21

Understanding Project Management

Oracle Primavera software products are
In this chapter: designed to support the project management
needs of organizations that manage large
Why Use Project Portfolio
Management? numbers of projects at one time.
Your Role in the Organization
These integrated applications use project
Project Management Process
Overview portfolio management (PPM) to support the
Planning, Controlling, and management needs of project teams in
Managing Projects different locations and at varying levels of
the organization.

This chapter provides an overview of PPM,

including typical roles, and presents basic
concepts for planning, managing, and
controlling your projects.
22 Part 1: Overview and Configuration

Why Use Project Portfolio Management?

Large businesses typically have hundreds or even thousands of projects
underway at one time to create the new products and services that build
their future. These projects cross normal business hierarchies and chains
of command, making project portfolio management (PPM) an
organization-wide challenge. The pressure to complete projects on time,
within budget, and maintain a competitive edge, is driving corporations
to develop and implement PPM processes. They are moving away from
a traditional functional structure to a multi-project organization that
must achieve clear, often urgent goals, using limited, shared resources.
They need the fastest business payback from those projects to realize
potential revenue and increase shareholder equity.

PPM provides comprehensive information on all projects in an

organization, from executive-level summaries to detailed plans by
project. Individuals across all levels of the company can analyze, record,
and communicate reliable information and make timely informed
decisions that support their corporate mission. By putting the right tools
in the right hands, PPM enables an organization to:

■ Make strategic business decisions;

■ Control the minute detail that is necessary to finish projects;
■ Understand current resource demands, set priorities, and evaluate
long-term staffing requirements;
■ Use skilled resources effectively and productively;
■ Reorganize projects to fit shifting priorities without sacrificing
quality.

Oracle Primavera P6 - Project Management

 Understanding Project Management 23

Your Role in the Organization

P6 meets the needs of several types of users. The following section
describes the P6 application audience by roles. Roles may vary or
overlap depending on the organization.

Network administrators Network administrators configure an

organization’s network environment (local- and wide-area networks) for
optimal performance with P6 applications. They install and maintain the
server and client components of the applications. In addition, they
manage user access to data and develop and maintain a comprehensive
security policy to ensure that PPM data are protected from unauthorized
access, theft, or damage.

Network administrators ensure that the hardware and software

supporting Primavera applications function reliably by
■ Setting up and maintaining the network to ensure reliable
connections and the fastest possible data transfer
■ Creating and maintaining accurate lists of network resources and
users so that each has a unique network identity

Database administrators Database administrators (DBAs) are

responsible for setting up, managing, and assigning access rights for the
Primavera database. They set and oversee rules governing use of
corporate databases, maintain data integrity, and set interoperability
standards.

Database administrators ensure reliable access to the Primavera 

database by
■ Installing, configuring, and upgrading database server software and
related products as required
■ Creating and implementing the database
■ Implementing and maintaining database security, including creating
and maintaining users, roles, and privileges for the database
■ Monitoring database performance and tuning as needed
■ Planning for growth and changes and establishing and maintaining
backup and recovery policies and procedures

Oracle Primavera P6 - Project Management

24 Part 1: Overview and Configuration

Operations executives Operations executives are responsible for

strategic planning and ongoing performance analysis. They use the
Project Management module and the Portfolios section of P6 Web
Access to analyze schedule, resource, and cost data across projects.

Senior executives may be responsible for

■ Prioritizing projects
■ The profit/loss for a specific business entity
■ Funding and go/no-go decisions about projects
■ Strategic planning over the future of the business or division

Project controls coordinators Project controls coordinators are

responsible for ensuring that Primavera applications are implemented
properly and operate smoothly. They play a key role during
implementation by:
■ Working with operations executives and program/project managers
to set up methodologies in the Methodology Management module
■ Working with operations executives and program/project managers
to structure project, organizational breakdown structure (OBS), and
resource hierarchies, set up basic calendars, and define
organization-wide custom fields and codes in the Project
Management module
■ Working with the project administrator to create user accounts and
user groups for the Project Management module
■ Assigning security rights to users in the Project Management
module

Program managers Program managers oversee several high-level

project managers; they are responsible for multiple projects and use the
Project Management and Methodology Management modules, along
with P6 Web Access to:
■ Perform cross-project analysis
■ Manage projects to on-time and on-budget completion
■ Prioritize resources across projects
■ Plan projects before they are funded

Oracle Primavera P6 - Project Management

 Understanding Project Management 25

Project managers Project managers manage multiple small,

repetitive projects or a single, complex project. They are responsible for
on-time/on-budget completion of the projects and use the Project
Management module and P6 Web Access to:
■ Allocate specific named resources to a project in conjunction with
the functional manager of those resources
■ Communicate project information both up and down the chain of
command
■ Manage resources related to the project

Resource/cost managers Resource managers allocate resources

across projects and distribute their workloads. They are responsible for
resource planning, including recruiting, hiring, and training resources,
and they may be responsible for loading resource information in the
Project Management module, the Methodology Management module,
and the Resource section of P6 Web Access. Cost managers perform
detailed financial analysis of projects, handle project billing, and
integrate financial information within the company.

Team leaders Team leaders manage the work for a portion of a larger
project. They are managers who produce work and manage a team, and
they often use the Project Management and Progress Reporter modules,
and P6 Web Access, to prioritize short-term tasks or objectives,
typically when the duration is less than the planning period of the
project.

Team members Team members are trained in a specific skill

required on a project. They work with their manager to develop
activities and durations for incorporation into the schedule. Once
activities are added to the schedule, team members update them using
the Progress Reporter module to indicate the work they performed
during designated accounting periods. Team members may also use
personalized dashboards in P6 Web Access to quickly access their
projects, activities, documents, and more.

Oracle Primavera P6 - Project Management

26 Part 1: Overview and Configuration

Project Management Process Overview

When contractors develop plans for a building, one of the first steps is
laying a foundation. This is also a true for building projects using the
Project Management module. The hierarchical structuring of data serves
as the foundation before the addition of actual project data. The
following is a suggested sequence for setting up these structures:
■ Set up the organizational breakdown structure (OBS), which is the
hierarchical arrangement of your company’s management structure,
either as roles or individuals.
■ Set up the enterprise project structure (EPS), which is the
hierarchical structure that identifies the company-wide projects and
enables organization and management of those projects in your
organization.
■ Set up a resource hierarchy that reflects your organization’s
resource structure and supports the assignment of resources to
activities.
■ For each project, set up the work breakdown structure (WBS),
which is a hierarchical arrangement of the products and services
produced during and by a project.

For information about Project controls coordinators, working with operations executives and
setting up security, see the
Oracle Primavera P6
program/project managers, structure the OBS and EPS hierarchies.
Administrator’s Guide. This Setting up the OBS first enables association of the responsible managers
guide is available from the with their areas of the EPS—either nodes or projects—when the EPS is
Primavera Documentation
Center, which is located in structured. User access and privileges to nodes and projects within the
the \Documentation\ EPS hierarchy are also implemented via a responsible OBS, so the
<language> folder of the
P6 physical media or
security profiles that monitor data access by project participants can be
download. established early on in the process.

Once the OBS is established, the EPS can be set up. An EPS can consist
of multiple root nodes, which enable particular types of projects to be
grouped together, such as project templates or high-risk projects. Within
each root node, you can further break down an EPS into multiple EPS
nodes, such as Capital Improvement projects and Manufacturing
projects, to categorize the types of templates projects.

Oracle Primavera P6 - Project Management

 Understanding Project Management 27

The WBS acts as a continuation of the EPS for the individual projects in
the organization. A WBS provides organization and control of project
and activity information through a hierarchy of WBS elements. When
you create projects, the Project Management module automatically
creates a WBS element at the same hierarchy level and with the same
name as the project. You can set anticipated project dates, budgets, and
spending plans for a WBS at a high level to indicate when the work
should occur and how much its planned budget and monthly spending
will be before any projects are added to the EPS. In addition, you can
use the pre-established budget amounts and funding information you set
for WBS elements for their project and activity counterparts.

For details on setting up The following example represents how the OBS, EPS, and WBS
these structures, see the
applicable chapters in Part
structures interrelate within one branch of the EPS.
2.

The responsible manager used

for the root node in the EPS
branch is used as the default
for the EPS nodes and projects
for that branch; you can
change the assignment(s).

The WBS extends beyond

the project level—all
activities in the project
have a WBS association.

Oracle Primavera P6 - Project Management

28 Part 1: Overview and Configuration

Planning, Controlling, and Managing Projects

Before implementing P6 to schedule projects, team members and other
project participants should understand the processes involved in project
management and the associated recommendations that help smooth the
implementation that best supports your corporate mission.

If you were driving to a place you had never seen, would you get in the
car without directions or a map? Probably not. More than likely you’d
take the time to plan your trip, consider alternate routes, and estimate
your time of arrival. Planning the drive before you even left would help
your trip be more successful. And, along the way, should you encounter
road blocks or traffic delays, you would have already identified alternate
ways to reach your destination.

Project management follows the same methodology and purpose; to

achieve each project’s goals, you need to plan them in advance. Good
project management is no longer an option in today’s corporate world. It
is a critical tool to help your company stay on target and accomplish its
goals.

Simply stated, project management is the process of achieving set goals

within the constraints of time, budget, and staffing restrictions. It allows
you to get the most out of your available resources. Resources include
■ People
■ Materials
■ Money
■ Equipment
■ Information
■ Facilities
■ Roles

Project portfolio management factors in all of these variables across

multiple projects, enabling project managers and company executives to
see an accurate picture of how each project’s resource use affects other
projects.

Oracle Primavera P6 - Project Management

 Understanding Project Management 29

The process of project management is guided by three key principles:

■ Planning
■ Controlling
■ Managing

Planning a project The first step in project management is to define

your project.
1 What is the scope of the work? What activities will make up the
project and what is their relationship to each other? You’ll also want
to identify the major milestones that will help you monitor the
project’s progress.
2 What is the project duration? What are the dates when the project
will begin and end?
3 What resources are available to the project? Beyond labor, think
about all the types of resources you will require.
4 Who will perform what tasks? Determining your labor resources
and their available workhours is a key part of building a successful
project. You’ll need to plan for downtime and holidays and
determine the regular workweek for various staffing types.
5 How much will the project cost? What are the costs per resource?
Are there any hidden project costs?
6 What is the estimated budget? Establishing a project budget
estimate in advance helps you monitor possible cost overruns.

The answers to these questions form the framework of your project.

Controlling a project Once you have built your project and

estimated your budgeting needs, you save this original plan as a
baseline, or target schedule, to help you control the project. A baseline
provides a solid point of reference as your schedule changes over time.
It allows you to compare the original schedule to the current one and
identify significant changes and develop contingency plans.

You control a project to keep it heading in the right direction. You’ll

want to track work progress and costs, compare them to your baseline,
and then recommend what actions should be taken.

Oracle Primavera P6 - Project Management

30 Part 1: Overview and Configuration

Effective project control reaps many benefits. It allows you to keep a

close eye on possible problems before they become critical. It lets the
project team and senior management view cost and scheduling
timeframes based on the reality of the schedule.

Managing a project The process of guiding a project from start to

finish is the responsibility of a project manager. A good project manager
wears many hats, acting at various times as a motivator, communicator,
coordinator, and advisor. As you control the project’s progress, it is your
job to keep your team aware of changes to the schedule and possible
consequences. In many ways, you are the project’s ambassador,
ensuring that your project organization is carrying out its
responsibilities for the best possible outcome.

To be an effective project manager also requires consistency when you

update your projects. Select a day each week, or biweekly, when you
will regularly update projects. This regular update will include progress
on values such as
■ Dates on which activities started or finished
■ Dates when resources are consumed
■ Changes to resource rates

Determine a standard policy for the update and scheduling procedure,

and for reporting progress.

The Project Management module provides many tools to assist you in

reporting progress to both team members and senior management. Use
the Project Web Site option to create a central location where team
members can view project progress. Consider the many system reports
as a means for communicating change. In addition, senior management
can use the Portfolios section of P6 Web Access to summarize project
data and easily capture a snapshot of how a project or group of projects
is progressing.

Oracle Primavera P6 - Project Management