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Instructor's Manual to Accompany
Information Technology
Project Management,
Third Edition
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Instructor’s Materials Prepared by
Kathy Schwalbe, Ph.D., PMP
Companion Web Site: www.course.com/mis/schwalbe
Instructor’s Manual to accompany Information Technology Project Management, Third Edition is published by
Course Technology.
Editor for Course Technology
Janet Aras
©2004 Course Technology
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Table of Contents
Contents of the Instructor’s Manual ......................................................................................................... 5
Preface ................................................................................................................................................... 6
Chapter 1 ................................................................................................................................................. 9
Chapter 2 ............................................................................................................................................... 13
Chapter 3 ............................................................................................................................................... 17
Chapter 4 ............................................................................................................................................... 20
Chapter 5 ............................................................................................................................................... 24
Chapter 6 ............................................................................................................................................... 29
Chapter 7 ............................................................................................................................................... 34
Chapter 8 ............................................................................................................................................... 38
Chapter 9 ............................................................................................................................................... 42
Chapter 10 ............................................................................................................................................. 45
Chapter 11 ............................................................................................................................................. 49
Chapter 12 ............................................................................................................................................. 54
Appendix A............................................................................................................................................ 58
Appendix B ............................................................................................................................................ 59
Appendix C ............................................................................................................................................ 60
Appendix D............................................................................................................................................ 61
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Contents of the Instructor’s Manual
This Instructor’s Manual is designed to provide a starting point for your teaching effort. For each chapter in
the Information Technology Project Management, Third Edition textbook, this manual provides the following:
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Chapter Overview – The chapter overview provides you with a summary of the material covered in
the chapter. The chapter overview may also include Technical Notes.
Chapter Objectives – a bulleted list of the learning objectives listed in the book.
Instructor Notes – The instructor notes provide lesson plans, additional information on the topic at
hand, and references to figures in the textbook.
Classroom Activities – These optional activities provide ideas for increasing student engagement and
reinforcing important concepts and skills.
Troubleshooting Tips- The troubleshooting tips provide detailed information on common technical
errors and conceptual problems students might encounter, as well as basic solutions for you to offer.
Quick Quizzes – These quizzes can provide a break in the lecture to get students thinking and can also
be used as a pop quiz or quick review
Discussion Questions – thought provoking questions and real world situations to involve students in
the topic at end of lecture, while tying together previous class sessions. Should be more than one line
question expecting a one-line answer. Should have no “right” answer, meant to expand the mind.
Key Terms – important terms covered in text that students should know; something that instructors
can easily print out and hand to students.
Note:
Solutions to end-of-chapter materials are now included in a separate document, as are sample syllabi.
There is also a separate document with additional activities for students.
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Preface
Suggestions on Teaching a Project Management Course
Running a course in project management as a project itself is a great way for students to understand, apply, and
reflect on the material. This technique adds variety to each class by using the students as resources. Several
teaching strategies to promote this approach include surveying students in class, using student presentations,
group projects, a class Web site, and other forms of technology to enhance teaching and learning, and
encouraging outside reading.
Class Survey
Have students introduce themselves and fill out a survey with contact information and their expectations for the
course, their strengths, and their weaknesses. You can refer to the sample survey on pg. vii. Knowing basic
information about each student enables you to take advantage of the contributions each student can make to the
class.
Student Presentations and Group Projects
Students should give presentations and work on group projects during the course. Group presentations and
projects help them understand and apply the concepts they are learning. Two sample syllabi (see the separate
document with sample syllabi) are provided to help you plan your course to include these student presentations
and projects. Try experimenting with different ways to teach the material, and use students as a resource to
help develop and test new ideas.
If possible, try to find real-world projects for students to work on in groups as part of class. It is a good idea to
have a few project ideas before the course starts, and let each student propose a project for a homework
assignment early in the term. Many projects can provide services for the instructor, his or her department, the
college, or local community groups or companies. Many organizations need Web pages, databases, systems
analysis, and computer training. Students can also do group projects based on running cases in the textbook
and on the companion Web site.
Using Other Technology to Enhance Teaching and Learning
Since the textbook focuses on information technology projects, it is very effective to apply information
technology to teach the course. The Web is a great tool for organizing information. You can keep copies of
lecture notes, the course syllabus, student presentations, and links to course-related web sites on a class Web
site. Students appreciate receiving hardcopies of PowerPoint lecture slides to use for notes during class. You
can also require students to use the computer when giving their presentations, providing group project status
information, and to communicate outside of class time with you and each other.
Most students want to enhance their knowledge of software, and they enjoy learning Microsoft Project 2002.
Students get a 120-day copy of this software with the textbook, and you should expect them to go through most
of Appendix A on their own. You could require students to use Project 2002 for each group project and give
them a take-home exercise using this software or make a Project 2002 assignment part of an exam. Try to
spend some time in class providing hands-on instruction in Project 2002 to get the students started in using this
powerful software.
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Encouraging Outside Reading
Encourage students to read books and articles related to the course. For example, you could require students to
read Stephen Covey's The 7 Habits of Highly Effective People as part of their reading requirement. This bestselling book provides a good basis for discussing human resources management and communications. Students
could give short presentations on each habit and relate how it applies to project management. Several other
books that you can use in a similar fashionare mentioned in the list of suggested readings at the end of each
chapter and in this Instructor Manual. For example, other texts related to the people side of project
management include Frederick Brooks’ "The Mythical Man-Month," Vijay Verma's "Organizing Projects for
Success," and David Keirsey's "Please Understand Me II." You could also assign more technical books such as
Eliyahu Goldratt’s “Critical Chain,” Peter Pande’s “The Six Sigma Way,” or have students find several
references on a specific topic for a presentation or paper.
Contact the Author
Feel free to share your suggestions at any time by e-mailing me at [email protected]. My personal web
pages are available at www.augsburg.edu/ppages/~schwalbe or www.kathyschwalbe.com. My home page
includes a link to information related to project management, links to articles about project management,
sample student projects, and so on. Also be sure to use the new companion Web site at
www.course.com/mis/schwalbe.
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Class Survey
Name: _________________________
Major: _________________________
Daytime Phone: _________________
Brief job description:
1. In this class, all students are resources.
this class?
E-mail address: ______________________
Minor: _____________________________
Employer: __________________________
What are some of your abilities/strengths as they might relate to
2.
What are some of your weaknesses or areas you would like to improve?
3.
What are you most interested in learning from this class?
4.
Are you currently working on a project or have you recently completed one? Please describe the project
below.
5.
For the group project, team members will need skills in several areas. Please rank yourself on a scale of 1
to 10 (10 being best) on each of the skills listed below.
 Real project experience
 Customer interaction
 Research skills
 Writing skills
 Presentation skills
 Software skills (project management software)
 Web site creation
 Leadership
 Teamwork facilitation
6.
List any questions or concerns on the back of this page. Thanks!
ACADEMIC HONESTY:
I have read and understand the policies regarding academic honesty. I understand how they apply to this
course, and I pledge myself to abide by the policies and work to create an atmosphere of academic integrity on
the campus.
Signature: _____________________________
Date: ____________________
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Chapter 1
Introduction to Project Management
Chapter Overview
Chapter 1 provides an introduction to the field of project management, emphasizing the area of
information technology projects. It defines what a project is, what project management entails, and other
key terms. It also relates project management to other disciplines, provides a brief history of project
management, and discusses the project management profession.
Chapter Objectives
1. Understand the growing need for better project management, especially for information technology
projects
2. Explain what a project is and provide examples of information technology projects
3. Describe what project management is and discuss key elements of the project management framework
4. Discuss how project management relates to other disciplines
5. Understand the history of project management
6. Describe the project management profession, including recent trends in project management research,
certification, and software products
Instructor Notes
Introduction
To provide motivation for students to study project management, mention the statistics found on p. 2:
 The U.S. spends $2.3 trillion on projects every year, an amount equal to one-quarter of the nation’s
gross domestic product.
 The world as a whole spends nearly $10 trillion of its $40.7 trillion gross product on projects of all
kinds.
 More than sixteen million people regard project management as their profession.
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On average, a project manager earns more than $82,000 per year.
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More than half a million new information technology (IT) application development projects were
initiated during 2001, up from 300,000 in 2000.
Also mention the figures in the What Went Wrong section, especially the fact that only 16.2% of
information technology projects were considered successful in the 1995 CHAOS study.
Good project management is very important to making effective use of information technology and people.
What is a Project?
Many people do not understand the basic characteristics of projects. Stress the definition of a project – a
temporary endeavor undertaken to create a unique product or service. The attributes of a project should be
noted, as well. A project:
 has a unique purpose
 is temporary
 requires resources (often from various areas)
 should have a primary sponsor or customer
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 involves uncertainty.
Describe several projects with which you are familiar. Students like to hear about their instructor's
experiences. Also discuss the triple constraint of project managementbalancing scope, time, and cost
goals. Use a visual example that will help students remember scope, time and cost (I describe a Far Side
coffee mug I have with Einstein in thick spectacles (specs are like the project scope), looking puzzled at an
equation he wrote on a chalkboard. At the end of a complicated math proof is a conclusion that time = $.
This visual example helps students remember scope, time, and cost.) Give examples of each constraint on
various projects you are familiar with. Some of these examples should have a stronger emphasis on scope,
and others should be more focused on time and cost. The project management course, itself, could be used
effectively as an example of a project. Time and cost of the course are fairly inflexible, so the main
constraint you can control is the scope.
What is Project Management?
There are several important concepts in this section. Project management is the application of
knowledge, skills, tools, and techniques to project activities in order to meet project requirements. Note
that this definition has changed in the PMBOK Guide 2000 to emphasize meeting project requirements,
not stakeholder needs and expectations from a project, as stated in the 1996 version. Figure 1-2 provides a
great visual framework for discussing this definition. Review the other definitions. Students appreciate
seeing a preview of what new tools and techniques they will learn in a class. Show the class examples of a
WBS, Gantt chart, network diagram, and earned value chart as a few tools unique to project management
that they will learn about.
How Project Management Relates to Other Disciplines
Explain that project management overlaps with general management knowledge and practice, as well as
with the project's application areas, knowledge, and practice. Give examples to distinguish unique aspects
of each discipline. Describe how you think managing information technology projects is different from
managing other types of projects, such as building a home.
History of Project Management
Briefly summarize the history of project management and emphasize that many organizations and
industries are still struggling to understand and apply good project management to their unique situations.
The Project Management Profession
Students are usually very interested in learning more about career options. Many may not have considered
being project managers or their roles as project team members. Highlight the career information in Table
1-2 on p. 19. Note that information technology project managers have the highest annual salary ($95,719)
in the top ten list of most in demand information technology skills/job. Invite a guest speaker to come in
and discuss what it is like to be a project manager. Many local chapters of PMI are available and members
are glad to speak to students about the project management profession. The PMP certification and code of
ethics are also important parts of the profession that should be discussed. Students should also be aware of
the growth in project management software products in the past few years. Let them know that they do
have a copy of Project 2002 in the back of the text and instructions on using it in Appendix A.
Classroom Activities
1.
Triple Constraint Exercise:
Have students form two-person groups to discuss the triple constraint in more detail. Have one person
explain in his/her own words what the triple constraint means and give an example of it on a real
project. Assign roles to the students. One student should be the "talker” and the other person the
“listener” who will actively listen to his teammate, ask questions, take notes, and be ready to share
information with the class. Give students 5-10 minutes for the exercise. Then ask for volunteers to
describe a project they discussed that did not go well and why. Have them explain the scope, time,
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2.
and cost constraints and how the project fared on each. Then ask for an example of a project that went
very well. Continue getting examples as time and interest allow.
Project Attributes Exercise:
Have students form 3-4 person groups to relate the project attributes listed on pp. 4-5 to their project
management class. Then have them discuss their expectations as major stakeholders in the class.
What do they expect to get out of the class? What do they expect from the instructor, their classmates,
and themselves in order for the class to be a success? Have each group present their findings, and
collect their recorded comments.
Troubleshooting Tips
Strong starts are very important on projects and in classes. Project your own enthusiasm for project
management and teaching. Take time to have students fill out a survey (sample provided in this manual)
and introduce themselves. Include a fun topic to add to general introductions. For example, in addition to
having everyone say what their major is, where they work, and so on, have students describe one thing that
is unique about them that most people wouldn't know about. Other ideas would be to have students
describe their favorite hobby, favorite food, and so on. When introducing yourself, provide your response
to the additional introductory question, too. Set a good tone for the entire course, and encourage lots of
participation. Try the above classroom activities or similar ones to get students engaged in the course and
to help them meet their classmates.
Quick Quiz
1.
2.
3.
4.
What three knowledge areas comprise the triple constraint of project management?
ANSWER: scope, time, and cost
Name two tools and techniques that are unique to project management.
ANSWER: Any of the following: project charter, WBS, Gantt chart, network diagram, critical path
analysis, cost estimates, earned value management, or any item listed in Table 1-1 on pages 11-12.
Modern project management began with what project?
ANSWER: The Manhattan Project
What is the designation for people certified as project managers by the Project Management Institute?
ANSWER: PMP (which stands for Project Management Professional)
Discussion Questions
1.
2.
3.
Why is the topic of project management getting more attention lately?
What do you think about the CHAOS studies definition of a successful project? Do you think there
can be other definitions of success besides meeting scope, time, and cost goals?
Can recent college graduates expect to be project managers right away? What is a typical career path
for a project manager?
Key Terms
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critical path — the longest path through a network diagram that determines the earliest
completion of a project
enterprise project management software — software that integrates information from multiple
projects to show the status of active, approved, and future projects across an entire organization
Gantt chart —a standard format for displaying project schedule information by listing project
activities and their corresponding start and finish dates in a calendar format
program — a group of projects managed in a coordinated way
project — a temporary endeavor undertaken to create a unique product or service
project management — the application of knowledge, skills, tools, and techniques to project
activities in order to meet project requirements
Project Management Institute (PMI) — international professional society for project managers
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project management knowledge areas — project integration management, scope, time, cost,
quality, human resource, communications, risk, and procurement management
Project Management Office (PMO) — an organizational group responsible for coordinating the
project management functions throughout an organization
Project Management Professional (PMP) — certification provided by PMI that requires
documenting project experience and education, agreeing to follow the PMI code of ethics, and
passing a comprehensive examination
project management tools and techniques — methods available to assist project managers and
their teams.
project manager — the person responsible for working with the project sponsor, the project
team, and the other people involved in a project to meet project goals
project portfolio management — when organizations group and manage projects as a portfolio
of investments that contribute to the entire enterprise’s success
project sponsor — the person who provides the direction and funding for a project
stakeholders — people involved in or affected by project activities
triple constraint — balancing scope, time, and cost goals
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Chapter 2
The Project Management and Information
Technology Context
Chapter Overview
Chapter 2 discusses the context for project management in general and information technology projects in
particular. It describes the importance of taking a systems view when selecting and working on projects,
understanding organizations and stakeholders, the project and product life cycles, the unique nature of
information technology projects, and important skills and attributes for good project managers.
Chapter Objectives
1. Understand the systems view of project management and how it applies to information technology
projects
2. Analyze a formal organization using the structural, human resources, political, and symbolic
organizational frames
3. Describe the differences among functional, matrix, and project organizational structures
4. Explain why stakeholder management and top management commitment are critical for a project’s
success
5. Understand the concept, development, implementation, and close-out phases of the project life cycle
6. Distinguish between project development and product development
7. Discuss the unique attributes and diverse nature of information technology projects
8. List the skills and attributes of a good project manager in general and in the information technology
field
Instructor Notes
A Systems View of Project Management
Most students in information technology fields have heard of a systems approach. It is still important to
explain what it means to look at projects in the context of a larger system. Figure 2-1 provides an example
of applying the three-sphere model of systems management to the opening case. Review the opening case
and this figure with the class.
Understanding Organizations
There are many books and courses on organizational behavior. The four frames of organizations presented
here provide a good reference for helping students think about various aspects of organizations. Most
people focus too much on the structural frame and it is also important to address the human resources,
political, and symbolic frames of organizations.
Many students with little work experience are not familiar with the various organizational charts shown in
Figure 2-2. Provide examples of a functional, matrix, and project structure. Ask students in the class who
are familiar with organizational charts what type of structure their company uses and have them explain
how it affects project work. Table 2-1 summarizes the influence of organizational structure on projects.
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Discuss the importance of identifying and working with various project stakeholders and the importance of
top management commitment. The opening case provides a good context for explaining different
stakeholders and their views of projects.
Stakeholder Management
You cannot overemphasize the importance of identifying and managing stakeholder relationships. Be sure
students understand who various stakeholders are on projects, especially top management. Stress that the
number one factor associated with successful information technology projects is executive support.
Discuss how important it is for executives to support specific projects and good project management
processes.
Project Phases and the Project Life Cycle
Most students in information technology fields have also heard of project life cycles. Stress that all
projects follow a typical project life cycle composed of four phasesconcept, development,
implementation, and close-out. Contrast the project life cycle with product life cycles. Contrast the
predictive systems development life cycles models with the adaptive ones on pages 46-47. Also stress the
fact that developing many information technology products involves several different projects.
Focus on the fact that an important part of project management is having management reviews after each
project phase. The “What Went Right?” on pg. 49 illustrates the value of having specific deliverables and
kill points at the end of project phases.
The Context of Information Technology Projects
There are several issues unique to the information technology industry that affect project management.
Highlight the nature of information technology projects, characteristics of project team members, and the
diverse technologies often involved.
Suggested Skills for a Project Manager
Project management requires many different skills. Review Table 2-3 as an example of what project
managers do. Also review Table 2-4 to compare characteristics of effective and ineffective project
managers. Provide personal examples of good and bad project managers from your experience and ask
your students to do the same.
Classroom Activities
1.
2.
Systems management:
Think of a recent change that occurred at your college, in your community, or in the news. Use the threesphere model for systems management and brainstorm issues regarding the change based on the business,
technology, and organization spheres.
Project management skills:
Divide students into groups of 3 or 4. Ask them to develop their own list of 5-10 skills they think are
important for good information technology project managers. Then ask them to rate themselves on each of
these skills (on a scale of 1-10, 10 being high) and discuss how they can improve their weaknesses.
Troubleshooting Tips
Many students have not had to write a systems analysis or really think about how a project they are
working on fits into the big picture of an organization. Try to think of an example your students can relate
to. Also, students confuse the project life cycle with the systems development life cycle. Spend extra time
of these topics, and feel free to use non-information technology product examples to further illustrate the
point that products can have a variety of life cycles. Students also may have a hard time understanding
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exactly what project managers do. Try to bring in a real project manager or have students interview one
for an assignment to get a better idea of this career field.
Quick Quiz
1.
2.
3.
4.
What are the phases of the project life cycle?
ANSWER: concept, development, implementation, and close-out
What type of organizational structure has project team members reporting to at least two bosses?
ANSWER: matrix
What type of organizational structure gives the least amount of authority to project managers?
ANSWER: functional
Name two significant characteristics of effective project managers.
ANSWER: Any of the following: lead by example, are visionaries, are technically competent, are
decisive, are good communicators, are good motivators, stand up to upper management when
necessary, support team members, and encourage new ideas
Discussion Questions
1.
2.
3.
Many people have a hard time taking a systems view when it comes to managing projects. Why do
you think this is the case? What can be done to help people take a systems view?
Describe the project life cycle and the project process groups. Many people confuse the two. What is
a key distinguishing feature of the two concepts?
Some of the adaptive approaches to developing systems are becoming more popular. Are they better
or more appropriate than prescriptive approaches in most cases? Why or why not?
Key Terms
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Adaptive Software Development (ASD) — a SDLC model that assumes that systems development
follows an adaptive or non-prescriptive approach because the scope of the project cannot be clearly
articulated and the schedule and cost cannot be accurately predicted
deliverable — a product, such as a report or segment of software code, produced as part of a project
executive steering committee — a group of senior executives from various parts of the organization
who regularly review important corporate projects and issues
Extreme Programming (XP) — an approach to programming for developing software in rapidly
changing environments
functional organizational structure — an organizational structure that groups people by functional
areas such as information technology, manufacturing, engineering, and accounting
human resources frame — focuses on producing harmony between the needs of the organization and
the needs of people
matrix organizational structure — an organizational structure in which employees are assigned to
both functional and project managers
phase exit or kill point — management review that should occur after each project phase to
determine if projects should be continued, redirected, or terminated
political frame — addresses organizational and personal politics
politics — competition between groups or individuals for power and leadership
predictive life cycle — a SDLC model in which the scope of the project can be clearly articulated and
the schedule and cost can be accurately predicted
project acquisition — the last two phases of a project life cycle, implementation and close-out
project feasibility — the first two phases of a project life cycle, concept and development
project life cycle — the collection of project phases—concept, development, implementation, and
close-out
project organizational structure — an organizational structure that groups people by major projects,
such as specific aircraft programs
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Scrum — an iterative development process for software where the iterations are referred to as sprints,
which normally last thirty days
structural frame — deals with how the organization is structured (usually depicted in an
organizational chart) and focuses on different groups’ roles and responsibilities to meet the goals and
policies set by top management
symbolic frame — focuses on the symbols, meanings, and culture of an organization
systems — sets of interacting components working within an environment to fulfill some purpose
systems analysis — a problem-solving approach that requires defining the scope of the system to be
studied, and then dividing it into its component parts for identifying and evaluating its problems,
opportunities, constraints, and needs
systems approach — a holistic and analytical approach to solving complex problems that includes
using a systems philosophy, systems analysis, and systems management
systems development life cycle (SDLC) — a framework for describing the phases involved in
developing and maintaining information systems
systems management — addressing the business, technological, and organizational issues associated
with making a change to a system
systems philosophy — an overall model for thinking about things as systems
systems thinking — taking a holistic view of an organization to effectively handle complex situations
16
Chapter 3
The Project Management Process Groups: A Case Study
Chapter Overview
Chapter 3 describes the five project management process groups and how they relate to the nine
knowledge areas. It also describes how organizations can develop their own information technology
project management methodologies to help manage their own projects in their unique environments. A
large part of this chapter describes a detailed case study to show how to apply the project management
process groups (initiating, planning, executing, controlling, and closing) to an information technology
project. The case study uses many of the templates provided in Appendix D of the text.
Chapter Objectives
1. Describe the five project management process groups, the typical level of activity for each, and the
interactions among them
2. Understand how the project management process groups relate to the project management knowledge
areas
3. Discuss how organizations develop information technology project management methodologies to meet
their needs
4. Review a case study of an organization applying the project management process groups to manage an
information technology project
5. Understand the contribution that effective project initiation, project planning, project execution, project
control, and project closing make to project success
Instructor Notes
Project Management Process Groups
Project management process groups progress from initiation activities to planning activities, executing
activities, controlling activities, and closing activities. Provide examples of each of these processes. Also
be sure to emphasize that these are process groups and not the project life cycle phases. It is easy to
confuse the two. Explain Figure 3-1 to show how the process groups relate to each other and the level of
activity over time. Point out that, in general, the most time should be spent on executing processes
followed by planning processes. Table 3-1 maps the project management knowledge areas to the process
groups. Students studying to take the PMP exam should find this to be a useful table to study.
Developing an Information Technology Project Management Methodology
Talk about how important it is for organizations to figure out how to best use project management in their
own organizations. Discuss the example provided in this section from Blue Cross Blue Shield of
Michigan, emphasizing the changes they made to PMI’s general project management processes to meet
their unique needs.
Case Study: JWD Consulting’s Project Management Intranet Site Project
This case study provides a detailed example of initiating, planning, executing, controlling, and closing a
project. Stress the fact that many projects have common elements in each of these process groups, but
because every project is unique, you must decide what tools, techniques, and documentation are
appropriate. Spend time reviewing the sample documents provided, such as a business case, project
17
charter, team contract, scope statement, and so on. This chapter provides an example of the big picture of
managing a project. Later chapters provide details describing the concepts, documents, and other
information presented in this chapter.
Classroom Activities
1.
2.
Process Groups:
After discussing the project management process groups, have students estimate how much time and
money is typically spent on projects in each of these process groups. Assume you have one year and
$100,000 to spend.
Reviewing Templates:
Have students form 3-4 person groups, and randomly assign each group one or two of the sample
documents to review from the case study. Have them discuss the purpose of the document, find the
corresponding template in Appendix D, and develop a list of questions they have about the
document(s).
Troubleshooting Tips
Some students will like seeing the big picture view of project management in the case study early in the
book, while other students will feel overwhelmed. Assure students that they are not expected to
understand all of the information provided in the case study and that they will learn more about when and
how to create the documents shown in later chapters. Also be sure to point that templates for all of the
documents shown are provided in Appendix D and on the companion Web site.
Quick Quiz
1.
Which project management process group includes activity from every single knowledge area? In
which process group should you spend the most time and money?
ANSWER: planning, executing
2. Which company provided an example of how they modified PMI’s guidelines to create their own
information technology project management methodology?
ANSWER: Blue Cross Blue Shield of Michigan
3. Name two of the main outputs of project initiation.
ANSWER: project manager assigned, key stakeholders identified, business case completed, project
charter completed and signed (any two)
Discussion Questions
1.
2.
3.
What does research suggest as best practices for how much time should be spent in initiating and
planning activities for projects? Do you think that estimate is realistic? Why or why not?
What do you think organizations should develop their own information technology project
management methodologies? Why can’t they just follow a book or already developed methodology?
Do you think the case study is based on real or fictitious information? What parts of the case study
seem most real, and which seem most fictitious?
Key Terms
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closing processes — formalizing acceptance of the project or phase and bringing it to an orderly end
controlling processes — actions to ensure that project objectives are met
executing processes — coordinating people and other resources to carry out the project plans and
produce the products or deliverables of the project
initiating processes — actions to commit to begin or end projects and project phases
planning processes — devising and maintaining a workable scheme to accomplish the business need
that the project was undertaken to address
process — a series of actions directed toward a particular result
18
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project management process groups — the progression of project activities from initiating to
planning, executing, controlling, and closing
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Chapter 4
Project Integration Management
Chapter Overview
Chapter 4 provides detailed information on the first of the nine knowledge areas, project integration
management. It describes project plan development, project plan execution, and integrated change control.
This chapter again emphasizes the importance of making sure projects fit into the big picture of an
organization. It also highlights the need for new project managers to let go of doing detailed technical and
focus on project management.
Chapter Objectives
1. Describe an overall framework for project integration management as it relates to the other project
management knowledge areas and the project life cycle
2. Describe project plan development, including project plan content, using guidelines and templates for
developing plans, and performing a stakeholder analysis to help manage relationships
3. Explain project plan execution, its relationship to project planning, the factors related to successful
results, and tools and techniques to assist in project plan execution
4. Understand the integrated change control process, planning for and managing changes on information
technology projects, and developing and using a change control system
5. Describe how software can assist in project integration management
Instructor Notes
What is Project Integration Management?
Many people confuse integration management with systems integration. Stress the definition of project
integration managementthe processes involved in coordinating all of the other project management
knowledge areas throughout a project's life cycle. Figure 4-2 shows this concept in a graphical format.
Also mention that this chapter covers the first of the nine project management knowledge areas. Figure 41 summarizes the inputs, tools and techniques, and outputs of each process for project integration
management. The PMBOK Guide 2000 provides similar figures for each knowledge areas. Note that
“integrated change control” was called “overall change control” in prior versions of the PMBOK Guide.
To be a good project manager, you must focus on performing integration management. It is especially
difficult for people with technical backgrounds to delegate many technical tasks, so that they can focus on
integration management and the “big picture” view of the project. The opening case illustrates this
common problem and the need for project managers to communicate well with the project sponsorin this
case, senior management.
Project Plan Development
A project plan is very important in project management, in contrast to some plans written in other settings
that are often exercises in bureaucracy. Stress that project plans, unlike other plans students may be
familiar with, are written to guide project execution. Performance is based on how well the project team
executes the plan.
Discuss key parts of a project plan and the fact that all plans are unique, just as all projects are unique.
Table 4-1 provides an outline of a software project management plan from IEEE. Also discuss the
importance of performing a stakeholder analysis. Table 4-2 provides a good example of how a fairly
20
simple analysis can improve a project manager's understanding of whom is involved in or affected by a
project and how to manage relationships with them.
Project Plan Execution
Project plan execution refers to managing and performing the work described in the project plan. The
project team produces the project’s products during execution. Application area knowledge is very
important for good project execution. The “What Went Right?” on pg. 120 provides a great example of a
project manager who used his product knowledge to deliver projects more effectively. The “What Went
Wrong?” on p. 118 illustrates that the main purpose of project plans is to guide execution, and project
managers must practice what they preach. The main tools and techniques for project plan execution
include using a work authorization system, status review meetings, and project management software.
Provide examples of how organizations use each of these tools or techniques.
Integrated Change Control
Very few projects go exactly as planned. Some people can a project plan a point to deviate from. It is
important to plan for some changes, but not to let them get out of hand. Many successful project managers
know when to say "No" to changes. Discuss that change control is a difficult yet very important part of
being a project manager. Highlight the three main objectives of integrated change controlinfluencing
factors that create changes to ensure that changes are beneficial, determining that a change has occurred,
and managing actual changes as they occur. Many people only focus on the last objective. Figure 4-3
provides a nice visual of the integrated change control process. Using a change control system is very
important on information technology projects because changes in one area often affect other areas. Table
4-3 provides suggestions for managing integrated change control.
Using Software to Assist in Project Integration Management
All of the knowledge area chapters now include a section describing how you can use software to assist
with that area. Try to provide examples of how different organizations use different types of software.
Project management software obviously helps in performing project integration management. Several
other software products, such as word processing software, presentation software, spreadsheets, databases,
and various communication software all assist in managing this knowledge area.
Classroom Activities
1.
2.
Develop a detailed outline for a project plan’s introductory section:
The project could be the development of a new software product, or any other scenario you feel the
class would be interested in. Assume that the instructor is the project sponsor. Have students work in
small groups to develop their introduction, following the guidance provided on p. 111. Have one
student record the group’s response for you to collect. To add an interesting twist, provide a very
vague description of the project and see how differently groups respond. Walk around the classroom
as they work on this activity. See how many groups ask for more information. They should be asking
questions for clarification. Stress the importance of communications and asking questions, especially
in the early phases of project management.
Case study discussion:
Have students form small groups (3-4 people), then have them review and discuss the opening case.
Have them answer the following questions: What was the real problem in this case? Was Nick a good
project manager? Why or why not? What could he have done to improve the situation, and what
should senior management have done?
Troubleshooting Tips
Have students discuss the opening and closing case study to spark their interest in this chapter. Most
students think that Nick was not a good project manager, even though he did get the project done on time
and probably within budget. Stress that it’s not enough to just meet scope, time, and cost goals. Project
21
managers must identify, understand, and management relationships with all key project stakeholders. If
you can find examples of good project plans or share stories about project execution of change control, it
makes the information more interesting to students. Since this chapter is still pretty high level, some
students may need more details and examples for it to make sense.
Quick Quiz
1.
2.
3.
What are the three main processes of integration management?
ANSWER: project plan development, project plan execution, and integrated change control
What is the main purpose of a project plan?
ANSWER: to facilitate action or guide project execution
What project management tool can you use to help manage relationships with different people
involved in your project?
ANSWER: a stakeholder analysis
Discussion Questions
1.
2.
3.
Why should you create a stakeholder analysis if it is not a part of the formal project plan? How would
you go about creating one?
Many information technology project managers come from senior technical positions. What can you
do to help them transition into a project management role?
When do you need a person with a strong technical background to lead a project? When do you need
a strong businessperson? What other types of people might make good project managers in different
situations?
Key Terms
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Change Control Board (CCB) — a formal group of people responsible for approving or rejecting
changes on a project
change control system — a formal, documented process that describes when and how official project
documents may be changed
configuration management — a process that ensures that the descriptions of the project’s products
are correct and complete
integrated change control — coordinating changes across the entire project
interface management — identifying and managing the points of interaction between various
elements of a project
project integration management — includes the processes involved in coordinating all of the other
project management knowledge areas throughout a project’s life cycle. The main processes involved
in project integration management include project plan development, project plan execution, and
integrated
change control.
project management software — software specifically designed for project management
project plan — a document used to coordinate all project planning documents and guide project
execution and control. Key parts of a project plan include an introduction or overview of the project, a
description of how the project is organized, the management and technical processes used on the
project, and sections describing the work to be done, schedule information, and budget information.
project plan development — taking the results of other planning processes and putting them into a
consistent, coherent document—the project plan
project plan execution — carrying out the project plan by performing the activities it includes
stakeholder analysis — an analysis of information such as key stakeholders’
names and organizations, their roles on the project, unique facts about each stakeholder, their level of
interest in the project, their influence on the project, and suggestions for managing relationships with
each stakeholder
status review meetings — regularly scheduled meetings used to exchange project information
22
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work authorization system — a method for ensuring that qualified people do the work at the right
time and in the proper sequence
23
Chapter 5
Project Scope Management
Chapter Overview
Chapter 5 discusses a very important knowledge area and part of the triple constraint—project scope
management. It also describes various methods for selecting projects, including using various financial
analysis techniques, weighted scoring models, and a balanced scorecard. Once projects are selected, it is
crucial to do a good job defining the work to be done and how it will be done. Important tools include
developing a project charter, scope statement, and work breakdown structure.
Chapter Objectives
1. Understand the elements that make good project scope management important
2. Describe the strategic planning process, apply different project selection methods, such as a net present
value analysis, a weighted scoring model, and a balanced scorecard, and understand the importance of
creating a project charter
3. Explain the scope planning process and contents of a scope statement
4. Discuss the scope definition process and construct a work breakdown structure using the analogy, topdown, bottom-up, and mind mapping approaches
5. Understand the importance of scope verification and scope change control to avoid scope creep on
information technology projects
6. Describe how software can assist in project scope management
Instructor Notes
What is Project Scope Management?
Many people are not familiar with the term scope management. Scope refers to all the work involved in
creating the products of the project and the processes used to create them. Project scope management
includes the processes involved in defining and controlling what is or is not included in a project. Many
projects fail due to poor scope management. Scope management is difficult because people have different
understandings of what should be done on projects. It is very important to ensure that the project team and
stakeholders have the same understanding of what products will be produced as a result of a project and
what processes will be used in producing those products.
Project Initiation: Strategic Planning and Project Selection
Many students studying information technology or management have had some exposure to strategic
planning. Review what strategic planning is and how it relates to selecting what projects an organization
should work on. Some students may confuse strategic information systems with strategic planning, or
think that only strategic information systems projects should be done. Be sure to clarify the difference
between strategic planning and strategic information systems. Not all projects produce strategic
information systems, and a lot of strategic planning does not refer to information technology.
An important part of ensuring project success is to pick important projects to work on in the first place.
Table 5-1 shows the main reasons why firms invest in information technology projects. Even though
students may have heard of the importance of addressing business needs, emphasize the fact that
24
information technology should support explicit and implicit business objectives and provide strong
financial returns. The least cited reason firms invest in information technology projects is to introduce new
technology. Students often like to learn new technologies just for the sole purpose of learning the new
technologies. Stress that information technology should support business needs first and foremost.
Figure 5-1 provides a good summary of the relationship between strategic planning and project selection.
Review the various methods for selecting projects. Focus discussion on broad organizational needs,
categorizing information technology projects, net present value analysis, return on investment, payback
analysis, and weighted scoring models. Provide examples of projects that fit in each category.
Depending on students' backgrounds, time could be spent reviewing the calculations for determining NPV,
ROI, payback period, and weighted scoring models. Most students enjoy learning new techniques or
refreshing their understanding of them. Many companies use these techniques, and even though students
think they understand them, they often have difficulty performing the actual calculations and interpreting
the results.
A project charter is a very important tool in project management. Review the purpose of a charterto
formally recognize the existence of a project and provide direction on the project's objectives and
management. Review the sample charter on pp. 154-155.
Scope Planning and the Scope Statement
Emphasize that after a project charter is done, many projects require additional documentation to
determine the scope. A scope statement is a document used to develop and confirm a common
understanding of the project scope. A Statement of Work (SOW) is a type of scope statement used in
many government projects. Scope statements vary depending on the nature of the project. Review the
sample scope statement that was provided in the case study in chapter 3 on pp. 83-85. Stress the
importance of clearly describing all project deliverables.
Scope Definition and the Work Breakdown Structure
Understanding and creating work breakdown structures (WBS) are a very important part of project
scope management. Show the class the examples provided in the textbook. You could also open some of
the sample files in Project 2002 to show the students other WBSs. The tasks you enter in Project 2002
should follow a WBS format.
Mention the different approaches to developing WBSs, and include at least one class exercise to reinforce
the fact that there are different ways to create WBSs for the same project. Stress the fact that it is difficult
to create a good WBS. Review the basic principles for creating a good WBS on pp. 166-167.
Scope Verification and Scope Change Control
Review the definitions of scope verification and scope change control. Stress the importance of having
project stakeholders formally accept the project scope through scope verification. Show Table 5-5 and
stress that the first three factors causing information technology project problemslack of user input,
incomplete requirements and specifications, and changing requirements and specificationsall relate to
scope verification and change control. Review the suggestions for improving these three problem areas
and include your own suggestions based on your experiences.
Using Software to Assist in Project Scope Management
Highlight the various types of software that you can use to perform scope management. Be sure to show
students Appendix D and the companion Web site, highlighting where they can download template files
created in various software packages. Several of the templates are related to project scope management.
25
Classroom Activities
1.
2.
Weighted decision matrix:
A fun way to illustrate this technique is to apply it to finding a roommate (or significant other). Let
students suggest 4 to 5 criteria they would use in choosing a roommate (or significant other). Then
decide on the weight for each criterion, being sure the weights add up to one hundred. Have the class
pick 3 potential roommates (or significant others), then add a fourth choice that is one of the students'
actual roommates (or significant others). Enter the data into spreadsheet software like Microsoft
Excel. Evaluate each potential roommate (or significant other) using the suggested criteria, add the
scores, then determine the weighted scores. It is interesting to see what criteria students come up with
and who they suggest as potential roommates (or significant others). This activity also demonstrates
using spreadsheet software to assist in scope management.
ANSWER: Answers will vary, but here is an example.
Criteria
Weight
Roommate
Roommate
Roommate
Roommate
#1
#2
#3
#4
Neat
30%
100
100
80
10
Respectful
20%
90
100
95
95
Quiet
30%
40
20
10
100
Independent
10%
70
10
20
100
Friendly
10%
50
10
20
100
Weighted
72
58
50
72
Scores
Work breakdown structure:
Divide students into groups of 3 or 4. Have them create a WBS based on the opening case, or use
another example, like building a house, planning a wedding, or any other project of interest. Give
them instructions as to the level of detail and format for the WBS. Have one student describe the
project, and make sure the group includes all the work that must be done in the WBS. Review the
results when the groups are finished to show the wide variety of ways there are to create a WBS.
Point out obvious omissions in some of the WBSs.
Troubleshooting Tips
Plan to spend a fair amount of time on this chapter because it includes a lot of important information. To
make it more interesting, plan to use Excel to demonstrate how to do some of the financial techniques
shown in this chapter. If students have computers in class, they could recreate Figure 5-2 (the Net-Present
Value Example). If only the instructor has a computer, information could be entered by the instructor and
then discussed with the class.
Include an activity in which students get some hands-on practice creating a WBS. If they will be doing
real group projects or one of the running cases as part of the class, give them class time to start working on
the WBS in their groups. Refer them to the examples in the text and the templates. Be sure the students
have determined the deliverables before creating a WBS. You should also show students several of the
template files that come with Project 2002 to show them how those WBSs were set up.
Quick Quiz
1.
2.
3.
What is the main reason why firms invest in information technology projects?
ANSWER: to support explicit business objectives
If you have three independent projects with NPVs of $100, $400, and -$100, which project(s) would
you recommend based solely on the NPV?
ANSWER: Recommend the project with an NPV of $100 and the one with an NPV of $400. Both
are profitable. If you must choose one project, recommend the project with the highest NPV$400
in this example.
What document formally recognizes the existence of a project?
ANSWER: a project charter
26
4.
What is the main output of the scope definition process and is also an outcome-oriented analysis of the
work involved in a project that defines the total scope of the project?
ANSWER: a WBS
Discussion Questions
1.
2.
3.
Which method(s) for selecting projects are most often used in an organization you are familiar with?
Why? Which method(s) do you think should be used more often?
Project charters seem fairly simple. Why do you think many projects do not have them?
Why is it difficult to find good examples of WBSs?
Key Terms
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analogy approach — creating a WBS by using a similar project’s WBS as a starting point
balanced scorecard — a methodology that converts an organization’s value drivers, such as customer
service, innovation, operational efficiency, and financial performance, to a series of defined metrics
bottom-up approach — creating a WBS by having team members identify as many specific tasks
related to the project as possible and then grouping them into higher-level categories
cash flow—benefits minus costs or income minus expenses
cost of capital —the return available by investing the capital elsewhere
deliverable — a product, such as a report or segment of software code, produced as part of a project
directives — new requirements imposed by management, government, or
some external influence
discount factor — a multiplier for each year based on the discount rate and year
discount rate — the minimum acceptable rate of return on an investment; also called the required rate
of return, hurdle rate, or opportunity cost of capital, shown in a percentage format, such as 8 percent
initiation — committing the organization to begin a project or continue to the next phase of a project
internal rate of return (IRR) — the discount rate that results in an NPV of zero for a project
Joint Application Design (JAD) — using highly organized and intensive workshops to bring
together project stakeholders—the sponsor, users, business analysts, programmers, and so on—to
jointly define and design information systems
mind mapping — a technique that can be used to develop WBSs by using branches radiating from a
central core idea to structure thoughts and ideas
net present value (NPV) analysis — a method of calculating the expected net monetary gain or loss
from a project by discounting all expected future cash inflows and outflows to the present point in
time
opportunities — chances to improve the organization
payback period — the amount of time it will take to recoup, in the form of net cash inflows, the net
dollars invested in a project
problems — undesirable situations that prevent the organization from achieving its goals
project charter — a document that formally recognizes the existence of a project and provides
direction on the project’s objectives and management
project scope management — the processes involved in defining and controlling what is or is not
included in a project
prototyping — developing a working replica of the system or some aspect of the system to help
define user requirements
required rate of return — the minimum acceptable rate of return on an investment
return on investment (ROI) — (benefits minus costs) divided by costs
scope — all the work involved in creating the products of the project and the processes used to create
them
scope change control — controlling changes to project scope
scope creep — the tendency for project scope to keep getting bigger and longer
27
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scope definition — subdividing the major project deliverables into smaller, more manageable
components
scope planning — developing documents to provide the basis for future project decisions, including
the criteria for determining if a project or phase has been completed successfully
scope statement — a document used to develop and confirm a common understanding of the project
scope
scope verification — formalizing acceptance of the project scope, sometimes by customer sign-off
strategic planning — determining long-term objectives by analyzing the strengths and weaknesses of
an organization, studying opportunities and threats in the business environment, predicting future
trends, and projecting the need for new products and services
top-down approach—creating a WBS by starting with the largest items of the project and breaking
them into their subordinate items
use case modeling — a process for identifying and modeling business events, who initiated them, and
how the system should respond to them
weighted scoring model — a technique that provides a systematic process for basing project
selection on numerous criteria
work breakdown structure (WBS) — a deliverable-oriented grouping of the work involved in a
project that defines the total scope of the project
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Chapter 6
Project Time Management
Chapter Overview
Chapter 6 discusses another very important knowledge area and part of the triple constraint—project time
management. Important concepts in this chapter include developing project schedules, creating network
diagrams and Gantt charts, critical chain scheduling, and PERT.
Chapter Objectives
1. Understand the importance of project schedules and good project time management
2. Define activities as the basis for developing project schedules
3. Describe how project managers use network diagrams and dependencies to assist in activity sequencing
4. Explain how various tools and techniques help project managers perform activity duration estimating
and schedule development
5. Use a Gantt chart for schedule planning and tracking schedule information
6. Understand and use critical path analysis
7. Describe how to use several techniques for shortening project schedules
8. Explain the basic concepts behind critical chain scheduling and Program and Review Technique (PERT)
9. Discuss how reality checks and people issues are involved in controlling and managing changes to the
project schedule
10. Describe how software can assist in project time management
Instructor Notes
Importance of Project Schedules
Many people view project time management as one of the most important and most unique aspects of
project management. This chapter includes many terms, tools, and techniques that are unique to project
management. Stress the importance of understanding and studying this chapter, particularly if students
plan to take the PMP or IT Project+ exams.
Many projects that are completed are finished late. The 1995 CHAOS report found that the average time
overrun was 222 percent. Schedule issues are the main reason for conflicts on projects. Students can often
relate to problems with time since many of them are juggling work, school, families, and so on. Stress the
importance of developing realistic schedules and then adhering to these realistic schedules in order to help
improve project time management.
Activity Definition
It may seem like activity definition should fall under project scope management, but you can’t determine a
schedule until you clearly define the activities required for the project. Emphasize that many other
knowledge areas and process groups come into play when creating a project schedule. There must be a
strong scope definition before creating a schedule, as well as good information concerning cost, quality,
human resources, and so on. The WBS highlighted in the previous chapter is very important for further
defining activities and creating a project schedule. Stress the importance of documenting WBS activities
and making sure the project team understands each activity before doing activity sequencing or duration
estimating.
29
Activity Sequencing
The concept of creating dependencies or relationships makes sense to most students. However, few
students have experience creating these dependencies, or have even seen or heard of a network diagram.
Plan to spend a fair amount of time on this section. Walk through a simple example, such as the one
shown using Project X in Figure 6-2 on pg. 187. It is often easier for students to read and create the
activity-on-arrow network diagrams, even though project management software uses the precedence
diagramming method. Show students the same project using both diagramming methods (Figure 6-2 and
6-4). Have students create a simple network diagram in class using just a few activities (you can make one
up or use Exercises 2 in the text). After covering this section, you should have students start using Project
2002. Make sure they can create a WBS and understand activity sequencing before they use the software.
Many people misuse Project 2002 because they do not understand these important concepts.
Activity Duration Estimating
People often become confused when creating duration estimates. Unlike many cost estimates where you
estimate the amount of time someone would work on an activity, the duration estimate includes that time,
plus any elapsed time. Give a few examples to illustrate this concept. For example, the course you are
teaching might include 24 to 48 hours of class time, but the duration of the class is much longer than 2 to 4
days. There is elapsed time between classes. Emphasize that people who will actually do the work should
provide input into the duration estimates, and emphasize the importance of reviewing similar projects and
seeking expert advice when preparing estimates. Many people are overly optimistic about how long it will
take to complete activities.
Schedule Development
Emphasize that the ultimate goal of schedule development is to create a realistic project schedule that
provides a basis for monitoring project progress. Schedules are an important part of project plans, and
most people can easily understand schedules and see if work is being completed on time or not. Explain
the important project management tools for schedule development: Gantt charts, network diagrams
(formerly called PERT charts), and critical path analysis. Many students have seen a Gantt chart before,
but they may not have referred to them by that name. Few people are familiar with network diagrams or
critical path analysis, and most people haven’t seen the PERT weighted average formula before. Students
often have a difficult time understanding these concepts. Review the concepts and examples in class and
stress that these are important tools to learn particularly critical path analysis. Also highlight the basic
approaches for shortening project schedulesfast tracking and crashing. Discuss important concepts
related to critical chain scheduling, including multitasking, resource constraints, and buffers. Depending
on the nature of your course, you could have students read Goldratt’s Critical Chain text and write a
detailed paper about this concept.
Controlling Changes to the Project Schedule
Mention the importance of reviewing project schedules to ensure that they are both reasonable and
realistic. Many project managers and team members are pressured to create unrealistic time estimates. It
is better to negotiate realistic schedules up front on most projects than to deal with schedule overruns later
in the project. It is also important to remember the people issues involved in developing and maintaining
project schedules. It takes good leadership to keep people on schedule. The “What Went Right?” on pg.
209 provides a good example of leadership in managing project schedules.
In your own course, you have definite time constraints. Discuss how you determine the schedule in your
syllabus, and use it as an example of developing and controlling a schedule. There are often changes in a
course that could affect the schedule. Discuss how you deal with those changes.
30
Using Software to Assist in Time Management
Project management software is most often used for time management. Unlike other software
(spreadsheets, databases, and so on), project management software easily creates Gantt chart, network
diagrams, and critical path information. Demonstrate some of the Project 2002 features related to project
time management. Table 6-2 on pg. 211 lists several of these features.
Also stress how complex project management software is and the importance of using it correctly. Many
companies have Project 2002 or similar software, but they use it only to create Gantt charts. The textbook
provides examples of senior managers wasting time by not understanding basic concepts such as linking
tasks and establishing baselines in order to use project management software effectively.
Classroom Activities
1.
2.
Project network diagram:
After students create a practice network diagram in class, such as the one in Exercise 2, have them
exchange their answers with another student. If students are having trouble grasping this concept,
have them do another exercise in small groups and draw their solutions on the board.
Project 2002:
Demonstrate how to link tasks in Project 2002. You could create the same network diagram you use
in the above classroom activity using the software. Also show the class how to set up different types
of dependencies, such as start to start or a task with lead or lag time. If students have computers in
class, ask them to do some basic time management tasks using Project 2002. See Appendix A for
more information.
Quick Quiz
1.
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3.
4.
What is the first step in project time management?
ANSWER: Activity definition
What is the most common type of task dependency?
ANSWER: Finish-to-start
What is the critical path on a project?
ANSWER: The critical path is the series of activities in a project network diagram that determines the
earliest completion date of the project. See other definitions in the text.
What is PERT? What is the formula you use when using PERT?
ANSWER: PERT is a project network analysis technique used to estimate project duration when
there is a high degree of uncertainty about the individual activity duration estimates. The PERT
weighted averages formula is (optimistic time + 4 X most likely time + pessimistic time)/6
Discussion Questions
1.
2.
3.
4.
Explain the main items on a Gantt chart. Do you think everyone uses Gantt charts properly? Why or
why not?
Discuss methods for shortening a project schedule. What are some of the advantages and
disadvantages of shortening project schedules?
What is a milestone? Provide a few examples of milestones.
Do you think many organizations use critical path analysis? What about chain scheduling? Justify
your responses.
Key Terms
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activity — an element of work, normally found on the WBS, that has an expected duration, cost, and
resource requirements; also called task
activity definition — identifying the specific activities that the project team members and
stakeholders must perform to produce the project deliverables
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activity duration estimating — estimating the number of work periods that are needed to complete
individual activities
activity-on-arrow (AOA) or arrow diagramming method (ADM) — a network diagramming
technique in which activities are represented by arrows and connected at points called nodes to
illustrate the sequence of activities
activity sequencing — identifying and documenting the relationships between project activities
backward pass — a project network diagramming technique that determines the late start and late
finish dates for each activity in a similar fashion
baseline dates — the planned schedule dates for activities in a Gantt chart
buffer — additional time to complete a task, added to an estimate to account for various factors
burst — when a single node is followed by two or more activities on a network diagram
crashing — a technique for making cost and schedule tradeoffs to obtain the greatest amount of
schedule compression for the least incremental cost
critical chain scheduling — a method of scheduling that takes limited resources into account when
creating a project schedule and includes buffers to protect the project completion date
critical path — the series of activities in a network diagram that determines the earliest completion of
the project. It is the longest path through the network diagram and has the least amount of slack or
float
critical path method (CPM) or critical path analysis — a project network analysis technique used
to predict total project duration
dependency — the sequencing of project activities or tasks; also called a relationship
discretionary dependencies —sequencing of project activities or tasks defined by the project team
and used with care since they may limit later scheduling
dummy activities — activities with no duration and no resources used to show a logical relationship
between two activities in the arrow diagramming method of project network diagrams
duration — the actual amount of time worked on an activity plus elapsed time
early finish date — the earliest possible time an activity can finish based on the project network logic
early start date — the earliest possible time an activity can start based on the project network logic
effort — the number of workdays or work hours required to complete a task
external dependencies — sequencing of project activities or tasks that involve relationships between
project and non-project activities
fast tracking — a schedule compression technique in which you do activities in parallel that you
would normally do in sequence
feeding buffers — additional time added before tasks on the critical path that are preceded by noncritical-path tasks
finish-to-finish dependency — a relationship on a network diagram where the “from” activity must
be finished before the “to” activity can be finished
finish-to-start dependency — a relationship on a project network diagram where the “from” activity
must be finished before the “to” activity can be started
forward pass — a network diagramming technique that determines the early start and early finish
dates for each activity
free slack (free float) — the amount of time an activity can be delayed without delaying the early
start of any immediately following activities
Gantt chart — a standard format for displaying project schedule information by listing project
activities and their corresponding start and finish dates in a calendar format
late finish date — the latest possible time an activity can be completed without delaying the project
finish date
late start date — the latest possible time an activity may begin without delaying the project finish
date
mandatory dependencies — sequencing of project activities or tasks that are inherent in the nature of
the work being done on the project
merge —when two or more nodes precede a single node on a network diagram
milestone — a significant event on a project with zero duration
32
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multitasking — when a resource works on more than one task at a time
Murphy’s Law — if something can go wrong, it will
network diagram — a schematic display of the logical relationships or sequencing of project
activities
node — the starting and ending point of an activity on an activity-on-arrow diagram
Parkinson’s Law — work expands to fill the time allowed
PERT weighted average = (optimistic time + 4 X most likely time + pessimistic time)/6
Precedence Diagramming Method (PDM) — a network diagramming technique in which boxes
represent activities
probabilistic time estimates — duration estimates based on using optimistic, most likely, and
pessimistic estimates of activity durations instead of using one specific or discrete estimate
Program Evaluation and Review Technique (PERT) — a project network analysis technique used
to estimate project duration when there is a high degree of uncertainty with the individual activity
duration estimates
project buffer — additional time added before the project’s due date
project time management — the processes required to ensure timely completion of a project
schedule control — controlling and managing changes to the project schedule
schedule development — analyzing activity sequences, activity duration estimates, and resource
requirements to create the project schedule
slack — the amount of time a project activity may be delayed without delaying a succeeding activity
or the project finish date; also called float
slipped milestone —a milestone activity that is completed later than planned
SMART criteria — guidelines to help define milestones that are specific, measurable, assignable,
realistic, and time-framed
start-to-finish dependency — a relationship on a project network diagram where the “from” activity
cannot start before the “to” activity is finished
start-to-start dependency — a relationship in which the “from” activity cannot start until the “to”
activity starts
Theory of constraints (TOC) — a management philosophy that states that any complex system at any
point in time often has only one aspect or constraint that is limiting its ability to achieve more of its
goal
total slack (total float) — the amount of time an activity may be delayed from its early start without
delaying the planned project finish date
tracking Gantt chart — a Gantt chart that compares planned and actual project schedule information
33
Chapter 7
Project Cost Management
Chapter Overview
Chapter 7 provides an introduction on the third knowledge area that comprises the triple constraint—
project cost management. Important topics include basic project cost management principles, concepts,
and terms, resource planning, types of cost estimates, cost budgeting, earned value management, and
project portfolio management.
Chapter Objectives
1. Understand the importance of good project cost management
2. Explain basic project cost management principles, concepts, and terms
3. Describe how resource planning relates directly to project cost management
4. Explain cost estimating using definitive, budgetary, and rough order of magnitude (ROM) estimates
5. Understand the processes involved in cost budgeting and preparing a cost estimate for an information
technology project
6. Understand the benefits of earned value management and project portfolio management to assist in cost
control (Note: The text improperly says portfolio project management in this objective. It should be
project portfolio management).
7. Describe how software can assist in project cost management
Instructor Notes
Importance of Project Cost Management
Cost management is another trouble spot for IT projects. It is usually not difficult for IT professionals to
learn about project cost management; they just often are not interested in the subject. Emphasize the fact
that most senior managers making IT project decisions know more about cost issues than they do about
technology, and project managers need to learn to speak the language of cost management. If students
have had previous courses in accounting or finance, ask them to help explain some of the basic principles
of cost management or important concepts that all professionals should understand.
Basic Principles of Cost Management
Many students confuse profits and costs. Give an example to illustrate the difference between the two.
See the quick quiz for one example. Also emphasize the importance of a project’s life cycle costs.
Investment decisions for projects are usually based on projected life cycle costs and benefits. Since there
are several important terms in this section, you might want to create a short quiz or matching exercise to
help reinforce the meanings of the terms.
Resource Planning
Most students can relate to resource planning because they have worked in part-time or full-time jobs that
included hiring and scheduling human resources. Many organizations do a poor job of resource planning.
Ask students for some example of jobs they have had that did a good job of resource planning and some
34
that did a poor job of resource planning. Emphasize the importance of developing a list of resource
requirements for projects to provide the basis for cost estimates.
Cost Estimating
This section of this chapter is very important, but student interest may not be high since few students have
been in a position in which they had to create cost estimates. Table 7-3 provides a good summary of the
types of cost estimates. Summarize the cost estimating tools and techniques, and then show the sample
estimate in Tables 7-4 and 7-5. If you have another sample cost estimate, show it to the students to help
them understand what an estimate looks like and how it is prepared.
Cost Budgeting
Many students have heard of budgeting, but few have experienced the process of creating budget inputs or
trying to spend money within budget guidelines. Share examples of cost budgeting. Table 7-6 provides
one example based on the sample cost estimate. Also stress the fact that for a project, the cost baseline is a
very important output of cost budgeting. Project cost performance is measured against this baseline.
Project managers should have input into the budgeting process.
Cost Control
An important part of a project manager's job is controlling project costs. Mention integrated change
control systems described in Chapter 4, Project Integration Management, as well as standard reports
showing a project’s budgeted and actual costs. Then plan to spend a fair amount of time explaining earned
value management. Students may become confused by the many acronyms involved. Also note that the
acronyms have changed from the PMBOK Guide – 1996 edition. Earned value used to be referred to as
BCWP, but now it is EV. PV used to be BCWS, and AC used to be ACWP. Project 2002 still uses the
1996 acronyms. Help students memorize the formulas in Table 7-7, then work through a few examples.
Several are provided in the textbook. Also discuss that even though this technique makes perfect sense, it
is difficult to implement on most projects. The government is a strong proponent of earned value
management, and more and more private companies are starting to use it to help manage projects and
control costs. More and more organizations are also using project portfolio management. Highlight the
levels involved mentioned on p. 249.
Using Software to Assist in Cost Management
Demonstrate some of the cost-related features of Project 2002 as described in Appendix A. You could
also demonstrate some features of Excel to help in preparing cost estimates, budgets, and earned value
charts. If you have easy access to the Internet, search for project portfolio management software to view
sample screens, such as the one by Planview shown in Figure 7-4.
Classroom Activities
1.
2.
Earned value exercise:
Do Exercise 1 on p. 254 during class. Make sure students know how to perform earned value
calculations and interpret the results
Examples of real cost data:
Find an example of a cost estimate or budget inputs. Let the students review and critique the
information.
Troubleshooting Tips
Go through several examples in this chapter. Have students do earned value exercises during class and
make sure they understand this concept of project cost management.
35
Students often want to do more hands-on activities, so let them use Excel or Project 2002 to prepare some
cost estimates either in class or as an assignment. Project 2002 can be cumbersome with cost and human
resources data, so review that section of the appendix with the class. Warn students that if you assign
resources to a task, Project 2002 assumes they are full-time. Resources are often not assigned full time on
many project tasks.
Quick Quiz
1.
2.
3.
According to the 1995 CHAOS study, what was the average cost overrun on IT projects? What was it
in the 2001 study?
ANSWER: 189 percent in the 1995 study; 145 percent in the 2001 study
Suppose you sell 10 widgets per day on average, and the average cost per widget is $10. If you sold
11 widgets one day, what would the affect on profits be?
ANSWER: There is not enough information to answer this question. You are given costs and asked
to estimate profits. You do not know what the average profit is per widget. You might lose money by
selling more widgets.
What is another name for earned value?
ANSWER: BCWP or budgeted cost of work performed
Discussion Questions
1.
2.
3.
Why do you think it’s difficult to understand some of the basic cost terms in this chapter? Why aren’t
many technical people interested in cost-related subjects? What could be done to change this?
Suppose you were asked to prepare a cost estimate for a project to purchase laptops for all faculty and
staff at your college or university. How would you start? How long would it take you to prepare a
good estimate? What type of estimate would you prepare, and what approach to developing a cost
estimate would you use?
What can organizations do to ensure estimates are good? What can they do to prevent cost overruns?
Key Terms
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actual cost (AC) — the total of direct and indirect costs incurred in accomplishing work on an
activity during a given period, formerly called the actual cost of work performed (ACWP)
analogous estimates — a cost estimating technique that uses the actual cost of a previous, similar
project as the basis for estimating the cost of the current project, also called top-down estimates
baseline — the original project plan plus approved changes
bottom-up estimates — a cost estimating technique based on estimating individual work items and
summing them to get a project total
budget at completion (BAC) — the original total budget for a project
budgetary estimate — a cost estimate used to allocate money into an organization’s budget
cash flow analysis — a method for determining the estimated annual costs and benefits for a project
COCOMO II — a newer, computerized cost-estimating tool based on Boehm’s original model that
allows one to estimate the cost, effort, and schedule when planning a new software development
activity
computerized tools — cost-estimating tools that use computer software, such as spreadsheets and
project management software
Constructive Cost Model (COCOMO) — a parametric model developed by Barry Boehm for
estimating software development costs
contingency reserves — dollars included in a cost estimate to allow for future situations that may be
partially planned for (sometimes called known unknowns) and are included in the project cost
baseline
cost baseline — a time-phased budget that project managers use to measure and monitor cost
performance
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cost budgeting — allocating the overall cost estimate to individual work items to establish a baseline
for measuring performance
cost control — controlling changes to the project budget
cost estimating — developing an approximation or estimate of the costs of the resources needed to
complete the project
cost management plan — a document that describes how cost variances will be managed on the
project
cost performance index (CPI) — the ratio of earned value to actual cost; can be used to estimate the
projected cost to complete the project
cost variance (CV) — the earned value minus the actual cost
definitive estimate — a cost estimate that provides an accurate estimate of project costs
direct costs — costs that are related to a project and can be traced back in a cost-effective way
earned value (EV) — the percentage of work actually completed multiplied by the planned cost,
formerly called the budgeted cost of work performed (BCWP)
earned value management (EVM) — a project performance measurement technique that integrates
scope, time, and cost data
estimate at completion (EAC) — an estimate of what it will cost to complete the project based on
performance to date
function points — technology independent assessments of the functions involved in developing a
system
indirect costs — costs that are related to the project but cannot be traced back in a cost-effective way
intangible costs or benefits — costs or benefits that are difficult to measure in monetary terms
internal rate of return (IRR) — the discount rate that makes the net present value equal to zero; also
called time-adjusted rate of return
learning curve theory — a theory that states that when many items are produced repetitively, the unit
cost of those items normally decreases in a regular pattern as more units are produced
legacy systems — older information systems that usually ran on an old mainframe computer
life cycle costing — considers the total cost of ownership, or development plus support costs, for a
project
management reserves — dollars included in a cost estimate to allow for future situations that are
unpredictable (sometimes called unknown unknowns)
overrun . the additional percentage or dollar amount by which actual costs exceed estimates
parametric modeling — a cost-estimating technique that uses project characteristics (parameters) in
a mathematical model to estimate project costs
planned value (PV) — that portion of the approved total cost estimate planned to be spent on an
activity during a given period, formerly called the budgeted cost of work scheduled (BCWS)
profit margin — the ratio between revenues and profits
profits — revenues minus expenses
project cost management — the processes required to ensure that the project is completed within the
approved budget
reserves — dollars included in a cost estimate to mitigate cost risk by allowing for future situations
that are difficult to predict
resource planning — determining what resources (people, equipment, and materials) and what
quantities of each resource should be used to perform project activities
rough order of magnitude (ROM) estimate — a cost estimate prepared very early in the life of a
project to provide a rough idea of what a project will cost
schedule performance index (SPI) — the ratio of earned value to planned value; can be used to
estimate the projected time to complete a project
schedule variance (SV) — the earned value minus the planned value
sunk cost — money that has been spent in the past
tangible costs or benefits — costs or benefits that can be easily measured in dollars
37
Chapter 8
Project Quality Management
Chapter Overview
Chapter 8 highlights the importance of quality on information technology projects, defines quality and
quality management, and explains the processes of quality planning, quality assurance, and quality control.
It provides several examples of various tools and techniques such as Pareto diagrams, quality control
charts, and using Six Sigma to improve quality.
Chapter Objectives
1. Understand the importance of project quality management for information technology products and
services
2. Define project quality management and understand how quality relates to various aspects of information
technology projects
3. Describe quality planning and its relationship to project scope management
4. Discuss the importance of quality assurance
5. List the three outputs of the quality control process
6. Understand the tools and techniques for quality control, such as Pareto analysis, statistical sampling, Six
Sigma, quality control charts, and testing
7. Describe important concepts related to Six Sigma and how it helps organizations improve quality and
reduce costs
8. Summarize the contributions of noteworthy quality experts to modern quality management
9. Understand how the Malcolm Baldrige Award and ISO 9000 standard promote quality in project
management
10. Describe how leadership, cost, organizational influences, and maturity models relate to improving
quality in information technology projects
11. Discuss how software can assist in project quality management
Instructor Notes
What is Project Quality Management
Emphasize the key terms in this sectionquality, conformance to requirements, fitness for use, quality
planning, quality assurance, and quality control. Provide examples of how these terms relate to projects
you are familiar with. For example, you may have worked on a project that the project team thought was
of high quality, but it was not what the customer wanted. Project quality management emphasizes meeting
or exceeding customer needs and expectations, so you must focus on understanding the customer's view of
quality.
Quality Planning
Emphasize the key terms in this sectiondesign of experiments, functionality, features, system outputs,
performance, reliability, and maintainability.
38
Quality Assurance
Quality assurance is sometimes referred to as the management section of project quality management. The
project manager and senior management can have the greatest impact on the quality of projects by
establishing a good quality assurance system. Benchmarking and quality audits are key terms in this
section. Also note the example of what goes into a quality assurance plan.
Quality Control
Plan to spend the most time on quality control and its tools and techniques. Although the focus is on
quality control, it is important to emphasize the importance of proper planning and quality assurance to
avoid having too much need for rework and process adjustments.
Tools and Techniques for Quality Control
Students always like learning new tools and techniques. Go over the examples in the textbook of Pareto
analysis, fishbone diagrams, quality control charts, and testing programs. Also plan to spend some time
discussing Six Sigma. Most students do not like the material on statistics, but at least explain what
standard deviation is and how reducing variation helps to improve quality. Students enjoy doing Exercise
3 on pg. 299 (rolling a pair of dice to illustrate a normal distribution). Remember to bring a lot of dice to
class the day that you cover this topic. Or ask a student to find or write a simple program to let students
simulate this activity on the computer for extra credit.
Modern Quality Management
Briefly summarize key contributions made by Deming, Juran, Crosby, Ishikawa, Taguchi, and
Feigenbaum. Many students have heard of Deming and Juran. Ask them what they know about these
experts’ work on quality management. Also discuss the Malcolm Baldrige Award and ISO 9000, since
these are also important aspects of quality management.
Improving Information Technology Project Quality
Highlight the importance of leadership, understanding the cost of quality, organizational influences on
quality, and the use of different maturity models to help improve quality. Tom DeMarco's research on
programmer productivity is very interesting (pg. 292-293). Many companies are using or researching
different maturity models, so this is an interesting topic to students, as well.
Using Software to Assist in Quality Management
Discuss different software products available specifically for quality management, such as statistical
analysis tools. Ask students to investigate different tools being sold to help manage Six Sigma projects.
Classroom Activities
1.
2.
Expectations exercise:
A lot of project quality management is understand and managing customer expectations. Have
students jot down their answers to the following questions:
a. One of your neighbors bought an expensive new car. How much did it cost?
b. You had to wait in line for a long time. How long did you wait?
c. Your boss is really old. How old is your boss?
d. You recently applied for a job, and the company sent a letter saying they’d get back to you in
the near future. When will they get back to you?
Poll the class to find the high and low responses for each discussion to see the amount of variation in
the responses. Stress the importance of knowing what the customer’s expectations are in order to
manage project quality. For example, if part of the project includes delivery of an expensive new car,
the customer might be upset if you deliver one that costs a lot more or less than expected.
Six Sigma presentation and discussion:
39
Have a student give a presentation on Six Sigma, using at least three outside references. Then have
the class discuss what they think about Six Sigma and how it is affecting project quality.
Troubleshooting Tips
Ask students if they have discussed quality in any of their other classes or at work. Discuss similarities
and differences between those other sources of information on quality and what is covered in this textbook.
Ask students to discuss whether there are any aspects of quality control and quality management that are
unique to project management or information technology.
Quick Quiz
1.
2.
3.
Define quality and what is meant by stated and implied needs.
ANSWER: Quality is the totality of characteristics of an entity that bear on its ability to satisfy stated
or implied needs. Stated needs are formally communicated either verbally or in writing. Implied
needs mean the product is fit for use or can be used as it was intended.
Who created fishbone diagrams, and what are they used for?
ANSWER: Ishikawa developed fishbone diagrams, and they are used to trace complaints about
quality problems back to the responsible production operations to find the root cause.
Which is better, 3 sigma, 4 sigma, 5 sigma, or 6 sigma?
ANSWER: 6 sigma. There are less defective units as sigma increases.
Discussion Questions
1.
2.
3.
Provide examples of the cost of quality based on your own personal experience.
Do you think that people accept poor quality in information technology projects and products in
exchange for faster innovation? What other reasons might there be for such poor quality?
Do you think Six Sigma is another quality management fad?
Key Terms
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acceptance decisions — decisions that determine if the products or services produced as part of the project will
be accepted or rejected
appraisal cost — the cost of evaluating processes and their outputs to ensure that a project is error-free or within
an acceptable error range
benchmarking — a technique used to generate ideas for quality improvements by comparing specific project
practices or product characteristics to those of other projects or products within or outside the performing
organization
Capability Maturity Model (CMM) — a five-level model laying out a generic path to process improvement for
software development in organizations
conformance — delivering products that meet requirements and fitness for use
conformance to requirements — the project processes and products meet written specifications
control chart — a graphic display of data that illustrates the results of a process over time
cost of nonconformance — taking responsibility for failures or not meeting quality expectations
cost of quality — the cost of conformance plus the cost of nonconformance
defect — any instance where the product or service fails to meet customer requirements
Define, Measure, Analyze, Improve, Control (DMAIC) —a systematic, closed loop process for continued
improvement that is scientific and fact based
design of experiments — a quality technique that helps identify which variables have the most influence on the
overall outcome of a process
external failure cost — a cost related to all errors not detected and corrected before delivery to the customer
features — the special characteristics that appeal to users
Fishbone diagrams — diagrams that trace complaints about quality problems back to the responsible production
operations; sometimes called Ishikawa diagrams
fitness for use — a product can be used as it was intended
functionality — the degree to which a system performs its intended function
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integration testing — testing that occurs between unit and system testing to test functionally grouped
components to ensure a subset(s) of the entire system works together
internal failure cost — a cost incurred to correct an identified defect before the customer receives the product
ISO 9000 — a quality system standard developed by the International Organization for Standardization (ISO)
that includes a three-part, continuous cycle of planning, controlling, and documenting quality in an organization
maintainability — the ease of performing maintenance on a product
Malcolm Baldrige National Quality Award — an award started in 1987 to recognize companies that have
achieved a level of world-class competition through quality management
maturity model — a framework for helping organizations improve their processes and systems
mean — the average value of a population
measurement and test equipment cost — the capital cost of equipment used to perform prevention and
appraisal activities
normal distribution — a bell-shaped curve that is symmetrical about the mean of the population
Pareto analysis — identifying the vital few contributors that account for most quality problems in a system
Pareto diagrams — histograms that help identify and prioritize problem areas
performance — how well a product or service performs the customer’s intended use
prevention cost — the cost of planning and executing a project so that it is error-free or within an acceptable
error range
process adjustments — adjustments made to correct or prevent further quality problems based on quality
control measurements
project quality management — ensuring that a project will satisfy the needs for which it was undertaken
quality — the totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs
quality assurance — periodically evaluating overall project performance to ensure the project will satisfy the
relevant quality standards
quality audits — structured reviews of specific quality management activities that help identify lessons learned
and can improve performance on current or future projects
quality circles — groups of non-supervisors and work leaders in a single company department who volunteer to
conduct group studies on how to improve the effectiveness of work in their department
quality control — monitoring specific project results to ensure that they comply with the relevant quality
standards and identifying ways to improve overall quality
quality planning — identifying which quality standards are relevant to the project and how to satisfy them
reliability — the ability of a product or service to perform as expected under normal conditions without
unacceptable failures
rework — action taken to bring rejected items into compliance with product requirements or specifications or
other stakeholder expectations
Robust Design methods — methods that focus on eliminating defects by substituting scientific inquiry for trialand-error methods
seven run rule — if seven data points in a row on a quality control chart are all below the mean, above the
mean, or are all increasing or decreasing, then the process needs to be examined for nonrandom problems
Six Sigma — a comprehensive and flexible system for achieving, sustaining, and maximizing business success
that is uniquely driven by close understanding of customer needs, disciplined use of facts, data, statistical
analysis, and diligent attention to managing, improving, and reinventing business processes
six 9s of quality — a measure of quality control equal to 1 fault in 1 million opportunities
standard deviation — a measure of how much variation exists in a distribution of data
statistical sampling — choosing part of a population of interest for inspection
system outputs — the screens and reports the system generates
system testing — testing the entire system as one entity to ensure it is working properly
unit test — a test of each individual component (often a program) to ensure it is as defect-free as possible
user acceptance testing — an independent test performed by end users prior to accepting the delivered system
yield — represents the number of units handled correctly through the development process
41
Chapter 9
Project Human Resource Management
Chapter Overview
Chapter 9 introduces the first facilitating knowledge area, project human resource management. There are
many important topics in this chapter, and whole courses are devoted to improving human resource
management. Review basic topics like motivation and emphasize what project managers and teams need
to know to make effective use of human resources.
Chapter Objectives
After reading this chapter, you will be able to:
1. Explain the importance of good human resource management on projects, especially on information
technology projects
2. Define project human resource management and understand its processes
3. Summarize key concepts for managing people by understanding the theories of Abraham Maslow,
Frederick Herzberg, David McClelland, and Douglas McGregor on motivation, H. J. Thamhain and D. L.
Wilemon on influencing workers, and Stephen Covey on how people and teams can become more effective
4. Discuss organizational planning and be able to create a project organizational chart, responsibility
assignment matrix, and resource histogram
5. Understand important issues involved in project staff acquisition and explain the concepts of resource
assignments, resource loading, and resource leveling
6. Assist in team development with training, team-building activities, and reward systems
7. Describe how project management software can assist in project human resource management
Instructor Notes
The Importance of Human Resource Management
Project human resource management deals specifically with organizational planning, staff acquisition, and
team development. Although many topics in this chapter are similar to those covered in courses on human
resource management, there are unique aspects of managing people in a project environment, such as
resource loading and resource leveling.
Keys to Managing People
Although some items in this section may be a review to students, it is still important to analyze and discuss
motivation theories, influence, power, and improving effectiveness. Not all students have had psychology
or other courses that cover these topics, and there are some unique aspects of project management that
make for interesting discussion. The “What Went Right?” on pg. 321 provides information on effective
practices for ensuring partnerships between people in business and technology areas. Many students have
heard of Covey's seven habits, but few have read his books. You might want to make The 7 Habits of
Highly Effective People a required additional reading for the course or choose another book that highlights
the “people side” of project management. In general, students in IT fields do not take many courses
related to people issues.
42
Organizational Planning
Most students are familiar with organizational charts, but few have seen project organizational charts or
heard of a responsibility assignment matrix. Review examples of these matrixes, such as the ones provided
in Figures 9-4 and 9-5. Also discuss the sample resource histogram in Figure 9-6 and how this tool helps
to ensure adequate staffing on projects.
Project Staff Acquisition
Resource loading and leveling are important concepts in project human resource management. Most
students can understand resource loading and interpret a resource histogram. Resource leveling, on the
other hand, is more challenging to explain and understand. Discuss Figure 9-8 in class. Because of their
familiarity with the Tetris game, most students are able to understand the goal of resource leveling. Make
sure they understand that the project network diagram is a key input to resource leveling.
Team Develpment
Team development should also be reviewed and discussed. If time permits, have students take the MyersBriggs Type Indicator (MBTI) test. A free web-based version of this instrument is available from
www.humanmetrics.com or www.keirsey.com or similar sites. Several other instruments are available to
help people better understand themselves and their teammates, but the MBTI is currently the most popular.
The social styles profile is also fairly popular. Share your experiences with team building exercises and
your opinions of their helpfulness.
Using Software to Asssit in Human Resource Management
Demonstrate some of the human resource features of Project 2002. Appendix A includes a section on
human resource management. It features an example of using Project 2000 to create resource histograms
and to assist with resource leveling. Most Project 2002 users, however, do not use the cost or human
resource management features of Project 2002. Spreadsheets or other software are commonly used for
project human resource management.
Classroom Activities
1. Meyers-Briggs Type Indicator (MBTI) discussion:
Have students take the MBTI, then divide them into groups of four to discuss their profiles and how they
might use this information if they were to work together on a project. If students are doing group projects
as part of class, use their project groups for this discussion.
2. Resource histogram:
If students have easy access to computers, have them recreate the histogram found in Figure 9-6.
Troubleshooting Tips
Students usually can relate to the opening case in this chapter. Have a student read the opening case aloud
to illustrate an example of how mature, well-educated adults can act in a childish fashion. This case is
based on a true story. Ask students what they think happened. The ending is found in the closing case,
and is also a true situation. Depending on how much time you have in your course, require an additional
reading related to the people side of project management. The suggested readings in the textbook and in
the further readings or resources provide several ideas.
Quick Quiz
1.
Give an example of a hygiene factor, according to Herzberg.
ANSWER: Answers could include a more attractive work environment, training, or fringe benefits
such as a good parking space or casual dress, and so on. Herzberg also says that money is a hygiene
factor.
43
2.
What type of chart is used to show resource loading?
ANSWER: A histogram
3. What do the letters RAM stand for as they relate to project human resource management? What does
RACI stand for in a RACI chart?
ANSWER: RAM stands for Responsibility Assignment Matrix. A RACI chart is a type of RAM that
shows responsibility, accountability, consultation, and informed roles for project stakeholders.
4. What ways to have influence are correlated with successful projects?
ANSWER: Expertise and work challenge
Discussion Questions
1.
2.
3.
Discuss the Opening Case. Did Sarah use appropriate behavior? Why or why not?
Do you think everyone can easily be a team player? What types of people have more difficulty being
team players? What helps promote this team player behavior?
What do you think is more important for a good IT professional: strong technical skills or strong
people skills?
Key Terms
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coercive power — using punishment, threats, or other negative approaches to get people to do things they do not
want to do
deputy project managers — people who fill in for project managers in their absence and assist them as needed,
similar to the role of a vice president
empathic listening — listening with the intent to understand
expert power — using one’s personal knowledge and expertise to get people to change their behavior
extrinsic motivation — causes people to do something for a reward or to avoid a penalty
hierarchy of needs — a pyramid structure illustrating Maslow’s theory that people’s behaviors are guided or
motivated by a sequence of needs
intrinsic motivation — causes people to participate in an activity for our own enjoyment
legitimate power — getting people to do things based on a position of authority
mirroring — the matching of certain behaviors of the other person
Myers-Briggs Type Indicator (MBTI) — a popular tool for determining personality preferences
organizational planning — identifying, assigning, and documenting project roles, responsibilities, and reporting
relationships
organizational breakdown structure (OBS) — a specific type of organizational chart that shows which
organizational units are responsible for which work items
overallocation — when more resources than are available are assigned to perform work at a given time power
— the potential ability to influence behavior to get people to do things they would not otherwise do
RACI charts — charts that show Responsibility, Accountability, Consultation, and Informed roles for project
stakeholders
rapport — a relation of harmony, conformity, accord, or affinity
referent power — getting people to do things based on an individual’s personal charisma
resource histogram — a column chart that shows the number of resources assigned to a project over time
resource leveling — a technique for resolving resource conflicts by delaying tasks
resource loading — the amount of individual resources an existing schedule requires during specific time
periods
responsibility assignment matrix (RAM) — a matrix that maps the work of the project as described in the
WBS to the people responsible for performing the work as described in the OBS
reward power — using incentives to induce people to do things
staff acquisition — getting the needed personnel assigned to and working on the project
staffing management plan — a document that describes when and how people will be added to and taken off
the project team
subproject managers — people responsible for managing the subprojects that a large project might be broken
into
synergy — an approach where the whole is greater than the sum of the parts
team development — building individual and group skills to enhance project performance
44
Chapter 10
Project Communications Management
Chapter Overview
Chapter 10 describes another important facilitating knowledge area, project communications management.
It explains the processes involved in project communications management, methods for improving project
communications, and how various types of software can enhance communications.
Chapter Objectives
After reading this chapter, you will be able to:
1. Understand the importance of good communication on projects and describe the major components of a
communications management plan
2. Discuss the elements of project communications planning, including information distribution,
performance reporting, and administrative closure
3. Discuss various methods for project information distribution and the advantages and disadvantages of
each
4. Understand individual communication needs and how to determine the number of communications
channels needed for a project
5. Understand how the main outputs of performance reporting help stakeholders stay informed about
project resources
6. Recognize how the main outputs of administrative closure are used to formally end a project
7. List various methods for improving project communications, such as managing conflicts, running
effective meetings, using e-mail effectively, and using templates
8. Describe how software can enhance project communications
Instructor Notes
The Importance of Project Communications Management
Bring a copy of a cartoon (such as Dilbert) making fun of how poorly many technical people communicate.
You cannot overemphasize how important it is to have good communications on projects. As discussed in
Chapter 9, Project Human Resource Management, every person is unique in what motivates him or her.
Everyone is also unique in how they communicate. Information technology professionals are not known
for being particularly strong communicators, but stress that communication skills are critical and can
definitely be developed. Most people agree that it is their communications skills that help them advance
the most in their careers. Interviewers are often looking for communications skills at job interviews.
If students are doing group projects as part of the course, suggest that they skim this chapter very early in
the course along with Appendix D, Templates.
Communications Planning
Most people have not heard of a communications management plan. Review the main components of this
plan. It is also important to analyze project stakeholders' communications needs and preferences. Show
the sample stakeholder analysis for project communications in Table 10-1.
45
Information Distribution
Students should be familiar with the topics in this section. Discuss various methods for distributing project
information, using different forms of technology, and using informal and formal information distribution.
Table 10-2 provides interesting information on when to use different communications media. Discuss
your own experiences with how you send and receive project-related information.
It is often assumed that adding more people to a project will automatically help accomplish more work.
Discuss the issue of the complexity of communications as the number of people involved in a project
increases. Review the formula for determining the number of communications channels ((n(n-1))/2).
Figure 10-1 illustrates this concept. If students have had a data communications and networks class, they
should be familiar with this formula.
Performance Reporting
Stress the importance of performance reports and status review meetings in project management. Remind
students of some of the topics discussed in Chapter 3, Project Integration Management, such as how
important it is to align projects with organizational goals and to have top management support. Holding
status review meetings is a powerful tool for accomplishing both, as well as an effective way to keep all
stakeholders informed of what is happening on the project. Explain the difference between status reports,
progress reports, and project forecasting. Remind students that earned value analysis is a tool for showing
progress in terms of meeting project scope, time, and cost goals and can be used to estimate completion
time and cost.
Administrative Closure
Administrative closure is done poorly on many projects. Stress how important it is to prepare project
archives, obtain formal acceptance of projects, and document lessons learned on projects. You could use
the analogy of completing a course. Students often write a final project report to archive what they have
done; the instructor determines acceptance by assigning grades; and students should be required to
document what they learned from the project or course.
Suggestions for Improving Project Communications
Several ideas are presented here, such as how to resolve conflict, develop better communication skills, run
effective meetings, use templates for project communications, and develop a communications
infrastructure. If students plan to take the PMP certification exam, make sure they understand the various
conflict resolution modes. If students are doing group projects, point out the many templates provided in
this section.
Using Software to Assist in Project Communications
Summarize the different types of software that can assist in project communicationse-mail, the Web,
workgroup software, Project 2002, mobile computing software, and so on. Review some Project 2002
features, such as inserting comments and hyperlinks by specific project tasks and saving files as html
documents, as described in Appendix A. Also mention the importance of keeping the latest project
information up-to-date and avoiding information overload by using too much technology.
46
Classroom Activities
1. Improving Project Communications:
Divide students into groups of three to five to share examples of projects on which they have worked in
which communications were good and some in which communications were not so good. Have them
develop a list of five to ten things to do and five to ten things not to do to help improve communications.
Assign a recorder to share the group's ideas with the entire class.
2. Virtual Communications:
Some of your students may be taking your class via distance learning. Others may have worked or will
work on projects in a virtual environment. Have students use virtual communications to complete an
activity in a virtual team environment and then discuss what adjustments they need to make to work
virtually. For example, you could have students do the above activity virtually.
Troubleshooting Tips
If students are working on group projects, have them at least skim this chapter early in the course. Ask
students to describe problems they have had communicating on past or current projects. Provide a way for
students to share problems with you, without upsetting their classmates. For example, include a group and
self-assessment for the group project and have each person allocate points to all team members. Have
them reflect on what they could have done differently to improve project communications.
Quick Quiz
1. What is the formula for determining the number of communications channels?
ANSWER: number of communications channels = (n(n-1))/2
2. Which mode for handling conflicts is favored by project managers?
ANSWER: Confrontation mode, which is also known as problem-solving mode.
3. What is the difference between a status report and a performance report? Give an example of each.
ANSWER: A status report describes where the project stands at a specific point in time. An earned value
analysis is an example of a status report. A progress report describes what the project team has
accomplished during a certain period of time. A weekly activity report is an example of a progress report.
Discussion Questions
1.
2.
The concept of a communications management plan makes logical sense, yet many projects do not
create or follow this type of plan. Why do you think this is the case?
Which skills do you think are more important for information technology project managers to possess
at various points in their careersstrong technical skills or strong communications skills?
Key Terms
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administrative closure — generating, gathering, and disseminating information to formalize phase or project
completion
communications infrastructure — a set of tools, techniques, and principles that provide a foundation for the
effective transfer of information among people
communications management plan — a document that guides project communications
communications planning — determining the information and communications needs of the stakeholders: who
needs what information, when will they need it, and how will the information be given to them
compromise mode — using a give-and-take approach to resolving conflicts; bargaining and searching for
solutions that bring some degree of satisfaction to all the parties in a dispute
confrontation mode — directly facing a conflict using a problem-solving approach that allows affected parties
to work through their disagreements
forcing mode — using a win-lose approach to conflict resolution to get one’s way
formal acceptance — documentation that the project’s sponsor or customer signs to show they have accepted
the products of the project
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groupthink — conformance to the values or ethical standards of a group
information distribution — making needed information available to project stakeholders in a timely manner
kickoff meeting — a meeting held at the beginning of a project or project phase where all major project
stakeholders discuss project objectives, plans, and so on
lessons learned — reflective statements written by project managers and their team members
performance reporting — collecting and disseminating performance information, which includes status reports,
progress measurement, and forecasting
progress reports — reports that describe what the project team has accomplished during a certain period of time
project archives — a complete set of organized project records that provide an accurate history of the project
project forecasting — predicting future project status and progress based on past information and trends
smoothing mode — deemphasizing or avoiding areas of differences and emphasizing areas of agreements
status reports — reports that describe where the project stands at a specific point in time
withdrawal mode — retreating or withdrawing from an actual or potential disagreement
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Chapter 11
Project Risk Management
Chapter Overview
Chapter 11 provides an introduction to project risk management, one of the most misunderstood
knowledge areas of project management. Important topics include understanding what risk is and why risk
management is important, the project risk management processes, tools and techniques such as
probability/impact matrices, Top Ten Risk Item tracking, and simulations.
Chapter Objectives
After reading this chapter, you will be able to:
1. Understand what risk is and the importance of good project risk management
2. Discuss the elements involved in risk management planning
3. List common sources of risks on information technology projects
4. Describe the risk identification process and tools and techniques to help identify project risks
5. Discuss the qualitative risk analysis process and explain how to calculate risk factors, use
probability/impact matrixes, the Top Ten Risk Item Tracking technique, and expert judgment to rank risks
6. Explain the quantify risk analysis process and how to use decision trees and simulation to quantitative
risks
7. Provide examples of using different risk response planning strategies such as risk avoidance,
acceptance, transference, and mitigation
8. Discuss what is involved in risk monitoring and control
9. Describe how software can assist in project risk management
10. Explain the results of good project risk management
Instructor Notes
The Importance of Project Risk Management
Many people ignore risk management on projects, and a few people over emphasize it. Define risk, risk
utility or risk tolerance, and the difference among people who are risk-averse, risk-seeking, and riskneutral. Emphasize that risk management should be done during the entire project life cycle. It is
especially important to consider risk when selecting projects to work on, as illustrated in the opening and
closing case.
Note the study results in Table 11-1 pointing out that most industries are least mature when it comes to
project risk management. Also note that this knowledge area has changed a fair amount from the 1996
edition of the PMBOK Guide.
Risk Management Planning
Emphasize the importance of creating a risk management plan for projects when it makes sense to do so.
Table 11-2 includes questions addressed in a risk management plan. Give examples of contingency plans,
fallback plans, and contingency reserves.
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Common Sources of Risk on Information Technology Projects
Several studies show common sources of risk. Table 10-3 highlights the importance of user involvement,
executive management support, and clear requirements in order to reduce risk on information technology
projects. Describe projects you have worked on and what risks they faced.
Risk Identification
Discuss potential risks by knowledge area, as described in Table 11-5. Also describe the tools and
techniques for identifying risks such as information-gathering techniques, checklists, and diagramming.
Remind students that fishbone diagrams (from Chapter 8, Project Quality Management) can also be used to
help in identifying potential risks.
Qualitative Risk Analysis
Emphasize the importance of considering the likelihood of an identified risk occurring and its impact if it
does occur. Give examples of using a probability/impact matrix. The example in the text is from a real
project, but it may be too complicated for some students to understand. You could have the class identify
potential risks for getting a good grade in your class, then put each item on a chart where the x-axis is the
impact of the risk occurring and the y-axis is the probability of the risk occurring. Also discuss the Top 10
Risk Item Tracking tool and mention that Microsoft uses this tool in their Solutions Framework. Remind
students of the importance of consulting experts to help in qualitative risk analysis, too.
Quantitative Risk Analysis
Plan to spend some time reviewing different methods for quantifying risk. Students who are strong in math
will like this section, and students who are less inclined towards math may be intimidated by some of the
techniques presented. Explain the concept of decisions trees and determining the expected monetary value
(EMV) of a project. Figure 11-4 provides a good example of how to calculate EMV. Stress that
calculations are done from left to right, and the probabilities for outcomes must add up to one. Give
students a few minutes to practice using EMV in class. You could do Exercise 4 in the textbook or make
up an example.
Review other risk quantification methods such as PERT estimations, and simulation. Monte Carlo
simulation is an important concept, but students may have a difficult time understanding it. Figures 11-5
and 11-6 in the section on using software to assist in project risk management provide examples on how to
use and interpret the results of a Monte Carlo simulation.
Quantitative Risk Analysis
Plan to spend some time reviewing different methods for quantifying risk. Students who are strong in math
will like this section, and students who are less inclined towards math may be intimidated by some of the
techniques presented. Explain the concept of decisions trees and determining the expected monetary value
(EMV) of a project. Figure 11-4 provides a good example of how to calculate EMV. Stress that
calculations are done from left to right, and the probabilities for outcomes must add up to one. Give
students a few minutes to practice using EMV in class. You could do Exercise 4 in the textbook or make
up an example.
Risk Response Planning
Explain the difference between risk avoidance, risk acceptance, risk transference, and risk mitigation.
Table 11-8 provides general mitigation strategies for technical, cost, and schedule risks on projects.
Discuss items included in a risk response plan, including residual risks and secondary risks.
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Risk Monitoring and Control
Discuss the importance of responding to risk events. Also emphasize that risk management is an on-going
activity performed by the entire project team throughout the entire project.
Using Software to Assist in Project Risk Management
Discuss some of the different software tools that can assist in project risk management. Remind students
what PERT estimates are and then suggest Monte Carlo simulation as a better method for using
probabilistic estimates. If you have any risk analysis software, you could demonstrate how to use it.
Demonstrating risk analysis software might not be appropriate, however, for an undergraduate class, as it
may be too advanced for them to understand it.
Results of Good Project Risk Management
Briefly discuss that although good project risk management is very important, good crisis management
sometimes receives more attention. An outstanding project manager and team will perform good project
risk management in order to avoid needing to attend to crises.
Classroom Activities
1.
2.
Estimated monetary value:
Have students pair up to work on Exercise 4 in the textbook to calculate EMV.
Determining personal risk tolerance:
Divide students into groups of three to five to discuss what they believe to be their own personal
tolerance for risk toward a certain area, such as finances, personal relationships, lifestyle, etc. After
students pick the area and the category they believe they fall under (risk-seeking, risk-averse, or riskneutral), have them create a list of criteria to help determine risk tolerance more systematically. For
example, they could list five to ten questions and determine risk tolerance based on the answers. The
group could also research the availability of tools that help determine risk tolerance. Many financial
planners offer such tools.
Troubleshooting Tips
If your school has Monte Carlo simulation software, it would be most effective to run it in class (or ask a
student to run it) to help the class understand how this software works. The Top 10 Risk Item Tracking is
much easier to understand than Monte Carlo simulation, as is doing a simple probability/impact matrix.
Depending on the nature of your class, you should decide how much to emphasize the quantitative aspects
of project risk management. If students are preparing for the PMP exam, they should know how to do the
EMV calculations.
Quick Quiz
1.
2.
3.
What are the most important success criteria for information technology projects, according to the
Standish Group?
ANSWER: User involvement, executive management support, and a clear statement of requirements.
If a project has a 50 percent probability or making $100 and a 50 percent probability of making no
money at all, what is its expected monetary value?
ANSWER: $50
What does risk mitigation mean? Provide an example of how to mitigate risk on a project.
ANSWER: Risk mitigation means reducing the impact of a risk event by reducing its probability of
occurrence. An example of mitigating risk on a project would be to assign a very experienced project
manager to a project to mitigate the risk of poor management.
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Discussion Questions
1.
2.
3.
Read the opening and closing case. What would you do if you were Cliff? What would you do if you
worked for Cliff?
Do you think many organizations use probability/impact matrices? What about simulations? When
does it make sense to use either or both?
Discuss the last sentence in this chapter on pg. 417 before the Case Wrap-up. Do you think project
managers should strive to make their jobs look easy? Justify your answer.
Key Terms
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brainstorming — a technique by which a group attempts to generate ideas or find a solution for a specific
problem by amassing ideas spontaneously and without judgment
contingency plans — predefined actions that the project team will take if an identified risk event occurs
contingency reserves or allowances — provisions held by the project sponsor that can be used to mitigate cost
and/or schedule risk, should possible changes in project scope or quality occur
Delphi technique — an approach used to derive a consensus among a panel of experts, to make predictions
about future developments
expected monetary value (EMV) — the product of the risk event probability and the risk event’s monetary
value
fallback plans — plans developed for risks that have a high impact on meeting project objectives, to be
implemented if attempts to reduce the risk are not effective
flowcharts — diagrams that show how various elements of a system relate to each other
influence diagrams — diagrams that represent decision problems by displaying essential elements, including
decisions, uncertainties, and objectives, and how they influence each other
interviewing — a fact-finding technique that is normally done face-to-face or via telephone, but can also occur
through e-mail or instant messaging
Monte Carlo analysis —a risk quantification technique that simulates a model’s outcome many times, to
provide a statistical distribution of the calculated results
probability/impact matrix or chart — a matrix or chart that lists the relative probability of a risk occurring on
one side of a matrix or axis on a chart and the relative impact of the risk occurring on the other
qualitative risk analysis — qualitatively analyzing risks and prioritizing their effects on project objectives
quantitative risk analysis — measuring the probability and consequences of risks and estimating their effects on
project objectives
residual risks — risks that remain after all of the response strategies have been implemented
risk — the possibility of loss or injury
risk acceptance — accepting the consequences should a risk occur
risk-averse — having a low tolerance for risk
risk avoidance — eliminating a specific threat or risk, usually by eliminating its causes
risk events — specific circumstances that may occur to the detriment of the project
risk factors — numbers that represent overall risk of specific events, given their probability of occurring and the
consequence to the project if they do
risk identification — determining which risks are likely to affect a project and documenting the characteristics
of each
risk management plan — a plan that documents the procedures for managing risk throughout the project
risk management planning — deciding how to approach and plan the risk management activities for a project,
by reviewing the project charter, WBS, roles and responsibilities, stakeholder risk tolerances, and the
organization’s risk management policies and plan templates
risk mitigation — reducing the impact of a risk event by reducing the probability of its occurrence
risk monitoring and control — monitoring known risks, identifying new risks, reducing risks, and evaluating
the effectiveness of risk reduction throughout the life of the project
risk-neutral — a balance between risk and payoff
risk response planning — taking steps to enhance opportunities and reduce threats to meeting project objectives
risk-seeking — having a high tolerance for risk
risk symptoms or triggers — indications for actual risk events
risk transference — shifting the consequence of a risk and responsibility for its management to a third party
risk utility or risk tolerance — the amount of satisfaction or pleasure received from a potential payoff
runaway projects — projects that have significant cost or schedule overruns
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secondary risks — risks that are a direct result of implementing a risk response
Top Ten Risk Item Tracking — a qualitative risk analysis tool for identifying risks and maintaining an
awareness of risks throughout the life of a project
triggers — indications for actual risk events
workarounds— unplanned responses to risk events that project teams use when there is no contingency plan in
place
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Chapter 12
Project Procurement Management
Chapter Overview
Chapter 12 provides an introduction to the last of the nine project management knowledge areas, project
procurement management. Depending on the project environment, project managers may need to know a
lot about this area or very little. Important topics include the growth in procurement for information
technology projects, the processes involved in procurement management, and the types of software
available to assist in procurement management.
Chapter Objectives
After reading this chapter, you will be able to:
1. Understand the importance of project procurement management and the increasing use of outsourcing
for information technology projects
2. Describe the procurement planning process, procurement planning tools and techniques, types of
contracts, and statements of work
3. Discuss what is involved in solicitation planning and the difference between a request for proposal and a
request for quote
4. Explain what occurs during the solicitation process
5. Describe the source selection process and different approaches for evaluating proposals or selecting
suppliers
6. Discuss the importance of good contract administration
7. Describe the contract close-out process
8. Discuss types of software available to assist in project procurement management
Instructor Notes
Importance of Project Procurement Management
Highlight the statistics on outsourcing to help emphasize the importance of this knowledge area. Many
textbooks and people tend to ignore project procurement management, but it is an important part of project
management. Many people use the term purchasing or outsourcing instead of procurement. Try to use
examples students can relate to when describing the importance of good procurement management. For
example, most people have had a variety of experiences purchasing clothing or basic household goods, as
well as more expensive items such as automobiles or housing.
Procurement Planning
Procurement planning means deciding what to procure, when to procure it, and how to procure it.
Performing a make-or buy analysis is a procurement planning technique to help decide if an organization
should produce its own goods or services or purchase them from someone else. If students are unfamiliar
with this concept, provide a few examples in class. The decision is often based on finances and fit in the
organization. For example, if you can make your own wedding gown exactly as you'd like it for $100 in
materials and have the time and talent to do it, you might prefer to make it than spend a lot of time
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shopping and over $1,000 to buy it. However, if you need to buy an expensive sewing machine and give
up a well-paying job to find time to make the dress, it would probably end up costing you more than
$1,000 to make it. See the exercises on make-or-buy analysis for further examples. Also stress the
importance of seeking expert advice on major procurement decisions.
Other important topics in this section include contract types and statements of work. Figure 12-2
summarizes the types of contracts and the level of risk of each, from a buyer or seller perspective. Provide
examples of each type of contract, as is done in the textbook. Most students are not familiar with contract
types.
Solicitation Planning
If an organization decides to procure goods or services from an outside entity, it must perform solicitation
planning. This section also includes terms with which most students may be unfamiliar. RFPs and RFQs
are commonly used. Try to bring in a sample RFP or RFQ or ask a student to share one with the class.
Your college may have documents you can use as examples for projects they may have done, such as
constructing new buildings, upgrading computer equipment, hiring consultants, and so on. A Web search
on RFPs should provide some examples, also. Stress that it is very difficult to prepare and to respond to
an RFP.
Solicitation
The main output of solicitation is the receipt of proposals or bids. Discuss the various methods for
soliciting proposals or bids. Share your own experiences in this area or ask students to share theirs.
Source Selection
Source selection is an important part of project procurement management. Review the sample proposal
evaluation sheet and detailed criteria for selecting vendors in Figures 12-5 and 12-6. Remind students of
the weighted scoring model described in Chapter 5, Project Scope Management. Many proposal
evaluations use this technique. Stress the importance of including non-technical criteria in evaluating
proposals for information technology-related goods and services.
Contract Administration
Stress that contracts are legally binding, so it is very important to administer contracts well. Mention the
suggestions for ensuring adequate change control on projects that involve outside contractshaving key
people review, approve, and document contract changes; performing an impact analysis before approving
any changes; and documenting changes in writing.
Contract Close-out
Contract close-out involves product verification and several administrative activities to update records and
archive information for future use. Outputs of contract close-out include a contract file and formal
acceptance and closure. Some organizations simply do not pay vendors if they have not delivered the
goods or services as described in the contract. If the contract states that payments are based on
performance as described in the contract, then it is legal to withhold payment for poor performance. Stress
the importance of using legal advice in all contract matters, including close-out.
Classroom Activities
1.
2.
Make or buy analysis:
Have students perform a simple make or buy analysis like the one provided in Exercise 3 on p. 450.
RFP preparation:
Students could work in groups of two to four to draft an RFP. Exercise 5 in the textbook provides one
scenario for writing an RFP to provide laptops for your college or university. The team could then
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also complete Exercise 6 to create the source selection criteria they would use to evaluate proposals
for providing the laptops.
Troubleshooting Tips
Procurement is not the most exciting topic for students. Try to do a few activities to engage the students,
such as the activities provided above or exercises from the textbook.
Quick Quiz
1.
2.
3.
Which organization plans to increase spending on information technology outsourcing services from
$6.6 billion in 2002 to nearly $15 billion by 2007?
ANSWER: the U.S. federal government
What type of contract has the least amount of risk for the buyer?
ANSWER: Firm fixed price
What do the letters RFP stand for?
ANSWER: Request for Proposal
Discussion Questions
1.
2.
3.
Why do you think that the many books on project management and the people studying project
management do not spend much time on the topic of procurement management?
Some experts recommend working with preferred vendors, even if their prices may be higher than
other vendors. Why do you think this is the case?
The government plans to increase outsourcing expenditures dramatically in the next several years.
What should organizations do to earn some this work? How is providing goods and services for the
government different than providing it for other organizations?
Key Terms
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constructive change orders — oral or written acts or omissions by someone with actual or apparent authority
that can be construed to have the same effect as a written change order
contract — a mutually binding agreement that obligates the supplier to provide the specified products or
services, and obligates the buyer to pay for them
contract administration — managing the relationship with the supplier
contract close-out — completion and settlement of the contract, including resolution of any open items
cost plus fixed fee (CPFF) contract — a contract in which the buyer pays the supplier for allowable
performance costs plus a fixed fee payment usually based on a percentage of estimated costs
cost plus incentive fee (CPIF) contract — a contract in which the buyer pays the supplier for allowable
performance costs along with a predetermined fee and an incentive bonus
cost plus percentage of costs (CPPC) contract — a contract in which the buyer pays the supplier for allowable
performance costs along with a predetermined percentage based on total costs
cost-reimbursable contracts — contracts involving payment to the supplier for direct and indirect actual costs
fixed-price or lump-sum contracts — contracts with a fixed total price for a well-defined product or service
make-or-buy decision — when an organization decides if it is in its best interests to make certain products or
perform certain services inside the organization, or if it is better to buy them from an outside organization
procurement — acquiring goods and/or services from an outside source
procurement planning — determining what to procure and when
project procurement management — the processes required to acquire goods and services for a project from
outside the performing organization
Request for Proposal (RFP) — a document used to solicit proposals from prospective suppliers
Request for Quote (RFQ) — a document used to solicit quotes or bids from prospective suppliers
solicitation — obtaining quotes, bids, offers, or proposals as appropriate
solicitation planning — documenting product requirements and identifying potential sources
source selection — choosing from among potential suppliers
statement of work (SOW) — a description of the work required for the procurement
termination clause — a contract clause that allows the buyer or supplier to end the contract
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time and material contracts — a hybrid of both fixed-price and cost-reimbursable contracts
unit price contract — a contract where the buyer pays the supplier a predetermined amount per unit of service,
and the total value of the contract is a function of the quantities needed to complete the work
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Appendix A
Guide to Using Microsoft Project 2002
Teaching Tips
Appendix A provides step-by-step instructions on using Microsoft Project 2002. Students should be able
to go through the entire appendix on their own after a brief introduction to the software. It is best to cover
Chapters 1-6 of the textbook first so students know about WBSs, Gantt charts, network diagrams, and so
on. It is helpful to go through the Overview of Microsoft Project 2002 during class and demonstrate basic
functions such as entering task durations and relationships. If you are in a room where students have PCs
and you have the time, then you could have students begin to work through this appendix during class. It
usually works best to have them complete the Appendix for a homework assignment.
Hands-on use of any software package is important. You could assign students to go through part or all of
Appendix A as a homework assignment and print out some of the files they produce. As a minimum, you
should have students work through the time management section step-by-step. You could have them
change the date of the file and enter their name in the title of the project and then print out the Gantt chart
on p. 496 for a first assignment. Depending on the emphasis of your course, you could also have students
do some of the exercises at the end of Appendix A.
Files mentioned in the appendix are available Course Technology’s web site, and solutions are available
on the Instructor Resource CD-Rom. Note that Project 2002 is a very sophisticated and often complicated
program. Don’t expect students (or yourself) to become an expert. The resource assignment features can
be especially confusing to use.
If students are doing a class project, require them to use Project 2002 to plan their projects. You could
also have them enter actuals, if desired, and analyze their planned versus actual performance on the class
project. The exercises at the end of Appendix A are fairly challenging, and there are also several shorter
exercises in earlier chapters and in Appendix C.
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Appendix B
Advice for the Project Management Professional (PMP)
Exam and Related Certifications
Teaching Tips
Since many students may not be interested in certification, especially traditional students, you might wish to
have students read this appendix on their own and answer questions they might have in class. The information
is very straightforward. Be sure to direct students to PMI's web site for the latest information on certification
(www.pmi.org). Do let students know about new certification exams, like the CompTIA IT Project+ exam,
which does not require any work experience and is less expensive than PMP certification. See
www.comptia.org for more details.
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Appendix C
Running Cases
Teaching Tips
This appendix is new to the third edition. Several faculty members have asked for good cases they can assign
to students for individual or group projects. Each case has five parts based on the project management process
groups (initiating, planning, executing, controlling, and closing). There are several tasks under each part.
Read through the questions and decide if you want to assign all or parts of them. Potential solutions are
provided on the Instructor Resources CD-Rom. Additional running cases will be provided on the companion
Web site at www.course.com/mis/schwalbe. Feel free to create your own case studies, and send them to me at
[email protected] if you’d like to share them with other instructors.
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Appendix D
Templates
Teaching Tips
Let students know about these templates early in your course. You can download the template files from the
companion Web site at www.course.com/mis/schwalbe. Feel free to modify them to meet your specific needs.
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