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Project ManagementSharif MBA – Fall 1385

Session 3 - Dr. Sepehri

Project LifecycleBurke Chapter 3

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Time, Cost and Quality Triangle

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Project Environment Model

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Project Stages & Gates

The starting point in the development of Project Management methodology is the implementation of a stage-gate process.

Stage-gate process requires a life-cycle and process owner definition.

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Stages & Gates

Groups of series or parallel activities (based upon the risks of the project)

Managed by cross-functional teams

To reach a predetermined deliverable established by management

Structured decision points at the end of each stage

Number of gates must be limited

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Project Phases and

the Project Life Cycle

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Project Phases and

the Project Life CycleOrganizations performing projects will usually divide each project into several project phases to improve management control and provide for links to the ongoing operations of the performing organization. Collectively, the project phases are known as the project life cycle.Each project phase is marked by completion of one or more deliverables. A deliverable is tangible, verifiable work product such as a feasibility study, a detail design, or a working prototype. The conclusion of a project phase is generally marked by a review of both key deliverables and project performance to date,to a) determine if the project should continue into its next phase and b) detect and correct errors cost effectively. These phase-end reviews are often called phase exits, stage gates, or kill points.

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Definition of a project life cycle

ResourcesUtilized

RES

OU

RC

ES

TIME

CONCEPTUAL PHASE

DETAILEDPLANNING PHASE

FEASIBILITY ANDPRELIMINARY

PLANNING PHASE

IMPLEMENTATIONPHASE

CONVERSIONOR TERMINATION

PHASE

PMO PM

O *

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Project Phases and the Project Life Cycle

The phase sequence defined by most project life cycles generally involves some form of technology transfer or handoff such as requirements to design, construction to operations, or design to manufacturing. Deliverables from the preceding phase are usually approved before work starts on the next phase. However, a subsequent phase is sometimes begun prior to approval of the previous phase deliverables when the risks involved are deemed acceptable.

This overlapping phases is often called fast tracking.Project life-cycle descriptions may be very general or very detailed. Highly detailed descriptions may have numerous forms, charts, and checklists to provide structure and consistency. Such detailed approaches are often called project management methodologies.

Care should be taken to distinguish the project life cycle from the product life cycle. For example, a project undertaken to bring a new desktop computer to market is but one phase or stage of the product life cycle.

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Project Phases and the Project Life Cycle

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Gatekeepers

Individuals (i.e. sponsors) or groups of individuals assigned by senior managementEmpowered to enforce the structured process (including change management)Authorized to evaluate performance and make decisionsAnd willing to provide the team necessary technical and business information

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Gatekeeper’s decisions

Proceed to next gate with the original objectives

Proceed to the next gate with revised objectives

Delay making a gate decision until further information is obtained

Terminate the project

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Stage-Gate Failures

Assigning gatekeepers and not empowering them to make decisions

Assigning gatekeepers who are afraid to terminate a project

Failure to provide the team with information critical to gate reviews

Allowing the team to focus more on the gates than on the stages

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Project Life-Cycle (level of effort)

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Project Life-Cycle Components

(for a typical project)

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Potential to Add Value / Cost of Changes

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Project Life-Cycle (level of detail)

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Product life-cycle

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Product Life-Cycle (Frigate/Military Project)

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Product Life-Cycle (Computer System)

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Product Life-Cycle (Nuclear Power Station)

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Project Phases and Project Life Cycle

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The Three-Legged Stool

ProjectManager

LineManagement

ManagementSenior

(I.e. Sponsor)

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Project Manager vs. Line Manager

Functional Manager:Defines how the work will be done!Provide sufficient resources.Has responsibility for the deliverables.

Project Manager:Completes task definitions.Resource requirements definitionsMajor timetable milestonesEnd-item quality and reliability requirementsBasis for performance measurements

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SponsorshipSponsorship

Most projects also havea project sponsor which may or may

not reside at the executive levels

of management.

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PM LM LM LM

PM = Project ManagerAPM = Assistant Project ManagerLM = Line or Functional Manager

APM

APM

SPONSOR GM

Multiple Boss Reporting

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Classical Management

PlanningOrganizingStaffingControllingDirecting

Which of the above is Usually NOT

performed by the project manager?

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Promises Made???PromotionGradeSalaryBonusOvertimeResponsibilityFuture work assignments

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The Functional Role

The functional manager has the responsibility to define how the task will be done and where the task will be done (i.e., the technical criteria)The functional manager has the responsibility to provide sufficient resources to accomplish the objective within the project’s constraints (i.e., who will get the job done).

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Functional Obstacles

Unlimited work requests (especially during competitive bidding)Predetermined deadlinesAll requests having a high priorityLimited number of resourcesLimited availability of resourcesUnscheduled changes in the project planUnpredicted lack of progress

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Functional Obstacles(continued)

Unpredicted lack of progressUnplanned absence of resourcesUnplanned breakdown of resourcesUnplanned loss of resourcesUnplanned turnover of personnel

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Sponsorship

Scope of WorkScope of Work

Master PlanMaster Plan

Project Org. StructureProject Org. Structure

Key StaffingKey Staffing

PoliciesPolicies

Monitoring ExecutionMonitoring Execution

Executive Client ContactExecutive Client Contact

ProjectSponsorProjectSponsor

ClientClient

ProjectSponsorProjectSponsor

ProjectManagerProject

Manager

ProjectManagerProject

Manager

ProjectTask Force

ProjectTask Force

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Project Team

Project Team

ProjectManagerProject

Manager

The Project Sponsor InterfaceThe Project Sponsor Interface

Project ManagerProject

Manager

ProjectSponsorProjectSponsor

• Objective Setting• Up-Front Planning• Project Organization• Key Staffing• Master Plan• Policies• Monitoring Execution• Priority-Setting• Conflict Resolution• Executive-Client Contact

• Objective Setting• Up-Front Planning• Project Organization• Key Staffing• Master Plan• Policies• Monitoring Execution• Priority-Setting• Conflict Resolution• Executive-Client Contact

Relationship:Relationship:

Project Sponsor:Lower/Middle Management

Project Sponsor:Lower/Middle Management

Project Sponsor:Senior Management

Project Sponsor:Senior ManagementPriority ProjectsPriority Projects

Maintenance ProjectsMaintenance Projects

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Project Vs. Functional Influences

Project Influence in Decision-Making

Dual Influence

FunctionalOrganization

Matrix ProjectOrganization

Rel

ativ

e In

fluen

ce

Functional InfluenceIn Decision-Making

Organization

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Types of Cultures

Cooperative

Non-cooperative

Competitive

Isolated (large companies)

Fragmented (multinational)

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LowLow

NeutralNeutral

HighHigh

Resistance to ChangeResistance to Change

FinanceFinance H.R.H.R. Eng.Eng. I.T.I.T.SalesSalesMarketingMarketing ProcurementProcurement Manu.Manu. R&DR&D

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Resistance to Change

Work HabitsNew guidelines/processesNeed to share power informationCreation of a fragmented work environmentNeed to give up established work patternsChange in comfort zones

Social GroupsUnknown new relationshipsMultiple bossesMultiple, temporary assignmentsSevering of established ties

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Resistance to ChangeEmbedded Fears

Fear of failureFear of terminationFear of added workload Fear or dislike of uncertainty/unknownFear of embarrassmentFear of “we/they’ organization

Wage and Salary AdministrationShift in authority and powerLack of recognition after the changesUnknown rewards and punishmentsImproper evaluation of personal performanceMultiple bosses

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Change ProcessChange ProcessSu

ppor

t for

Cha

nge

Supp

ort f

or C

hang

e

TimeTime

DenialDenial

ResistanceResistance

ExplorationExploration

ResistanceResistance

SupportSupport

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The Tip-of-the-iceberg SyndromeDELEGATION

OF AUTHORITY TO PROJECT MANAGER

EXECUTIVE MEDDLING

LACK OF UNDERSTANDING OF HOW PROJECTMANAGEMENT SHOULD WORK

LACK OF TRAINING IN COMMUNICATIONS / INTERPERSONAL SKILLS

Many Of The Problems Associated With Project Management WillSurface Much Later In The Project And Result In Much Higher Costs

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Successful Culture

A good daily working relationship between the project manager and those line managers who directly assign resources to projectsThe ability of functional employees to report vertically to their line manager at the same time they report horizontally to one or more project managers

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The Definition Of Success

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SuccessSuccess

Definition of Success

Primary Factors• Within Time• Within Cost• Within Quality• Accepted by The Customer

Definition of Success

Primary Factors• Within Time• Within Cost• Within Quality• Accepted by The Customer

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SuccessSecondary Factors:

o Customer Referenceo Follow-on Worko Financial Successo Technical Superiorityo Strategic Alignmento Regulatory Agency Relationso Health and Safetyo Environmental Protectiono Corporate Reputationo Employee Alignmento Ethical conduct

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SuccessCritical Success Factors (CSFs) [Focuses on the Deliverables]

Key Performance Indicators (KPIs) [Focuses on the Execution Metrics of the Process]

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Key Performance Indicators

These are shared learning topics which allow us to maximize what we do right and correct what we do wrong.

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Success: Point Or Cube?Success: Point Or Cube?

Cos

tC

ost

TimeTime

Quality

(or scope)Quality

(or scope)

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Components of FailureComponents of Failure

NoneNoneAA

PerceivedFailure

PerceivedFailure

ActualActual PlannedPlanned PerfectionPerfectionAchievableAchievableBB CC DD

Actual FailureActual FailurePlanningFailure

PlanningFailure

EE

Accomplishment

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Components of FailureComponents of Failure

NoneNoneAA

Perceived FailurePerceived Failure

ActualActual PlannedPlanned PerfectionPerfectionAchievableAchievableBB CC DD

ActualFailureActualFailure

PlanningFailure

PlanningFailure

EE

Accomplishment

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Mitigation Strategies Available

ProjectObjectives

ProjectObjectives

ProjectPlanningProject

Planning

Schedule RiskAssessment

Schedule RiskAssessment

Financial RiskAssessment

Financial RiskAssessment

Technical RiskAssessment

and Forecasting

Technical RiskAssessment

and Forecasting

Market RiskAssessment

and Forecasting

Market RiskAssessment

and Forecasting

ProjectExecution

ProjectExecution

TechnicalStrategy

TechnicalStrategy

Product

/Mark

et

Strateg

y

Product

/Mark

et

Strateg

y

Opportunities for TradeoffsResulting from Risk Analyses

Opportunities for TradeoffsResulting from Risk Analyses

Numerous Limited

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Risk Planning

Poor Risk ManagementPoor Risk Management

TechnicalInabilityTechnicalInability

Customer E

xpectatio

ns

Customer E

xpectatio

ns

Actual Performance

Actual PerformancePerf

orm

ance

Perf

orm

ance

TimeTime

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Project Management Inputs

ProjectManagement

ProjectManagement

OrganizationOrganization

WorkTasks

WorkTasks

ToolsMethodology

ToolsMethodology

PeoplePeople

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Integrated Processes(Past, Present, and Future)

Integrated Processes(Past, Present, and Future)

Yrs: 1990-2000

• Project management

• Total quality management

• Concurrent engineering

• Scope change management

• Risk management

• Project management

• Total quality management

• Concurrent engineering

• Scope change management

• Risk management

Yrs: 2000-2010

• Supply chain management

• Business processes

• Feasibility studies

• Cost-benefit analyses (ROI)

• Capital budgeting

• Supply chain management

• Business processes

• Feasibility studies

• Cost-benefit analyses (ROI)

• Capital budgeting

IntegratedProcesses

IntegratedProcesses

CurrentIntegratedProcesses

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Integrated Processes for The 21st CenturyIntegrated Processes for The 21st Century

Project ManagementProject Management

ConcurrentEngineeringConcurrentEngineering

Total QualityManagementTotal QualityManagement

RiskManagement

RiskManagement

ChangeManagement

ChangeManagement