Starting Out in Project Management

Starting Out in Project

ManagementThird edition

Association for Project Management

Association for Project ManagementIbis House, Regent Park

Summerleys Road, Princes RisboroughBuckinghamshire

HP27 9LE

© Association for Project Management 2018

First published 2004Second edition 2007

Third edition 2018

All rights reserved. No part of this public a tion may be repro duced, stored in a retrieval system, or trans mit ted, in any form or by any means, without the express permis sion in writing of the

Association for Project Management. Within the UK excep tions are allowed in respect of any fair dealing for the purposes of research or private study, or criti cism or review, as permit ted under the Copyright, Designs and Patents Act, 1988, or in the case of repro graphic repro duc tion in

accord ance with the terms of the licenses issued by the Copyright Licensing Agency. Enquiries concern ing repro duc tion outside these terms and in other coun tries should be sent to the Rights

Department, Association for Project Management at the address above.

The authors, Peter Simon and Ruth Murray-Webster, have asser ted their moral right under the Copyright, Designs and Patents Act, 1988 and subsequent amend ments to be

iden ti fied as the authors of this work.

British Library Cataloguing in Publication Data is avail able.Paperback ISBN: 978-1-903494-72-1

eISBN: 978-1-903494-73-8

Cover design by Fountainhead Creative ConsultantsTypeset by RefineCatch Limited, Bungay, Suffolk

in 11/14pt Foundry Sans

v

Contents

List of figures x

Foreword xii

Preface xiii

Fundamental features of project management Introduction 3

1 Project manage ment 5Projects and project manage ment 5What is a project? 5Projects and business-as-usual 6Project manage ment 7Project manage ment processes 9The rela tion ship between time, cost and quality 11

2 Programme manage ment and port fo lio manage ment 15Programmes and port fo lios 15What is a programme and what is programme manage ment? 15What is a port fo lio and what is port fo lio manage ment? 17

3 Organising for projects 19The differ ent roles and respons ib il it ies required in the manage ment of projects 19Governance and spon sor ship of projects 21The project manage ment office 21Methods, processes and proced ures 22Organisation struc tures 22

4 Project life cycles 27The project life cycle and project life cycle phases 27The reasons for split ting projects into phases 28Formal gate reviews 30Other types of life cycle 32Waterfall versus agile 33

vi

Contents

5 Teamwork and lead er ship 35Project team, team work, team build ing and team devel op ment 35Leadership and the role of the leader 37

6 Conflict manage ment and nego ti ation 41What is conflict manage ment? 41How can the project manager manage conflict? 42Negotiation in project manage ment 43

The concept (idea) phase Introduction 49

7 Project context 51PESTLE analysis 52Legal require ments 53Sustainability 54

8 Stakeholder engage ment 55Stakeholders 55Stakeholder engage ment 55Stakeholder analysis 57

9 Requirements manage ment 59Requirements 59Requirements manage ment 59Requirements manage ment through the project life cycle 62

10 Communication 65Communication and the contents of a commu nic a tion plan 65Barriers to commu nic a tion 67

11 Project success 71Outputs, outcomes and bene fits 71Project success criteria and key perform ance indic at ors (KPIs) 72Benefits 74Success factors 76Organisational change manage ment 78

12 Business case 79Ownership of a busi ness case 79The purpose and content of the busi ness case 80Investment appraisal 81Funding 82

vii

Contents

The definition (planning) phase Introduction 87

13 Scope manage ment 89Decomposing scope into manage able chunks 91Using a Responsibility Assignment Matrix (RAM) 92Managing scope through out the project 95

14 Quality manage ment 97What is quality and what is quality manage ment? 97The four elements of quality manage ment 99

15 Health, safety, secur ity and envir on mental (HSSE) manage ment 103Health and safety 104Security 104Environment 104

16 Risk manage ment 107Risks to project object ives 107A typical project risk manage ment process 110The use of a risk log 112Analysis of overall project risk 113

17 Estimating 115The estim at ing funnel 115Estimating methods 117

18 Scheduling 121Key concepts in schedul ing 121Milestones 125

19 Resource manage ment 129Resource manage ment/optim isa tion, resource smooth ing and resource level ling 129Resource crit ical path/crit ical chain 131

20 Procurement 135Procurement 135The purpose of a procure ment strategy/plan 135Supplier remu ner a tion (paying suppli ers) 138

21 Budgeting 141Creating a budget 141Cost contin gency 142

viii

Contents

22 The project manage ment plan 145What is the PMP? 145Why have a PMP? 146

The development (execution) phase Introduction 151

23 Issue manage ment 153Issues and issue manage ment 153Issues and risks 153

24 Change control 157Project change and the use of a change request 157Change freeze 158Project change control 159The steps involved in a change control process and the use of the change log (register) 160

25 Configuration manage ment 165Configuration iden ti fic a tion and config ur a tion control 165Why use config ur a tion manage ment? 167

26 Monitoring and control 169Monitoring 169Earned value manage ment 171Control 174Cost control and cost manage ment 174

27 Information manage ment and report ing 177Information manage ment 177Project report ing 178

The handover and closure (completion) phase Introduction 183

28 Handover and Closure 185Handover 185Closure 186

29 Post-project reviews and know ledge manage ment 189Conducting a post-project review 189The import ance of a post-project review 190Knowledge manage ment 192

ix

Contents

Extended and product life cycle phases Introduction 195

30 Extended and product life cycle phases 197Benefit real isa tion and meas ure ment 197Organisational change manage ment 197Benefits track ing 199Benefits real isa tion reviews 199Operations 199Termination 200Total cost of owner ship 200

Glossary 201

Index 217

x

List of figures

1.1 Fundamentals of project manage ment – over view 31.2 Projects and business-as-usual 71.3 Balancing managing and doing 81.4 Project manage ment processes 101.5 The project manager’s ‘trilemma’ 132.1 Programme spiral life cycle 162.2 A port fo lio 183.1 Project organ isa tional roles 203.2 Organisation struc tures 234.1 Project Children’s Hospice (PCH) life cycle 294.2 Gate reviews provide confid ence 314.3 Extended and product life cycles 325.1 The project team 365.2 Good project managers lead groups into becom ing a team 386.1 Ways of managing conflict 426.2 A five-stage nego ti ation process 437.1 Concept (idea) phase – over view 497.2 Understanding project context 518.1 All stake hold ers must be engaged 568.2 A stake holder analysis tool (stake holder cube) 589.1 Requirements manage ment 6010.1 Methods of commu nic a tion 6610.2 Communication Plan for PCH 6811.1 Success criteria 7311.2 Success criteria and bene fits 7511.3 Critical success factors 7712.1 Purpose of the busi ness case 7912.2 Contents of the busi ness case 8113.1 Definition (plan ning) phase – over view 8713.2 Project scope and object ives 9013.3 Product break down struc ture/work break down struc ture

(PBS/WBS) for PCH 93

xi

List of figures

13.4 Responsibility assign ment matrix for PCH 9414.1 Fit for purpose 9814.2 Elements of quality manage ment 10115.1 Health, safety, secur ity and envir on mental (HSSE) in prac tice 10316.1 Risks can be oppor tun it ies or threats 10816.2 A project risk manage ment process 11116.3 A simple risk log for PCH 11317.1 The estim at ing funnel 11617.2 Different methods of estim at ing 11817.3 A journey to work using a three-point estim ate and the

PERT formula 11918.1 Network diagram for PCH 12218.2 Gantt chart for PCH 12318.3 Gantt chart showing total and free float for PCH 12618.4 Milestone plan for PCH 12819.1 Resource smooth ing and level ling 13119.2 Resource crit ical path or crit ical chain 13320.1 Project procure ment process 13620.2 Ways of paying suppli ers 13821.1 Base costs plus contin gency 14222.1 Purpose and content of the project manage ment plan (PMP) 14522.2 Agreeing the PMP 14623.1 Development (execu tion) phase – over view 15223.2 Escalate to resolve issues 15424.1 Many things lead to a change 15824.2 If only we had used formal change control 15924.3 A change control process 16125.1 Configuration items 16625.2 Configuration item status 16726.1 Gantt chart showing progress for PCH 17026.2 Example of earned value manage ment – planned cost curve 17226.3 Example of earned value manage ment – with actual costs 17326.4 Example of earned value manage ment – earned value 17327.1 Reporting project status 17928.1 Handover and closure (comple tion) phase – over view 18328.2 Project handover and closure 18629.1 Post-project review 19030.1 Organisational change manage ment 198

xii

Foreword

As a modern, professional body, we recognise the need to develop talent for the future by ensuring that the next generation of project manager is equipped with the core skills required and given clear guidance and support throughout their career journey.

Since its release in 2004 Starting Out in Project Management has built a deserved reputation as the ‘go-to guide’ for those new to project management. The text is easy-to-follow and the diagrams are easy-to-understand. In fact, it’s an easy read from start to finish.

The latest edition builds on that success and is sure to reward anybody who is curious to learn more, for example, not just about the time, cost, quality triangle, but the project manager’s trilemma in trying to balance them.

Starting Out is written as an introductory text, as a good general read, as a reference book – and as an enduring source of inspiration for any aspiring project manager.

Association for Project Management– the chartered body for the project profession

January 2018

xiii

Preface

When we wrote the first edition of this book in 2003, our respect ive chil dren Amy, Kirsty, Joel, Megan, Lois (Simon) and Josh and Helen (Murray-Webster) were all in either univer sity or school (or pre-school) and project manage ment was strug gling to break out of its tradi tional roots and into the modern world of busi ness and fast-moving organ isa tional change. The second edition, published 10 years ago in 2007 was updated slightly, but progress in modern ising project manage ment was slow. We are delighted with the sales of that book and it is our priv ilege to be asked to write this third edition. What is really pleas ing for us is to see project manage ment coming of age as an essen tial, business-critical discip-line, and a chartered profes sion. More amazing has been to watch our chil dren and their part ners move either directly or indir ectly into the world of project manage ment and put into prac tice the profes sion that has served us well and that we care so much about. It is with partic u lar pride too that we can attrib ute the modern ised figures for this edition to Josh Murray-Webster. Until the fourth edition . . .

Peter SimonRuth Murray-Webster

Fundamental features of project manage ment

3

Introduction

In this section we discuss some of the main concepts that under pin project manage ment. These include the recog ni tion that projects are differ ent from business-as-usual, and that along side projects we have other mech an isms for deliv er ing planned change called programmes and port fo lios.

We will also discuss the key roles needed to ensure that projects are success fully delivered. These include the sponsor and project manager who work with the project team and with busi ness users to deliver a project, report ing to a steer ing group/commit tee. We touch on the ways an organ isa tion can set itself up to deliver projects, recog nising that differ ent arrange ments suit differ ent situ ations.

The idea of a project life cycle is the key differ en ti ator between projects and business-as-usual. All projects follow a life cycle of some descrip tion, and we will outline the basic ideas of a project life cycle and of the exten ded and product life cycles.

Finally, projects are delivered by people and an ability to lead teams, nego ti ate and resolve conflicts is a vital skill, so we outline the basic elements of team work, lead er ship, conflict manage ment and nego ti ation.

Fundamentals ofproject management

Projectmanagement

Programme &portfoliomanagement

Organisingfor projects

Projectlife cycle

Teamwork &leadership

Conflictmanagement& negotiation

Figure 1.1 Fundamentals of project management – overview

5

1

Project manage ment

Projects and project management

Projects and project manage ment have been around for a very long time. Some of the iconic build ings and struc tures we all know were created over 5,000 years ago and it is clear that they could not have been construc ted without a great deal of plan ning and organ isa tion. However, the discip line of project manage ment as we know it today has been around not nearly so long. Many argue that it is less than 50 years old (from the time of the North Sea oil boom and the first major nuclear power stations), while others suggest that it is more like 100 years. Henry Gantt of ‘Gantt chart’ fame published his book Organizing for Work in 1919. It doesn’t really matter when it all started. What is import ant is that in today’s fast-moving world the success ful deliv ery of projects has never been more import ant.

What is a project?

At its simplest level the word project is used to describe activ it ies that are done to meet specific object ives for change. Changes that are managed as projects can be amend ments to things that already exist, or the intro duc tion of new things. It can involve new products, new services, or improve ment to exist ing products or services. Whatever the cause of the change and the nature of the project, the prin ciples of project manage ment always apply.

Even though project work involves doing new things, it still needs to be controlled, so that the specific object ives are met and the organ isa tion actu ally gains the desired bene fits. One way that this control is achieved is by setting targets or constraints for time, cost and quality. Some people and some organ-isa tions prefer to use the term perform ance rather than quality. For a ‘start ing out’ book we can use the terms quality and perform ance inter change ably, both meaning that the project needs to meet defined stake holder require ments. When we talk about stake hold ers in project manage ment, we mean the organ-isa tions or people who have an interest or role in the work, or are impacted by it.

Starting Out in Project Management

6

Project work is rarely ever done within a single part of an organ isa tion, e.g. contained within one depart ment or using a single special ist group. Project work cuts across tradi tional bound ar ies and requires people to come together tempor ar ily to focus on achiev ing the specific project object ives. As a result, effect ive team work is central to projects.

Doing new things means that the project’s outputs, outcomes and/or bene fits can never be predicted with certainty. Uncertain situ ations are all around us, but the nature of project work means that there tends to be lots of uncer tainty that might affect the project. For example, it is not possible to know with any degree of certainty how long it will take to create a new design; or to build some thing that uses new tech no logy. Likewise, it is not possible to know if a team who have not worked together before will be effect ive, or whether a new product, e.g. a Formula One racing car, will perform until it is actu ally tested, or whether a new smart phone will sell in the numbers expec ted. The fact that projects are uncer tain means that project managers need to clearly under stand the under pin ning assump tions being made by stake hold ers, and actively manage risk through out the life of the project.

All of the points made so far help define project work as distinct from other sorts of work. Most organ isa tions will be able to separ ate those tasks that are done to main tain the business-as-usual or oper a tional activ it ies from those things that are done to intro duce change, i.e. projects (and programmes).

Projects and business-as-usual

The main way in which projects are differ ent from the routine busi ness of work is asso ci ated with the unique ness of projects. While routine work involves the repe ti tion of processes in a way that gives consist ency and reli ab il ity, project work involves doing new things, or modi fy ing exist ing methods and prac tices. This means that project work, unlike business-as-usual, will always have a defined start and an end point, and a partic u lar and unique scope of work to do between those points.

Taking all these consid er a tions together, projects can be said to have the follow ing features:

n unique endeav our with defined start and finish pointsn under taken to achieve specific object ives for changen carried out within defined time, cost and quality constraints

7

Project manage ment

Businessas-usual

Specific objectives

Outcomes

Need to changeBusiness benefits

achieved

Time

Scope

Cost Quality

Figure 1.2 Projects and business-as-usual

n requires team-working across tradi tional depart mental bound ar iesn deliv ers outputs that enable outcomes to the busi ness that are bene fi cialn neces sar ily involves risk that needs to be managed.

Business-as-usual does not meet these criteria.

Project Children’s Hospice (PCH)

You have been approached by a friend to be part of an initi at ive to raise funds for your local chil dren’s hospice. You work in the headquar ters build ing of a company along with 500 other people. Your friend would like you to organ ise a fund-raising event to take place during normal working hours in exactly 10 weeks’ time. This coin cides with a number of other fundrais ing initi at ives that will be happen ing for the same cause on the same day. Your initial object ives are to involve as many people as possible and to raise at least £10,000 for the charity.

Starting Out in Project Management

8

Project management

If projects are used to intro duce change, it follows that project manage ment is primar ily about organ ising and controlling the intro duc tion of the desired change.

The words or phrases that tend to be used to describe project manage ment include:

n under stand ing the needs and require ments of all the stake hold ersn plan ning what work needs to be done, when, by whom and to what stand ardsn build ing and motiv at ing the team to achieve the planned workn coordin at ing the work of a range of differ ent peoplen monit or ing that the work is being done to plan (time, cost and quality/

perform ance)n taking action to keep the planned work on track, or to change the plan in a

controlled way if that is the best way to achieve the change object ivesn deliv er ing success ful results (outputs, outcomes and/or bene fits).

Project manage ment should be a service to the organ isa tion that is request ing the change, and is the process by which control is exerted over the project in order to achieve a desired end point.

Some projects have a dedic ated project manager who takes respons ib il ity for deliv er ing the project object ives to time, cost and quality. Where this is the case

Specific objectivesfor change

Workcontent

Projectmanagement

Business benefits

Both work content and project management need to be given equal priority

Figure 1.3 Balancing managing and doing

9

Project manage ment

it will be easy to see that the work the project manager does is focused on the points in the bulleted list above.

Some projects have a project manager who addi tion ally takes on the role of a tech nical special ist within the project team, e.g. a busi ness analyst who is both managing the project to estab lish feas ib il ity for a new computer system, and doing the busi ness analysis them selves, or a manager of a hockey team who is both managing the organ isa tion of a major tour na ment and playing in the tour na ment on the day.

When this happens – and it does all the time when projects are small or contained primar ily within one part of the organ isa tion – it is really import ant that the project manager focuses just as much on the manage ment of the project as on complet ing the work that must be done for the project to be a success.

Project Children’s Hospice (PCH)

You are the project manager for Project Children’s Hospice (PCH). It is your respons ib il ity to plan what needs to be done, making use of as many of the staff members as is prac tical. As you are an expert in commu nic a tions manage ment, you will prob ably design and carry out the commu nic a tions element of the project your self. It is clearly your respons ib il ity to monitor the work as it progresses, as well as motiv ate and coordin ate your project team.

Project management processes

Processes are things that turn inputs into outputs.It follows, then, that project manage ment processes turn inputs,

includ ing things such as user require ments or tech nical specific a tions, into those outputs that will achieve the specific change object ives, e.g. new products or services.

Project manage ment processes include:

n a start ing or initi at ing process that secures agree ment to begin a portion of work

n a plan ning process that takes an input and turns it into a set of integ rated plans against which to imple ment the project. As the project progresses there is

Starting Out in Project Management

10

invari ably a need for a re-planning process to reflect project progress or changes in object ives

n a monit or ing process that meas ures the progress of a project against its plan, whether it is ahead or behind sched ule, over-spending or under-spending against budget, or deliv er ing outputs that meet the desired perform ance or quality object ives

n a controlling process that reacts to the inform a tion gathered during monit or-ing, and enables decisions to be made to correct late ness, over-spending or poor quality

n a learn ing process that takes an input such as a finished project and turns it into a set of amended guidelines, processes and check lists for the next project

n a closing process that form ally concludes a portion of work.

You will see a pattern among these processes. They are not specific to any partic u lar project or any project phase; rather, they are the things that happen on all projects and in all phases of a project. They are the things concerned with project manage ment in general, rather than any specific project.

The labels and terms used to describe a partic u lar project process may vary. Sometimes it is easy to become confused between the labels given for project manage ment processes and the labels given for the phases in a project life cycle. This will be explored further in Chapter 4, which deals specific ally with the project life cycle.

Start

Close

Learn

PlanReplan

Control

Monitor

Figure 1.4 Project management processes

11

Project manage ment

The fact is, theor et ical terms rarely matter. What does matter in prac tice is that you not only under stand the terms that are used in your organ isa tion, but also that you can compare and contrast them with other terms used in published liter at ure about project manage ment as a means of under stand ing what your organ isa tion does and why.

Project Children’s Hospice (PCH)

Your project to raise money for the chil dren’s hospice charity is made up of four distinct phases: concept, defin i tion, devel op ment and handover and closure. These phases make up the life cycle for your project.

To apply project manage ment processes, each phase needs to be started, planned, monitored, controlled and closed, having learned any lessons for future projects.

PCH day will take place in exactly 10 weeks. This date is not move able. You have talked to your boss who is the HR director. She supports the project and has agreed to act as sponsor but has intro duced the follow ing new constraints, within which you must manage the project:

n Whatever you do must not offend anyone.n The whole project must not eat up more than 1,000 hours of work time

for staff, includ ing you.n There should be no more than £500 of external expendit ure.n The company should get good press through local news pa per, radio and

TV cover age.

The relationship between time, cost and quality

Time, cost and quality are the three attrib utes that are typic ally described as either object ives or constraints for any project. For example:

n The project must be completed by 31 December 2020.n The project must not spend more than £500,000.n The products and services created must meet specific a tion X456.

Starting Out in Project Management

12

Sometimes these attrib utes are altern at ively stated as sched ule, budget and perform ance, but here we will refer to time, cost and quality. The rela tion ship between these three attrib utes is at the heart of project manage ment.

It is unlikely that any project could ever achieve object ives that are considered to be the quick est, the cheapest and the best, even though that is what we would all like. In fact, if a project has to be delivered to meet a chal len ging finish date, it is likely that it will cost the organ isa tion more overall than if it had a more relaxed sched ule. Likewise, if a project has to achieve a tight specific a tion for quality, it will prob ably cost more or take longer than it would have if the quality require ments had been reduced.

Projects are inten ded to be planned taking the relat ive prior it ies of time, cost and quality into account at the start, but given the chal lenges of estim at ing and the inher ent uncer tain ties within projects, it is perhaps no surprise that projects need to adjust over time and that (for example) projects involving public safety end up taking longer and costing more than origin ally planned because, during deliv ery, quality is given greater prior ity than time and cost. Similarly, projects that need to be completed by a certain date, perhaps build ing a new stadium for a planned sport ing event, almost invari ably cost more than planned and/or have a finished product that is to a lower specific a tion than was origin ally conceived.

Projects are unique, and initial plans that reflect time, cost and quality object ives are, in reality, ‘educated guesses’ that need to be imple men ted in an uncer tain world. In such a scen ario, it is rare for the project to proceed exactly to plan. The more usual situ ation is that some thing happens that requires the project manager to make a ‘trade-off’ – to take more time to achieve the specific a tion, to spend more money to hold the dead line, or to agree reduced quality in order to hold the time and cost plans.

Because such dilem mas typify project manage ment, the trian gu lar rela tion ship between time, cost and quality is often called the ‘iron triangle of project manage ment’ or the ‘project manager’s trilemma’.

Often the area inside the triangle is said to repres ent the project scope, i.e. all the work that has to be done to achieve the time, cost and quality object ives. This is clearly another attrib ute of the project that can be varied as long as the project manager can be certain that an amended scope will still deliver the outcomes and bene fits that the organ isa tion requires from the change. A reduc tion in scope means that less work will be done, which then makes time and cost object ives more achiev able. Sometimes there is a confu sion between scope and quality. Scope defines the outputs of the project. Outputs are usually phys ical things, such as a docu ment, a wall or a pump. Quality defines the grade or specific a tion

13

Project manage ment

that the project outputs (the docu ment, wall or pump in this example) need to be delivered to. Some parts of the scope (outputs) can be less tangible, such as changes in beha viour of staff. In this case defin ing quality can be more diffi cult but is still required.

It follows, then, that the most import ant thing for a project manager to under stand when balan cing the time, cost and quality object ives is the relat ive prior ity of object ives for the client organ isa tion. Is it more import ant to finish on time, on budget or to the right quality?

Project Children’s Hospice (PCH)

For Project Children’s Hospice you under stand the relat ive prior it ies to be: first, time, because the date is fixed; second, cost, because your boss has given you an effect ive maximum budget; and third, quality (in terms of posit ive aware ness gener ated and funds raised), as no prom ises have been made to the national charity.

Scope

Time

QualityCost

What comes first?

Figure 1.5 The project manager’s trilemma