Chapter 3: Initiating Projects

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Chapter 3Initiating Projects
Introduction to Project Management
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Learning Objectives

• Describe the five project management process
  groups, map them to the project management
  knowledge areas, discuss why organizations
  develop their own project management
  methodologies, and understand the importance of
  top management commitment and organizational
  standards in project management.
• Discuss the initiating process used by Global
  Construction, including pre-initiating tasks,
  breaking large projects down into smaller
  projects, and initiating tasks.

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Learning Objectives (continued)

• Identify project stakeholders, and perform a
  stakeholder analysis.
• Prepare a business case to justify the need for a
  project.
• Create a project charter to formally initiate a
  project.
• Describe the importance of holding a good project
  kick-off meeting.
• Develop a preliminary project scope statement to
  help understand project requirements.

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Project Management Process Groups

• Project management process groups progress from
  initiating activities to planning activities,
  executing activities, monitoring and controlling
  activities, and closing activities.
• A process is a series of actions directed toward
  a particular result.

Monitoring and controlling
Initialing
Planning
Executing
Closing
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Description of Process Groups

• Initiating processes include actions to begin or
  end projects and project phases.
• Planning processes include devising and
  maintaining a workable scheme to ensure that the
  project meets its scope, time, and cost goals as
  well as organizational needs.
• Executing processes include coordinating people
  and other resources to carry out the project
  plans and produce the deliverables of the project
  or phase.
• A deliverable is a product or service produced or
  provided as part of a project.
• Monitoring and controlling processes measure
  progress toward achieving project goals, monitor
  deviation from plans, and take corrective action
  to match progress with plans and customer
  expectations.
• Closing processes include formalizing acceptance
  of the project or phase and bringing it to an
  orderly end.

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Characteristics of the Process Groups

• The level of activity and length of each process
  group varies for every project.
• Normally, executing tasks require the most
  resources and time, followed by planning tasks.
• Monitoring and controlling processes are done
  throughout the projects life span.
• Initiating and closing tasks are usually the
  shortest (at the beginning and end of a project
  or phase, respectively), and they require the
  least amount of resources and time.
• However, every project is unique, so there can be
  exceptions.
• Note that process groups apply to entire projects
  as well as to project phases.
• A phase is a distinct stage in project
  development, and most projects have distinct
  phases.

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Mapping the Process Groups to the Knowledge Areas

• You can map the five process group into the nine
  project management knowledge areas.
• For example, the project integration management
  knowledge areas includes seven processes spread
  across all five project management process
  groups.
• Based on the PMBOK Guide, 2004, there are
  forty-four total processes in project management.
• Table 3-1 provides a big-picture view of the
  process groups and knowledge areas.

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Nine project management knowledge areas
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Common Project Management Tools and Techniques by
Knowledge Areas
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Project Management Process Groups and Knowledge
Area Mapping
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Project Management Process Groups and Knowledge
Area Mapping (continued)
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Developing a Project Management Methodology

• The PMBOK Guide is a standard that describes
  best practices for what should be done to manage
  a project.
• A methodology describes how things should be
  done, and different organizations often have
  different ways of doing things.
• Successful organizations develop and follow a
  customized, formal project management process.
• For example, they create and use templates or
  files with a preset format that serves as a
  starting point for creating various documents so
  that the format and structure do not have to be
  re-created.

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PMBOK Guide

• http//www.unipi.gr/akad_tmhm/biom_dioik_tech/file
  s/pmbok.pdf

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Templates
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What Went Right?

• Key findings from a five-year study by William
  Ibbs and Justin Reginato include the following
• Organizations with more mature project management
  practices have better project performance, which
  result in projects completed on time and within
  budget much more often than most projects.
• Project management maturity is strongly
  correlated with a more predictable project
  schedule and cost performance.
• Organizations that follow good project management
  methodologies have lower direct costs of project
  management (6 ) than those that do not (11 ).
• A Centre for Business Practices study showed
  organizations that stress shareholders,
  customers, and employees outperform those that do
  not.
• Over an 11-year period, the former increased
  revenues by an average of 682 versus 166 for
  the latter, expanded their workforces by 282
  versus 36, grew their stock prices by 901
  versus 74, and improved their net incomes by
  756 versus 1.
• AST Group, Can You Quantify the Value of
  Enterprise Project Management in Your
• Organisation? ITWeb Tech Forum (March 17,
  2005).

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The Importance of Top Management Commitment

• Without top management commitment, many projects
  will fail.
• Some projects have a senior manager called a
  champion who acts as a key proponent for a
  project.
• Projects are part of the larger organizational
  environment, and many factors that might affect a
  project are out of the project managers control.

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How Top Managers Can Help Project Managers
Succeed?
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How Top Managers Can Help Project Managers Succeed

• Provide adequate resources.
• Approve unique project needs in a timely manner.
• Encourage cooperation from people in other parts
  of the organization and deal with political
  issues.
• Mentor and coach them on leadership issues.
• Develop and enforce organizational standards.
• Support a Project Management Office (PMO).

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Project Management Office (PMO)

• A project management office (PMO) is an
  organizational entity created to assist project
  managers in achieving project goals.
• A PMO can help development standards and
  methodologies, provide career paths for project
  managers, and assist project managers with
  training and certification.

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Nine project management knowledge areas
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Project Management Process Groups and Knowledge
Area Mapping
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Project Management Process Groups and Knowledge
Area Mapping (continued)
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Initiating Process for Global Constructions
Just-In-Time Training Project
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Initiating Process for Global Constructions
Just-In-Time Training Project
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Pre-initiating Tasks

• It is good practice to lay the groundwork for a
  project before it officially starts.
• After a project is approved, senior managers
  should meet to accomplish the following tasks
• Determine the scope, time, and cost constraints
  for the project.
• Identify the project sponsor (the person who
  provides high-level direction and often the
  funding for the project).
• Select the project manager.
• Meet with the project manager to review the
  process and expectations for managing the
  project.
• Determine if the project should be divided into
  two or more smaller projects (like the
  Just-In-Time Training Project was) because it is
  easier to manage smaller projects than larger
  ones.

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Summary Information for the Just-In-Time Training
Phase I Project
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Summary Information for the Just-In-Time Training
Phase I Project (continued)
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Initiating Process for Global Constructions
Just-In-Time Training Project
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Project Management Process Groups and Knowledge
Area Mapping
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Project Management Process Groups and Knowledge
Area Mapping (continued)
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Initiating Tasks

• Identify and understand project stakeholders.
• Prepare a business case for the project (if
  needed).
• Create the project charter.
• Hold a kick-off meeting.
• Develop a preliminary scope statement.

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Initiating Tasks

• Identify and understand project stakeholders.
• Prepare a business case for the project (if
  needed).
• Create the project charter.
• Hold a kick-off meeting.
• Develop a preliminary scope statement.

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Identifying and Understanding Project Stakeholders

• Project stakeholders are the people involved in
  or affected by project activities.
• Internal project stakeholders generally include
  the project sponsor, project team, support staff,
  and internal customers for the project. Other
  internal stakeholders include top management,
  other functional managers, and other project
  managers.
• External project stakeholders include the
  projects customers (if they are external to the
  organization), competitors, suppliers, and other
  external groups that are potentially involved in
  or affected by the project, such as government
  officials and concerned citizens.

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Stakeholder Analysis

• A stakeholder analysis provides information about
  key stakeholders to help manage relationships
  with them.
• Includes the following information
• Names and organizations of key stakeholders
• Their roles on the project
• Unique facts about each stakeholder
• Their levels of interest in the project
• Their influence on the project
• Suggestions for managing relationships with each
  stakeholder
• Because a stakeholder analysis often includes
  sensitive information, it should not be part of
  the official project plans, which are normally
  available for all stakeholders to review.

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Sample Stakeholder Analysis
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Exercise

• Fill the template for your own project.

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Initiating Tasks

• Identify and understand project stakeholders.
• Prepare a business case for the project (if
  needed).
• Create the project charter.
• Hold a kick-off meeting.
• Develop a preliminary scope statement.

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Preparing a Business Case for the Project

• Successful organizations initiate projects to
  meet business needs, and a common business need
  is to spend money wisely.
• A business case is a document that provides
  justification for investing in a project.
• It is a good idea to have one of the companys
  financial managers review the information for
  accuracy.

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Contents of a Business Case

• Introduction/Background
• Business Objective
• Current Situation and Problem/Opportunity
  Statement
• Critical Assumptions and Constraints
• Analysis of Options and Recommendation
• Preliminary Project Requirements
• Budget Estimate and Financial Analysis
• Schedule Estimate
• Potential Risks
• Exhibits

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Sample Business Case
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Sample Business Case (continued)
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Sample Business Case (continued)
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Exercise

• Fill the template for your own project.

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Initiating Tasks

• Identify and understand project stakeholders.
• Prepare a business case for the project (if
  needed).
• Create the project charter.
• Hold a kick-off meeting.
• Develop a preliminary scope statement.

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Creating a Project Charter

• A project charter is a document that formally
  recognizes the existence of a project and
  provides a summary of the projects objectives
  and management.
• It authorizes the project manager to use
  organizational resources to complete the project.
• Ideally, the project manager will play a major
  role in developing the project charter.
• Instead of project charters, some organizations
  initiate projects using a simple letter of
  agreement or formal contracts.
• A crucial part of the project charter is the
  sign-off section.

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Contents of a Project Charter

• Project Title and Date of Authorization
• Project Start Date
• Project Finish Date
• Other Schedule Information
• Budget Information
• Project Manager
• Project Objectives
• Approach
• Roles and Responsibilities
• Sign-off
• Comments

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Sample Project Charter
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Sample Project Charter (continued)
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Media Snapshot

• In television shows like Changing Rooms or
  Trading Spaces, participants have two days and
  1000 to update a room in their neighbors house.
  Because the time and cost are set, its the scope
  that has the most flexibility.
• Unlike most projects in which the project team
  works closely with the customer, homeowners have
  little say in what is done and cannot inspect the
  work along the way. They walk into their newly
  decorated room with their eyes closed.
• What happens when the homeowners dont like the
  work thats been done? The FAQ section of tlc.com
  says, Everyone on our show is told upfront that
  theres a chance they wont like the final design
  of the room. Each applicant signs a release
  acknowledging that the show is not responsible
  for redecorating a room that isnt to the owners
  taste.
• Too bad you cant get sponsors for most projects
  to sign a similar release form. It would make
  project management much easier!

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Exercise

• Fill the template for your own project.

56
Initiating Tasks

• Identify and understand project stakeholders.
• Prepare a business case for the project (if
  needed).
• Create the project charter.
• Hold a kick-off meeting.
• Develop a preliminary scope statement.

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Holding a Project Kick-off Meeting

• Experienced project managers know that it is
  crucial to get projects off to a great start.
• A kick-off meeting is a meeting held at the
  beginning of a project so that stakeholders can
  meet each other, review the goals of the project,
  and discuss future plans.
• Often used to get support for a project and
  clarify roles and responsibilities.
• The project champion should speak first and
  introduce the project sponsor and project
  manager.
• Often a fair amount of work is done to prepare
  for the meeting.

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Sample Kick-Off Meeting Agenda
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Exercise

• Fill the template for your own project.

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Initiating Tasks

• Identify and understand project stakeholders.
• Prepare a business case for the project (if
  needed).
• Create the project charter.
• Hold a kick-off meeting.
• Develop a preliminary scope statement.

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Developing a Preliminary Scope Statement

• A scope statement is a document used to develop
  and confirm a common understanding of the project
  scope.
• It describes in detail the work to be
  accomplished and is an important tool for
  preventing scope creepthe tendency for project
  scope to continually increase.
• It is helpful to create a preliminary, or
  initial, scope statement during project
  initiation so that the entire project team can
  start important discussions and work related to
  the project scope.
• There are usually several versions, and each one
  becomes more detailed as the project progresses
  and more information becomes available.

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What Went Wrong?

• There are many examples of poor scope management
  in the software industry. A highly publicized
  example is Nikes now infamous i2 supply-chain
  management problem. A software glitch from the
  400 million project cost Nike more than 100
  million in lost sales depressed its stock price
  by 20 percent triggered several class-action
  lawsuits and caused its chairman, president, and
  CEO, Phil Knight, to lament, This is what you
  get for 400 million...a speed bump.
• The Nike disaster provides a classic example of
  spending too much money on too much software and
  consulting, with too little to show for the
  effort. The company also moved too quickly in
  implementing new software without knowing how it
  might affect its older legacy systems. Nike has
  since recovered from this major software disaster
  and learned to be more patient in understanding
  and managing the scope of software projects.
• Christopher Koch, Nike Rebounds How (and Why)
  Nike Recovered from its
• Supply Chain Disaster, CIO Magazine (June 15,
  2004).

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A Swing is a Swing is a Swing?
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Contents of a Scope Statement

• Contents and length will vary based on the
  project.
• Typical contents include
• The product or service requirements and
  characteristics
• A summary of all deliverables
• The project success criteria
• References to related documents

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Sample Section of a Preliminary Scope Statement
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Exercise

• Fill the template for your own project.

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Chapter Summary

• The five project management process groups are
  initiating, planning, executing, monitoring and
  controlling, and closing. These processes occur
  at varying levels of intensity throughout each
  phase of a project, and specific outcomes are
  produced as a result of each process.
• Mapping the main activities of each project
  management process group into the nine project
  management knowledge areas provides a big picture
  of what activities are involved in project
  management.

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Chapter Summary (continued)

• Global Constructions Just-In-Time Training
  project demonstrates the process of initiating a
  project. Several pre-initiating tasks include
  determining the scope, time, and cost constraints
  for the project assigning the project sponsor
  and selecting the project manager meeting with
  the project manager to review the process and
  expectations for managing the project and
  determining if the project should be broken down
  into two or more smaller projects.
• The main tasks normally involved in project
  initiation include identifying and understanding
  project stakeholders, preparing a business case
  for the project, creating the project charter,
  holding a kick-off meeting, and developing a
  preliminary scope statement.