pmp ch1
Project-Based Organizations
Project-based organizations (PBOs) refer to various organizational forms that create temporary systems for carrying out their work. PBOs can be created by different types of organizations (i.e., functional, matrix, or projectized
Organizations and Project Management
Organizations use governance to establish strategic direction and performance parameters. The strategic direction provides the purpose, expectations, goals, and actions necessary to guide business pursuit and is aligned with business objectives. Project management activities should be aligned with top-level business direction, and if there is a change, then project objectives need to be realigned. In a project environment, changes to project objectives affect project efficiency and success.
Operational Stakeholders in Project Management
While operations management is different from project management the needs of stakeholders who perform and conduct business operations are important considerations in projects that will affect their future work and endeavors. Project managers who consider and appropriately include operational stakeholders in all phases of projects, gain insight and avoid unnecessary issues that often arise when their input is overlooked.
Responsibilities and Competencies of the Project Manager
In general, project managers have the responsibility to satisfy the needs: task needs, team needs, and individual needs. As project management is a critical strategic discipline, the project manager becomes the link between the strategy and the team. Projects are essential to the growth and survival of organizations. Projects create value in the form of improved business processes, are indispensable in the development of new products and services, and make it easier for companies to respond to changes in the environment, competition, and the marketplace. The project manager's role therefore becomes increasingly strategic. However, understanding and applying the knowledge, tools, and techniques that are recognized as good practice are not sufficient for effective project management. In addition to any area-specific skills and general management proficiencies required for the project, effective project management requires that the project manager possess the following competencies: • Knowledge—Refers to what the project manager knows about project management. • Performance—Refers to what the project manager is able to do or accomplish while applying his or her project management knowledge. • Personal—Refers to how the project manager behaves when performing the project or related activity. Personal effectiveness encompasses attitudes, core personality characteristics, and leadership, which provides the ability to guide the project team while achieving project objectives and balancing the project constraints.
Operations and Project Management
Ongoing operations are outside of the scope of a project; however, there are intersecting points where the two areas cross. Projects can intersect with operations at various points during the product life cycle, such as: • At each closeout phase; • When developing a new product, upgrading a product, or expanding outputs; • While improving operations or the product development process; or • Until the end of the product life cycle. Operations are ongoing endeavors that produce repetitive outputs, with resources assigned to do basically the same set of tasks according to the standards institutionalized in a product life cycle. Unlike the ongoing nature of operations, projects are temporary endeavors.
Relationship Between Project Management, Operations Management, and Organizational Strategy
Operations management is responsible for overseeing, directing, and controlling business operations. Operations evolve to support the day-to-day business, and are necessary to achieve strategic and tactical goals of the business. Examples include: production operations, manufacturing operations, accounting operations, software support, and maintenance. Though temporary in nature, projects can help achieve the organizational goals when they are aligned with the organization's strategy. Organizations sometimes change their operations, products, or systems by creating strategic business initiatives that are developed and implemented through projects. Projects require project management activities and skill sets, while operations require business process management, operations management activities, and skill sets.
Relationships Among Portfolio Management, Program Management, Project Management, and Organizational Project Management
Organizational project management (OPM): OPM is a strategy execution framework utilizing project, program, and portfolio management as well as organizational enabling practices to consistently and predictably deliver organizational strategy producing better performance, better results, and a sustainable competitive advantage. Portfolio, program, and project management are aligned with or driven by organizational strategies. Conversely, portfolio, program, and project management differ in the way each contributes to the achievement of strategic goals. Portfolio management aligns with organizational strategies by selecting the right programs or projects, prioritizing the work, and providing the needed resources, whereas program management harmonizes its projects and program components and controls inter-dependencies in order to realize specified benefits. Project management develops and implements plans to achieve a specific scope that is driven by the objectives of the program or portfolio it is subjected to and, ultimately, to organizational strategies. OPM advances organizational capability by linking project, program, and portfolio management principles and practices with organizational enablers (e.g. structural, cultural, technological, and human resource practices) to support strategic goals.
The Relationship Between Project Management and Organizational Strategy
Organizational strategy should provide guidance and direction to project management—especially when one considers that projects exist to support organizational strategies. Often it is the project sponsor or the portfolio or program manager who identifies alignment or potential conflicts between organizational strategies and project goals and then communicates these to the project manager.
Objectives of Project Managers & PMOs
Project managers and PMOs pursue different objectives and, as such, are driven by different requirements. All of these efforts are aligned with the strategic needs of the organization. Differences between the role of project managers and a PMO may include the following: • The project manager focuses on the specified project objectives, while the PMO manages major program scope changes, which may be seen as potential opportunities to better achieve business objectives. • The project manager controls the assigned project resources to best meet project objectives, while the PMO optimizes the use of shared organizational resources across all projects. • The project manager manages the constraints (scope, schedule, cost, quality, etc.) of the individual projects, while the PMO manages the methodologies, standards, overall risks/opportunities, metrics, and interdependencies among projects at the enterprise level.
Projects and Strategic Planning
Projects are often utilized as a means of directly or indirectly achieving objectives within an organization's strategic plan. Projects are typically authorized as a result of one or more of the following strategic considerations: • Market demand • Strategic opportunity/business need • Social need • Environmental consideration • Customer request • Technological advance • Legal requirement
Interpersonal Skills of a Project Manager
• Leadership, • Team building, • Motivation, • Communication, • Influencing, • Decision making, • Political and cultural awareness, • Negotiation, • Trust building, • Conflict management, and • Coaching.
Operations Management
Operations management is a subject area that is outside the scope of formal project management as described in this standard. Operations management is an area of management concerned with ongoing production of goods and/or services. It involves ensuring that business operations continue efficiently by using the optimum resources needed and meeting customer demands. It is concerned with managing processes that transform inputs (e.g., materials,components, energy, and labor) into outputs (e.g., products, goods, and/or services).
What is Project Management?
Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements. Project management is accomplished through the appropriate application and integration of the 47 logically grouped project management processes, which are categorized into five Process Groups. These five Process Groups are: • Initiating, • Planning, • Executing, • Monitoring and Controlling, and • Closing.
The Link Between Project Management and Organizational Governance
Projects (and programs) are undertaken to achieve strategic business outcomes, for which many organizations now adopt formal organizational governance processes and procedures. Organizational governance criteria can impose constraints on projects—particularly if the project delivers a service which will be subject to strict organizational governance. Because project success may be judged on the basis of how well the resultant product or service supports organizational governance, it is important for the project manager to be knowledgeable about corporate/ organizational governance policies and procedures pertaining to the subject matter of the product or service
Role of the Project Manager
The project manager is the person assigned by the performing organization to lead the team that is responsible for achieving the project objectives. The role of a project manager is distinct from a functional manager or operations manager. Typically the functional manager is focused on providing management oversight for a functional or a business unit, and operations managers are responsible for ensuring that business operations are efficient.
The Relationships Among Portfolios, Programs, and Projects
The relationship among portfolios, programs, and projects is such that a portfolio refers to a collection of projects,programs, subportfolios, and operations managed as a group to achieve strategic objectives. Programs are grouped within a portfolio and are comprised of subprograms, projects, or other work that are managed in a coordinated fashion in support of the portfolio. Individual projects that are either within or outside of a program are still considered part of a portfolio. Although the projects or programs within the portfolio may not necessarily be interdependent or directly related, they are linked to the organization's strategic plan by means of the organization's portfolio.
The specific project characteristics and circumstances can influence the constraints on which the project management team needs to focus.
The relationship among these factors is such that if any one factor changes, at least one other factor is likely to be affected. For example, if the schedule is shortened, often the budget needs to be increased to add additional resources to complete the same amount of work in less time. If a budget increase is not possible, the scope or targeted quality may be reduced to deliver the project's end result in less time within the same budget amount. Project stakeholders may have differing ideas as to which factors are the most important, creating an even greater challenge. Changing the project requirements or objectives may create additional risks. The project team needs to be able to assess the situation, balance the demands, and maintain proactive communication with stakeholders in order to deliver a successful project
Managing a project typically includes, but is not limited to:
• Identifying requirements; • Addressing the various needs, concerns, and expectations of the stakeholders in planning and executing the project; • Setting up, maintaining, and carrying out communications among stakeholders that are active, effective, and collaborative in nature; • Managing stakeholders towards meeting project requirements and creating project deliverables; • Balancing the competing project constraints, which include, but are not limited to: ○ Scope, ○ Quality, ○ Schedule, ○ Budget, ○ Resources, and ○ Risks.
Portfolio Management
A portfolio refers to projects, programs, subportfolios, and operations managed as a group to achieve strategic objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related. For example, an infrastructure firm that has the strategic objective of "maximizing the return on its investments" may put together a portfolio that includes a mix of projects in oil and gas, power, water, roads, rail, and airports. From this mix, the firm may choose to manage related projects as one program. All of the power projects may be grouped together as a power program. Portfolio management refers to the centralized management of one or more portfolios to achieve strategic objectives. Portfolio management focuses on ensuring that projects and programs are reviewed to prioritize resource allocation, and that the management of the portfolio is consistent with and aligned to organizational strategies.
Function of a PMO
A primary function of a PMO is to support project managers in a variety of ways which may include, but are not limited to: • Managing shared resources across all projects administered by the PMO; • Identifying and developing project management methodology, best practices, and standards; • Coaching, mentoring, training, and oversight; • Monitoring compliance with project management standards, policies, procedures, and templates by means of project audits; • Developing and managing project policies, procedures, templates, and other shared documentation (organizational process assets); and • Coordinating communication across projects.
Program Management
A program is defined as a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not available from managing them individually. Programs may include elements of related work outside the scope of the discrete projects in the program. A project may or may not be part of a program but a program will always have projects. Program management is the application of knowledge, skills, tools, and techniques to a program in order to meet the program requirements and to obtain benefits and control not available by managing projects individually.
What is a Project?
A project is a temporary endeavor undertaken to create a unique product, service, or result. The temporary nature of projects indicates that a project has a definite beginning and end. The end is reached when the project's objectives have been achieved or when the project is terminated because its objectives will not or cannot be met,or when the need for the project no longer exists Every project creates a unique product, service, or result. The outcome of the project may be tangible or intangible. A project can create: • A product, service, an improvement, or a result
Project Management Office
A project management office (PMO) is a management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques. The responsibilities of a PMO can range from providing project management support functions to actually being responsible for the direct management of one or more projects. There are several types of PMO structures in organizations, each varying in the degree of control and influence they have on projects within the organization, such as: Supportive: Supportive PMOs provide a consultative role to projects by supplying templates, best practices, training, access to information and lessons learned from other projects. This type of PMO serves as a project repository. The degree of control provided by the PMO is low. • Controlling: Controlling PMOs provide support and require compliance through various means. Compliance may involve adopting project management frameworks or methodologies, using specific templates, forms and tools, or conformance to governance. The degree of control provided by the PMO is moderate. • Directive: Directive PMOs take control of the projects by directly managing the projects. The degree of control provided by the PMO is high.
Business Value
Business value is a concept that is unique to each organization. Business value is defined as the entire value of the business; the total sum of all tangible and intangible elements. Examples of tangible elements include monetary assets, fixtures, stockholder equity, and utility. Examples of intangible elements include good will, brand recognition, public benefit, and trademarks. Depending on the organization, business value scope can be short-,medium-, or long-term. Value may be created through the effective management of ongoing operations. However, through the effective use of portfolio, program, and project management, organizations will possess the ability to employ reliable, established processes to meet strategic objectives and obtain greater business value from their project investments. While not all organizations are business driven, all organizations conduct business-related activities. Whether an organization is a government agency or a nonprofit organization, all organizations focus on attaining business value for their activities.
