Lesson: 02 Lecture: 03&04
Course: Project Management
Code: BUS 427
Program: BBA
Faculty: Samir Bhadra
Lecturer
Dept. of Business Administration(RUD)
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Chapter 2:
Project Integration Management
Learning Objectives
Describe an overall framework for project integration
management as it relates to the other project
management knowledge areas and the project life cycle.
Discuss the strategic planning process and apply different
project selection methods.
Explain the importance of creating a project charter to
formally initiate projects.
Describe project management plan development,
understand the content of these plans, and review
approaches for creating them.
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Learning Objectives
Explain project execution, its relationship to project
planning, the factors related to successful results, and
tools and techniques to assist in directing and managing
project work.
Describe the process of monitoring and controlling a
project.
Understand the integrated change control process,
planning for and managing changes on information
technology (IT) projects, and developing and using a
change control system.
Explain the importance of developing and following good
procedures for closing projects.
Describe how software can assist in project integration
management.
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The Key to Overall Project Success: Good Project
Integration Management
Project managers must coordinate all of the other
knowledge areas throughout a project’s life cycle.
Many new project managers have trouble looking at the
“big picture” and want to focus on too many details
Project integration management is not the same thing as
software integration.
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Project Integration Management Processes
1. Developing the project charter: Developing the project charter involves
working with stakeholders to create the document that formally authorizes
a project—the charter.
2. Developing the project management plan: Developing the project
management plan involves coordinating all planning efforts to create a
consistent, coherent document—the project management plan.
3. Directing and managing project work: Directing and managing project
work involves carrying out the project management plan by performing the
activities included in it.
4. Monitoring and controlling project work: Monitoring and controlling
project work involves overseeing activities to meet the performance
objectives of the project.
5. Performing integrated change control: Performing integrated change
control involves identifying, evaluating, and managing changes throughout
the project life cycle.
6. Closing the project : Closing the project or phase involves finalizing all
activities to formally close the project or phase. 6
Figure 2-1. Project Integration Management
Summary
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What Went Wrong?
The Surrey police force began looking into replacing its
criminal intelligence system in 2005, but the project was
finally cancelled in 2013, and the old system was replaced
with a much less expensive one used by thirteen other
forces.
The person in charge of the project would not take
responsibility for it.
An audit report said the project was beyond their in-house
capabilities and experience
Organizations must make the right staffing/outsourcing
decisions
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Strategic Planning and Project Selection
Strategic planning involves determining long-
term objectives, predicting future trends, and
projecting the need for new products and services.
Organizations often perform a SWOT analysis:
analyzing Strengths, Weaknesses, Opportunities, and
Threats.
As part of strategic planning, organizations
◦ identify potential projects
◦ use realistic methods to select which projects to work on
◦ formalize project initiation by issuing a project charter
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Figure 2-3. Information Technology
Planning Process
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Methods for Selecting Projects
There are usually more projects than available
time and resources to implement them.
Methods for selecting projects include:
◦ focusing on broad organizational needs
◦ categorizing information technology projects
◦ performing net present value or other financial
analyses
◦ using a weighted scoring model
◦ implementing a balanced scorecard
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Focusing on Broad Organizational Needs
It is often difficult to provide strong justification for
many IT projects, but everyone agrees they have
a high value.
“It is better to measure gold roughly than to count
pennies precisely”
Three important criteria for projects:
◦ There is a need for the project
◦ There are funds available
◦ There’s a strong will to make the project succeed
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Categorizing IT Projects
One categorization is whether the project
addresses
◦ a problem
◦ an opportunity, or
◦ a directive
Another categorization is how long it will take to
do and when it is needed
Another is the overall priority of the project
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Financial Analysis of Projects
Financial considerations are often an important
consideration in selecting projects
Three primary methods for determining the
projected financial value of projects:
◦ Net present value (NPV) analysis
◦ Return on investment (ROI)
◦ Payback analysis
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Net Present Value Analysis
Net present value (NPV) analysis is a method of calculating the
expected net monetary gain or loss from a project by discounting
all expected future cash inflows and outflows to the present point in
time.
Projects with a positive NPV should be considered if financial value
is a key criterion.
The higher the NPV, the better.
NPV Calculations
Determine estimated costs and benefits for the life of the project and
the products it produces.
Determine the discount rate (check with your organization on what
to use).
Calculate the NPV (see text for details).
Notes: Some organizations consider the investment year as year
0, while others start in year 1. Some people entered costs as
negative numbers, while others do not. Check with your
organization for their preferences. 15
Figure 2-4. Net Present Value Example
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Return on Investment
Return on investment (ROI) is calculated by
subtracting the project costs from the benefits and
then dividing by the costs
ROI = (total discounted benefits - total discounted costs) /
discounted costs
The higher the ROI, the better
Many organizations have a required rate of return
or minimum acceptable rate of return on investment
for projects
Internal rate of return (IRR) can by calculated by
finding the discount rate that makes the NPV equal
to zero.
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Payback Analysis
Another important financial consideration is payback
analysis.
The payback period is the amount of time it will take to
recoup, in the form of net cash inflows, the total dollars
invested in a project
Payback occurs when the net cumulative discounted
benefits equals the costs
Many organizations want IT projects to have a fairly
short payback period
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Developing a Project Charter
After deciding what project to work on, it is important to let
the rest of the organization know
A project charter is a document that formally
recognizes the existence of a project and provides
direction on the project’s objectives and management
Key project stakeholders should sign a project charter to
acknowledge agreement on the need and intent of the
project; a signed charter is a key output of project
integration management.
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Inputs for Developing a Project Charter
A project statement of work
A business case
Agreements
Enterprise environmental factors
Organizational process assets, which include formal
and informal plans, policies, procedures, guidelines,
information systems, financial systems, management
systems, lessons learned, and historical information
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Developing a Project Management Plan
A project management plan is a document used to
coordinate all project planning documents and help
guide a project’s execution and control
Plans created in the other knowledge areas are
subsidiary parts of the overall project management plan
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Common Elements of a Project Management Plan
Introduction or overview of the project
Description of how the project is organized
Management and technical processes used on the
project.
Work to be done, schedule, and budget information
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Table 2-2. Sample Contents for a Software
Project Management Plan (SPMP)
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What the Winners Do?
"The winners clearly spell out what needs to be done in a
project, by whom, when, and how. For this they use an
integrated toolbox, including PM tools, methods, and
techniques…If a scheduling template is developed and used
over and over, it becomes a repeatable action that leads to
higher productivity and lower uncertainty. Sure, using
scheduling templates is neither a breakthrough nor a feat.
But laggards exhibited almost no use of the templates.
Rather, in constructing schedules their project managers
started with a clean sheet, a clear waste of time.”
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Directing and Managing Project Work
Involves managing and performing the work described in
the project management plan.
The majority of time and money is usually spent on
execution.
The application area of the project directly affects.
project execution because the products of the project
are produced during execution.
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Coordinating Planning and Execution
Project planning and execution are intertwined and
inseparable activities.
Those who will do the work should help to plan the work
Project managers must solicit input from the team to
develop realistic plans.
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Capitalizing on Product, Business, and
Application Area Knowledge
It is often helpful for IT project managers to have prior
technical experience.
On small projects, the project manager may be required
to perform some of the technical work or mentor team
members to complete the projects.
On large projects, the project manager must understand
the business and application area of the project.
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Project Execution Tools and Techniques
Expert judgment: Experts can help project managers and
their teams make many decisions related to project
execution
Meetings: Meetings allow people to develop relationships,
pick up on important body language or tone of voice, and
have a dialogue to help resolve problems.
Project management information systems: There are
hundreds of project management software products
available on the market today, and many organizations are
moving toward powerful enterprise project management
systems that are accessible via the Internet
See the What Went Right? example of Kuala Lumpur’s
Integrated Transport Information System on p. 169
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Monitoring and Controlling Project Work
Changes are inevitable on most projects, so it’s
important to develop and follow a process to monitor
and control changes.
Monitoring project work includes collecting, measuring,
and disseminating performance information
A baseline is the approved project management plan
plus approved changes.
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Performing Integrated Change Control
Three main objectives are:
◦ Influencing the factors that create changes to
ensure that changes are beneficial
◦ Determining that a change has occurred
◦ Managing actual changes as they occur
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Change Control on Information Technology
Projects
Former view: The project team should strive to do
exactly what was planned on time and within budget.
Problem: Stakeholders rarely agreed up-front on the
project scope, and time and cost estimates were
inaccurate.
Modern view: Project management is a process of
constant communication and negotiation.
Solution: Changes are often beneficial, and the project
team should plan for them.
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Change Control System
A change control system is a formal, documented
process that describes when and how official
project documents and work may be changed
Describes who is authorized to make changes and
how to make them
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Change Control Board (CCB)
A change control board is a formal group of people
responsible for approving or rejecting changes on a
project.
CCBs provide guidelines for preparing change requests,
evaluate change requests, and manage the
implementation of approved changes.
Includes stakeholders from the entire organization.
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Making Timely Changes
Some CCBs only meet occasionally, so it may
take too long for changes to occur
Some organizations have policies in place for
time-sensitive changes
◦ “48-hour policy” allows project team members to make
decisions, then they have 48 hours to reverse the
decision pending senior management approval
◦ Delegate changes to the lowest level possible, but keep
everyone informed of changes
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Global Issues
Rapid changes in technology, such as the increased use of mobile
roaming for communications, often cause governments around the
world to take action.
Incompatible hardware, software, and networks can make
communications difficult in some regions, and a lack of competition
can cause prices to soar.
Fortunately, a group called the Organization for Economic Co-
operation and Development (OECD) promotes policies that will
improve the economic and social well-being of people around the
world.
In February 2012, the OECD called upon its members’
governments to boost competition in international mobile roaming
markets.
By the end of 2013, wireless broadband penetration grew to 72.4%
in the OECD area
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Configuration Management
Configuration management ensures that the
descriptions of the project’s products are correct and
complete.
Involves identifying and controlling the functional and
physical design characteristics of products and their
support documentation.
Configuration management specialists identify and
document configuration requirements, control changes,
record and report changes, and audit the products to
verify conformance to requirements.
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Closing Projects or Phases
To close a project or phase, you must finalize all
activities and transfer the completed or cancelled
work to the appropriate people
Main outputs include
◦ Final product, service, or result transition
◦ Organizational process asset updates
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