model 86 communication profiles 183 communication strategy 161 competence 184, 291 competence baseline 349 competence development 291 competence management 291 completion date 122, 202 complex project 135 complex projects 298, 315 comprehensive assessment 302 concurrent engineering 110 conflict 231
395
conflict resolution 237 conflict style inventories 238 contextual competence 350 contingency response planning 154 continuous improvements 207 contract 39, 188 contract statement of work 186
document delivery 250 document version control 157 double-entry accounting 142 double-loop learning 296 DSDM 68, 111, 337 duration 119 duration estimate 121
F far-zone 108 feedback 162, 211, 213, 254, 262, 289 final costs 203 final report 259, 371 final result 239, 248 financial analysis 51
contractor 32, 187, 188 contribution 144 control chart 195 core process 15 core stakeholder 48 corporate culture 95 cost control follow-up 196 cost performance index 201 cost variance 198 costs 143 CPI 201 crashing 134 creative assignment 68 credential 344 critical chain 207 critical path 128, 134 CRM 310 cross-organizational cooperation 10 culture 2, 3 customer claims 204 customer perspective 304 customer relationship management 310
dynamic development 111 Dynamic System Development Method 68, 111, 337
financial benefit 318 financial control 197 financial management systems 310 financial perspective 304 finish date 129 finish-to-finish 134 FIRO theory 91 float 129 flow chart 117 free float 129 front loaded project 134 funds 203
E EAC 203 earned value 197, 256, 257 earned value management 197 effect 26 EMV 205 enabler 287 end result 27 end-user 244 enterprise project management 309, 311 enterprise resource planning 310 EPM 311 ERP 310 estimate at completion 203 estimate model 145 estimate to completion 203 ETC 203 EV 257 evaluation 254 D evaluation meeting 169 decision meeting 169 evaluation score 187 decision-making process 4, 7, 160, 262 EVM 197 deficiency needs 230 executed activity 194 definition of a project 18 executing a project 177 delegating 226, 227 execution 15 delivery 27, 247, 258 execution phase 175, 191, 239 delivery acceptance 249, 370 exit criteria 265 delivery goal 27 expectations 103 Deming Prize 207 expected monetary value 205 dependency 114, 117, 119, 127 experienced group 300 design phase 192 experiential learning theory 294, 295 development models 337 explicit knowledge 292 development process 338 extrinsic motivation 228 DICE 280
G Gantt chart 125 general project model 16, 356 goal 27 goal perception 101, 283 goal setting 27 governance model 330 government contracting 187 gross benefits 53 group composition 83 H handover 247, 248, 253 hierarchy 7 holistic view 310 human resources 77 I IFB 186 I-message 214 impact realization 16, 268 implementation 239 implementation phase 240 implementation plan 274 implementation planning 243
Index 80/20 rule 206 A A3 report 275 ABC method 218 AC 199, 203, 256, 257 acceptance test 248 accrual-basis accounting 146 activity 116, 118, 127 activity cost estimate 145 activity list 119 activity planning 116 act-plan-do-check cycle 155 actual cost 197, 199, 203, 256 actual delivery 258 Adizes characters 183 Adizes, Ichak 85 ADM 114 administration 250 administration model 251 administration plan 252 administrative organization 250 agreement 33 alliances 234 allocating resources 328 ambassador 279 ambiguous project 299 apprenticeship 293 Arrow Diagramming Method 114 assessment 193, 248 assessment criteria 187 assigning roles 183 assignment 18 available funds 147, 204 B BAC 257 back loaded project 135 back-casting 74 background description 24 balance of interest 48
index
balanced scorecard 289, 304, 306 bar chart 125 baseline 106, 135 baseline plan 135 behavioral competence 350 Belbin Team Role Inventory 84 Belbin’s team roles 84, 183 benchmarking 308 benefit effects 53 benefit impact 267 bottom-up 143 brainstorming 42 BSC 304 budget 141, 147 budget at completion 257 burning platform 284 business change management 273 business goal 10 business impact goal 16, 26, 268, 270 business level 11 business objectives 54 business perspective 291 business process 3 business risk 318 business systems 325 business unit 312 business value 24, 50 C calculated mean value 123 calculation 143 calendar time 58 CAPM 345, 348 career ladder 354 career path 291, 354 cash flow 203 cause and effect diagram 157 certification 343 certification process 347, 351 Certified Associate in Project Management 345
Certified Project Director 349 Certified Project Management Associate 349 Certified Project Manager 349 Certified Senior Project Manager 349 change 208, 274, 279 change administration 329 change control board 160 change management 157 change management environment 278 change management leader 276 change management plan 247 change management process 160, 278, 280 change management project 273, 279 change management value 282 change request 160 checklist 251, 339 client 24 client competency 69 closing phase 253, 268 closure 15 coaching 329 collective memory 289 communication 161, 176 communication and cooperation 311 communication model 162 communication plan 166 communication profile model 86 communication profiles 183 communication strategy 161 competence 184, 291 competence baseline 349 competence development 291 competence management 291 completion date 122, 202 complex project 135 complex projects 298, 315 comprehensive assessment 302 concurrent engineering 110 conflict 231
395
conflict resolution 237 conflict style inventories 238 contextual competence 350 contingency response planning 154 continuous improvements 207 contract 39, 188 contract statement of work 186
document delivery 250 document version control 157 double-entry accounting 142 double-loop learning 296 DSDM 68, 111, 337 duration 119 duration estimate 121
F far-zone 108 feedback 162, 211, 213, 254, 262, 289 final costs 203 final report 259, 371 final result 239, 248 financial analysis 51
contractor 32, 187, 188 contribution 144 control chart 195 core process 15 core stakeholder 48 corporate culture 95 cost control follow-up 196 cost performance index 201 cost variance 198 costs 143 CPI 201 crashing 134 creative assignment 68 credential 344 critical chain 207 critical path 128, 134 CRM 310 cross-organizational cooperation 10 culture 2, 3 customer claims 204 customer perspective 304 customer relationship management 310
dynamic development 111 Dynamic System Development Method 68, 111, 337
financial benefit 318 financial control 197 financial management systems 310 financial perspective 304 finish date 129 finish-to-finish 134 FIRO theory 91 float 129 flow chart 117 free float 129 front loaded project 134 funds 203
E EAC 203 earned value 197, 256, 257 earned value management 197 effect 26 EMV 205 enabler 287 end result 27 end-user 244 enterprise project management 309, 311 enterprise resource planning 310 EPM 311 ERP 310 estimate at completion 203 estimate model 145 estimate to completion 203 ETC 203 EV 257 evaluation 254 D evaluation meeting 169 decision meeting 169 evaluation score 187 decision-making process 4, 7, 160, 262 EVM 197 deficiency needs 230 executed activity 194 definition of a project 18 executing a project 177 delegating 226, 227 execution 15 delivery 27, 247, 258 execution phase 175, 191, 239 delivery acceptance 249, 370 exit criteria 265 delivery goal 27 expectations 103 Deming Prize 207 expected monetary value 205 dependency 114, 117, 119, 127 experienced group 300 design phase 192 experiential learning theory 294, 295 development models 337 explicit knowledge 292 development process 338 extrinsic motivation 228 DICE 280
G Gantt chart 125 general project model 16, 356 goal 27 goal perception 101, 283 goal setting 27 governance model 330 government contracting 187 gross benefits 53 group composition 83 H handover 247, 248, 253 hierarchy 7 holistic view 310 human resources 77 I IFB 186 I-message 214 impact realization 16, 268 implementation 239 implementation phase 240 implementation plan 274 implementation planning 243
396
index
implementation project 239 implementing a project tool 137 improvements 207 incentive 228 inclusion phase 242 inexperienced group 300 influencing stakeholders 163
linking the changes 279 logic diagram 114 logical relationship 128
information meeting 169 informational edge 244 initiation process 22 innovation process 76 integration 341 integration leader 340 internal process perspective 304 International Project Management Association 349 intrinsic motivation 228 invitation for bid 186 IPMA 349, 352 IPMA Competence Baseline 349
marketing plan 46 Maslow, Abraham 229 mathematical methods 122 matrix 7, 8 matrix organization 182 maturity analysis 297 maxi risk method 153 MBTI 89 McGregor, Douglas 221 meeting 169, 321 meeting 32 mentor/mentee system 329 mentorship 293, 329 Meredith Belbin 84 methodology 36 Microsoft Project Professional 137 milestone 14, 37, 114, 127 milestone diagram 194 milestone method 116 milestone plan 14, 71, 115 mini risk method 151 mirrored client organization 82 mobilization 283 modulteam 6 MoSCoW prioritization 65 motivation 227, 229, 286 motivation triangle 287 motivator 287 Myers-Briggs Type Indicators 89
J job costing 143 K kick-off 100, 102, 192, 262 kick-out 262 Kilmann, Ralph H. 238 knowledge 292 knowledge management 289 L labor costs 148 labor hour 121 lead 134 leadership management 220 leadership style 226 learning group 300 learning growth perspective 304 learning organization 296 learning style 294 learning style inventory 294 lessons learned 253 Lichtenberg Technique 122 line manager 8, 80
M Maslow’s hierarchy of needs 229 management model 11
N National Competence Baseline 352 NCB 352 near-zone 108 negotiation meeting 169 negotiation techniques 189 negotiations 189 net benefits 53
index
net present value 148 network 4 network diagram 114 network diagramming 114 nonviolent communication 213 O objective 24, 25 object-oriented design 338 OBS 316 Office SharePoint 173 open space technology 280 OPM3 301 organization 1 organizational breakdown structure 316 organizational chart 4 organizational plan 4 organizational project management maturity model 301 organizational structure 2 original plan 208 outstanding issues list 250 overhead costs 143 P Pacioli, Luca 142 Pareto chart 206 Pareto principle 206 PDM 114 PENG 52 performance measurement baseline 148 performance measurement baseline plan 197 performance report 168, 195 performed result 197 personal development 217 PgMPSM 345, 347 planned delivery 258 planned value 199, 257 planning 15, 36, 105 planning meeting 100, 106 planning methods 108 PMBOK®Guide 346 PMCL 355 PMI 345, 352
397
PMO 327 PMP 345, 347 portfolio 274, 302 portfolio management 309, 311, 314, 322 portfolio pyramid 314 portfolio review 320
progress line 197 progress report 369 project 77, 302 project account 256 project anatomy 340 project assessment 54 project boundaries 25
project planning flow 126 project portal 171 project portfolio 312, 328 project preparation directive 34 project preparation guideline 37, 38 project process 306 project quality assessment 180
portfolio tool 322 positioning chart 319 post production depression 264 post project feelings 264 power play 236 PPS 335 practical project steering 335 Precedence Diagramming Method 114 preliminary calculation 197 preliminary estimate 144 premature project termination 265 prerequisites 23, 35, 43 pre-study 15, 35, 36, 39 prevention over inspection 154 primary stakeholder 48 Primavera 139 PRINCE 336 prioritization 9, 58, 243 prioritizing projects 328 probability and impact matrix 152 problem solving 57 problem statement 186 process 2 process owner 291 procurement 31, 185 procurement process 185 product 27 product breakdown structure 65 product costs 143 product description 186 product development model 68 product goal 255 product quality 58 product requirement 61, 191 productivity 193, 203 program 302, 312 program management 315 progress 193
project budget 34, 141, 367 project calculation 143 project charter 29, 34, 358 project control 10 project coordinator 82 project costs 143 project definition 31 project evaluation 176, 254, 267, 320 project flow 15 project goal 27, 255, 268 project group 77, 79 project group staffing 182 project group termination 263 project group’s competence 299 project initiation 17, 21 project level 11 project lifecycle budget 252 project lifecycle 15 project limitations 25 project management 10, 311 Project Management Institute 345 project management maturity 181 project management model 330, 331 Project Management Office 327 Project Management Professional 345 project management support office 327 project management triangle 58, 147 project maturity 289, 301 project meeting 169 project model 16, 327 project office 170, 327 project organization 5, 77, 366 project owner 27, 78 project phases 15, 16 project plan 34, 46, 107, 359 project plan process 107 project plan review 177 project planning 105
project quality management plan 154 project reporting 323 project requirement 61 project review 193, 321, 328, 329 project review model 179 project risk assessment 179 project scope 40 project scorecard 306 project specification 31 project sponsor chain 78 project staffing 176 project status 197 project status information 201 project support 328 project team 183 project termination 253, 265 project tool 136, 321, 328 project’s characteristics 298 project’s purpose 227 project’s scope 257 projectbase 356 projectized organization 7, 259, 297 Projectplace international 172 proposal 31, 32 PROPS™ 334 PV 199, 257 Pygmalion effect 222 Q qualitative risk analysis 148, 151 quality assurance 154, 329 quality assurance manager 81 quality audit 154 quality definition 154 quality management 141 quality planning 154 quality requirement 156 quality review 206
396
index
implementation project 239 implementing a project tool 137 improvements 207 incentive 228 inclusion phase 242 inexperienced group 300 influencing stakeholders 163
linking the changes 279 logic diagram 114 logical relationship 128
information meeting 169 informational edge 244 initiation process 22 innovation process 76 integration 341 integration leader 340 internal process perspective 304 International Project Management Association 349 intrinsic motivation 228 invitation for bid 186 IPMA 349, 352 IPMA Competence Baseline 349
marketing plan 46 Maslow, Abraham 229 mathematical methods 122 matrix 7, 8 matrix organization 182 maturity analysis 297 maxi risk method 153 MBTI 89 McGregor, Douglas 221 meeting 169, 321 meeting 32 mentor/mentee system 329 mentorship 293, 329 Meredith Belbin 84 methodology 36 Microsoft Project Professional 137 milestone 14, 37, 114, 127 milestone diagram 194 milestone method 116 milestone plan 14, 71, 115 mini risk method 151 mirrored client organization 82 mobilization 283 modulteam 6 MoSCoW prioritization 65 motivation 227, 229, 286 motivation triangle 287 motivator 287 Myers-Briggs Type Indicators 89
J job costing 143 K kick-off 100, 102, 192, 262 kick-out 262 Kilmann, Ralph H. 238 knowledge 292 knowledge management 289 L labor costs 148 labor hour 121 lead 134 leadership management 220 leadership style 226 learning group 300 learning growth perspective 304 learning organization 296 learning style 294 learning style inventory 294 lessons learned 253 Lichtenberg Technique 122 line manager 8, 80
M Maslow’s hierarchy of needs 229 management model 11
N National Competence Baseline 352 NCB 352 near-zone 108 negotiation meeting 169 negotiation techniques 189 negotiations 189 net benefits 53
index
net present value 148 network 4 network diagram 114 network diagramming 114 nonviolent communication 213 O objective 24, 25 object-oriented design 338 OBS 316 Office SharePoint 173 open space technology 280 OPM3 301 organization 1 organizational breakdown structure 316 organizational chart 4 organizational plan 4 organizational project management maturity model 301 organizational structure 2 original plan 208 outstanding issues list 250 overhead costs 143 P Pacioli, Luca 142 Pareto chart 206 Pareto principle 206 PDM 114 PENG 52 performance measurement baseline 148 performance measurement baseline plan 197 performance report 168, 195 performed result 197 personal development 217 PgMPSM 345, 347 planned delivery 258 planned value 199, 257 planning 15, 36, 105 planning meeting 100, 106 planning methods 108 PMBOK®Guide 346 PMCL 355 PMI 345, 352
397
PMO 327 PMP 345, 347 portfolio 274, 302 portfolio management 309, 311, 314, 322 portfolio pyramid 314 portfolio review 320
progress line 197 progress report 369 project 77, 302 project account 256 project anatomy 340 project assessment 54 project boundaries 25
project planning flow 126 project portal 171 project portfolio 312, 328 project preparation directive 34 project preparation guideline 37, 38 project process 306 project quality assessment 180
portfolio tool 322 positioning chart 319 post production depression 264 post project feelings 264 power play 236 PPS 335 practical project steering 335 Precedence Diagramming Method 114 preliminary calculation 197 preliminary estimate 144 premature project termination 265 prerequisites 23, 35, 43 pre-study 15, 35, 36, 39 prevention over inspection 154 primary stakeholder 48 Primavera 139 PRINCE 336 prioritization 9, 58, 243 prioritizing projects 328 probability and impact matrix 152 problem solving 57 problem statement 186 process 2 process owner 291 procurement 31, 185 procurement process 185 product 27 product breakdown structure 65 product costs 143 product description 186 product development model 68 product goal 255 product quality 58 product requirement 61, 191 productivity 193, 203 program 302, 312 program management 315 progress 193
project budget 34, 141, 367 project calculation 143 project charter 29, 34, 358 project control 10 project coordinator 82 project costs 143 project definition 31 project evaluation 176, 254, 267, 320 project flow 15 project goal 27, 255, 268 project group 77, 79 project group staffing 182 project group termination 263 project group’s competence 299 project initiation 17, 21 project level 11 project lifecycle budget 252 project lifecycle 15 project limitations 25 project management 10, 311 Project Management Institute 345 project management maturity 181 project management model 330, 331 Project Management Office 327 Project Management Professional 345 project management support office 327 project management triangle 58, 147 project maturity 289, 301 project meeting 169 project model 16, 327 project office 170, 327 project organization 5, 77, 366 project owner 27, 78 project phases 15, 16 project plan 34, 46, 107, 359 project plan process 107 project plan review 177 project planning 105
project quality management plan 154 project reporting 323 project requirement 61 project review 193, 321, 328, 329 project review model 179 project risk assessment 179 project scope 40 project scorecard 306 project specification 31 project sponsor chain 78 project staffing 176 project status 197 project status information 201 project support 328 project team 183 project termination 253, 265 project tool 136, 321, 328 project’s characteristics 298 project’s purpose 227 project’s scope 257 projectbase 356 projectized organization 7, 259, 297 Projectplace international 172 proposal 31, 32 PROPS™ 334 PV 199, 257 Pygmalion effect 222 Q qualitative risk analysis 148, 151 quality assurance 154, 329 quality assurance manager 81 quality audit 154 quality definition 154 quality management 141 quality planning 154 quality requirement 156 quality review 206
398
index
quality standard 156 quantitative risk analysis 148, 152 R RAM 317 Rational Unified Process 338 RBS 317 reaction to changes 245 reference group 81, 246 reference measurement 271 remaining work 203 report 140, 167 request for proposal 31, 186 request for quotation 186 requirement 186 requirement specification 34, 60, 156, 191, 243, 248 research project 68 residual risks 179 resource 58, 120, 188, 316 resource acquirement 176 resource agreement 34 resource assignment 136 resource breakdown structure 317 resource collision 319 resource constraints 130 resource coordination 327 resource histogram 132, 146 resource management 311, 316 resource management plan 120 resource owner 80, 182, 188 resource procurement 120, 182, 189 resource share allocation 133 responsibility assignment matrix 317 result 248 review 193 RFP 186 RFQ 186 rhetoric 165 risk 141 risk analysis 204, 244, 368 risk category 150 risk event 149 risk identification 148, 149, risk management 148
risk mitigation 148 risk probability 205 risk response 204 risk response planning 148, 153 roadmap 71 role assignment 182 roles 83, 244
Spiral Model 111, 337 split roles 234 sponsor 13, 77, 78, 176, 183 staffing management plan 182 stakeholder 25, 27, 47, 48, 161, 163 stakeholder analysis 47 stakeholders management 278
termination phase 256, 262 test leader 340 theory of constraints 207 theory of human motivation 229 Theory X 221 Theory Y 221 Think drop 288
rolling wave planning 108 rules 94 RUPÂŽ 338
stakeholders’ analysis 243 stakeholders’ mapping 365 standard deviation 123 standard for portfolio management 314 start meeting 192 status meeting 321 steering committee 71, 80 steering committee meeting 169 strategic importance 317 strategy 10, 11, 51 strong matrix 8 structure 2 structuring 40 sub network 116 sub project 115, 135 sub project manager 81 sub-deliveries 40 success factors 278 success rate 280 successive principle 122 supporting process 15 SWOT analysis 44 SWOT matrix 43 system development model 192 system development project 68 system owner 251 systems thinking 296
Thomas, Kenneth W. 238 Thomas-Kilmann Conflict Mode Instrument 238 time boxing 112, 337 tollgate 13 tollgate assessment 13 top-down 143 total absorption costing 143 total float 129 training 291, 328 transparency 103 trigger 287 triple constraint 58
S scenario 66 schedule 40, 106, 125, 127, 146 schedule adjustment 134 schedule overrun 258 schedule performance index 201 schedule variance 198 scientific management 124 s-curve 147 secondary stakeholder 48 securing the result 286 self assessment 302 self management leadership 219 self-knowledge 209, 344 self-leadership 217 senior management 281 sequential development 109 shared responsibility 182 SharePoint 137 shortcomings 264 simulation 124 single-loop learning 296 situational analysis 45, 243, 315, 364 situational leadership 224 slack 129 SMART goal 28, 243, 270 SML 219 social capital 277 social competence 220 solution 55 solution selection 57 specific costs 143 specified competence 184 SPI 201
T tacit knowledge 292 tactics 11 target 27 team building 94 team roles 84 team rules 98 technical competence 350 tender 187 termination 13, 254, 263
U unambiguous project 299 uncertainty 122, 148 unwritten rules 286 use cases 66 user 82 V values 96 Venice Method 142 vision 10, 279 Volvo 6 W warrantee obligations 264 waterfall model 109 WBM 117 WBS 40, 274 weak matrix 8 Window, Johari 210 work breakdown structure 40 work flow 134 work meeting 169 work package 40, 117, 340 work package method 117
index
399
398
index
quality standard 156 quantitative risk analysis 148, 152 R RAM 317 Rational Unified Process 338 RBS 317 reaction to changes 245 reference group 81, 246 reference measurement 271 remaining work 203 report 140, 167 request for proposal 31, 186 request for quotation 186 requirement 186 requirement specification 34, 60, 156, 191, 243, 248 research project 68 residual risks 179 resource 58, 120, 188, 316 resource acquirement 176 resource agreement 34 resource assignment 136 resource breakdown structure 317 resource collision 319 resource constraints 130 resource coordination 327 resource histogram 132, 146 resource management 311, 316 resource management plan 120 resource owner 80, 182, 188 resource procurement 120, 182, 189 resource share allocation 133 responsibility assignment matrix 317 result 248 review 193 RFP 186 RFQ 186 rhetoric 165 risk 141 risk analysis 204, 244, 368 risk category 150 risk event 149 risk identification 148, 149, risk management 148
risk mitigation 148 risk probability 205 risk response 204 risk response planning 148, 153 roadmap 71 role assignment 182 roles 83, 244
Spiral Model 111, 337 split roles 234 sponsor 13, 77, 78, 176, 183 staffing management plan 182 stakeholder 25, 27, 47, 48, 161, 163 stakeholder analysis 47 stakeholders management 278
termination phase 256, 262 test leader 340 theory of constraints 207 theory of human motivation 229 Theory X 221 Theory Y 221 Think drop 288
rolling wave planning 108 rules 94 RUPÂŽ 338
stakeholders’ analysis 243 stakeholders’ mapping 365 standard deviation 123 standard for portfolio management 314 start meeting 192 status meeting 321 steering committee 71, 80 steering committee meeting 169 strategic importance 317 strategy 10, 11, 51 strong matrix 8 structure 2 structuring 40 sub network 116 sub project 115, 135 sub project manager 81 sub-deliveries 40 success factors 278 success rate 280 successive principle 122 supporting process 15 SWOT analysis 44 SWOT matrix 43 system development model 192 system development project 68 system owner 251 systems thinking 296
Thomas, Kenneth W. 238 Thomas-Kilmann Conflict Mode Instrument 238 time boxing 112, 337 tollgate 13 tollgate assessment 13 top-down 143 total absorption costing 143 total float 129 training 291, 328 transparency 103 trigger 287 triple constraint 58
S scenario 66 schedule 40, 106, 125, 127, 146 schedule adjustment 134 schedule overrun 258 schedule performance index 201 schedule variance 198 scientific management 124 s-curve 147 secondary stakeholder 48 securing the result 286 self assessment 302 self management leadership 219 self-knowledge 209, 344 self-leadership 217 senior management 281 sequential development 109 shared responsibility 182 SharePoint 137 shortcomings 264 simulation 124 single-loop learning 296 situational analysis 45, 243, 315, 364 situational leadership 224 slack 129 SMART goal 28, 243, 270 SML 219 social capital 277 social competence 220 solution 55 solution selection 57 specific costs 143 specified competence 184 SPI 201
T tacit knowledge 292 tactics 11 target 27 team building 94 team roles 84 team rules 98 technical competence 350 tender 187 termination 13, 254, 263
U unambiguous project 299 uncertainty 122, 148 unwritten rules 286 use cases 66 user 82 V values 96 Venice Method 142 vision 10, 279 Volvo 6 W warrantee obligations 264 waterfall model 109 WBM 117 WBS 40, 274 weak matrix 8 Window, Johari 210 work breakdown structure 40 work flow 134 work meeting 169 work package 40, 117, 340 work package method 117
index
399
project management, program management, or portfolio management.
Project Management can be used for training and educational
purposes, and as a handbook when executing projects or during a certification process. The book’s disposition follows a project’s flow. Sections on project methodology are mixed with chapters on leadership and personal development. Content and terminology are adapted to match PMI’s and IPMA’s view on project management.
Project Management covers all areas a project manager should
command to professionally execute projects and manage programs. Thanks to the book’s pedagogic and unambiguous disposition, no previous knowledge in project management is needed to take advantage of the contents. The book has also received honors, which confirms the high standard.
Project Management also deals with change management, project maturity and the project office, which should appeal to any business executive and decision maker who holds responsibility for the develop- ment of the organization and how resources are utilized.
Project Management
Project Management is aimed at everyone who works with
Bo Tonnquist
Project Management has a homepage, with exercises, presentation
material and templates supporting a general project model which is available to universities, other learning institutions and training providers that are using this book. www.bonnierutbildning.se/project Bo Tonnquist, MS EE, senior partner of Baseline Management Scandinavia, is a consultant in project management, marketing and business development. He has extensive experience from assignments in international corporations and public organizations. Bo has published several books in project management and was involved in the implementation of IPMA certifications in Sweden.
A Guide to the Theory of Project, and Practice Program and Portfolio Management, and Business Change
He was previously a member of the local IPMA Certification Board.
ISBN 978-91-622-8916-4
9 789162 289164 www.bonnierutbildning.se
Best nr 622- 8916-4
bonniers