Chapter 1 Introduction to Project Management – Core Concepts of Project Management

CHAPTER 1

Introduction to Project Management

Key Points

  • Characteristics of projects
  • Projects as systems
  • Basic project—critical success factors

Almost every organization gets involved in many projects. A major reason projects are so important is the fast pace of change and the more specialized nature of modern business. Many of these projects involve information systems, a distinctive type of project. Firms have to keep at least close to the cutting edge for harnessing the power of computers in almost every aspect of business. Large accounting firms have enlarged their information systems consulting operations, and almost all of this type of consulting involves an information systems project. This means that there are more and more unique activities drawing people together from diverse locations and diverse organizations with diverse, specialized skills.

Project management has long been associated with operations management and is an important topic in operations management’s curriculum. There has been an explosion of projects in the field of information systems. Information systems project management involves some characteristics that are different from those found in operations management, but many of the same tools can be applied. This is primarily due to the volume of new projects that organizations have adopted to implement computer technology. There are many useful things that information technology can do for organizations. The information technology environment involves high turnover of personnel, turbulent work environments, and rapidly changing technology. This results in high levels of uncertainty with respect to time and cost. Despite this more volatile environment, project management principles applicable to operations management can often be transferred to the information systems environment.

What Is a Project?

A project involves getting a new, complex activity accomplished. Many activities qualify as projects. Building the Golden Gate Bridge, transporting the Statue of Liberty across the Atlantic, and the attempt to elect Barack Obama as president were all major projects. So were the development of the atomic bomb and sending men to the moon.

Each political campaign is a marketing project, just like other marketing projects to sell new products. You have each written a paper, which was assigned as a “project.” These projects involved researching some topic and organizing ideas into a cohesive, rational whole. In football, developing a promising young quarterback prospect is often a multiyear project, including intensive coaching to learn the team’s offense, to learn the style of teammates, development of leadership skills, passing technique, and building endurance and strength. What television viewers might view as natural talent may have involved the closely planned and coordinated activities of quite a large number of people.

Projects

  • Involve a definable purpose
  • Cut across organizational lines
  • Are unique activities

Projects are purposeful in that they are designed to accomplish something for the organization undertaking them. Projects usually cut across organizational lines, drawing people from a variety of functional specialties. Constructing automobiles on an assembly line is no longer a project once the assembly line is developed, because it becomes a closed, repetitive activity that continues as long as anyone can foresee. Making a series of sales calls is not a project, because it is not a unique activity. However, just like the first assembly line, the first round of sales calls is a project, until a desired level of competence is attained. Projects include:

  • Constructing something
    • a road, a dam, a building, an information system
  • Organizing something
    • a meeting, an election campaign, a symphony, a movie
  • Doing anything the first time
  • Accomplishing a new, complex activity

Project Characteristics

Because projects involve new activities, they typically involve high levels of uncertainty and risk. One of the reasons assembly line operations are efficient is that everyone does the same thing over and over, hour after hour, day after day, year after year. This repetitiveness allows high degrees of specialization, which in turn enables greater productivity. The activities of many different people and machines can be balanced for maximum efficiency in an assembly line operation. Projects involve lower degrees of efficiency than are obtained in assembly line operations.

Because of this higher degree of uncertainty, it is much more difficult to estimate the level of resources required to accomplish a project than it is for other forms of productive organizations. It is also more difficult to estimate the time required (which amounts to another resource). Many projects are late, but not all projects take longer than estimated. The Russian atomic bomb project was completed ahead of schedule, and about the same time, the U.S. U-2 airplane project was finished in about one-tenth of the estimated time. Yet, projects finished ahead of schedule are still rare. Projects are collections of activities. If one activity is late, other activities often have to wait for it to finish. If an activity is ahead of schedule, those doing the work tend to be more careful, or slow down for other reasons. The activities that follow often cannot start early anyway, as the people and materials for those activities may not be available until the originally scheduled starting time. For these and other reasons, it is far more common for projects to be late than to be finished early.

Because of their temporary nature, projects inevitably involve gathering together a diverse group of specialists to accomplish a variety of tasks. Project team members often will not know each other very well, at least in the beginning of the project. They will tend to be quite different people, with different skill sets and interests. The primary feature of a project is that it is a set of temporary activities conducted by ad hoc organizations.

Information systems projects have many similarities to generic projects. They consist of activities, each with durations, predecessor relationships, and resource requirements. They involve high levels of uncertainty and often suffer from time and cost overruns, while rarely experiencing time and cost underruns. However, information systems projects are different from generic projects in some aspects. While each project is unique, there are usually many, many replications of the types of information systems projects. Most are served by a standard methodology, with the need to identify user requirements, followed by design of a system, production of the system, testing of the system, training and implementation, and ultimately maintenance of the system. These steps are not always serial, with many loops back to prior stages. They involve the need for specialists in different areas of the information systems field, but these specialties are not as distinctly different as carpentry and electrical work. Systems analysts usually know how to program, and testers know all of the other functions involved in a project. Project team members from the development side usually understand each other well. Information systems projects of course involve computers, which is a distinct characteristic that has more impact than what might have been apparent initially.

Types of Projects

Projects in the engineering world tend to involve a lot of uncertainty (especially with respect to how long they will take). But information systems projects have added levels of uncertainty. To demonstrate these differences, let us consider four types of projects: engineering (construction), political, movies, and information systems.

First, engineering projects involve more physical activities, while the other three types of projects involve people creating something. It can be argued that engineering projects are thus much easier to manage, because scheduling is a matter of calculating physical quantities and using past production rates to determine how long activities should take.

Second, information systems projects require specialists with different skill sets to work together to create a software product. Movies are similar in this respect. There may be a variety of skills needed for political projects, but for the most part, it is public relations—working with the press to put your candidate in the best light and getting maximum positive exposure. (Some specialists may be needed to cover up negative exposures.) Information systems and movies involve lots of different specialties. Movies need actors, a staff to make actors happy, camera people, directors, grips, and lots of other things. Information systems projects need system analysts, programmers and/or software developers, testers, system installers, trainers, and other specialty skills.

Third, projects involving humans creating things are much more difficult to estimate, because it is more difficult to estimate how long a creative activity (like writing a bug-free code) will take. Actually, political campaigns are more predictable because there is an end point—voting day. Effectiveness might be hard to estimate, but duration is pretty much given. Movies also have planned schedules, but directors may feel that artistic creativity was lacking in scheduled shots and insist on redoing them. Information systems clearly involve less certainty as to duration than the other three kinds of projects considered here.

Dimensions of Complexity

Projects can differ on a number of aspects. These include the number of people involved and the diversity of skills involved. Some projects are individual efforts to accomplish something. Others, like a major military campaign, can involve hundreds of thousands of people. The more people that are involved, the greater the need to organize into subunits, requiring a higher proportion of managers and thus a lower proportion of productive people. In general, the more complex the project, the more time and resources required.

Group size dimensions can vary over extremes. A few examples of projects for different sized groups, ranging from individual effort through three general group levels, are given for comparison.

Project Size by Size of Group

Individual: A term paper is often an individual effort.
Making an oil painting of a landscape is an individual project.
Group: Organizing a wedding can be a major project for a small group.
Implementing a computer system may involve a small group project.
Each audit is a project conducted by auditing specialists.
Organization: Construction organizations are created to develop efficient skills at building structures of one type or another. As each project is completed, there is often a great deal of change in personnel, although the organization will retain some of its people for the next project.
Information systems consulting organizations follow a similar pattern.
Multiorganization: The space shuttle involves coordinated activities of many people.
Probably the most involved projects known to mankind are also the most wasteful. World War II involved the radical reorganization of entire countries, relocation of entire industries in the Soviet Union, long marches in China, the rebuilding of entire industries in Germany and England, and development of entire new industries in the United States.

Projects can also differ on the dimensions of uncertainty. It is much more difficult to predict how much time is to be required the first time you do something. Since projects are usually things done for the first time, they usually take longer than expected when they were estimated. Information systems currently are in very high demand, outstripping their supply. Another possible bias is introduced by the practice of making initial estimates intentionally low to get work. This bias improves the probability of getting work, which is often negotiated on a cost-plus basis. This practice is not at all recommended, as it leads to a bad reputation when initial promises are not kept. Furthermore, it has ethical ramifications with respect to truth in advertising. An additional factor in project lateness is that large government projects are the most commonly reported. These projects tend to be very complex and often overrun time and budget. How many times have you read about a government project of significant magnitude taking less time than estimated? Since there is a strong correlation between time and money, late projects almost always cost more than expected. When was the last time you heard of a government project having a cost underrun?

General project management is a field that has developed primarily since World War II. With more complex undertakings, many project management principles have been developed. They typically involve a cost/time/quality trade-off, found in almost any project. Specifically in the information systems field, this trade-off can be stated as follows:

In the field of information systems, there is an old adage that you can have any two of three things in a project. You can get it done on time, you can get it done within budgeted cost, or you can get it done well. If you are willing to wait, you can get the job done right within cost. If you are willing to spend the money, you can get a good job done quickly. Or, you can get the job done on time and within budget, with the only reservation being that it will not perform as specified.

This adage is not presented as a recommended way to treat all projects. We all like to think that we can do better than anyone else and accomplish all three tasks. But over and over, in the fields of construction, government projects, and information systems, problems in completing projects on time, within budget, and meeting specifications have been encountered. Project management cannot be blamed for all of these reported failures. The point is that we should understand the difficulties involved in a project environment, seeking to understand the project as a system so that we keep it on target with respect to accomplishing what it is intended to do, in the most timely and efficient manner possible. Bringing in a project on time, within budget, and meeting specifications is tough. Project managers need to expect difficult challenges.

Modern Business

Business has grown much more complex, with interrelated currencies and stock markets. The pace of business is at the speed of light, as stock trading is conducted electronically, oftentimes by artificial intelligence systems. Information technology markets are less predictable. The outputs of many companies are tied together through just-in-time systems with dedicated suppliers. At the output end of production, producers and retailers are often connected through electronic data interchange. The international aspect of business is typified by arrangements such as GATT, NAFTA, and the European Economic Community. The rapid pace of change has resulted in the disappearance of many companies, age-old organizations like the Southwest Conference, and entire countries like the Soviet Union.

In the rapidly changing world of business today, there is a growing need to manage projects intelligently. Project management advanced a great deal in the defense, aerospace, and construction industries. Techniques developed for controlling the interrelated activities of many different organizations and crews can be applied to the field of information systems, which includes many projects to install new applications or to tie old applications together.

Project Management Systems

Projects are systems. Subsystems found in project management systems include a technical core, a control subsystem, and a project information subsystem. The technical core includes the technical expertise and equipment that gives the system the ability to accomplish what it needs to do. Expertise can include systems analysis, program development, testing, installation, and user training skills. Equipment in a broad sense can include software, such as CASE tools and subroutines, that improve productivity. The control subsystem is the means management has to control operations. Within an organization, this control subsystem coordinates the technical core with the outside environment. In an institution, an example of a control subsystem is the board of directors, which approves goals and strategies for the organization (which are usually generated by top management). In a project management system, control includes procedures specified for specific tasks, milestones to mark the completion of project phases, and the expertise available within the project team to solve problems when they are encountered. The project information subsystem gives management measures of how the system is accomplishing its objectives. Project information systems need to record the current status of activities, list responsibilities, planned and actual durations of activities, and cost expenditures.

The value of viewing projects as systems is that the total view of the project in light of its intended purpose is clearer. Projects consist of many interrelated tasks, done by different people with different skills. If each task was accomplished in isolation, many suboptimalities would occur. Possibly specific tasks would be done faster or at less expense if the rest of the project was disregarded, but the focus of each member of the project team should be to accomplish project objectives and not to optimize production of specific tasks. If trade-offs exist between task accomplishment and project accomplishment, the systems view makes it clear that overall project considerations come first.

Systems provide a useful framework within which to view projects. To make projects work, project managers need to be able to anticipate the consequences of planned actions. They need to develop an organization system, through hiring and training appropriate, qualified people, within budget. They need to be able to know who they have to deal with outside of the system, for supplies, materials, regulation compliance, etc. They need to understand how to measure how the project is progressing and what controls are available if the project does not progress as planned. Understanding the concept of systems makes it much easier to see the impact of the principles of project management.

Project Entities

A number of people are needed to make projects work. We have stated that user involvement is important. One reason is that they are the client (stakeholders). The client paying for or controlling the project is the sponsor (sometimes appearing in the form of a project board), causing the project to be undertaken. Related to the sponsor is the project champion (sometimes another synonym for sponsor). A project champion may not have authority, but has influence at the budgetary authorization level, and often serves as a cheerleader in keeping top management support for the project high.

The project manager coordinates the efforts of people coming from a variety of functional areas. Project managers also need to integrate planning and control costs, by assigning tasks and schedules to the members of the project team.

The project team is a group of people with the required skills to accomplish the project. They will often come from different places with radically different skills and backgrounds. Oftentimes these project team members will enter the project (and leave) at different times, making for an even greater degree of turbulence. People who work on projects need to be very flexible and to learn to work with various people.

The project management system is the organizational structure used by the project manager to get things done. The project management system includes the information system to provide project team members with the necessary information, as coordination between groups is critical to integrate activities. Organizational structure involves procedures to ensure accurate communication and completeness of activities.

The Project Environment

Successful implementation has been found to require mastery of the technical aspects of systems along with an understanding of key organizational and behavioral dynamics. There has been a great deal of study of information systems project failure. Failure can arise due to failing to meet design objectives. Projects also can fail with respect to time and budget constraints. Seemingly successful projects may fail because their intended users do not use them. And finally, systems may not meet the expectations of stakeholders.

Most information systems projects have been reported to be much less successful, reflecting in part a very turbulent environment where many changes are needed. Quite often, management gives up and changes direction. This is not always possible to do.

Numerous studies have been conducted on factors that lead to the success of a project. These factors include planning, user involvement, good communication, and sound monitoring of projects. Additional factors that are repeatedly reported as important for the success of information systems project include top management support and a clear statement of project objectives.

Three factors have consistently appeared as success factors in project failure. These factors, which are also found in general kinds of projects, comprise the following:

Client involvement

Top management support

Clear statement of project objectives

Summary

Project management has many features that are different from those of repetitive operations. These include:

  • Lower degrees of efficiency
  • Operating in a much less predictable market with more rapidly changing technology
  • The need to coordinate more parties and organizations
  • A highly dynamic environment involving temporary tasks

Projects are systems consisting of interrelated parts working together to accomplish project objectives. There are a number of important roles within information systems projects. Project managers have to balance technical understanding with the ability to motivate diverse groups of people (the project team) brought together on a temporary basis. Managing this team requires organizing in a way that groups can coordinate their diverse activities. Project champions play an important role in obtaining organizational commitment to projects.

While there are many valuable information systems projects that have been completed, the development environment is very difficult. Rarely do information systems projects get completed on time, stay within budget, and fulfill specifications simultaneously. Top management support to projects has repeatedly been found to be critical to information systems project success. User groups need to be consulted to find out just what systems will be required to do. Systems designers need to be involved to make sure that new systems fit in with the overall organizational information system. Programmers need to be involved to ensure realistic production rates. End-users need to be involved to ensure the quality of systems by making sure that they are usable and useful. After planning, many meetings need to be held to coordinate the project through acceptance and completion.

This book is based on an earlier text, now in two parts. The first book covers project basics. The second book focuses on the quantitative tools of project management. This chapter has presented various statistics indicating endemic problems in completing information systems projects on time, within budget, and at designed functionality. While the successful completion of a project is a challenge, there are some things that can be done to improve the probability of a project’s success. The book reviews a number of project management concepts. These include developing organizational ability to work on projects, as discussed in Chapters 2 and 3. Sponsor expectations can be based on better information if a good job of project selection is conducted, as discussed in Chapter 4. Systems analysis and design is covered in Chapter 5 and agile forms in Chapter 6. Chapter 7 discusses the impact of risk and the means to assess responsibility for schedule delay. Chapter 8 discusses the importance of critical success factors in the context of project implementation.

Glossary

Control subsystem. Means to manage project operations.

Project champion. Cheerleader who keeps motivation for the project going.

Project entities. Types of people involved in the project.

Project failure. Standards for project goals that are not met (budget, time, quality, as well as stakeholder expectations).

Project information subsystem. Means to monitor accomplishment of project objectives.

Project management system. Technical core, control subsystem, and project information system.

Project manager. Coordinator of the project, responsible for project success.

Project team. Staff undertaking the project.

Sponsor. Client paying for the project.

Stakeholders. Clients—those for whom the project is being undertaken.

Technical core. Expertise and equipment providing the means to accomplish the project.

PMBOK Items Relating to Chapter 1

A project is a temporary endeavor undertaken to create a unique product, service, or result.

Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements.

A stakeholder is an individual, group, or organization who may affect or be affected by a decision, an activity, or an outcome of a project.

Stakeholders include all members of the project team as well as all interested entities that are internal or external to the organization.

13.1 Identify Stakeholders—process of identifying the people, groups, or organizations that could impact or be impacted by a decision, activity, or outcome of the project; analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success.

13.2 Plan Stakeholder Management—process of developing appropriate management strategies to effectively engage stakeholders throughout the project life cycle, based on the analysis of their needs, interests, and potential impact on project success.

13.3 Manage Stakeholder Engagement—process of communicating and working with stakeholders to meet their needs/expectations, address issues as they occur, and foster appropriate stakeholder engagement in project activities throughout the project life cycle.

13.4 Monitor Stakeholder Engagement—process of monitoring overall project stakeholder relationships and adjusting strategies and plans for engaging stakeholders.

Thought Questions

  1. What makes something a project as opposed to the alternatives?
  2. Find and compare sources seeking to identify project-critical success factors.