Project Management: Key Concepts and Best Practices

Posted on Dec 19, 2024 in Other subjects

Agents of Change in Projects

Key drivers of change: technology, market, customers, and society.

How to survive in an unstable environment? Companies seek competitive advantage through cost or differentiation. They aim for flexibility and agility to adapt to market changes, meet customer needs, and maintain attractive prices and margins. Strategic plans guide the company’s direction and performance. Projects are tools for implementing strategic actions. Project success depends on the success of the strategies, hence the importance of aligning projects with business strategies.

What is a Project?

According to Maximian, a project is a temporary endeavor with a defined beginning, middle, and end, creating a unique product within budget constraints.

Project Definitions

PMBOK Definition: A project is a unique and temporary undertaking to develop a product or service. Temporary means it has a defined start and end. Unique means the product or service is different from others.

ISO 10006 Definition: A project is a unique process with coordinated activities, start and finish dates, undertaken to achieve an objective with specific requirements, including time, cost, and resource constraints.

Project Variables

Time / Cost / Scope

Project Characteristics

Uncertainty and Complexity

Projects vs. Continuing Operations

Fundamentally different.

  • Project: Closed upon achieving its objective.
  • Continuing operations: Reach goals, create new ones, and work continues.

Differences

  • Project: Unique undertaking to generate a unique product or service.
  • Program: A set of interrelated projects.
  • Portfolio: A collection of projects or programs in the same business area.
Why Manage Projects?

Because of significant changes in the workplace, such as fewer people doing more tasks, more complex projects, competition, easier access to information, and more sophisticated customers demanding higher quality.

Essentials of Project Management:

  • Project manager: Responsible for project implementation within performance, time, and cost standards.
  • Team: Executes project activities, leading to deliverables.
  • Project Plan: Consolidates all project information: scope, time, cost, risk, etc. It is a guide for implementation, record-keeping, and process control.

Basic Parts of Project Planning:

  • Scope: Meets business requirements and stakeholder expectations.
  • Deadline: Compliance can determine project success or failure.
  • Cost: Budget constraints.
  • Risk: How risks are managed influences the final result.

Phases of a Project (Life Cycle): Idea / Design / Development / Delivery

PMI: Promotes professionalism and ethics in project management.

PMO: Organizational unit supporting project conduct, linking Executive Management and Project Management.

Roles and Responsibilities:

  • Optimize resource use.
  • Disseminate project management culture.
  • Focus on project management development.
  • Define project management principles and standards.

PMBOK: Knowledge for proper project management (good practice).

Management Areas (9):

  • Project Scope Management: Ensures the project includes all necessary work.
  • Time Project Management: Ensures the project is completed on time.
  • Project Cost Management: Ensures project costs stay within budget.
  • Project Quality Management: Ensures the project meets its needs.
  • Human Resources Management: Effectively uses personnel.
  • Project Communications Management: Ensures proper information collection and dissemination.
  • Project Risk Management: Identifies, analyzes, and responds to project risks.
  • Project Procurement Management: Plans and executes acquisition of goods and services.
  • Project Integration Management: Ensures proper coordination of project elements.

GROUPS Process Management (PMBOK – 5):

  • Initiation processes: Authorizes the project or phase.
  • Planning processes: Defines goals and selects the best action.
  • Enforcement procedures: Coordinates resources to carry out the plan.
  • Process Control: Monitors progress, identifies variances, and takes corrective action.
  • Procedures for closure: Formalizes acceptance and closes the project or phase.

Organizational Influences on Projects:

  • Organizational Systems
  • Culture and organizational styles
  • Organizational Structure
  • Company and Client standards and regulations
  • Internationalization
  • Government regulations

Structures for Projects:

  • Functional Structure: Hierarchy where each employee has one superior, grouped by specialty.
  • Matrix Structure: Project activities are performed by different units with coordination.
    • Mild: Manager with limited authority coordinates across functional areas.
    • Balanced: Manager oversees the project with equal autonomy as the functional manager.
    • Heavy: Manager has primary responsibility and authority.
  • Projectized Structure: Team members work together, and the manager has great independence and authority.

Organizational factors influencing project success in a matrix structure: clarity of duties, responsibilities between project and functional managers, encouraging mutual participation in key decisions.

Functional Responsibilities of Managers:

  • Maintain high standards of performance and technical excellence.
  • Implement the latest techniques and practices.
  • Determine who will undertake tasks.
  • Provide facilities and support services.
  • Ensure staff training and development.
  • Start staff acquisition, development, and evaluation.

Project Manager Assignments:

  • Provide coordination to ensure the project receives required attention.
  • Define what will be done, when, and required skills.
  • Set action limits and technical specifications.
  • Define requirements and contact with clients.
  • Set and monitor cost, schedule, and technical performance.
  • Provide required technical integration.
  • Contribute to staff acquisition, development, and evaluation.

Responsibility of Project Manager: Meeting the consequences of activities and decisions, including team results.

Areas of Expertise of a Manager:

  • Finance and Accounting
  • Strategic, tactical, and operational planning
  • Organizational structure, behavior, personnel administration, compensation, benefits, career plan
  • Management-labor relations through motivation, delegation, supervision, team building, conflict management
  • Self-management through personal time management, stress management

Skills of a Project Manager: Leadership, Planning, Communication, Negotiation, Conflict Management, Influence in decision making.

Demand for an Individual in Matrix Structure:

  • Ability to manage conflict.
  • Attitude of cooperation and mutual trust.
  • Ability to develop new methods.
  • High spirit and sense of team.

Difference Between Managing and Leading:

  • Manage: Related to consistent production of major outcomes.
  • Leading: Directs, engages, inspires, motivates, and achieves change.

Types of Leadership:

  • Oriented manager: Authoritarian, without team discussion.
  • Oriented team: Democratic, tasks discussed with staff before decisions.

Transactional Leadership: Focuses on personal interests, results, material rewards, and appeals to team members.

Charismatic Leadership: Guides the team to high-performance, psychological reward.

Team: Members work collectively to produce a result greater than the sum of individual contributions.

Project Scope: Matches the work to be done to generate the product, as specified.

Product Scope: Corresponds to the characteristics of the product/service.

WBS (Work Breakdown Structure): Ensures the project includes all necessary work and no unnecessary work. Any work not in the WBS is outside the project scope.

Guarantor: Vision Graphics and structured project scope, Performance Planning, Cost and time establishment, Performance measurement, Logical relationship between objectives and resources, Network diagram, Responsibility establishment, Risk Identification, ID of what will not be provided.

PROJECT CHARTER: Formalizes the project’s existence and names those responsible.

Criteria for Project Selection: Realism, Flexibility, Low cost, Max-Degree of difficulty, Automation possibility.

Financial Viability: Cash Flow, Net Present Value, IRR, Payback Time, Index Return, Return on Investment.

Processes of Closure: Administrative and Contractual.

DEADLINE Management: Definition of activities, sequencing, duration estimation, schedule development, and control.

Detail of Activities: Inclusion of additional information or instructions.

Dependencies in Sequencing Activities:

  • Mandatory: Inherent in the nature of the work.
  • Refereed: Defined by the project management team. Use with caution.
  • External: Involve relationships between project activities and external activities.

Types of Dependency Relationship:

  • Finish-to-start: Activity A must finish before Activity B can start.
  • Finish-to-finish: Activity A must finish before Activity B can finish.
  • Start-to-start: Activity A must start before Activity B can start.
  • Start-to-finish: Activity A must start before Activity B can finish.

Activity Duration Estimates:

  • Top-down estimating: Based on analogy or mathematical relationships, used when information is limited.
  • Bottom-up estimating: Estimates individual work packages, then summarizes to higher levels.
  • Estimates similar: Uses information from previous projects.
  • Parametric estimates: Uses project characteristics in a mathematical model.

Factors influencing the quality of estimates: Project risks, Resources, Planning horizon, Structure design, Organizational culture.

Items for Schedule Development: Resource Description Framework, Project Calendars, Project constraints.

Resource Planning: Determines required physical resources and quantities.

Cost Estimate – Types:

  • Estimates by Analogy: Uses actual costs from similar projects.
  • Parametric modeling: Uses project characteristics in mathematical models.
  • Estimates botton-up: Estimates individual work items, then summarizes.

Types of Costs:

  • Variable Costs: Change with quantity produced or workload.
  • Fixed Costs: Not related to quantity produced.
  • Direct Costs: Directly related to project completion.
  • Overhead: Incurred for the benefit of the organization.
  • Unit cost of resources: Knowledge of unit rates is needed to calculate project costs.

Risks: Arises when uncertainty can affect objectives.

Risk Management Plan: Describes how risk identification, qualitative analysis, quantitative response planning, monitoring, and control will be implemented.

Risk Management Planning:

Entries: Project Charter, Organizational Policies, Risk management, Roles and Responsibilities, Defined Risk Tolerance, Stakeholder, Standards Management Plans, Risk Organization, EAP.

Tools and Techniques: Meeting Planning.

Outputs: Risk Management Plan.

Risk Response Planning: Develops options and actions to increase opportunities and reduce threats.

Quality Concept: Totality of characteristics that meet explicit and implicit design needs.

Quality Management: Ensures the project meets its needs.

Management of Human Resources Project: Includes all stakeholders. The life cycle of the project: no variation in the quantity and characteristics of the participants during the different phases.

HR Organizational Planning:

Entries: Project Interfaces, Personal Needs, Restrictions.

Tools and Techniques: Models, Practices, Organizational Theory, Stakeholder Analysis.

Outputs: Assign Roles and Responsibilities, Management Plan, Organizational chart, Support Details.

Managing Project Communications: Ensures information reaches all involved in a timely and economically viable manner.

PMBOK Division: Planning Communications, Information Distribution, Performance Reports, Administrative Closure.

Procurement Planning: Defines acquisition policy and strategy based on resources, deadlines, technology, risks, priorities, and management structure.

Main Processes of Procurement Management:

  • Procurement Planning: Determines what and when to hire.
  • Preparation of Procurement: Documents product requirements and identifies potential suppliers.
  • Collection of Proposals: Gets supply proposals.
  • Supplier Selection: Chooses from potential suppliers.
  • Contract Administration: Manages the relationship with suppliers.
  • Administrative Closure: Completes and settles the contract.

Project Integration Management: Ensures proper coordination of project elements, including project plan development, implementation, and integrated change control.