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This acknowledgment is really a special acknowledgment to two people who played a key role in getting this whole project started. First, Dave Crane and I had cofacilitated a three-day project management course for Boston University Corporate Education Center clients. Dave and I honed the course materials over a three-year period and then decided to turn it into a book. At that time, Bob Beck, who was recently retired after 25 years with IBM, was my business partner and volunteered to create the CD-ROM that would house the O'Neill & Preigh Church Equipment Manufacturers case study. Dave and Bob devoted most of their efforts to the case study and the CD-ROM, while I focused on the contents of the book. Our three-person team worked very well together and produced the first edition. In time, and after healthy sales of the first edition, we decided to do a second edition. That has been even more successful than the first edition. Bob has retired now and spends most of his time fishing and helping his missionary church build facilities in South America. Dave is fully occupied delivering training for Boston University. I'm still actively involved in project management consulting and writing. We've kind of gone our separate ways. I owe both of these friends and colleagues my heartfelt thanks for giving so freely of their time and energies. All three of us can look back with no regrets and know that we have done great work together.

Now it's time for the third edition. I've decided to retire O'Neill & Preigh; that case served us well. In its place there is a new case, the Jack Neift Trucking Company, and a new team member, Rudd McGary. I've learned a lot working with Dave and Bob and would like to think that that learning is reflected in this third edition.

Preface to the Third Edition

Someone once said, "If it ain't broke, fix it." The second edition has been very successful, and for that we are grateful. It ain't broke. But so much is happening in the world of projects and project management that it is time to fix it. The third edition represents a major updating of a very successful second edition. Comments from our readers and the significant changes taking place in the project management landscape are what prompted the writing of the third edition. For those who have followed this book through the previous editions and have become our loyal readers, we are offering a fresh and greatly expanded third edition. You will find that a few totally new topics are introduced here for the first time, that a number of contemporary topics have also been added, and that a number of continuing topics have had a fresh coat of paint applied. We hope that you will be pleased with the results.

There are two significant changes on the cover:

■ First, note the title change. We have added Traditional, Adaptive, Extreme as a subtitle. The material from the second edition of this title is mostly contained in the part devoted to the traditional approach to project management. There are now discussions in the book devoted to the adaptive and extreme approaches to project management. These discussions are new in the third edition. The part devoted to the adaptive approach is totally new. It has not been published elsewhere.

■ Second, note the change in authors. Bob Beck and Dave Crane are no longer listed as authors and have moved on to other adventures and have been replaced by Rudd McGary. Rudd is a veteran and brings years of project management consulting and training experience to the team. Welcome aboard, Rudd!

Rudd's major contribution is the replacement of the O'Neill & Preigh case study from the second edition with a fresh new case, Jack Neift Trucking Company. The CD-ROM that accompanies this book still contains the exercises much like the second edition, but the text itself also contains a number of discussion questions related to the chapter materials and to the case study as well.

This material is also new with the third edition. Much to our surprise the book has been widely adopted in undergraduate, graduate, and continuing education programs. The second edition was not written as a college text, but because of the numerous college adoptions, we have decided to write the third edition as both a reference and as a text. Many college faculty have written and asked for our support. We were cognizant of that need as we prepared this edition. That is why we've added more exercises and thought-provoking discussion questions that should add a bit of excitement to class lectures. Additionally, many of the requests for help asked for copies of the figures, so the CD-ROM contains PowerPoint slides of every figure and table in the book.

We would like to think that this edition offers you a complete view of effective project management as it is now practiced and how it should be practiced in the very near future.

Thank you again for adding our book to your project management library. If you have any questions or would just like to comment, you may contact me at [email protected] and Rudd at [email protected].

Enjoy!

Acknowledgments iii

Preface v

About the Authors xix

Introduction xxi

Part One Traditional Project Management 1

Chapter 1 What Is a Project? 3

Defining a Project 3

Sequence of Activities 4

Unique Activities 4

Complex Activities 4

Connected Activities 5

One Goal 5

Specified Time 5

Within Budget 5

According to Specification 6

What Is a Program? 6

Project Parameters 7

Scope 7

Quality 8

Cost 8

Time 8

Resources 9

The Scope Triangle 9

Scope Creep 11

Hope Creep 11

Effort Creep 11

Feature Creep 12

Project Classifications 12

Classification by Project Characteristics 13

Classification by Project Type 15

Putting It All Together 15

Discussion Questions 16

Chapter 2 What Is Traditional Project Management? 17

Principles of Traditional Project Management 17

Defining 18

Planning 19

Executing 20

Controlling 21

Closing 21

Traditional Project Management Life Cycle 22

Phases of Traditional Project Management 23

Levels of Traditional Project Management 28

Quality Management 29

Continuous Quality Management Model 30

Process Quality Management Model 30

Risk Management 33

Identifying Risk 34

Assessing Risk 3S

Planning Risk Response 3S

Risk Monitoring and Control 36

Risk Assessment Example 37

Procurement Management 38

Planning Procurement 39

Soliciting Requests for Proposals 40

Managing RFP Questions and Responses 41

Selecting Vendors 41

Managing Contracts 42

Closing Out the Contract 43

Relationship between Traditional Project

Management and Other Methodologies 43

The Pain Curve 44

Putting It All Together 48

Discussion Questions 48

Chapter 3 Scoping the Project 49

Defining the Project 49

Managing Client Expectations S0

Sorting Wants versus Needs S1

Developing Conditions of Satisfaction S1

Conducting Milestone Reviews S4

Creating the Project Overview Statement SS

Parts of the POS S6

Attachments 64

Using the Joint Project Planning Session to Develop the POS 67

Submitting a Project for Approval 67

Participants in the Approval Process 69

Approval Criteria 70

Project Approval Status 71

The Project Definition Statement 71

Putting It All Together 72

Discussion Questions 72

Chapter 4 Identifying Project Activities 75

The Work Breakdown Structure 75

Uses for the WBS 78

Generating the WBS 79

Top-Down Approach 79

Bottom-Up Approach 81

WBS for Small Projects 82

Intermediate WBS for Large Projects 83

Six Criteria to Test for Completeness in the WBS 84

Measurable Status 84

Bounded 85

Deliverable 86

Cost/Time Estimate 86

Acceptable Duration Limits 86

Activity Independence 86

Using a Joint Project Planning Session to Build the WBS 87

Approaches to Building the WBS 88

Noun-Type Approaches 89

Verb-Type Approaches 90

Organizational Approaches 91

Representing the WBS 91

Putting It All Together 95

Discussion Questions 95

Chapter 5 Estimating Duration, Resource Requirements, and Cost 97

Estimating Duration 97

Resource Loading versus Activity Duration 99

Variation in Activity Duration 101

Six Methods for Estimating Activity Duration 102

Estimation Precision 106

Estimating Resource Requirements 106

People as Resources 107

Resource Breakdown Structure 108

Estimating Duration as a Function of Resource Availability 109

Assign as a Total Work and a Constant Percent/Day 109

Assign as a Duration and Total Work Effort 110

Assign as a Duration and Percent/Day 110

Assign as a Profile 110

Estimating Cost 111

Resource Planning 111

Cost Estimating 112

Cost Budgeting 113

Cost Control 113

Using a JPP Session to Estimate Duration,

Resource Requirements, and Cost 114

Determining Resource Requirements 115

Determining Cost 115

Putting It All Together 116

Discussion Questions 116

Chapter 6 Constructing and Analyzing the Project Network Diagram 117

The Project Network Diagram 117

Envisioning a Complex Project Network Diagram 118

Benefits to Network-Based Scheduling 119

Building the Network Diagram Using the Precedence Diagramming Method 121

Dependencies 123

Constraints 125

Using the Lag Variable 129

Creating an Initial Project Network Schedule 129

Analyzing the Initial Project Network Diagram 135

Compressing the Schedule 135

Management Reserve 137

Using the JPP Session to Construct and Analyze the Network 139

Putting It All Together 141

Discussion Questions 142

Chapter 7 Finalizing the Schedule and Cost Based on

Resource Availability 143

Considering Resource Availability 143

Leveling Resources 144

Acceptably Leveled Schedule 146

Resource-Leveling Strategies 147

Utilizing Available Slack 147

Shifting the Project Finish Date 147

Smoothing 148

Alternative Methods of Scheduling Activities 148

Cost Impact of Resource Leveling 150

Implementing Micro-Level Project Planning 151

Work Packages 153

Purpose of a Work Package 153

Format of a Work Package 154

Putting It All Together 157

Discussion Questions 157

Chapter 8 Organizing and Conducting the Joint Project

Planning Session 159

Joint Project Planning Sessions 159

Planning the JPP Session 160

Attendees 161

Facilities 164

Equipment 164

The Complete Planning Agenda 164

Deliverables 165

Project Proposal 166

Contents of the Project Proposal 166

Putting It All Together 168

Discussion Questions 168

Chapter 9 Recruiting, Organizing, and Managing the Project Team 169

Project Manager vis-à-vis the Functional Manager 170

Projects as Motivation and Development Tools 171

Motivators 172

Hygiene Factors 172

Recruiting the Project Team 175

The Project Manager 175

Core Team Members 178

Contracted Team Members 181

Organizing the Project Team 185

Authority 185

Responsibility 186

Balancing a Team 186

Developing a Team Deployment Strategy 187

Developing a Team Development Plan 188

Establishing Team Operating Rules 188

Situations Requiring Team Operating Rules 189

Problem Solving 190

Decision Making 192

Conflict Resolution 196

Consensus Building 197

Brainstorming 198

Team Meetings 199

Managing Team Communications 200 Managing Communications Timing, Content, and Channels 200

Managing Communication Beyond the Team 203

Putting It All Together 206

Discussion Questions 206

Chapter 10 Monitoring and Controlling Progress 207

Control versus Risk 207

Purpose of Controls 208

High Control—Low Risk 209

Low Control—High Risk 209

Balancing the Control System 210

Control versus Quality 211

Progress Reporting System 211

Types of Project Status Reports 211

How and What Information to Update 215

Frequency of Gathering and Reporting Project Progress 216

Variances 217

Applying Graphical Reporting Tools 218

Gantt Charts 218

Milestone Trend Charts 219

Cost Schedule Control 222

Using the WBS to Report Project Status 228

Deciding on Report Level of Detail 230

Activity Manager 230

Project Manager 230

Senior Management 231

Managing Project Status Meetings 231

Who Should Attend? 231

When Are They Held? 232

What Is Their Purpose? 232

What Is Their Format? 233

Managing Change 234

Managing Problem Escalation 237

The Escalation Strategy Hierarchy 239

Problem Management Meetings 240

Putting It All Together 241

Discussion Questions 241

Chapter 11 Closing Out the Projects 243

Steps in Closing a Project 243

Getting Client Acceptance 244

Ceremonial Acceptance 244

Formal Acceptance 244

Installing Project Deliverables 245

Documenting the Project 245

Post-Implementation Audit 246

The Final Report 249

Celebrating Success 249

Putting It All Together 250

Discussion Questions 250

Chapter 12 Critical Chain Project Management 251

What Is the Critical Chain? 252

Variation in Duration: Common Cause versus Special Cause 252

Statistical Validation of the Critical Chain Approach 253

The Critical Chain Project Management Approach 255 Step 1: Creating the Early Schedule Project Network Diagram 255 Step 2: Converting the Early Schedule to the Late Schedule and Adding Resources 256

Step 3: Resolving Resource Conflicts 256

Buffers 257

Defining Buffers 258

Types of Buffers 258

Using Buffers 259

Managing Buffers 260

Track Record of Critical Chain Project Management 262

Putting It All Together 263

Discussion Questions 263

Part Two Adaptive Project Framework 265

Chapter 13 Introduction to the Adaptive Project Framework 267

Defining APF 268

An Overview of the APF 269

Version Scope 269

Cycle Plan 272

Cycle Build 273

Client Checkpoint 273

Post-Version Review 274

The APF Core Values 276

Client-Focused 276

Client-Driven 276

Incremental Results Early and Often 277

Continuous Questioning and Introspection 277

Change Is Progress to a Better Solution 277

Don't Speculate on the Future 278

Putting It All Together 278

Discussion Questions 278

Chapter 14 Version Scope 279

Defining the Version Scope 281

Developing the Conditions of Satisfaction 281

Writing the Project Overview Statement 283

Holding a Fixed Version Budget and Timebox 285

Planning the Version Scope 286

Developing the Mid-Level WBS 286

Prioritizing the Version Functionality 287

Prioritization Approaches 289

Prioritizing the Scope Triangle 290

Determining the Number of Cycles and Cycle Timeboxes 294

Assigning Functionality to Cycles 295

Writing Objective Statements for Each Cycle 295

Putting It All Together 295

Discussion Questions 296

Chapter 15 Cycle Plan 297

Developing a Low-Level WBS for This Cycle Functionality 299

Micromanaging an APF Project 300

Estimating Task Duration 301

Estimating Resource Requirements 302

Determining Resource Requirements in the WBS 303

Identifying a Specific Resource Needed 303

Sequencing the Tasks 303

Putting It All Together 304

Discussion Questions 304

Chapter 16 Cycle Build 305

Creating a Micro-Level Schedule and Finalizing

Resource Assignments 306

Writing Work Packages 309

Building Cycle Functionality 310

Monitoring and Adjusting the Cycle Build Schedule 311

Maintaining a Scope Bank 311

Maintaining an Issues Log 312

Using a Prioritized Scope Matrix 313

Holding Team Meetings 313

Status Reports 314

Putting It All Together 314

Discussion Questions 315

Chapter 17 Client Checkpoint 317

Inputs to the Client Checkpoint 319

Planned versus Actual Functionality Added 319

Scope Bank 319

Questions to Be Answered during Client Checkpoint 319

What Was Planned? 320

What Was Done? 320

Is the Version Scope Still Valid? 320

Is the Team Working as Expected? 321

What Was Learned? 321

Adjusting Functionality for the Next Cycle Plan 321

Updated Functionality List 322

Reprioritized Functionality List 322

Next Cycle Length 322

Putting It All Together 323

Discussion Questions 323

Chapter 18 Post-Version Review 325

Checking Explicit Business Outcomes 326 Reviewing Lessons Learned for Next Version Functionality 327

Assessing APF for Improvements 327

Putting It All Together 327

Discussion Questions 328

Chapter 19 Variations to APF 329

Proof-of-Concept Cycle 330

Revising the Version Plan 331

Extreme Project Management 331

Defining an Extreme Project 332

Overview of Extreme Project Management 333

Comparing Project Approaches 346

Putting It All Together 347

Discussion Questions 348

Part Three Organizational Considerations 349

Chapter 20 Project Portfolio Management 351

Introduction to Project Portfolio Management 352

Portfolio Management Concepts 352

The Major Phases of Project Portfolio Management 354

Establishing a Portfolio Strategy 356

Strategic Alignment Model 35Z

Boston Consulting Group Products/Services Matrix 359

Project Distribution Matrix 361

Growth versus Survival Model 363

Project Investment Categories 363

Choosing Where to Apply These Models 364

Evaluating Project Alignment to the Portfolio Strategy 364 Prioritizing Projects and Holding Pending

Funding Authorization 365

Forced Ranking 366

Q-Sort 367

Must-Haves, Should-Haves, Nice-to-Haves 367

Criteria Weighting 368

Paired Comparisons Model 369

Risk/Benefit 371

Selecting a Balanced Portfolio Using the

Prioritized Projects 372

Balancing the Portfolio 373

Strategic Alignment Model and Weighted Criteria 374

Project Distribution Matrix and Forced Ranking Model 376 Graham-Englund Selection Model and the Risk/Benefit Matrix 377

Balancing Using Partial Funding or Staffing of Projects 382

Managing the Active Projects 382

Project Status 383

Reporting Portfolio Performance 384

Closing Projects in the Portfolio 390

Attainment of Explicit Business Value 390

Lessons Learned 390

Preparing Your Project for Submission to the

Portfolio Management Process 391

A Revised Project Overview Statement 391

A Two-Step Submission Process 394

A New Submission Process 395

Putting It All Together 396

Discussion Questions 396

Chapter 21 Project Support Office 397

Background of the Project Support Office 398

What Is a Project Support Office? 399

Temporary or Permanent Organizational Unit 400

Portfolio of Services 400

Specific Portfolio of Projects 401

Naming the Project Support Office 401

Establishing Your PSO's Mission 403

Framing PSO Objectives 403

Exploring PSO Functions 404

Project Support 404

Consulting and Mentoring 405

Methods and Standards 406

Software Tools 407

Training 407

Project Manager Resources 408

Selecting PSO Organizational Structures 409

Virtual versus Real 409

Proactive versus Reactive 410

Temporary versus Permanent 410

Program versus Projects 410

Enterprise versus Functional 410

Hub—Hub and Spoke 410

Organizational Placement of the PSO 411

How Do You Know You Need a PSO? 412

The Standish Group Report 412

Spotting Symptoms That You Need a PSO 413

Establishing a PSO 415

PSO Stages of Growth 415

Planning a PSO 417

Challenges to Implementing a PSO 427

Speed and Patience 428

Leadership from the Bottom Up 428

A Systems Thinking Perspective 428

Enterprise-wide Systems 428

Knowledge Management 428

Learning and Learned Project Organizations 429

Open Communications 429

Putting It All Together 429

Discussion Questions 429

Epilogue Putting It All Together Finally 431

Closing Comments by Bob Wysocki 431

Closing Comments by Rudd McGary 432

Appendix A What's on the CD-ROM 435

System Requirements 435

Using the CD 436

What's on the CD 436

Troubleshooting 438

Appendix B Bibliography 439

Traditional Project Management 439

Adaptive Project Framework 448

Extreme Project Management 448

Organizational Considerations 449

Index

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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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