PAUL D GARDINER PRO ECT AGEMENT A ST]~TEGIC PLANNING APPROACH © Paul Gardiner 2005 All rights reserved No reproduction copy or transmission of this publication may be made without written permission No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988 First published 2005 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St Martin's Press, LLC and of Palgrave Macmillan Ltd Macmillan® is a registered trademark in the United States, United Kingdom and other countries Palgrave is a registered trademark in the European Union and other countries ISBN-13:978-Q-333-98222-8 ISBN-l0: 0-333-98222-3 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources A catalogue record for this book is available from the British Library A catalog record for this book is available from the library of Congress 10 14 13 12 11 10 09 08 07 06 05 Printed and bound in China Every effort has been made to trace all the copyright holders but if any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangements at the first opportunity About this book Learning objectives Why study project management? Who should use this book? Key features Companion website Learning aids How to use this book Key themes Resources for lecturers xi xi xi xii xii xii xiii xiii xiii Introduction to projects and project management Learning objectives Introduction What is a project? 1 TiME OUT: Recognising projects Characteristics of projects Insights from Industry The absent-minded professor The future of project management Associations, standards and journals Project management associations and institutes Project management standards Journals Personal training and education PROJECT M/-\NAGEMENT in action: The making xi ') z, 13 15 15 15 16 16 of a city technology college 17 Insights from Industry Future learning systems 17 Summary points References 20 20 A systems view of project management 22 Learning objectives Introduction A systems approach Introduction to systems theory Projects as systems The human factor Feedback in a system The importance of feedback 22 22 22 22 23 25 25 25 TIME OUT: Feedback in a simple gardening Insights from Industry A multimedia project for nursing students Project management explored Planning Organising Controlling Leading and motivating Hard and soft skills Where projects come from? Insights from Industry Sources of IT projects at a major UK bank 5 6 7 9 Insights from Industry Junior achievement faces growing paperwork mountain 10 Programme management Differences between programme and project management Insights from Industry Applied iT 11 History of project management Development of management thought Creation of special tools and techniques Development of information and communication technologies Socioeconomic and political influences Expanding scope of project management 12 11 12 12 12 13 13 13 pr~ect 25 Effect of a time lag in a feedback system Feed-forward systems 25 26 TIME OUT: Feed forward in a simple gardening project 26 Feedback and feed forward in project management Phases and characteristics of the project life cycle The project life cycle Insights from Industry Why bother with a feasibility study? Common life cycle characteristics TIME OUT: Project life cycle Information flows in a project Fast tracking Insights from Industry Benefiting from fast tracking Warning about fast tracking A contingency approach to project life cycles Software and systems development project life cycles TIME OUT: Soitwere development protect life cycles Building and construction 26 27 27 28 30 31 31 32 32 33 33 34 37 37 Insights from lndustry Dirty and Ha!!, Eoston College Research and development (R&D) Entertainment and events TIJVIE ()UT Live enieneinment Project governance Authorisation management 33 38 39 69 from Industry Authorisation 7G ,.),'7 PRC)jEC',T j\i\/\!\jA{3E~\/1l::l\,jT action: The Scottish Qualifications Authority Insights from Industry Summary points 71 77 References 78 Investment decision making 80 41 Learning objectives 41 42 42 Introduction 80 80 Fest.vat Disasters and emergencies 68 40 Insights from Industry Disasters and emerqencies Classifying projects Particoant mix Degree of standardisation Degree of visibility TiME OUT: Classifying projects ,'-f.2 Business need 43 Insights from industry IT investment management Office 80 process) US GEneral Feasibility study Insights from Industry Feasibility study requirements for development projects in China Insights from Industry Cutting-edge technoiogy project Size and complexity Industry Scaleable project management methodologies Projects in controlled environments (PRINCE 2) Chapman's project management scaleable rnethodoloqy 44 44 44 45 46 47 Summar/ points 52 References 53 Strategy and governance 54 Learning objectives Projects and strategy 54 54 54 Strategic management 55 Corporate governance 56 58 Strategic governance Lens 1: Decision making under uncertainty Lens 2: Strategic clarity versus freedom of choice Lens 3: E:trategic alignment of the project portfolio Lens 4: Eienefit delivery Lens 5: /J performance ethic 82 83 Business case development Business case perspectives Level of detail required Progressive development of a business case 83 Capital budgeting 85 86 Project appraisals Project summary Financial versus economic appraisal Externalities and their valuation Cash flows and sunk costs Cash flow analysis 47 PROJECT MANAGEMENT in action: A PC banking project Introduction A typical feasibility study 82 84 84 85 86 86 87 87 89 91 58 59 60 60 61 Prioritisation techniques Financial analysis Decision tree analysis Scoring and ranking models Portfolio optimisation Simulation Real options Cognitive modelling Cluster analysis Summary of prioritisation techniques 91 95 97 98 100 100 101 101 101 Insights from Industry Prioritisation in practice 101 61 Summary points 61 Acknowledgments PROJECT MANAGEMEi'n in action: Roadkill the movie 103 References 104 105 105 64 The project manager, sponsor and other stakeholders 106 office to integrate suppliers 6