Chapter 4:

Project Integration
Management

Information Technology Project

Management, Sixth Edition

Note: See the text itself for full citations.

 Learning Objectives
 Describe an overall framework for project
integration management as it relates to the other
PM knowledge areas and the project life cycle
 Explain the strategic planning process and apply
different project selection methods
 Explain the importance of creating a project
charter to formally initiate projects

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Management, Sixth Edition Copyright 2009 2
 Learning Objectives (continued)
 Describe project management plan
development, understand the content of these
plans, and review approaches for creating them
 Explain project execution, its relationship to
project planning, the factors related to
successful results, and tools and techniques to
assist in project execution
 Describe the process of monitoring and
controlling project work

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Management, Sixth Edition Copyright 2009 3
 Learning Objectives (continued)
 Understand the integrated change control
process, planning for and managing changes on
information technology projects, and developing
and using a change control system
 Explain the importance of developing and
following good procedures for closing projects
 Describe how software can assist in project
integration management

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Management, Sixth Edition Copyright 2009 4
 The Key to Overall Project Success:
Good Project Integration Management
 Project managers must coordinate all of the other
knowledge areas throughout a project’s life cycle
 Many new project managers have trouble looking

at the “big picture” and want to focus on too many

details .

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Management, Sixth Edition Copyright 2009 5
 Project Integration Management
Processes
 Develop the project charter: working with
stakeholders to create the document that formally
authorizes a project—the charter
 Develop the project management plan:
coordinating all planning efforts to create a
consistent, coherent document—the project
management plan
 Direct and manage project execution: carrying
out the project management plan by performing
the activities included in it

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Management, Sixth Edition Copyright 2009 6
 Project Integration Management
Processes (continued)
 Monitor and control the project work:
overseeing project work to meet the
performance objectives of the project
 Perform integrated change control:
coordinating changes that affect the project’s
deliverables and organizational process assets
 Close the project or phase: finalizing all project
activities to formally close the project or phase

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 Figure 4-1. Project Integration
Management Summary

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Management, Sixth Edition Copyright 2009 8
 Strategic Planning and Project
Selection
 Strategic planning involves determining long-term
objectives, predicting future trends, and projecting
the need for new products and services
 Organizations often perform a SWOT analysis

◦ Analyzing Strengths, Weaknesses, Opportunities, and

Threats
 As part of strategic planning, organizations:
◦ Identify potential projects
◦ Use realistic methods to select which projects to work on
◦ Formalize project initiation by issuing a project charter

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Management, Sixth Edition Copyright 2009 9
 Figure 4-2. Mind Map of a SWOT Analysis
to Help Identify Potential Projects

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Management, Sixth Edition Copyright 2009 10
 Methods for Selecting Projects
 There are usually more projects than available
time and resources to implement them
 Methods for selecting projects include:
◦ Focusing on broad organizational needs
◦ Performing net present value or other financial
analyses
◦ Using a weighted scoring model
◦ Implementing a balanced scorecard
NPV is future net cash flows minus the initial investment. If
positive, the investment should be made (unless an
even better investment exists) otherwise it should not.

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Management, Sixth Edition Copyright 2009 11
 Focusing on Broad
Organizational Needs
 It is often difficult to provide strong justification for
many IT projects, but everyone agrees they have
a high value
 “It is better to measure gold roughly than to count
pennies precisely”
 Three important criteria for projects:
◦ There is a need for the project
◦ There are funds available
◦ There’s a strong will to make the project succeed

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 Categorizing Projects
 One categorization is whether the project
addresses:
◦ A problem
◦ An opportunity, or
◦ A directive
 Another categorization is how long it will take to
do and when it is needed
 Another is the overall priority of the project

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 Financial Analysis of Projects
 Financial considerations are often an important
consideration in selecting projects
 Three primary methods for determining the projected

financial value of projects:

◦ Net present value (NPV) analysis
◦ Return on investment (ROI)
◦ Payback analysis

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Management, Sixth Edition Copyright 2009 14
 Net Present Value Analysis
 Net present value (NPV) analysis is a method of
calculating the expected net monetary gain or loss
from a project by discounting all expected future
cash inflows and outflows to the present point in
time
 Projects with a positive NPV should be considered if

financial value is a key criterion

 The higher the NPV, the better

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 Figure 4-4. Net Present Value Example

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Management, Sixth Edition Copyright 2009 16
 Figure 4-5. NPV Example

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Management, Sixth Edition Copyright 2009 17
 NPV Calculations
 Determine estimated costs and benefits for the life
of the project and the products it produces
 Determine the discount rate (check with your
organization on what to use)
 Calculate the NPV
 Notes: Some organizations consider the investment
year as year 0, while others start in year 1; some
people enter costs as negative numbers, while
others do not.

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 Return on Investment
 Return on investment (ROI) is calculated by
subtracting the project costs from the benefits and
then dividing by the costs
ROI = (total discounted benefits - total discounted costs) /
discounted costs
 The higher the ROI, the better
 Many organizations have a required rate of return
or minimum acceptable rate of return on investment
for projects
 Internal rate of return (IRR) can by calculated by
finding the discount rate that makes the NPV equal
to zero

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Management, Sixth Edition Copyright 2009 19
 Payback Analysis
 Another important financial consideration is
payback analysis
 The payback period is the amount of time it will
take to recoup, in the form of net cash inflows,
the total dollars invested in a project
 Payback occurs when the net cumulative
discounted benefits equals the costs
 Many organizations want IT projects to have a
fairly short payback period

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 Figure 4-6. Charting the Payback
Period

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 Weighted Scoring Model
 A weighted scoring model is a tool that provides a
systematic process for selecting projects based on
many criteria
 Identify criteria important to the project selection process
 Assign weights (percentages) to each criterion so they add
up to 100%
 Assign scores to each criterion for each project
 Multiply the scores by the weights and get the total
weighted scores
 The higher the weighted score, the better

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 Figure 4-7. Sample Weighted Scoring
Model for Project Selection

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Management, Sixth Edition Copyright 2009 23
 Project Charters
 After deciding what project to work on, it is
important to let the rest of the organization know
 A project charter is a document that formally
recognizes the existence of a project and
provides direction on the project’s objectives and
management
 Key project stakeholders should sign a project
charter to acknowledge agreement on the need
and intent of the project; a signed charter is a key
output of project integration management

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 Table 4-1. Example of Project Charter

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Management, Sixth Edition Copyright 2009 25
 Table 4-1. Charter (continued)

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 Project Management Plans
 A project management plan is a document used
to coordinate all project planning documents and
help guide a project’s execution and control
 Plans created in the other knowledge areas are

subsidiary (supplementary) parts of the overall

project management plan

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 Common Elements of a Project
Management Plan
 Introduction or overview of the project
 Description of how the project is organized

(organization chart)
 Management and technical processes used on

the project
 Work to be done, schedule, and budget

information

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Management, Sixth Edition Copyright 2009 28
 Table 4-2. Sample Contents for a Software
Project Management Plan (SPMP)

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Management, Sixth Edition Copyright 2009 29
 Project Execution
 Project execution involves managing and
performing the work described in the project
management plan
 The majority of time and money is usually spent

on execution
 The application area of the project directly affects

project execution because the products of the

project are produced during execution

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 Coordinating Planning and Execution
 Project planning and execution are intertwined
(overlapped) and inseparable activities
 Those who will do the work should help to plan the

work
 Project managers must solicit (request) input from

the team to develop realistic plans

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 Providing Leadership and a
Supportive Culture
 Project managers must lead by example to
demonstrate the importance of creating and then
following good project plans
 Organizational culture can help project execution
by:
◦ Providing guidelines and templates
◦ Tracking performance based on plans
 Project managers may still need to break the rules
to meet project goals, and senior managers must
support those actions

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 Important Skills for Project Execution
 General management skills like leadership,
communication, and political skills
 Product, business, and application area skills and

knowledge
 Use of specialized tools and techniques

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 Project Execution Tools and
Techniques
 Expert judgment: experts can help project managers
and their teams make many decisions related to project
execution
 Project management information systems: there are
hundreds of project management software products
available on the market today, and many organizations
are moving toward powerful enterprise project
management systems that are accessible via the
Internet

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Management, Sixth Edition Copyright 2009 34
 Monitoring and Controlling Project
Work
 Changes are inevitable on most projects, so it’s
important to develop and follow a process to
monitor and control changes
 Monitoring project work includes collecting,

measuring, and disseminating performance

information
 A baseline is the approved project management

plan plus approved changes

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Management, Sixth Edition Copyright 2009 35
 Integrated Change Control
 Three main objectives are:
◦ Influencing the factors that create changes to
ensure that changes are beneficial
◦ Determining that a change has occurred
◦ Managing actual changes as they occur

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 Change Control on Information
Technology Projects
 Former view: the project team should strive to do
exactly what was planned on time and within
budget
 Problem: stakeholders rarely agreed up-front on

the project scope, and time and cost estimates

were inaccurate
 Modern view: project management is a process of

constant communication and negotiation

 Solution: changes are often beneficial, and the

project team should plan for them

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 Change Control System
 A formal, documented process that describes
when and how official project documents and work
may be changed
 Describes who is authorized to make changes and

how to make them

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 Change Control Board (CCB)
 A formal group of people responsible for
approving or rejecting changes on a project
 CCBs provide guidelines for preparing change

requests, evaluate change requests, and manage

the implementation of approved changes
 Includes stakeholders from the entire organization

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 Making Timely Changes
 Some CCBs only meet occasionally, so it may
take too long for changes to occur
 Some organizations have policies in place for

time-sensitive changes
◦ “48-hour policy” allows project team members to make
decisions; then they have 48 hours to reverse the
decision pending senior management approval
◦ Delegate (pass on) changes to the lowest level possible,
but keep everyone informed of changes

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 Configuration Management
 Ensures that the descriptions of the project’s
products are correct and complete
 Involves identifying and controlling the functional
and physical design characteristics of products
and their support documentation
 Configuration management specialists identify
and document configuration requirements, control
changes, record and report changes, and audit
the products to verify conformance to
requirements.

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Management, Sixth Edition Copyright 2009 41
 Table 4-3. Suggestions for Performing
Integrated Change Control

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 Closing Projects and Phases
 To close a project or phase, you must finalize all
activities and transfer the completed or cancelled
work to the appropriate people
 Main outputs include:

◦ Final product, service, or result transition

◦ Organizational process asset updates

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 Using Software to Assist in Project
Integration Management
 Several types of software can be used to assist in
project integration management
◦ Documents can be created with word processing software
◦ Presentations are created with presentation software
◦ Tracking can be done with spreadsheets or databases
◦ Communication software like e-mail and Web authoring
tools facilitate communications (Flash, Dreamweaver)
◦ Project management software can pull everything together
and show detailed and summarized information
◦ Business Service Management (BSM) tools track the
execution of business process flows

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Management, Sixth Edition Copyright 2009 44
 Chapter Summary
 Project integration management involves
coordinating all of the other knowledge areas
throughout a project’s life cycle
 Main processes include:

◦ Develop project charter

◦ Develop project management plan
◦ Direct and manage project execution
◦ Monitor and control project work
◦ Perform integrated change control
◦ Close the project or phase

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Management, Sixth Edition Copyright 2009 45