Essence of the Key Project

Management Concepts

Dr. Sanath Divakara

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Knowledge component
• Project management and integration management
• Differentiate project management and operation management
• Relationship between project, program, portfolio and operation
management.
• Matching thinking styles with product development project types
• Three Underlying Concepts of Project Management
• Project and functional Matrix and Responsibilities
• Objectives of Project Management
• Strategic Transformative versus Traditional or Routine Projects

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Project Management definitions

• Project
A project is a temporary endeavor
undertaken to create a unique
product, service or result -
PIMBOOK SIXTH EDITION

• Management
Planning, organizing ,Executing,
Monitoring and Controlling

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Project Integration
• Project Integration Management is the first knowledge area of the
project management framework that helps in sustaining the stability
of the project. It touches all the phases of Project Management
Lifecycle.

• Initiation, Planning, Execution, Monitor Control, and Closing.

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 Project Initiation Context

Meet regulatory,
Legal or social Satisfy Stakeholder
requirements Request or Needs

Project

Implement or
Create, Improve or
Change Business or
Fix Products
Technological
Process or Service
Strategies

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Project Management Vs Operation Management ?

All enterprises consist of two classes of activities

• Operations that are ongoing and repetitive, and

• Projects and programs that are temporary endeavors undertaken to create

unique products, services or results, or otherwise significantly change the
enterprise.
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 Operation Management
• Operation management is an area that is outside the scope of formal
project management.
• Operation Management is concern with the ongoing production of good or
service
• It is ensure that business operations continue efficiently by using the
optimal resources needed to meet customer demands.
• Processes are – Planning organizing, controlling, leading and execution.

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Program Management

• Program management is define as the application of knowledge,

skills and principles to a program to achieve the program objectives
and to obtain benefits.

Ex- A program is a new communications satellite system with projects

for the design and construction of the satellite and the ground stations,
the launch of the satellite and the integration of the system.

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Program Management?

• Programs are “a group of related projects,”† but in recent years the concept of
strategic transformational programs‡ includes both projects and operations
(or other activities) within their scope.

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Project Portfolio Management

• A portfolio is defined as projects, programs, subsidiary portfolios and

operations managed as a group to achieve strategic objective.

• Portfolio management is defined as the centralized management of one

or more portfolios to achieve strategic objectives.

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Relationship of Project, Program, Portfolio and Operation
management

Project manages in three scenarios

• Stand alone projects (Outside of a portfolio or program)
• Within program
• Within portfolio

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Relationship of Project, Program, Portfolio and Operation management
Organizational Strategy

Sample Portfolio

Program Program
Portfolio
A B

Program Program
B1 C

Project Project Project Project Project Project Project Project Project

Operations
1 2 3 4 5 6 7 8 9

Shared Resources and Stakeholders

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The aims of portfolio management
• Guide organizational investment decisions
• Select the optimal mix of programs and projects to meet strategic
objectives
• Provide decision – making transparency
• Prioritize team and physical resource allocation
• Increase the likelihood of realizing the desired return on investment
• Centralize the management of the aggregate risk all compound
• Adhering to a common management system

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Why PPP is in PM

• Organization typically maintain a portfolio of projects as

continuous business process
• Managing proper balance of PP is a task of upper management
• With limited resources management must use long term and short
term project.
• Management must use proper measures to evaluate each projects,
measures should relates to the mission and goals.
• Organization must identify mission, goals and strategies using
formal analysis (SWOT).

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Symptoms of misaligned portfolio
• Many more projects than management expected
• Inconsistent determination of benefits, including double – counting
• Competing projects: no cross comparison of projects
• Interesting projects that don’s contribute to the strategy.
• Projects whose cost exceed their benefits
• Projects with much higher risk than other in the portfolio: no risk analysis of projects
• Lack of tracking against the plan, at least quarterly
• No identifies “ client” for many projects

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PPP Serve many purpose
• Identify proposed projects that are not really projects and should be handled through
other process
• To prioritize the list of available projects
• To limit the number of overall projects being managed so the important projects get
resources and attention they need
• To identify the real options that each project offers
• To identify the projects that best fit the organizational’ s goal and strategy
• To identify co- dependent projects
• To eliminate project that incur excessive risk and/or cost.
• Keep for overloading the organizational resources availability

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Steps in PPP
• Establish a Project Council – Establish and articulated strategic direction.
Members of the council
➢Senior management
➢Project manager of major projects
➢Head of project office
➢Relevant General managers
➢Key risk identifiers
➢Anyone which can details the progress of the PPP

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Matching thinking styles with product development
project types

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Steps in PPP
Identify project categories and criteria
➢Derivative projects – are with objectives or deliverables that are only
incrementally different in both products and process from existing offerings.
(Replace or add new ex lower priced versions)
➢A derivative project is a spin-off from another existing product or platform. It may
fill a gap in a current product line, offer more cost-competitive manufacturing, or
offer enhancements and features based on the core organization's technology.

➢Derivative Projects means any computer program, software, hardware appliances

developed or otherwise acquired by the Consultant which are modifications of,
enhancement to, be used with, derived from or based upon the Technology.
➢Ex: . Following iPhone design, new models of smart phones appear with predefined applications and
functions (camera, MP3 player, etc.)

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Steps in PPP
Identify project categories and criteria
➢Platform projects – The planned output of these projects represent major departures
from existing offering in terms of either product / service.

➢Create a new 'platform' for growth in the future. These projects offer
significant improvements in cost, quality, and performance.
➢A computer or hardware device and/or associated operating system, or a
virtual environment, on which software can be installed or run.

➢Examples of platforms include Linux , Microsoft Windows Vista®, and Java .

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Steps in PPP
Identify project categories and criteria

➢Breakthrough projects – A newer technology than platform projects. It may be a

disruptive technology.

Apple Vision Pro

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Steps in PPP
Identify project categories and criteria

➢R & D projects – “Blue sky” projects – Visionary endeavors oriented towards using
newly developed technologies or existing technologies in a new manner
➢R&D projects are undertaken in order to create the know-how and know-why of new
materials and technologies that eventually translate into commercial development
➢These projects are focused on inventions and have concept of a new product as a result.
They tend to establish new core products and new core processes that differ fundamentally
from previous generations.

"research without a clear goal" and "curiosity-driven science"

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Steps in PPP
Collect Project data
➢Be sure to update the data for ongoing projects and not just data from
previous evaluation – cost use ABC cost rather than incremental cost
➢Verify data (Use past experiences expert opinion)
➢Use project plan a schedule of project activities

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Steps in PPP
• Assess Resource Availability (Internal & External)
• Reduce the project and criteria set
• Prioritized the Project within categories
• Select the project to be funded and held reserves
• Implement the process

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PPP Management

• Management should fund for all selected projects

• The PPP should be repeated on regular basis
• Process should be flexible and improved continuously

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Three Underlying Concepts of Project Management
The three key differentiating characteristics of project management when
compared to ongoing, functional operations management are:

1. Assignment of integrative responsibilities for projects and programs at

several levels
2. Application of integrated project planning and control information
systems,
3. Execution of the work required for each project by integrated teams of
people using available, assigned resources.

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First concept

Assignment of integrative responsibilities at six levels for project, program,

and portfolio management:

1. CEO.
2. Portfolio steering group.
3. Executive project sponsor.
4. PMO: project management office.
5. Project managers.
6. Functional managers

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CEO and other level executives

Governmental ministers, secretaries, and senior executives:

• Establishing and clearly communicating the enterprise strategies.

• Assuring the existence of effective program/project management processes.
• Selecting and prioritizing strategic transformational programs and project
• Allocating available resources to all approved program and project portfolios.

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Portfolio steering groups

• Validating that all approved programs and projects support strategic

objectives.
• Prioritizing programs and projects within assigned portfolios and allocating
available resources within those portfolios.
• Overseeing and governing the performance on programs and projects.

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Project and program executive sponsors
For assigned major, critical programs and projects:
• Project sponsorship is the effective link between the organization’s senior executive body
and the management of the project.
• The sponsoring role has decision making, directing and representational accountabilities…
Sponsors own the business case.
• Competent project sponsorship is of great benefit to even the best project managers.
• Their responsibilities include but are not limited to:
• Providing strategic direction to their assigned program or project managers/ directors to
resolve high level conflicts or make decisions that are beyond those persons’ scope of
authority.
• Monitoring economic and political changes within the environment external to the
project or program and reflecting such changes in the strategic direction given to the
program or project managers

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Managers of the project management discipline

• Developing and improving the program and project management processes, policies,
procedures, practices, and tools for their assigned parts of the organization.
• Providing training of and direction to assigned program and project managers/directors and
specialized (project controls) support staff members.
• Assuring that the best and most appropriate project/program management planning,
scheduling, and reporting (project controls) staff assistance, and information systems are
provided to all project and program managers.
• Other roles and responsibilities that may be assigned to PMOs within the enterprise.

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Project and program managers or directors

• Overall integrative planning, project direction, and control of the project through all its
phases to achieve the specified results on time and within budget.
• Building and leading the project team.
• Evaluating actual progress of the project and exerting their assigned project authority by
giving project direction to all functional project team leaders

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Functional (specialist) managers and their functional project
team leaders .

• Providing the required skilled people, facilities, equipment, and other

resources and giving them integrative, functional direction, in compliance
with the project/program direction from the project/program manager,
regarding the specified scope of results, quality, schedule, and budget for their
assigned functional work.
• Actively participating in project and program planning, scheduling,
monitoring, and reporting activities in compliance with the enterprise’s
established project management processes and procedures. 34
Second Concept
Application of integrated project planning and control information systems
• Application of integrative and predictive practices, processes, methods, information
systems, and related tools in projects
• These produce and effectively use the information required to plan, schedule,
monitor, report, and control the scope, risks, schedules, resources, and costs of
projects, programs, and project portfolios, while integrating their entire project life
cycles.
• Historically these were most often based on once-through, deterministic methods,
although iterative, heuristic, and “agile” processes are now often used or required,
mainly for software or research and development (R&D) projects
• These iterative processes still have a predictive and control objective for the entire
project.
• A large number of computer-supported, Internet-enabled information systems are
presently available to assist with these planning, scheduling, reporting, and
controlling tasks, ranging from simple, single-project applications to enterprise-wide
information system
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Third Concept –Integrated Teams of People
Execution of the work required for each project by integrated teams of people using
available, assigned resources
• Assigning, building, and directing each project team:
• The nature of the project obviously determines the skilled people and other resources
that will be required to plan and execute the project.
• Selection and assignment of the project team members is usually a negotiation
process involving the Project Executive Sponsor, functional (line) managers, and the
project manager.
• Primary responsibility of each assigned project and program manager is to build a
cohesive team that is comprised of the multi-disciplined functional managers and
specialists (project team leaders), plus the project controls specialists, needed to plan,
schedule, estimate, execute, and manage each project and program.
• The project manager leads the team and gives project direction to all team members,
usually through the functional managers, who are providing the needed skilled people
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Project direction
• Integrative project information systems support to project scope
• Then determine how much labor and other costs are available in the project budget
for its completion.
• Ideally the project scope, budget, and schedule are established with agreement
between the project manager and the functional managers supporting the project.
• Functional direction is given to the functional project team members by the assigned
functional manager.
• Direction consists of how the work is to be done; what quality and other
specifications are to be met to achieve the project objectives, including its scope,
schedule, budget, and quality of the results produced; and who will be assigned to
actually do the work.
• A project is not really a live project until the project team is assembled and begins
their work to plan and execute the many tasks that must be completed to achieve the
project objectives. The primary role of the project manager is to lead and motivate
the project team throughout the life of the project

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These Three Basic Concepts Underlie All of the Policies, Principles,
and Practices of Project Management
• Project management discipline within a complex organization results in a
project/functional matrix of responsibilities that can range from a weak to a
strong matrix
• Referring to the authority of the project and program managers to give project
direction to the project and program team members that are doing the work.
• If a project or program manager tries to give functional direction to project
team members, even when he or she is very skilled in that particular function,
without the complete involvement and agreement of the responsible
functional manager, serious conflict will result

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Influence of Organizational Structure on Projects

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 What is Matrix organization
• A matrix organization is defined as
one in which there is dual or multiple
managerial accountability and
responsibility.
• In a balanced matrix organization
various people in the organization
have two bosses

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What is Matrix organization

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The Objectives of Project Management Are Twofold
1. To assure that each project and program, when initially conceived and
authorized, supports the organization’s approved, higher-level strategic
objectives and contains acceptable risks regarding the project’s or program’s
objectives: political, competitive, technical, cost, and schedule.

2. To plan, schedule, control, and lead each authorized project simultaneously

with all other projects and programs within the enterprise effectively and
efficiently so that each will achieve its approved objectives:
1. Meeting its related strategic objective by producing the specified results on schedule
and within budget, with satisfaction for all affected stakeholders.

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Strategic Transformative versus Traditional or
Routine Projects
It is necessary and useful to recognize the differences between:
• Major, strategic transformative projects that are intended to change
or transform the enterprise significantly and thereby achieve its
strategic vision, mission, and objectives,
• Routine “delivery,” “commercial,” “deployment,” “process,
service, or product improvement,” or “compliance” projects that
generate income and profit, reduce cost, otherwise improve the
services or products provided to the enterprise’s customers or
constituents, or comply with laws and regulations, within the
enterprise’s established strategic vision and objectives, without
creating significant changes within the enterprise itself.
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Basic Differences of Project Types

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Strategic Transformative Programs
• Thiry (2010, p. 16) defines program management as “The governance
and harmonize management of a number of projects and other actions
to achieve stated business benefits and create value for the stakeholder
• Differentiate this definition from the traditional definition by using
Thiry’s definition to refer to strategic transformative programs. The
“other actions” in his definition are typically operational in nature
within the enterprise, and the broader objectives
• “To achieve stated business benefits and create value for the
stakeholders” are predominantly strategic in nature.

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Project-Driven versus Project-Dependent
Enterprises
Project Driven – Primary business
• Rely on projects for normal revenue.
• Are usually mature in the management of these “delivery” projects.
• May be less mature in management of transformative programs and
projects

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Project-Dependent Organizations
• Derive most of their revenues from selling products or services.
• Rely on projects and project management for expansion or
development of new products or processes.
• Often employ Project-Driven organizations for specific needs.
• Projects, however, are vital to their continued growth and prosperity:
• To develop new products or services, enter new markets, expand
their facilities, and so on. Strategic transformational programs,
and major projects within these project dependent enterprises,
often include the purchase under contract of delivery projects
from project-driven enterprises.

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Origins of Projects: The Incubation/Feasibility Phase
• What the project will create (new product, facility, service, information system,
organization, other principle deliverables, etc.).
• What business benefits will be produced for the organization that will pay for the project, as
will be detailed in the Business Case that is produced during the Project Starting Phase.
• Verification that the project is aligned with the strategic plans and objectives of the
sponsoring organization.
• A reasonable idea of the overall scope of the project, together with its expected time
schedule and cost, and whether the needed money and other key resources can reasonably
be expected to be available, as will be verified and detailed in the Project Charter that is
produced during the Project Starting Phase.
• Preliminary or conditional approvals that the project will require from governmental
authorities or other agencies (environmental, economic, health, others, etc.) as well as any
intellectual property and physical rights of access that are needed for the project to succeed.
• Overall economic, technological, political, social,† and physical feasibility of the project,
including the level and acceptability of the various risks that are involved

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Origins of Projects: The Incubation/Feasibility Phase

The basic question here is:

• Where does this initial ‘embryonic knowledge and understanding’ about the
potential project come from?
• This information must be accumulated through a process of “information
buffering*” (Di Filippo, 2011) over a period of time prior to authorizing any
project to enter the current standard Project Starting Phase, and this
information buffering occurs in every case during the usually undefined but
always present Project Incubation/Feasibility Phase.

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Post-Project Evaluation Phase

1. The project from a project management viewpoint.

2. The project’s products and results.
3. All project stakeholders’ perspectives of both the project and its
results, including turnover of people both during the project and
after the Project Closeout Phase, and subsequent application of
lessons learned for use on future projects.
4. The overall project and its products from the cognitive constraint
perspective

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Origins of Two Project Types within Project-Driven and
Project-Dependent Organizations

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•

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