PMBOK2008_English.pdf - Chapter 1 Introduction A Guide to...

Unformatted text preview: Chapter 1 Introduction A Guide to the Project Management Body of Knowledge (PMBOK® Guide) is the recognized standard for the project management profession. As with other professions such as law, medicine, and accounting, the knowledge contained in this standard evolved from the good practices of project management practitioners who have contributed to the development of this standard. The complete Project Management Body of Knowledge is a collection of recognized good practices that are widely applied by project management professionals and practitioners for the successful management of projects. The PMBOK® Guide provides guidelines for managing individual projects within an organization. It defines project management and related concepts, describes the project management life cycle, and outlines related processes. This chapter defines several key terms and provides an overview of the PMBOK® Guide in the following major sections: 1.1 Project Management Standard Purpose 1.2 What is a Project? 1.3 What is Project Management? 1.4 Relationship Between Project Management, Program Management, and Portfolio Management 1.5 Project Management in Operations Management 1.6 Role of the Project Manager 1.7 Project Management Body of Knowledge 1.8 Enterprise Environmental Factors 1.1 Project Management Standard Purpose The increasing success of project management indicates that the application of appropriate knowledge, processes, skills, tools, and techniques can have an impact on the success of projects. To provide readers with a general overview of the project management discipline, the PMBOK® Guide identifies that subset of the Project Management Body of Knowledge generally recognized as good practice. “Generally recognized” means the knowledge and practices described are applicable to most projects most of the time, and there is consensus about their value and usefulness. “Good practice” means there is general agreement that the application of these skills, tools, and techniques can enhance the chances of success over a wide range of projects. Good practice does not mean the knowledge described should always be applied uniformly to all projects; the organization and/or project management team is responsible for determining what is appropriate for any given project. This method that allows the standards to work for most projects most of the time is called “project tailoring.” The project manager, with approval from the project sponsor, will typically use a certain level of rigor based on the type of project. It is important that agreed-upon tailoring requirements are documented in the project management plan. This ensures that the project team will follow the standards defined for the project. The PMBOK® Guide also provides and promotes a common vocabulary within the project management profession for discussing, writing, and applying project management concepts. Such a standard vocabulary is an essential element of a professional discipline. The Project Management Institute (PMI) views this standard as a foundational project management reference for its professional development programs, including: • • • • Project Management Professional (PMP®) certification, Certified Associate in Project Management (CAPM®) certification, Program Management Professional (PgMP)SM certification. Project management education and training offered by PMI Registered Education Providers (R.E.P.s), and • Accreditation of educational programs in project management. As a foundational reference, this standard is neither complete nor all-inclusive. Appendix D discusses application area extensions, and Appendix E lists sources of further information on project management. In addition to the standards that establish guidelines for project management processes, tools, and techniques, there is a code that guides practitioners of the profession of project management. The Project Management Institute Code of Ethics and Professional Conduct describes the expectations practitioners have of themselves and others. The Code is specific about the basic obligation of honesty and fairness. It requires that practitioners demonstrate a commitment to honesty, ethical conduct, and compliance with laws and regulations. It carries the obligation to comply with organizational and professional policies and laws. Since practitioners come from diverse backgrounds and cultures, the Code of Ethics and Professional Conduct applies globally. When dealing with any stakeholder, practitioners should be committed to honest and fair practices and respectful dealings. The Project Management Institute Code of Ethics and Professional Conduct is posted on PMI’s website. 1.2 What is a Project? Projects differ from other types of work. A project is a temporary endeavor undertaken to create a unique product, service, or result. These temporary and unique characteristics determine if a particular endeavor is a project. If an organization determines the nature of the work to be temporary and unique, it may decide to apply project management principles. Managing work by applying the project management standard allows organizations to achieve a set of business objectives more efficiently and effectively. The temporary nature of projects indicates a definite beginning and definite end. The end is reached when the project’s objectives have been achieved, when the project is terminated because its objectives will not or cannot be met, or the need for the project no longer exists. Temporary does not necessarily mean short in duration; many projects last for several years. Temporary does not generally apply to the product, service, or result created by the project; most projects are undertaken to create a lasting outcome. For example, a project to build a national monument will create a result expected to last centuries. Projects can also have social, economic, and environmental impacts that far outlast the projects themselves. The duration of a project is finite. A project’s duration can range from a few weeks to several years. It may involve a simple set of activities (such as organizing a picnic) or a very complex effort (such as the design of a new space shuttle). The project team, as a working unit, is created for the sole purpose of accomplishing a project’s objectives. When a project attains its objective or it is terminated for some reason, the project reaches its end and the project team is disbanded. Typically, project team members move on to other projects or return to their original organizational assignments. Conversely, teams involved in the other types of work (i.e., nonproject but “operational”) are not necessarily disbanded when the work achieves its objectives; a new set of objectives is adopted and the work continues. The unique nature of projects means every project creates a specific product, service, or result that differentiates it from other products, services, or results. Although repetitive elements may be present in some project deliverables, this does not change the fundamental uniqueness of the project work. For example, many office buildings are constructed with the same or similar materials or by the same team, but each facility is unique--with a different design, different location, different contractors, and so on. An ongoing work effort is generally a stable process because it follows an organization’s existing procedures. In contrast, because of the unique nature of projects, there may be uncertainties about the products, services, or results that the project creates. Project tasks can be new to a project team, which necessitates more dedicated planning than other routine work. In addition, projects are undertaken at all organizational levels. A project can involve a single person, a single organizational unit, or multiple organizational units. A project can create: • • • • • • • • • A product that is quantifiable and can be either a component of another item or an end item in itself, A capability to perform a service (e.g., a business function that supports production or distribution), or A result such as an outcome or document (e.g., a research project that develops knowledge that can be used to determine whether a trend is present or a new process will benefit society). Examples of projects include, but are not limited to: Developing a new product or service, Effecting a change in the structure, staffing, or style of an organization, Developing or acquiring a new or modified information system, Constructing a building or infrastructure, and Implementing a new business process or procedure. 1.3 What is Project Management? Project management is the application of knowledge, skills, tools, and techniques to project activities to meet project requirements. Project management is accomplished through the appropriate application and integration of the project management process groups. These process groups consist of: • Initiating, • Planning, • Executing, • Monitoring and Controlling, and • Closing. The project manager, along with the project team, is responsible for accomplishing the project objectives. Managing a project typically includes: • • Identifying requirements, Adapting the specifications, plans, and approach to the different concerns and expectations of the various stakeholders, and • Balancing the competing demands for quality, scope, time, and cost. Project managers deliver projects while balancing the requirements of the scope, schedule, quality, and budget. The relationship among these factors is such that if any one factor changes, at least one other factor is likely to be affected. For example, if the schedule is shortened, often the budget needs to be increased to add additional resources to complete the same amount of work in less time. If a budget increase is not possible, the scope or quality may be reduced to deliver a product in less time for the same budget. Project stakeholders may have differing ideas as to which factors are the most important, creating an even greater challenge. Changing the project requirements may create additional risks. The project team must be able to assess the situation and balance the demands in order to deliver a successful project. Project management processes are iterative because of the progressive elaboration that occurs throughout the project’s life cycle. Progressive elaboration involves continuously improving and detailing a plan as more specific information and more accurate estimates become available. Progressive elaboration allows a project management team to manage to a greater level of detail as the project evolves. 1.4 Relationship Between Project Management, Program Management, and Portfolio Management Project management exists in a broader context that includes program management and portfolio management. Figure 1-1. Portfolio, Program, and Project Management Interactions 1.4.1 Portfolio Management A portfolio refers to a collection of projects or programs and other work that is grouped together to facilitate effective management. The projects or programs of a portfolio may not necessarily be interdependent or directly related. For example, an infrastructure firm that has the strategic objective of “maximizing the return on its investments” may put together a portfolio that includes a mix of projects in oil and gas, power, water, roads, rail, and airports. From this mix, the firm may choose to manage related projects as one program. All of the power projects may be grouped together as a power program. Similarly, all of the water projects may be grouped together as a water program. Portfolio management refers to the centralized management of one or more portfolios and includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work. Portfolio management focuses on ensuring that projects and programs are reviewed to prioritize resource allocation, and that the management of the portfolio is consistent with and aligned to organizational strategies. 1.4.2 Program Management A program refers to a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. Programs may include elements of related work outside the scope of the discrete projects in the program. Some examples of programs include: • A new car model program that involves projects for the design and upgrades of each major component (e.g., the transmission, engine, interior, and exterior) while ongoing manufacturing occurs on an assembly line, and • An electronics firm that has program managers who are responsible for both individual product releases (projects) and the coordination of multiple releases over a period of time (an ongoing operation). Program management can be viewed as the centralized, coordinated management of a group of projects to achieve the program's objectives and benefits. Programs can involve several repetitive or cyclical undertakings. For example, utility companies may combine a series of projects into an annual “construction program.” 1.4.3 Projects and Strategic Planning Projects are a means of organizing activities that cannot be addressed within the organization’s normal operational limits. Projects are often utilized as a means of achieving an organization’s strategic plan. Projects are typically authorized as a result of one or more of the following strategic considerations. Some examples of these include, but are not limited to: • Market demands (e.g., an oil company authorizes a project to build a new refinery in response to chronic gasoline shortages), • Organizational needs (e.g., a training company authorizes a project to create a new course to increase its revenues), • Customer requests (e.g., an electric utility authorizes a project to build a new substation to serve a new industrial park), • Technological advances (e.g., a software firm authorizes a new project to develop a new generation of video games after the introduction of new game-playing equipment by electronics firms), or • Legal requirements (e.g., a chemical manufacturer authorizes a project to establish guidelines for the handling of a new toxic material). Projects, within programs or portfolios, are a means of achieving organizational goals and objectives, often in the context of a strategic plan. Although a group of projects within a program can have discrete benefits, they often also contribute to consolidated benefits as defined by the program. Organizations manage their portfolios based on their strategic plan, which may dictate a hierarchy in the portfolio, program, or projects. One goal of portfolio management is to maximize the value of the portfolio by the careful examination of the candidate projects. Those projects not expected to meet the portfolio’s strategic objectives may be excluded. The organization’s strategic plan and available resources guide these investments in projects. As Figure 1-1 illustrates, organizational strategies and priorities are linked and have relationships between portfolios and programs, and between programs and individual projects. Organizational planning impacts the component projects by means of project prioritization. Organizational planning can direct the funding and support for the component projects on the basis of risk/reward categories, specific lines of business, or general types of projects, such as infrastructure and internal process improvement. At the same time, projects provide feedback to programs and portfolios by means of status reports and change requests that may impact other projects, programs, and portfolios. The needs of the projects, including the resource needs, are rolled up and communicated back to the portfolio level, which in turn sets the direction for organizational planning. 1.4.4 Project Management Office A Project Management Office (PMO) is an organizational body or entity that can be responsible for the centralized and coordinated management of the projects, programs, and portfolios under its domain. The projects supported or administered by the PMO may not be related other than by being managed together. The specific form, function, and structure of a PMO is dependent upon the needs of the organization that it supports. A PMO may be delegated authority to act as an integral stakeholder and a key decisionmaker during the initiation phase of each project, to make recommendations, or to terminate projects to keep business objectives consistent. In addition, the PMO may be involved in the selection, management, and redeployment of shared or dedicated project resources. Some of the key features of a PMO may include, but are not limited to: • • Managing shared resources across all projects administered by the PMO, Identifying and developing project management methodology, best practices, and standards, • Developing and managing project policies, procedures, templates, and other shared documentation, and • Coordinating communication across projects. Project managers and PMOs pursue different objectives and, as such, are driven by different requirements. All of these efforts, however, are aligned with the strategic needs of the organization. Differences between the role of project managers and a PMO may include the following: • • • The project manager focuses on the specified project objectives, while the PMO manages major program scope changes and can view them as potential opportunities to better achieve business objectives. The project manager controls the assigned project resources to best meet project objectives, while the PMO optimizes the use of shared organizational resources across all projects. The project manager manages the scope, schedule, cost, and quality of the products of the work packages, while the PMO manages the overall risk, overall opportunity, and interdependencies among projects at the enterprise level. 1.5 Project Management in Operations Management While business goals are achieved through operations, new objectives are typically initiated through projects. Though temporary in nature, projects can help achieve the organizational goals when they are aligned with operations. Organizations sometimes change their operations or products by creating strategic business initiatives that use projects, programs, and portfolios. Projects require project management while operations require business process management or operations management. Projects intersect with operations at various points during the product life cycle: • At each closeout phase, • When developing a new product, upgrading a product, or expanding outputs, • Until the divestment of the operations at the end of the product life cycle. At each point, deliverables and knowledge are transferred from the project to operations for implementation of the delivered work. This occurs through a temporary transfer of project resources to operations toward the end of the project, or through a transfer of operational resources to the project at the start. Operations are permanent endeavors that produce repetitive outputs, with people assigned to do basically the same set of tasks according to the standards institutionalized in a product life cycle. Conversely, a project is a temporary endeavor where a team produces and executes a temporary project management plan. 1.6 Role of the Project Manager The role of a project manager is distinct from that of a functional manager. Typically the functional manager is focused on providing management oversight for an operational department and the resources that support the functional area. The project manager is involved with the planning, controlling and monitoring, as well as managing and directing the resources associated with a project. The project manager is also responsible to the project stakeholders for delivering a project’s objectives within scope, schedule, cost, and quality. Depending on the organizational structure, a project manager may ...
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