project group

Description

Group assignment, a Memo
Compose an memo that reveals your inspiration for accomplishments for this course, your project and your ambition to work on the skills of team communication.
This memo will reveal your team concept ready to talk about during week two.  It is suggested that you broaden your vision and think of problem that can be enhanced with technology, an application, better information resources and which will achieve a meaningful business benefit.

Compose a vision statement based on a problem definition that reflects what you will be inspired to solve.
Record your understanding of the concept of project management using the steps suggested in Gido and Clements’ successful project management book. Be sure to properly cite any sources you may have found from the text or the internet.
This memo explains what you wish to get out of this project. Write an overview of your concept. This is a graded writing exercise, so, it should be well written memo using any template format you choose. You may direct the memo to the course facilitator, to your sponsor, to your team or the entire class.
Gido, J. & Clements, J. P. (2012). Successful Project Management (5th Edition). South-Western CENGAGE Learning.Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Successful Project Management
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Successful Project Management
SEVENTH EDITION
JACK GIDO
Penn State University
JIM CLEMENTS
Clemson University
ROSE BAKER
University of North Texas
Australia • Brazil • Mexico • Singapore • United Kingdom • United States
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Successful Project Management,
Seventh Edition
Jack Gido, Jim Clements, and Rose Baker
Executive Product Director: Mike Schenk
Product Manager: Aaron Arnsparger
© 2018, 2015 Cengage Learning
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Unless otherwise noted all items
© Cengage Learning
Library of Congress Control Number: 2016955571
Student Edition:
ISBN: 978-1-337-09547-1
Loose-leaf Edition:
ISBN: 978-1-337-11608-4
Cengage Learning
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Print Number: 01
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Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
To my wonderful family: my wife, Rosemary; our sons, Steve and Jeff;
our “daughters,

” Teresa and Wendy; and our grandchildren,
Matthew, Alex, Allison, Meghan, and Sophie.
J.G.
To my wonderful wife, Beth, and our four incredible children—Tyler,
Hannah, Maggie, and Grace. I love you all very much.
J.P.C.
To my immensely supportive family: my late husband, Frank;
son, Dan; daughter, Francie; and my friends who have helped me
achieve my professional goals.
R.B.
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Brief Contents
CHAPTER
1
PART 1
Project Management Concepts
2
Initiating a Project
34
CHAPTER
2
Identifying and Selecting Projects
CHAPTER
3
Developing Project Proposals
PART 2
36
64
Planning, Performing, and Controlling the Project
100
102
CHAPTER
4
Defining Scope, Quality, Responsibility, and Activity Sequence
CHAPTER
5
Developing the Schedule
CHAPTER
6
Resource Utilization
CHAPTER
7
Determining Costs, Budget, and Earned Value
CHAPTER
8
Managing Risk
CHAPTER
9
Closing the Project
PART 3
146
214
242
288
304
People: The Key to Project Success
324
CHAPTER
10
The Project Manager
CHAPTER
11
The Project Team
CHAPTER
12
Project Communication and Documentation
CHAPTER
13
Project Management Organizational Structures
Appendix A
Project Management Information Systems 467
Appendix B
Project Management Websites
Appendix C
Appendix D
Project Management Associations around the Globe 481
Acronyms 485
326
360
406
442
479
Reinforce Your Learning Answers 487
Glossary 503
Index
511
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
vii
Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
About the Authors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxix
CHAPTER 1
Project Management Concepts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Project Attributes
5
Balancing Project Constraints
7
Project Life Cycle 10
Initiating 11
Planning 12
Performing 12
Closing 14
Project Management Process
Stakeholder Engagement
15
22
Global Project Management
23
Project Management Associations
24
Benefits of Project Management 25
Summary 27
Questions 29
Internet Exercises 29
Case Study 1: A Not-for-Profit Organization 30
Case Study 2: E-Commerce for a Small Supermarket
Bibliography 32
31
PART 1 Initiating a Project
CHAPTER 2
Identifying and Selecting Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Project Identification
Project Selection
39
Project Charter
42
38
Preparing a Request for Proposal
47
Soliciting Proposals 53
Summary 56
Questions 57
Internet Exercises 57
Case Study 1: A Midsize Pharmaceutical Company
Case Study 2: Transportation Improvements 59
Bibliography 62
58
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
ix
x
Contents
CHAPTER 3
Developing Project Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Building Relationships with Customers and Partners
Pre-RFP/Proposal Marketing
69
Decision to Develop a Proposal
Creating a Winning Proposal
Proposal Preparation
67
70
73
74
Proposal Contents 75
Technical Section 75
Management Section 77
Cost Section 78
Pricing Considerations
80
Simplified Project Proposal
81
Proposal Submission and Follow-Up
Customer Evaluation of Proposals
83
84
Contracts 87
Fixed-Price Contracts 87
Cost-Reimbursement Contracts 87
Contract Terms and Conditions 88
Measuring Proposal Success 89
Summary 91
Questions 93
Internet Exercises 94
Case Study 1: Medical Information Systems 94
Case Study 2: New Manufacturing Facility in China
Bibliography 99
96
PART 2 Planning, Performing, and Controlling the Project
CHAPTER 4
Defining Scope, Quality, Responsibility, and Activity Sequence . . . . . . . . . . . . . . . . . 102
Establish Project Objective
Define Project Scope
Plan for Quality
105
106
110
Create Work Breakdown Structure
Assign Responsibility
Define Activities
112
116
118
Sequence Activities 119
Network Principles 119
Create Network Diagram
121
Planning for Information Systems Development 125
An Information System Example: Internet Applications Development
for ABC Office Designs 129
Project Management Information Systems
Summary 132
Questions 134
Internet Exercises 135
130
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Contents
Case Study 1: A Not-for-Profit Medical Research Center
Case Study 2: The Wedding 137
Bibliography 139
Appendix: Microsoft Project 139
xi
135
CHAPTER 5
Developing the Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Estimate Activity Resources
149
Estimate Activity Durations
150
Establish Project Start and Completion Times
151
Develop Project Schedule 152
Earliest Start and Finish Times 152
Latest Start and Finish Times 156
Total Slack 158
Critical Path 160
Free Slack 163
Bar Chart Format 165
Project Control Process
166
Effects of Actual Schedule Performance
Incorporate Changes into Schedule
Update Project Schedule
Control Schedule
168
169
170
171
Scheduling for Information Systems Development 176
An Information System Example: Internet Applications Development
for ABC Office Designs (Continued) 178
Project Management Information Systems
180
Agile Project Management 183
Summary 189
Questions 192
Internet Exercises 194
Case Study 1: A Not-for-Profit Medical Research Center
Case Study 2: The Wedding 195
Bibliography 195
Appendix 1: Probabilistic Activity Durations 196
Appendix 2: Microsoft Project 206
194
CHAPTER 6
Resource Utilization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214
Resource-Constrained Planning
Resource Requirements Plan
Resource Leveling
216
218
220
Resource-Limited Scheduling
222
Resource Requirements for Information Systems Development 227
An Information System Example: Internet Applications Development
for ABC Office Designs (Continued) 227
Project Management Information Systems
Summary 231
Questions 232
Internet Exercises 233
228
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
xii
Contents
Case Study 1: A Not-for-Profit Medical Research Center
Case Study 2: The Wedding 233
Bibliography 234
Appendix: Microsoft Project 234
233
CHAPTER 7
Determining Costs, Budget, and Earned Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
Estimate Activity Costs
245
Determine Project Budget 247
Aggregate Total Budgeted Cost 247
Develop Cumulative Budgeted Cost 249
Determine Actual Cost 251
Actual Cost 251
Committed Costs 251
Compare Actual Cost to Budgeted Cost
Determine Value of Work Performed
Analyze Cost Performance
Cost Performance Index
Cost Variance 258
Estimate Cost at Completion
Control Costs
252
254
256
257
258
260
Manage Cash Flow
261
Cost Estimating for Information Systems Development 263
An Information System Example: Internet Applications Development
for ABC Office Designs (Continued) 264
Project Management Information Systems 265
Summary 267
Questions 269
Internet Exercises 270
Case Study 1: A Not-for-Profit Medical Research Center
Case Study 2: The Wedding 271
Bibliography 271
Appendix 1: Time–Cost Trade-Off 272
Appendix 2: Microsoft Project 276
271
CHAPTER 8
Managing Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288
Identify Risks
290
Assess Risks
292
Plan Risk Responses
Monitor Risks
293
294
Managing Risks for Information Systems Development 296
An Information System Example: Internet Applications Development
for ABC Office Designs (Continued) 297
Summary 298
Questions 299
Internet Exercises 299
Case Study 1: A Not-for-Profit Medical Research Center 299
Case Study 2: The Wedding 300
Case Study 3: Student Fund-Raising Project 300
Bibliography 302
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Contents
xiii
CHAPTER 9
Closing the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304
Project Closing Actions 306
Final Payments 307
Staff Recognition and Evaluation 307
Postproject Evaluation 308
Lessons Learned 310
Archive Project Documents 311
Customer Feedback
311
Early Project Termination 314
Summary 317
Questions 317
Internet Exercises 318
Case Study 1: Factory Expansion Project 318
Case Study 2: Market Research Report Project 320
Bibliography 322
PART 3 People: The Key to Project Success
CHAPTER 10
The Project Manager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
Project Manager Responsibilities 329
Planning 329
Organizing 329
Monitoring and Controlling 329
Project Manager Skills 330
Leadership Ability 330
Ability to Develop People 334
Communication Skills 335
Interpersonal Skills 336
Ability to Handle Stress 338
Problem-Solving Skills 338
Negotiating Skills 339
Time Management Skills 340
Developing Project Manager Competence
Delegation
340
342
Managing Changes 345
Summary 352
Questions 352
Internet Exercises 353
Case Study 1: Codeword 354
Case Study 2: ICS, Inc. 355
Bibliography 358
CHAPTER 11
The Project Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360
Acquiring the Project Team
362
Project Team Development
Forming 365
Storming 365
364
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
xiv
Contents
Norming 366
Performing 367
Project Kickoff Meeting
368
Effective Project Teams 370
Characteristics of Effective Teams 370
Barriers to Team Effectiveness 371
Effective Team Members 375
Team Building 376
Valuing Team Diversity 377
Ethical Behavior
382
Conflict on Projects 384
Sources of Conflict 384
Handling Conflict 386
Problem Solving 388
A Nine-Step Approach to Problem Solving
Brainstorming 390
388
Time Management 391
Summary 395
Questions 398
Internet Exercises 398
Case Study 1: Team Effectiveness? 399
Case Study 2: New Team Member 401
Bibliography 403
CHAPTER 12
Project Communication and Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406
Personal Communication 409
Verbal Communication 409
Written Communication 410
Effective Listening 411
Meetings 412
Types of Project Meetings
Effective Meetings 416
412
Presentations 419
Prepare the Presentation 421
Deliver the Presentation 422
Reports 423
Types of Project Reports
Useful Reports 425
423
Control Document Changes
426
Project Communication Plan
427
Stakeholder Communication
429
Collaborative Communication Tools 429
Summary 433
Questions 435
Internet Exercises 436
Case Study 1: Office Communications 436
Case Study 2: International Communications
Bibliography 441
438
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Contents
xv
CHAPTER 13
Project Management Organizational Structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442
Functional Organizational Structure
445
Autonomous Project Organizational Structure
Matrix Organizational Structure
447
449
Advantages and Disadvantages of Organizational Structures
Functional Organizational Structure 454
Autonomous Project Organizational Structure 454
Matrix Organizational Structure 455
Summary 457
Questions 459
Internet Exercises 459
Case Study 1: Multi Projects 460
Case Study 2: Organize for Product Development 462
Bibliography 466
453
Appendix A Project Management Information Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467
Appendix B Project Management Websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479
Appendix C Project Management Associations around the Globe . . . . . . . . . . . . . . . . . . . . 481
Appendix D Acronyms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 485
Reinforce Your Learning Answers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Preface
There are those who make things happen,
those who let things happen, and
those who wonder what happened.
We hope that Successful Project Management will help you have an enjoyable,
exciting, and successful experience as you grow through future project endeavors,
and that it will be the catalyst for enabling you to make things happen!
Best wishes for enjoyment, satisfaction, and success in all that you do.
Jack Gido
Jim Clements
Rose Baker
Our Approach
Project management is more than merely parceling out work assignments to individuals and hoping that they will somehow accomplish a desired result. In fact, projects
that could have been successful often fail because of such take-it-for-granted
approaches. Individuals need hard information and real skills to work successfully in
a project environment and to accomplish project objectives. Successful Project Management is written to equip its users with both—by explaining concepts and techniques and by using numerous examples to show how they can be skillfully applied.
Although the focus of the book is squarely on the practical things readers
absolutely need to know to thrive in project environments, the book does not
forsake objective learning; it simply challenges readers to think critically about
project management principles and to apply them within the context of the real
world. We capture lessons learned from years of managing projects, teaching
project management, and writing extensively about it.
Successful Project Management is intended for students as well as for working
professionals and volunteers. The book is designed to present the essential skills
readers need to make effective contributions and to have an immediate impact
on the accomplishment of projects in which they are involved. It prepares students with marketable and transferable skills and sends them into the workforce
ready to apply project management knowledge and skills. The book also supports
employer talent development and lifelong learning programs to develop and
train employees to work effectively in multifunctional teams and apply project
management tools and techniques to successfully accomplish project objectives.
Successful Project Management is written for everyone involved in projects,
not just project managers. Projects with good or even great project managers
still may not succeed, as the best efforts of all involved are essential. All the
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
xvii
xviii
Preface
people on the project team must have the knowledge and skills to work effectively together in a project environment. People do not become project managers
by reading books; they become project managers by first being effective project
team members. This book provides the foundation individuals need to be effective members of project teams and thereby boosts everyone’s potential to rise to
the challenge of managing teams and projects.
The book is written in an easy-to-understand, straightforward style with a minimum of technical terms. Readers acquire project management terminology gradually as they read the text. The mathematics is purposely kept simple. The text
does not use complex mathematical theories or algorithms to describe scheduling
techniques and does not include highly technical projects as examples. An overtly
technical approach can create a barrier to learning for individuals who lack deep
understanding of advanced mathematics or technical backgrounds. Separate
appendixes are provided for those readers who want more in-depth coverage of
probability considerations and time-cost trade-offs. Our book includes a broad
range of easily understood examples based on projects encountered in everyday
situations. For example, real-world applications include conducting a market survey, building an information system, and organizing a community festival.
Enhancements to the Seventh Edition
MINDTAP
The seventh edition introduces a brand new MindTap product. For each chapter,
this all-digital version of the book enhances learning with an engagement video
and discussion, a quiz with rich feedback, Microsoft Project 2016 tutorial videos,
and animations that highlight some of the cases in the end-of-chapter material. If
you’re interested in all these features, talk to your Cengage learning consultant.
Based on the excellent and supportive comments we received from our
reviewers, we are pleased to incorporate the following enhancements in the seventh edition of Successful Project Management:
®

Revised the chapter concepts and contents to support the Project Management Knowledge Areas of the Project Management Institute’s A Guide to the
Project Management Body of Knowledge (PMBOK Guide), Sixth Edition, as
shown in the table on the following page.
®

Provided animated videos of selected case studies. Each case study animation
includes embedded questions at intervals during the video for students to
answer as well as discussion questions at the end of the video.

Replaced all Real World Project Management vignettes (two in each chapter)
with more up-to-date vignettes that discuss a variety of applications and
industry sectors, both North American and International.

Enhanced and updated the Microsoft Project Appendixes in Chapters 4 through
7 based on Microsoft Project 2016, including all new figures of screen captures.

Updated tutorial videos for using Microsoft Project 2016, available within
the MindTap.

Made minor edits in the chapters to support the Project Management
Knowledge Areas of A Guide to the Project Management Body of Knowledge
®
®
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Preface
xix
® Project Management Knowledge Areas
PMBOK
Chapter
Integration Scope Schedule Cost Quality Resource Communications Risk Procurement Stakeholder
1. Project Management
Concepts
3
2. Identifying and
Selecting Projects
3
3
3
3. Developing Project
Proposals
3
4. Defining Scope,
Quality, Responsibility,
and Activity Sequence
3
5. Developing the
Schedule
3
3
3
6. Resource Utilization
7. Determining Costs,
Budget, and Earned
Value
3
3
3
3
3
3
3
3
8. Managing Risk
3
9. Closing the Project
3
10. The Project Manager
3
3
3
11. The Project Team
3
3
12. Project
Communication and
Documentation
3
3
13. Project Management
Organizational Structures
3
3
3
3
®
(PMBOK Guide) and to provide consistency of concepts and terminology
among the chapters.

Updated Appendix B, Project Management Websites.

Updated Appendix C, Project Management Associations around the Globe.
Distinctive Features
Successful Project Management has many distinctive features to enhance learning
and build skills.
®
Supports PMBOK Guide—Concepts in the chapters support the project management knowledge areas of the Project Management Institute’s A Guide to the
Project Management Body of Knowledge (PMBOK Guide).
®
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xx
Preface
Learning Outcomes—The beginning of each chapter identifies specific outcomes
the learner should be able to accomplish after studying the material.
Real-World Vignettes—Each chapter contains two real-world vignettes that
illustrate the topics in the chapter. These vignettes not only reinforce chapter
concepts but also draw readers into the discussion and pique their interest in
applications of project management.
Examples and Applications—Specific relevant real-world examples and applications are incorporated throughout this text to reinforce the concepts presented.
Reinforce Your Learning Questions—Brief questions appear alongside the text
to ensure that learners retain key concepts and that the fundamentals are not
ignored. These in-the-margin questions “pop up” throughout the text to provide
positive reinforcement and to help learners to gauge their comprehension of the
material.
Critical Success Factors—Each chapter contains a concise list of the important
factors that project managers and team members need to know to help make
their projects successful.
Chapter Outlines—Each chapter opens with an outline of the key topics that
will be covered. These outlines clarify expectations and allow readers to see the
flow of information at a glance.
Graphics and Templates—Numerous exhibits and templates appear in the
text to illustrate the application of important concepts and project management
tools.
Chapter Summaries—At the end of each chapter is a concise summary of the
material presented in the chapter—a final distillation of core concepts.
Review Questions and Problems—Each chapter has a set of questions and problems that test and apply chapter concepts, support the learning outcomes, and
reinforce understanding and retention.
Internet Exercises—Each chapter has a set of exercises to invite learners to
research and review information about real-world applications of various project
management topics and summarize their findings.
Case Studies—End-of-chapter case studies provide critical-thinking scenarios for
either individual or group analysis. Variety in case format ensures that all learners can relate to the scenarios presented. The cases are fun and are intended to
spark interesting debates. By fostering discussion of various viewpoints, the cases
provide opportunities for participants to expand their thinking about how to
operate successfully when differing views arise in the work environment. Thus
students gain valuable insight into what teamwork is all about.
Case Study Animations—Animated videos are provided of selected case studies.
Each case study includes embedded questions at intervals during the animation
for students to answer as well as discussion questions at the end of the video.
Microsoft Project 2016—Examples of how to use and apply Microsoft Project
2016 are included in appendixes in Chapters 4–7. Detailed instructions and a
number of sample screen displays are included.
Tutorial Videos—The book’s MindTap includes a series of brief videos that
illustrate how to use Microsoft Project 2016. The videos align with the material
in the Microsoft Project 2016 appendixes in Chapters 4–7 of the book.
®
®
®
®
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Preface
xxi
Project Management Information Systems—A comprehensive appendix discusses the use of project management information systems as a tool to plan,
track, and manage projects. Common features of project management information systems are discussed, along with selection criteria.
Project Management Websites— An appendix of project management websites
is provided as a good resource for additional information, applications, tools, and
research about project management. The book’s companion website includes
links to each of the project management websites listed.
Project Management Associations—A list of project management associations
around the globe is provided in an appendix for individuals who want to contact
these organizations about professional development, access to periodicals and
other publications, or career opportunities. The book’s companion website
includes links to each of the project management associations listed.
Organization and Content
Successful Project Management comprises 13 chapters plus appendixes with an
opening foundation chapter on project management concepts and the remaining
12 chapters divided into three parts:

Part 1, Initiating a Project, discusses identifying and selecting projects, and
developing project proposals.

Part 2, Planning, Performing, and Controlling the Project, covers defining
scope, quality, responsibility, and activity sequence; developing the schedule;
resource utilization; determining costs, budget, and earned value; managing
risk; and closing the project.

Part 3, People: The Key to Project Success, discusses the project manager; the
project team; project communication and documentation; and project management organizational structures.
Chapter 1, Project Management Concepts, is a foundation chapter that discusses the definition of a project and its attributes; managing a project within
the constraints of scope, quality, schedule, budget, resources, risks, and customer
satisfaction; the project life cycle of initiating, planning, performing, and closing
a project, as well as monitoring and controlling the project and managing
changes; the definition of project management and the steps of the project management process; stakeholder engagement; implications of global project management; project management associations; and the benefits of project management.
The concepts in this chapter support two PMBOK Guide project management
knowledge areas: project integration and stakeholder management.
Part 1, Initiating a Project, discusses identifying and selecting projects, and
developing project proposals. It includes two chapters:
®

Chapter 2, Identifying and Selecting Projects, covers how projects are identified, selected, authorized, and outsourced. The project charter is also discussed. The concepts in this chapter support two PMBOK Guide project
management knowledge areas: project integration and procurement
management.
®
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xxii
Preface

Chapter 3, Developing Project Proposals, deals with building effective relationships with customers and partners; proposal marketing strategies; decision making to go forward with a proposal; creating winning proposals;
proposal preparation and contents, including simplified project proposals;
pricing considerations; customer evaluation of proposals; types of contracts;
and measuring success of proposal efforts. The concepts in this chapter
support the PMBOK Guide project management knowledge area of project
procurement management.
®
Part 2, Planning, Performing, and Controlling the Project, covers project management techniques and tools. It includes six chapters:

Chapter 4, Defining Scope, Quality, Responsibility, and Activity Sequence,
discusses clearly defining the project objective; preparing a project scope
document; the importance of planning for quality; creating a work breakdown structure; assigning responsibilities for work elements; and defining
specific activities and creating a network diagram. The concepts in this
chapter support five PMBOK Guide project management knowledge areas:
project integration, scope, quality, resource, and schedule management.
®

Chapter 5, Developing the Schedule, deals with estimating the resources and
durations for activities; developing a schedule that indicates the earliest and
latest start and finish times for each activity; and determining slack and
identifying the critical path of activities. It also explains the project control
process, including monitoring and controlling progress; the effects of actual
performance; updating the schedule; approaches to controlling the schedule;
and agile project management. This chapter also includes an appendix on
using probabilistic activity durations. The concepts in this chapter support
three PMBOK Guide project management knowledge areas: project integration, resource, and schedule management.
®

Chapter 6, Resource Utilization, addresses taking resource constraints into
account when developing a network plan and project schedule; preparing a
resource requirements plan; leveling the use of resources within the required
time frame for a project; and determining the shortest project schedule when
the number of available resources is limited. The concepts in this chapter
support two PMBOK Guide project management knowledge areas: project
resource and schedule management.
®

Chapter 7, Determining Costs, Budget, and Earned Value, covers estimating the
costs of activities; creating a time-phased budget; cumulating actual costs;
determining the earned value of work actually performed; analyzing cost performance; estimating project cost at completion; approaches to controlling
costs; and managing cash flow. This chapter also includes an appendix on timecost trade-off. The concepts in this chapter support two PMBOK Guide project
management knowledge areas: project integration and cost management.
®

Chapter 8, Managing Risk, includes identifying and categorizing risks and
their potential impact; assessing the likelihood of occurrence and degree of
impact; prioritizing risks; preparing risk response plans; creating a risk
assessment matrix; and controlling and monitoring risks. The concepts in
this chapter support the PMBOK Guide project management knowledge
area of project risk management.
®
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Preface
xxiii

Chapters 4–8 include several continuing multichapter integrated examples
and case studies that apply the concepts and tools discussed in the chapters.
The examples and case studies are introduced in Chapter 4 and continue and
build through Chapters 5, 6, 7, and 8. Chapters 4 through 7 also include
appendixes on Microsoft Project that illustrate how to use and apply Microsoft Project to one of the multichapter integrated examples.

The last chapter in Part 2 is Chapter 9, Closing the Project. It discusses what
actions should be taken when closing a project; conducting a postproject
evaluation; the importance of documenting and communicating lessons
learned; organizing and archiving project documents; obtaining feedback
from customers; and early termination of projects. The concepts in this
chapter support two PMBOK Guide project management knowledge areas
of project integration and procurement management.
®
Part 3, People: The Key to Project Success, focuses on the importance of the people involved in a project. It includes four chapters:

Chapter 10, The Project Manager, discusses the responsibilities of the project
manager; the skills needed to manage projects successfully; ways to develop
project manager competence; approaches to effective delegation; and how the
project manager can manage and control changes to the project. The concepts in this chapter support three PMBOK Guide project management
knowledge areas: project integration, resource, and stakeholder management.
®

Chapter 11, The Project Team, covers the development and growth of teams;
the project kickoff meeting; effective teams including characteristics of effective project teams, barriers to team effectiveness, effective team members,
team building, and valuing team diversity; ethical behavior; sources of conflict during the project and approaches to handling conflict; problem solving,
including brainstorming; and effective time management. The concepts in
this chapter support the PMBOK Guide project management knowledge
area of project resource management.
®

Chapter 12, Project Communication and Documentation, addresses the
importance of effective verbal and written communication, including suggestions for enhancing personal communication; effective listening; types of
project meetings and suggestions for productive meetings; project presentations and suggestions for effective presentations; project reports and suggestions for preparing useful reports; controlling changes to project documents;
creating a project communication plan; and collaborative communication
tools. The concepts in this chapter support four PMBOK Guide project
management knowledge areas: project communications, integration,
resource, and stakeholder management.
®

Chapter 13, Project Management Organizational Structures, explains the
characteristics, advantages, and disadvantages of the functional, autonomous
project and matrix organizational structures and discusses the role of the
project management office. The concepts in this chapter support two
PMBOK Guide project management knowledge areas: project integration
and resource management.
®
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
xxiv
Preface
Appendix A, Project Management Information Systems, discusses the common features of project management information systems; criteria for selecting
a project management information system; and advantages of and concerns
about using such systems. Appendix B provides a list of websites that are good
resources for additional information, applications, tools, and research about project management. Appendix C is a list of project management associations
around the globe. Appendix D is a list of common project management acronyms. The book also includes answers to the Reinforce Your Learning questions
for each chapter, and a Glossary of project management terms used in the book.
Support Materials
This edition of Successful Project Management provides a support package that
will encourage student success and increase instructor effectiveness.
The comprehensive Instructor Manual includes sample syllabi, learning objectives and outcomes for each chapter, suggested teaching methods for each chapter,
lecture outlines, and answers to the end-of-chapter questions and case studies.
The Test Bank includes true/false, multiple-choice, and problem-solving exercises for each chapter. Cognero, an online, fully customizable version of the Test
Bank, provides instructors with all the tools they need to create, author/edit, and
deliver multiple types of tests. Instructors can import questions directly from the
Test Bank, create their own questions, or edit existing questions.
Instructor Companion Site. In addition to the supplements above, a comprehensive set of instructor support materials, including the Instructor Manual, PowerPoint slides, and a link to the trial version of Microsoft Project 2016, is available
for Successful Project Management on the book’s companion website at www.cengage
brain.com. These support materials are designed to guide the instructor and minimize class preparation time.
Student Companion Site. The Student Companion Site includes student
PowerPoint slides, Internet exercises from the text, website links, a link to the
trial version of Microsoft Project 2016, flashcards, and a glossary. The companion site can be found at www.cengagebrain.com. On the home page, students can
use the search box to insert the ISBN of the title (from the back cover of their
book). This will take them to the product page, where free companion resources
can be found.
®
®
®
®
Acknowledgments
We are very grateful to the individuals who helped with the publication of this
book. We offer special appreciation to Wes Donahue and Beth McLaughlin of
Penn State University for providing support materials and suggestions. Jason
Oakman did a meticulous job in preparing the original graphics. We want to
thank all the members of the project team at Cengage Learning/South-Western
who helped turn our vision into reality and contributed to the successful completion of this project. Special recognition goes to Aaron Arnsparger, Product Manager, Tara Slagle, Senior Content Project Manager at MPS North America, and
Sharib Asrar, Associate Program Manager at Lumina Datamatics Inc.
We would like to acknowledge the contributions of the Project Management
Institute to advancing the project management profession and, in particular, the
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Preface
xx v
multitude of volunteers and staff for their diligent work on the current and previous editions of A Guide to the Project Management Body of Knowledge
(PMBOK Guide).
We would like to recognize the important contributions of the following
reviewers for providing constructive and supportive comments for enhancing
this seventh edition:
®
Dennis Agboh
Morgan State University
Michael P. Allison
Embry-Riddle Aeronautical University
Charles Almond
West Virginia University–Parkersburg
Hilary Barnes
Lubbock Christian University
Graceful Beam
Georgia Northwestern Technical College
Sonja Bickford
University of Nebraska Kearny
Don Carpenter
Colorado Mesa University
Kuan-Chou Chen
Purdue University Calumet
Vivian Derby
Ottawa University (Ottawa, Kansas)
Dianna Dodd
Brown Mackie College
Karina Dundurs
West Valley College
Ahmed Eshra
Monroe College
Ephram Eyob
Virginia State University
Judy Field
Ridgewater College
James Gibbs
Mount St. Joseph University
Bob Gregory
Bellevue University
Donna Hanks
Western Dakota Technical Institute
Catherine Harris
Lone Star College
Morris Hsi
Lawrence Technical University
F. Kirk Keller
Wayne Community College
Jessica Kitchen
Rogue Community College
Frances Kubicek
Kalamazoo Valley Community College
J. Howard Kucher
Stevenson University
Changyue Luo
Governor’s
’’s State University
Hiral Shah
St. Cloud State University
Ben Shaw
Cape Fear Community College
Clara Spenny
Embry-Riddle Aeronautical University
Carrie Stevick
Baker University
William Tawes
Stevenson University
Ed Weckerly
Penn State University
We are also grateful to the following reviewers of the first six editions for their
valuable comments that continually enriched and advanced the text:
Dennis Agboh
Morgan State University
Dr. Stephen O. Agyei-Mensah
Clarion University of North
Pennsylvania
Basil Al-Hashimi
Mesa Community College
Michael Anderson
Simpson College
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xxv i
Preface
Kwasi Amoako-Gyampah
University of North Carolina at
Greensboro
Ed Arnheiter
Rensselaer Polytechnic InstituteHartford
Fred K. Augustine, Jr.
Stetson University
Mehmet Barut
Wichita State University
Ervin H. Baumeyer, PE
Lone Star College-North Harris
Catherine Beise
Salisbury University
Charles Bilbrey
James Madison University
Vicki Blanchard
Gibbs College of Boston
Blaine Boxwell
University of Bridgeport
Daniel Brandon
Christian Brothers University
Dr. Dorothy Brandt
Brazosport College
Daketima Briggs
Saint Mary’s
’’s University of Minnesota
Tyson Browning
Texas Christian University
James Browning
Brunswick Community College
Victoria Buenger
Texas A&M University
Thomas Bute
Humboldt State University
Tim Butler
Wayne State University
John H. Cable
University of Maryland
David T. Cadden
Quinnipiac University
Michael Cathey
George Washington University
Paul Chase
Becker College
David E. Clapp
Florida Institute of Technology
Robert Cohn
Long Island University-C.W. Post
Comfort Cover
Adams State College
Craig Cowles
Bridgewater State College
Sam DeWald
Penn State University
Charlene A. Dykman, Ph.D.
University of St. Thomas-Houston
Bari Dzomba
Penn State University
Geoffrey Egekwu
James Madison University
Ike Ehie
Southeast Missouri State University
Mike Ensby
Clarkson University
Lynn Fish
Canisius College
James Ford
Ford Consulting Associates
Okiechi Geoffrey Egekwu
James Madison University
Philip Gisi
DePaul University
Adrienne Gould-Choquette
State College of Florida
Richard Gram
Worcester Polytechnic Institute
Valarie Griep
Metropolitan State UniversityMinneapolis
Joseph Griffin
Northeastern University
Ronald Grossman
Central Connecticut State University
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Preface
x xvii
Ken Gyure
Ardeshir Lohrasbi
University of Arizona
University of Illinois-Springfield
Darryl S. Habeck
Changyue Luo
Milwaukee Area Technical College
Governor’s
’’s State University
Mamoon M. Hammad
Larry Maes
The George Washington University
Davenport University-Warren
Michael Hashek
Mary Jo Maffei
Gateway Technical College
MQ Associates
William Hayden
Nicoleta Maghear
State University of New York-Buffalo Hampton University
Vish Hedge
Reza Maleki
California State University-East Bay
North Dakota State University
Andrew Henderson
David M. Marion
Barstow Community College
Ferris State University
Joan E. Hoopes, Ph.D
James Marlatt, PMP
Marist College
University of Colorado
O’Brien Hughes
Kirsten Mast
Lone Star College
Albertson College of Idaho
Kimberly Hurns
William Milz
Washtenaw Community College
Northeast Wisconsin Technical College
Margaret Huron
Kathryn J. Moland, Ph.D., PMP
Lone Star College-North Harris
Livingstone College
Bhushan L. Kapoor
David Moore
California State University, Fullerton
Colorado School of Mines
Barbara Kelley
Janet C. Moore
St Joseph’s
’’s University
Penn State University
Laurie J. Kirsch
Herbert Moskowitz
University of Pittsburgh
Purdue University-West Lafayette
Brian M. Kleiner
William A. Moylan
Virginia Tech
Eastern Michigan University
Shawn Krest
Jim Murrow
Genesee Community College
Drury University
Francis Kubicek
Dr. Philip F. Musa
Kalamazoo Valley Community College The University of Alabama at
Birmingham
Ram Kumar
University of North Carolina–Charlotte Rakesh Narayan
Mid-State Technical College
Richard E. Kust
California State University, Fullerton
Carl Nelson
Polytechnic University
Chung-Shing Lee
Pacific Lutheran University
Hameed G. Nezhad, Ph.D.
Metropolitan State University
Lois M. Lemke
Northeast Wisconsin
Robert Niewoehner
Technical College
US Naval Academy
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xxv iii
Preface
Tony B. Noble
Mohave Community College
Michael Okrent
University of Bridgeport
John Olson
DePaul University
Shrikant S. Panwalkar
Purdue University
Fariborz Y. Partovi
Drexel University
Reed E. Pendleton
DeVry University-Fremont
Joseph A. Phillips
DeVry University
George Radu
Chancellor University
Tim Ralston
Bellevue Community College
William Ramshaw, PMP
Whitworth University
H. Dan Reid
University of New Hampshire
Pedro M. Reyes
Baylor University
Sandra Robertson
Thomas Nelson Community
College
Eltgad Roces
Penn State University
Carl R. Schultz
University of New Mexico
Sophia Scott
Southeast Missouri State University
Steven Segerstrom
College of Lake County
Wade H. Shaw
Florida Institute of Technology
Kevin P. Shea
Baker University
Dr. Yosef S. Sherif
California State University, Fullerton
William R. Sherrard
San Diego State University
P.K. Shukla
Chapman University
Al Skudzinskas
Towson University
Anne Marie Smith
La Salle University
Taverekere Srikantaiah
Dominican University
Jimmy C. Stallings
Webster University
Christy Strbiak
New Mexico State University
Fredrick A. Tribble
California State University,
Long Beach
Anthony P. Trippe
Rochester Institute of Technology
Sudhi Upadhyaya
Bemidji State University
Henri Van Bemmelen
University of Bridgeport
Linda Volonino
Canisius College
Agnieszka K. Waronska
Colorado State University-Pueblo
Cindy Wessel
Washington University
We would like to acknowledge all the individuals with whom we worked on projects and all the people who participated in our many project management
courses and workshops. They provided a learning environment for testing the
practical lessons included in this book.
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About the Authors
Jack Gido was most recently Director of Economic & Workforce Development
and Director of PennTAP, the Pennsylvania Technical Assistance Program at
Penn State University. In this position, he directed the program, obtained funding,
and provided leadership for a statewide staff who provided technology assistance
and workforce development to Pennsylvania business and industry to improve
their global competitiveness. Jack has 20 years of industrial management experience, including the management of productivity improvement and technology
development projects. He has an M.B.A. from the University of Pittsburgh and a
B.S. in Electrical Engineering from Penn State University. Jack is a member of the
Project Management Institute and former President of the Upstate New York
Chapter and teaches courses on project management.
Jim Clements currently serves as the 15th President of Clemson University. Prior
to becoming President at Clemson University, Jim served as President of West
Virginia University. Previously he was Provost and Vice President for Academic
Affairs, Vice President for Economic and Community Outreach, Chair of the
Computer and Information Sciences Department, and the Robert W. Deutsch Distinguished Professor of Information Technology at Towson University. He holds a
Ph.D. in Operations Analysis from the University of Maryland, Baltimore County,
an M.S. in Computer Science from the Johns Hopkins University, and a B.S. and
M.S. in Computer Science from the University of Maryland, Baltimore County. He
is the author of more than 75 research publications. During the past 25 years,
Dr. Clements has served as a consultant for a number of public and private organizations. He is also a four-time winner of the Faculty Member of the Year Award
given by students at Towson University.
Rose Baker is Assistant Professor in the Department of Learning Technologies,
College of Information, University of North Texas. Prior to joining the faculty at
the University of North Texas, Rose was a faculty member and directed research
and educational centers at Penn State University. She has led projects with local,
state, and federal agencies; academic institutions; corporations and businesses;
and nonprofit organizations. Rose has more than 25 years of project management
experience and has authored requests for proposals, competitive proposal submissions, research reports, and research publications. She holds a Ph.D. in Instructional Systems and an M.Ed. in Adult Education Theory and Practice from
Penn State University and earned a B.A. in Mathematics and Chemistry from
Washington and Jefferson College. Rose is a member of the Project Management
Institute and a certified Project Management Professional (PMP ).
®
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
xxix
Successful Project Management
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
1
Project Management
Concepts
Project Attributes
Balancing Project
Constraints
Project Life Cycle
Initiating
Planning
Performing
Closing
Syda Productions/Shutterstock.com
Project Management
Process
Stakeholder
Engagement
Global Project
Management
Project Management
Associations
Benefits of Project
Management
Concepts in this chapter support the following Project Management Knowledge Areas of
A Guide to the Project Management Body of Knowledge (PMBOK® Guide):
Summary
Project Integration Management
Questions
Project Stakeholder Management
Internet Exercises
Case Study 1 A Not-forProfit Organization
Case Questions
Group Activity
Case Study 2
E-Commerce for a
Small Supermarket
Case Questions
Group Activity
Optional Activity
Bibliography
2
REAL WORLD PROJECT MANAGEMENT
Managing Culture for Project Success
Consider the word, Culture. It brings to mind many ideas related to culture in the workplace, cultures in different companies, or cultures in countries. Culture is a way of thinking that distinguishes one group of people from other groups of people. An
organization’s culture of innovation is the support for new ideas, risk, and failure.
Behavior and attitudes are influenced by culture. Actions such as assertiveness,
collectivism, or humane orientation can be defined for different cultures and influence
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
how a project manager makes decisions related to managing a project and project team
members.
What impact do you think cultural practices have on project success?
Drew is a project manager for a firm with project teams in four countries, Austria,
Canada, Finland, and South Korea. Each of the teams interacts with Drew and the
team at the corporate headquarters through online video, phone calls, e-mails, and,
at times, on location meetings.
As part of the company’s professional development, Drew attended a training
session on understanding diversity and culture to learn about corporate innovation
culture and its relationship with assertiveness, collectivism, and humane orientation. One of the modules in the program indicated that cross-cultural management
can be influenced by managerial practices and other organizational factors. Innovation activities often include championing programs, incentives for initiating new
ideas, and monetary and nonmonetary rewards. The training materials described
companies with a high innovation culture also had workers who showed high
levels of analytical behaviors and a high problem-solving orientation. Drew hoped
to inspire the teams and have more support for an innovation culture in order to
increase the efficiency for solving problems or preventing problems in the teams’
projects.
As a result of the training, a survey was implemented to learn more about the
teams in each of the countries related to assertiveness, collectivism, and humane
orientation, the three factors most related to changes in corporate innovation
culture.
Drew had learned about each during the training. Assertiveness had been found
to be linked to encouragement for taking initiatives and rewards for performance.
Collectivists expressed pride, loyalty, and cohesiveness with others in their group or
organization. Those with a humane orientation encouraged or rewarded others for
their fairness, generosity, care, and kindness.
The findings of the survey indicated that the teams in the four countries were different from each other. The team from Austria had the highest scores in assertiveness and the team from Finland had the lowest. The team from South Korea had
the highest score for collectivism and the team from Finland had the lowest. The
team from Canada had the highest humane orientation score and the team from
Austria had the lowest.
Drew made decisions about what to do based upon the scores. More empowerment of individual champions and additional monetary and nonmonetary incentives
were given to the Austrian team as a means to stimulate the corporate innovation
culture because such practices are viewed favorably by those with more assertiveness in their social relationships. Providing material rewards are not fully compatible
with cultures low in assertiveness; therefore, Drew provided nonmonetary rewards
to the team from Finland. Drew applied more empowerment to the group for the
team from Korea due to their high scores for in-group collectivism to reinforce the
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
3
4
Introduction
team’s success rather than individual success. The same empowerment procedures
were followed for the team from Canada as the team from Korea because high levels
of humane orientation do not value self-enhancement, power, and materials possessions as much as low humane orientation. Additional feedback from the teams
helped Drew find that enhancing analysis and practices is more appropriate to organizations with high in-group collectivism, high assertiveness, and low humane
orientation.
From her work, it was learned that corporate culture should be compatible with
national cultural practices to increase the potential for project success. The success
factors that Drew experienced are successes that you as a project manager can
experience. The skills that Drew applied are ones that you will learn throughout this
book.
Based on information from Unger, B. B., Rank, J. J., & Gemünden, H. H. (2014). Corporate innovation culture
and dimensions of project portfolio success: The moderating role of national culture. Project Management
Journal, 45(6), 38–57.
This chapter presents an overview of project management concepts. You will become
familiar with the









LEARNING
OUTCOMES
After studying this
chapter, the learner
should be able to:
Definition of a project and its attributes
Key constraints within which a project must be managed
Life cycle of a project
Definition of project management
Elements of the project management process
Identification and engagement of stakeholders
Implications of global project management
Project Management Institute
Benefits of project management
• Define what a project is
• List and discuss the attributes of a project
• Explain what is meant
by project objective
• Define what is meant by
project deliverable
• Provide examples of
projects
• Discuss project
constraints
• Describe the phases of
the project life cycle
• Discuss stakeholder
engagement
• Define and apply project
management
• Discuss some implications of global project
management
• Discuss the steps of the
planning process
• Identify the three elements of the executing
process
• Create a stakeholder
register
• Discuss the Project
Management Institute
• List benefits of project
management
techniques
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
Chapter 1 Project Management Concepts
5
Project Attributes
A project is an endeavor to accomplish a specific objective through a unique set
of interrelated activities and the effective utilization of resources. The following
attributes help define a project:






A project has a clear objective that establishes what is to be accomplished. It
is the tangible end product that the project team must produce and deliver.
The project objective is usually defined in terms of end product or deliverable, schedule, and budget. It requires completing the project work scope and
producing all the deliverables within a certain time and budget. For example,
the objective of a project might be to introduce a new portable food preparation appliance in 10 months and within a budget of $2 million.
The project objective may also include a statement of the expected benefits
or outcomes that will be achieved from implementing the project. It is why the
project is being done. For example, a project with the objective to develop a
new product may have an expected outcome to sell a certain number of units
of that new product within a year, or to increase market share by a specific
percent. The project objective might be to expand market share by 3 percent
by introducing a new portable food preparation appliance within 10 months
with a budget of $2 million. In this case, the outcome of increased market
share would not be known until some time period has elapsed after the new
product development project is completed. Another example is a project with
an objective to put on an event to raise funds for a particular cause, such as
diabetes research, but the expected benefit of the event is to raise a certain
amount of money, such as $20,000. In this case, the completion of the
project—holding the fund-raising event—enables the benefit to be achieved.
A project is carried out through a set of interdependent activities (also referred
to as tasks)—that is, a number of nonrepetitive activities that need to be
accomplished in a certain sequence in order to achieve the project objective.
A project utilizes various resources to carry out the activities. Such resources
can include different people, organizations, equipment, materials, and facilities. For example, a project to perform a complex series of surgical operations may involve doctors with special expertise, nurses, anesthesiologists,
surgical instruments, monitoring equipment, prosthetic devices or transplant
organs, and special operating facilities.
A project has a specific time frame or finite life span. It has a start time and a
date by which the objective must be accomplished. For example, the refurbishing of an elementary school might have to be completed between June 20
and August 20.
A project may be a unique or one-time endeavor. Some projects, such as
designing and building a space station, are unique because they have never
been attempted before. Other projects, such as developing a new product,
building a house, or planning a wedding, are unique because of the customization they require. For example, a wedding can be a simple, informal occasion, with a few friends in a chapel, or a spectacular event, staged for royalty.
A project has a sponsor or customer. The sponsor/customer is the entity
that provides the funds necessary to accomplish the project. It can be a person, an organization, or a partnership of two or more people or organizations. When a contractor builds an addition to a house, the homeowner is
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6
Introduction

Reinforce Your Learning
1. What are some
attributes of a
project?
the customer who is funding or paying for the project. When a company
receives funds from a government agency to develop a robotic device for
handling radioactive material, the sponsor is the government agency. When
a company’s board of directors provides funds for a team of its employees to
upgrade the firm’s management information system, the board is the sponsor
of the project. In this last case, the term customer may take on a broader
definition, including not only the project sponsor (the company’s management) but also other stakeholders, such as the people who will be the end
users of the information system. The person managing the project and the
project team must successfully accomplish the project objective to satisfy the
project sponsor as well as the users of the project’s end product—an
upgraded information system.
Finally, a project involves a degree of uncertainty. Before a project is started,
a plan is prepared based on certain assumptions and estimates. It is important to document these assumptions because they will influence the development of the project work scope, schedule, and budget. A project is based
on a unique set of interdependent activities and estimates of how long each
activity should take, various resources and assumptions about the availability
and capability of those resources, and estimates of the costs associated with
the resources. This combination of assumptions and estimates causes uncertainty that the project objective will be completely accomplished. For example, the project scope may be accomplished by the target completion date,
but the final cost may be much higher than anticipated because of low initial
estimates for the cost of certain resources. As the project proceeds, some of
the assumptions will be refined or replaced with factual or updated information. For example, once the conceptual design of a company’s annual
report is finalized, the amount of time and costs needed to complete the
detailed design and produce the final document can be better estimated.
The following are some examples of projects:
Staging a theatrical production
Developing and introducing a new product
Developing a set of apps for mobile business transactions
Planning a wedding
Modernizing a factory
Designing and implementing a computer system
Converting a basement to a family room
Organizing and hosting a conference
Designing and producing a brochure
Executing an environmental cleanup of a contaminated site
Holding a high school reunion
Building a shopping mall
Performing a series of surgeries on an accident victim
Organizing a community festival
Consolidating two manufacturing plants
Rebuilding a town after a natural disaster
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Chapter 1 Project Management Concepts
Reinforce Your Learning
2. Identify three projects in which you
have been involved
during your lifetime.
7
Hosting a dinner for 20 relatives
Designing a business internship program for high school students
Building a tree house
Balancing Project Constraints
The successful accomplishment of the project objective could be constrained by
many factors, including scope, quality, schedule, budget, resources, risks, customer
satisfaction, and stakeholder support.
The project scope is all the work that must be done in order to produce all the
project deliverables (the tangible product or items to be provided), satisfy the customer that the deliverables meet the requirements and acceptance criteria, and
accomplish the project objective. For example, the project scope might be all of
the work involved in clearing the land, building a house, and landscaping to the
specifications agreed upon by the contractor and the buyer. Or a project to install
new high-speed specialized automation equipment in a factory might include
designing the equipment, building it, installing it, testing it to make sure it meets
acceptance criteria, training workers to operate and maintain the equipment, and
providing all the technical and operating documentation for the equipment.
Quality expectations must be defined from the onset of the project. The project work scope must be accomplished in a quality manner and meet specifications. For example, in a house-building project, the customer expects the
workmanship to be of the highest quality and all materials to meet specifications.
Completing the work scope but leaving windows that are difficult to open and
close, faucets that leak, or a landscape full of rocks will result in an unsatisfied
customer and perhaps a payment or legal dispute. Mechanisms such as standards, inspections, audits, and so forth must be put in place to assure quality
expectations are being met throughout the project and not just checked or
inspected at the end of the project, when it might be costly to correct. All project
deliverables should have quantitative acceptance criteria.
The schedule for a project is the timetable that specifies when each activity
should start and finish. The project objective usually states the time by which the
project scope must be completed in terms of a specific date agreed upon by the
sponsor and the organization performing the project. The project schedule indicates the dates when specific activities must be started and finished in order to
meet the project completion date (for example, when a new bridge is to be open
to traffic or when a new product must be launched at an industry exposition).
The budget of a project is the amount the sponsor or customer has agreed to
pay for acceptable project deliverables. The project budget is based on estimated
costs associated with the quantities of various resources that will be used to perform the project. It might include the salaries of people who will work on the
project, materials and supplies, equipment, rental of facilities, and the fees of
subcontractors or consultants who will perform some of the project tasks. For
example, for a wedding project, the budget might include estimated costs for
flowers, gown, tuxedo, caterer, cake, limousine rental, videographer, reception
facility, and so on.
Various resources are needed to perform the project activities, produce the
project deliverables, and accomplish the project objective. Resources include people, materials, equipment, facilities, and so forth. Human resources include
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8
Introduction
people with specific expertise or skills. Certain quantities of each type of resource
with specific expertise are required at specific periods of time during the project.
Similarly, particular equipment may be required during a certain portion of a
project, such as equipment needed to excavate the land before construction can
start on a new office building. The resource requirements for a project must be
aligned with the types and quantities of resources available at the time periods
when they are required.
There could be risks that adversely affect accomplishing the project objective.
For example, designing an information system using the newest technology may
pose a risk that the new technology may not work as expected. Or there may be
a risk that a new pharmaceutical product may not receive regulatory approval.
A risk management plan must be developed that identifies and assesses potential
risks and their likelihood of occurrence and potential impact, and delineates
responses for dealing with risks if they do occur.
Ultimately, the responsibility of the project manager is to make sure the
customer is satisfied. This goes beyond just completing the project scope within
budget and on schedule or asking if the customer or sponsor is satisfied at the
end of the project. It means not only meeting the customer’s expectations but
also developing and maintaining an excellent working relationship throughout
the project. It requires ongoing communication with the customer or sponsor
to keep the customer informed and to determine whether expectations have
changed. Regularly scheduled meetings or progress reports, phone discussions,
and e-mail are examples of ways to accomplish such communication. Customer
satisfaction requires involving the sponsor as a partner in the successful outcome
of the project through active participation during the project. The project manager must continually be aware of the degree of the customer’s satisfaction. By
maintaining regular communication with the customer or sponsor, the project
manager demonstrates genuine concern about the customer’s expectations; it
also prevents unpleasant surprises later.
The project manager and team need to build relationships with, and engage,
the various stakeholders who may influence or may be affected by the project, in
order to gain their support. See the section on stakeholder engagement later in
this chapter for further discussion.
Successfully completing the project requires finishing the scope of work within
budget and a certain time frame while managing resource utilization, meeting
quality specifications, and managing risks—and this must all be done while
assuring customer or sponsor satisfaction and dealing with stakeholders’ issues
and concerns and gaining their support. During the project, it is sometimes challenging to balance or juggle these factors, which often constrain one another and
could jeopardize accomplishing the project objective. See Figure 1.1. To help
ensure the achievement of the project objective, it is important to develop a
plan before starting the project work, rather than jumping in and starting without
a plan. Lack of a plan decreases the chances of successfully accomplishing the full
project scope within budget and on schedule.
Once a project is started, unforeseen circumstances may jeopardize the
achievement of the project objective with respect to scope, budget, or schedule.
They include:


The cost of some of the materials is more than originally estimated.
Inclement weather causes a delay.
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Chapter 1 Project Management Concepts
FIGURE 1.1
Factors Constraining Project Success
Scope
Customer
Satisfaction
Quality
Stakeholders
Risk
Schedule
Resources




9
Budget
Additional redesign and modifications to a new sophisticated medical
instrument are required to get it to meet performance specifications and
government testing requirements.
Delivery of a critical component for an aviation control system is delayed
several months.
Environmental contaminants are discovered when excavating for a new
building.
A key project team member with unique technical knowledge decides to
retire, which creates a gap in critical expertise.
Any of the above examples could affect the balance of scope, quality, schedule,
budget, resources, risks, customer satisfaction, and stakeholder support (or
impact these factors individually), jeopardizing successful accomplishment of
the project objective. The challenge for the project manager is to not only continually balance these factors throughout the performance of the project but also
prevent, anticipate, or overcome such circumstances if and when they occur.
Good planning and communication are essential to prevent problems from occurring or to minimize their impact on the achievement of the project objective
when they do occur. The project manager needs to be proactive in planning
Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203
10
Introduction
and communicating and provide leadership to the project team to keep these
constraining factors in balance and to accomplish the project objective.
Reinforce Your Learning
3. What are eight
factors that constrain
the achievement of a
project objective?
Project Life Cycle
The generic project life cycle has four phases: initiating, planning, performing,
and closing the project. Figure 1.2 shows the four phases and the relative level of
effort and time devoted to each phase. The time span of each phase and the associated level of effort will vary depending on the specific project. Project life cycles
vary in length from a few weeks to several years, depending on the content, complexity, and magnitude of the project.
In the initiating phase, projects are identified and selected. They are then
authorized, using a document referred to as a project charter. The planning
phase includes defining the project scope, identifying resources, developing a
schedule and budget, and identifying risks, all of which make up the baseline
plan for doing the project work. In the performing phase, the project plan is
executed, and activities are carried out to produce all the project deliverables
and to accomplish the project objective. During this phase, the project progress
is monitored and controlled to assure the work remains on schedule and within
budget, the scope is fully completed according to specifications, and all deliverables meet acceptance criteria. Also, any changes need to be documented,
approved, and incorporated into an updated baseline plan if necessary. In the
closing phase, project evaluations are conducted, lessons learned are identified
FIGURE 1.2
Effort
Project Life Cycle Effort
Project
Charter
Archived
Accepted
Project
Deliverables Documents
Document
Baseline
Plan
Time
Initiating Planning
Performing
Closing
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Chapter 1 Project Management Concepts
Reinforce Your Learning
4. Match the phases
of the project life
cycle, listed first, with
the descriptions that
follow:
__ First phase
__ Second phase
__ Third phase
__ Fourth phase
A. Planning
B. Performing
C. Initiating
D. Closing
Reinforce Your Learning
5. A project is
authorized using a
document called a
.
11
and documented to help improve performance on future projects, and project
documents are organized and archived.
INITIATING
This first phase of the project life cycle involves the identification of a need,
problem, or opportunity and can result in the sponsor authorizing a project to
address the identified need or solve the problem. Projects are initiated when a
need is identified by a sponsor—the people or the organization willing to provide
funds to have the need satisfied. For example, a company may need to reduce the
high scrap rate from its manufacturing process that makes its costs higher and
production times longer than those of its competitors, or a community with a
growing population may need to build a new school. In some cases, it could
take several months to clearly define a need, gather data, and define the project
objective. For example, the management of a hospital may want to establish an
on-site day care center for the children of its employees as part of its strategy to
attract and retain employees. However, it may take some time to gather data
regarding the need and analyze various approaches to addressing the need. It is
important to define the right need. For example, is the need to provide an on-site
day care center, or is it to provide child care for the children of the hospital’s
employees? That is, is “on-site” necessarily part of the need?
The need for projects is often identified as part of an organization’s strategic
planning process. Projects are a means to implement elements of specific strategies or actions, such as build an offshore wind farm, deploy a nutrition assistance
program in a developing country, construct a new manufacturing facility in
South America, or implement a corporate-wide online training program. Organizations may have many projects they would like to pursue, but they may be limited by the amount of available funds. Although an individual may need an
addition to his house, need a new car, and want to go on a two-week vacation,
he may not have the money to do all of those things. Therefore, organizations
must employ a process to select which projects to pursue. Once projects are
selected, they are formally authorized using a document referred to as a project
charter. The charter may include the rationale or justification for the project;
project objective and expected benefits; general requirements and conditions
such as amount of funds authorized, required completion date, major deliverables, and required reviews and approvals; and key assumptions.
If the organization decides to use external resources (a contractor) to perform
the project, the organization will prepare a document called a request for proposal
(RFP) that defines the project requirements and is used to solicit proposals from
potential contractors to do the project. Through the RFP, the sponsor or customer asks contractors to submit proposals on how they might address the
need and the associated costs and schedule to do so. An individual who needs
a new house may spend time identifying requirements for the house—size,
style, number of rooms, location, maximum amount she wants to spend, and
date by which she would like to move in. She may then write down these
requirements and ask several contractors to provide house plans and cost estimates. A company that has identified a need to develop a multifaceted advertising campaign for a new food product might document its requirements in an
RFP and send it to several advertising firms. The advertising firms would submit
proposals to the company. The company would then evaluate the competing
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12
Introduction
proposals and select an advertising firm (the contractor) to do the advertising
campaign (the project) and sign an agreement or contract with that firm.
PLANNING
Reinforce Your Learning
6. The result of the
planning phase is a
.
Before jumping in and starting the project, the project team or contractor must
take sufficient time to properly plan the project. It is necessary to lay out a roadmap, or game plan, that shows how the project scope will be accomplished
within budget and on schedule. Trying to perform a project without a plan is
like attempting to assemble a backyard grill without first reading the instructions.
Individuals who think planning is unnecessary or a waste of time invariably need
to find time later on to redo things. It is important to plan the work and then
work the plan. Otherwise, chaos and frustration will result, and the risk of project
failure will be higher. Once a project is authorized and/or a contract is signed
with an external contractor, the next phase of the project life cycle is to do
detailed planning for how to accomplish the project. The planning involves
determining what needs to be done (scope, deliverables), how it will get done
(activities, sequence), who will do it (resources, responsibility), how long it will
take (durations, schedule), how much it will cost (budget), and what the risks
are. The result of this effort is a baseline plan that is a set of integrated documents that shows how the project scope will be accomplished within budget
and on schedule and is used as a benchmark to which actual performance can be
compared.
Taking the time to develop a well-thought-out plan is critical to the successful
accomplishment of any project. Many projects have overrun their budgets,
missed their completion dates, or only partially satisfied their technical specifications because there was no viable baseline plan in place before they were started.
It is important that the people who will be involved in performing the project
also participate in planning the work. They are usually the most knowledgeable
about which detailed activities need to be done. Also, by participating in the
planning of the work, these individuals become committed to accomplishing it
according to the plan. Participation builds commitment.
PERFORMING
The third phase of the project life cycle is performing the project. Once the baseline plan has been developed, work can proceed. The project team, led by the
project manager, will execute the plan and perform the activities to produce all
the deliverables and to accomplish the project objective. The pace of project
activity will increase as more and various resources become involved in performing the project tasks. During the course of performing the project, different types
of resources will be utilized. For example, if the project is to design and construct
an office building, the project effort might first involve a few architects and engineers in developing the building plans. Then, as construction gets under way, the
resources needed will substantially increase to include steelworkers, carpenters,
electricians, painters, and the like. The level of effort will decrease after the building is finished, and a smaller number of different workers will finish up the landscaping and final interior touches.
This phase results in the accomplishment of the project objective, leaving the
customer satisfied that the full scope of the work and deliverables were completed according to specifications, within budget, and on time. For example, the
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Chapter 1 Project Management Concepts
Reinforce Your Learning
7. In the performing
phase, the project
plan is
to produce all the
and to accomplish the
.
13
performing phase is complete when a project team within a company has completed a project that consolidated two of its facilities into one, or when an external contractor has completed the design and installation of a customized
information system that satisfactorily passes performance tests and is accepted
by the customer.
While the project work is being performed, it is necessary to monitor and control the progress of the project work to ensure that everything is going according
to plan and the project objective will be accomplished. This involves measuring
actual progress and comparing it to planned progress according to the baseline
plan. To measure actual progress, it is important to keep track of which tasks
have actually been started and completed, when they were started and completed, the earned value of the work completed, if the project deliverables are
meeting the expected quality criteria, and how much money has been spent or
committed. If, at any time during the project, comparison of actual progress to
planned progress reveals that the project is behind schedule, overrunning the
budget, or not meeting the technical specifications, corrective action must be
taken to get the project back on track.
Before a decision is made to implement corrective action, it may be necessary
to evaluate several alternative actions to make sure the corrective action will
bring the project back within the scope, schedule, and budget constraints of the
project objective. Be aware, for instance, that adding resources to make up time
and get back on schedule may result in overrunning the planned budget. If a
project gets too far out of control, it may be difficult to accomplish the project
objective without sacrificing the scope, budget, schedule, or quality. The key to
effective project control is measuring actual progress and comparing it to
planned progress on a timely and regular basis throughout the performing
phase and taking any needed corrective action immediately. Hoping that a problem will go away without corrective intervention is naive. The earlier a problem
is identified and corrected, the better. Based on actual progress, it is possible to
forecast a schedule and budget for completion of the project. If these parameters
are beyond the limits of the project objective, corrective actions need to be
implemented at once.
Changes are going to occur during the performing phase. So it is important to
manage and control changes to minimize any negative impact on the successful
accomplishment of the project objective. A change control system needs to be
established for the process and procedures that define how changes will be documented, approved, and communicated. Agreement must be reached between the
sponsor or customer and the project manager or contractor, as well as between the
project manager and the project team, regarding the way changes will be handled.
These procedures should address communication between the project manager
and the sponsor or customer and between the project manager and the project
team. If changes are consented to verbally rather than approved in writing and
there is no indication given of the impact the changes will have on the work
scope, budget, or schedule, there are bound to be problems down the road. Project
team members should be careful about casually agreeing to changes without
knowing whether they will necessitate additional person-hours of work. If the customer does not agree to pay for extra effort, the contractor must absorb the additional costs and also risk overrunning costs for a particular activity or the project.
Some changes are trivial, but others may significantly affect the project work
scope, budget, or schedule. Deciding to change the color of a room before it is
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14
Introduction
painted is a trivial change. Deciding that you want a two-story house after the
contractor has already put up the framing for a single-story house is a major
change, and would certainly increase the cost and probably delay the completion
date.
The impact a change has on accomplishing the project objective may be affected
by when the change is identified. Generally, the later in the project that changes are
identified, the greater their effect on accomplishing the project objective. The aspects
most likely to be affected are the project budget and the completion date. This is
particularly true when work that has already been completed needs to be “undone”
to accommodate the required change. For example, it would be very expensive to
change the plumbing or wiring in a new office building after the walls and ceilings
are completed because some of them would need to be torn out and new ones
installed. However, if such a change was made much earlier in the project—for
instance, while the building was still being designed—the accommodation would
be easier and less costly. The drawings could be changed so that the plumbing
and wiring would be installed correctly the first time.
The project manager, project team, contractor, or sponsor/customer may initiate changes. Some changes could be necessary as a result of the occurrence of a
previously defined risk, such as a new product development not meeting certain
test criteria, which would mean additional redesign work.
When it is determined that corrective actions or changes are necessary, decisions must be made regarding how to update the baseline plan. These decisions
often mean a trade-off involving time, cost, scope, and quality. For example,
reducing the duration of an activity may require either increasing costs to pay
for more resources or reducing the scope of the activity (and possibly not meeting the customer’s technical requirements). Similarly, reducing project costs may
require using materials of a lower quality than originally planned. Once a decision is made on which actions to take, they must be incorporated into the schedule and budget. It is necessary to develop a revised schedule and budget to
determine whether the planned corrective measures or changes result in an
acceptable schedule and budget. If not, further revisions must be made until an
acceptable revised baseline plan is agreed upon.
The performing phase of the project life cycle ends when the sponsor or customer is satisfied that the project objective has been accomplished and that the
requirements have been met, and accepts the project deliverables.
CLOSING
The final phase of the project life cycle is closing the project. The process of
closing the project involves various actions, including collecting and making
final payments, evaluating and recognizing staff, conducting a postproject evaluation, documenting lessons learned, and archiving project documents.
The project organization should ensure that copies of appropriate project documentation are properly organized, filed, and archived so that they can be readily
retrieved for use in the future. For example, using some actual cost and schedule
information from a completed project may be helpful when developing the
schedule and estimated costs for a proposed project.
An important task during this phase is evaluating performance of the project.
The project team should identify lessons learned and make recommendations for
improving performance on future projects. To encourage the use of this information, a knowledge base system should be established that includes an easily
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Chapter 1 Project Management Concepts
15
accessible repository to retrieve lessons learned and information from previous
projects.
Feedback should also be obtained from the sponsor or customer to determine
whether the anticipated benefits from the project were achieved, assess the level
of customer satisfaction, and obtain any feedback that would be helpful in future
business relationships with this customer or other customers.
Reinforce Your Learning
8. Project management involves first
a
and then
that
.
Reinforce Your Learning
9. The project
must be agreed upon
by the
and the organization
that will
the project.
Project Management Process
Project management is planning, organizing, coordinating, leading, and controlling resources to accomplish the project objective. The project management process involves planning the work and then working the plan. A coaching staff may
spend hours preparing a unique plan for a game; the team then executes the plan
to try to accomplish the objective—victory. Similarly, the project management
process involves two major functions: first establishing a plan and then executing
that plan to accomplish the project objective.
Once the sponsor has prepared a project charter to authorize going forward with
a project, the front end effort in managing a project must be focused on establishing
a realistic baseline plan that provides a set of integrated documents that shows how
the project scope will be accomplished within budget and on schedule. The project
objective establishes what is to be accomplished. The planning process determines
what needs to be done (scope, deliverables), how it will get done (activities,
sequence), who will do it (resources, responsibility), how long it will take (durations,
schedule), and how much it will cost (budget). It includes the following steps:
1. Establish project objective. The objective must be agreed upon by the sponsor
or customer and the organization that will perform the project.
2. Define scope. A project scope document must be prepared. It should include
customer requirements, a statement of work, as well as a list of deliverables
and associated acceptance criteria that can be used to validate that the work
and deliverables meet specifications.
3. Create a work breakdown structure. Subdivide the project scope into pieces or
work packages. Although projects may seem overwhelming when viewed as
a whole, one way to conquer even the most monumental endeavor is to
break it down into smaller components. A work breakdown structure
(WBS) is a hierarchical decomposition of the project work scope into work
packages to be executed by the project team that will produce the project
deliverables. Figure 1.3 is an example of a WBS.
4. Assign responsibility. The person or organization responsible for each work
item in the WBS must be identified in order to inform the project team of
who is responsible and accountable for the performance of each work package and any associated deliverables. For example, Figure 1.3 indicates who is
responsible for each work item.
5. Define specific activities. Review each work package in the WBS and develop
a list of the detailed activities that need to be performed for each work
package and to produce any required deliverables.
6. Sequence activities. Create a network diagram that shows the necessary
sequence and dependent relationships of the detailed activities that need to
be performed to achieve the project objective. Figure 1.4 is an example of a
network diagram.
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16
Introduction
FIGURE 1.3
Work Breakdown Structure
Level 0
Festival
Lynn
Level 1
1
2
Promotion
Volunteers
Games
Rides
Lynn
Beth
Steve
Pat
3
4
Level 2
1.1
1.2
1.3
3.1
3.2
3.3
4.1
4.2
Newspaper
Ads
Posters
Tickets
Booths
Games
Prizes
Amusement
Contractor
Permits
Lynn
Keith
Andrea
Jim
Steve
Jeff
Pat
Neil
Level 3
7. Estimate activity resources. Determine the types of resources, such as the
skills or expertise required to perform each activity, as well as the quantity
of each resource that may be needed. Resources include people, materials,
equipment, and so on that may be required to perform each activity.
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Chapter 1 Project Management Concepts
5
6
7
Entertainment
Food
Services
Jeff
Bill
Jack
5.1
5.2
6.1
6.2
7.1
7.2
7.3
7.4
Performers
Grandstand
Food
Facilities
Parking
Clean-up
Restroom
Facilities
Security
Jeff
Jim
Bill
Chris
Steve
Tyler
Jack
Rose
5.2.1
5.2.2
7.2.2
7.3.1
Stage
Audio &
Lighting
Seating
5.2.3
Containers
7.2.1
Contractor
Restrooms
First Aid
Station
Jim
Joe
Jim
Tyler
Damian
Jack
Beth
6.2.1
17
6.2.2
7.3.2
6.2.3
Food
Booths
Cooking
Equipment
Eating
Areas
Chris
Bill
Jim
Resource estimates must consider the availability of each type of resource,
whether it is internal or external (such as subcontractors), and the quantity
available over the duration of the project. Designate a specific individual to
be responsible for each activity.
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18
Introduction
FIGURE 1.4
Network Diagram
Prepare
Mailing
Labels
5
Identify
Target
Consumers
1
Susan
Develop
Draft
Questionnaire
Pilot-Test
Questionnaire
2 Susan
3
Susan
Review Comments
& Finalize
Questionnaire
4
Susan
Steve
Print
Questionnaire
6
Steve
Develop
Data Analysis
Software
7
Andy
Develop
Software
Test Data
8
Susan
8. Estimate activity durations. Make a time estimate for how long it will take to
complete each activity, based on the estimate of the resources that will be
applied.
9. Develop project schedule. Based on the estimated duration for each activity
and the dependent relationships of the sequence of activities in the network
diagram, develop the overall project schedule, including when each activity is
expected to start and finish, as well as the latest times that each activity must
start and finish in order to complete the project by the required completion
date. Figure 1.5 is an example of a project schedule.
10. Estimate activity costs. Activity costs should be based on the types and
quantities of resources estimated for each activity as well as the appropriate
labor cost rate or unit cost for each type of resource.
11. Determine budget. A total budget for the project can be developed by aggregating the cost estimates for each activity. Similarly, budgets can be determined for each work package in the WBS by aggregating the cost estimates
for the detailed activities for each work package. Other costs, such as project
or organizational administrative, indirect, or overhead costs, should also be
included in the budget and be appropriately allocated to each activity or
work package. Once the total budget is determined for the overall project or
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Chapter 1 Project Management Concepts
9
Steve
11
Jim
Prepare
Report
Analyze
Results
Input
Response
Data
Mail
Questionnaire &
Get Responses
12
19
Jim
13
Jim
Test
Software
10
Andy
K
: ey
Activity
Description
Activity
Number
Person
Responsible
for each work package, a time-phased budget needs to be developed to distribute the budget over the duration of the project or work package based on
the project schedule for when each activity is expected to start and finish.
Figure 1.6 is an example of a time-phased project budget.
Once the project schedule and budget are developed, it must be determined
whether the project can be completed within the required time, with the allotted
funds, and with the available resources. If not, adjustments must be made to the
project scope, activity resource or duration estimates, or resource assignments
until an achievable, realistic baseline plan for accomplishing the project scope
within budget and on schedule can be established.
The result of the planning process is a baseline plan. Taking the time to
develop a well-thought-out plan is critical to the successful accomplishment of
any project. Many projects have overrun their budgets, missed their completion

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