Chapter 4: Project Integration Management

1. Chapter 4:Project Integration Management Information Technology Project Management, Sixth Edition Note: See the text itself for full citations.

2. Learning Objectives Information Technology Project Management, Sixth Edition Describe an overall framework for project integration management as it relates to the other PM knowledge areas and the project life cycle Explain the strategic planning process and apply different project selection methods Explain the importance of creating a project charter to formally initiate projects

3. Learning Objectives (continued) Information Technology Project Management, Sixth Edition Describe project management plans development, understand the content of these plans, and review approaches for creating them Explain project execution, its relationship to project planning, the factors related to successful results, and tools and techniques to assist in project execution Describe the process of monitoring and controlling project work

4. Learning Objectives (continued) Information Technology Project Management, Sixth Edition Understand the integrated change control process, planning for and managing changes on information technology 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

5. What is Project Integration Management ? The integration of all project components (people, plans, and work) and the coordination of other knowledge areas throughout project life cycle to successfully complete the project The integration of processes from all project process groups (initiation, planning, execution, control, and closing) throughout project life cycle to achieve project goals Information Technology Project Management, Sixth Edition

6. The Key to Overall Project Success: Good Project Integration Management Information Technology Project Management, Sixth Edition Integrating all project components and processes to achieve project goals Maintain good communication and relationships with all stakeholders – interface 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 focus on too many details Project integration management is not the same thing as software integration

7. Example Nick Carson recently became a project manager of a critical biotech enterprise project The project involved creating HW and SW for a DNA-sequencing instrument Nick had been the leading software developer on the project before being the project manager CEO asked him to deliver a production version of the SW for the DNA-sequencing instrument in nine months Nick had the technical background to make the project success Information Technology Project Management, Sixth Edition

8. Example (cont.) • Nevertheless, top management was upset because: • Nick performed the role of SW integrator instead of project manager • He focused on technical issues rather than management issues and ignored the big picture of the project • He never provide top management with detailed plans or accurate schedules • He ignored key stakeholders (top management) and focus on his technical team • He thought the project integration management means SW integration Information Technology Project Management, Sixth Edition

9. What Went Wrong? *Matlack, Carol. “First, Blame the Software,” BusinessWeek Online (October 5, 2006). • The Airbus A380 megajet project was two years behind schedule in Oct. 2006, causing Airbus’ parent company to face an expected loss of $6.1 billion over the next four years • The project suffered from severe integration management problems, or “integration disintegration...Early this year, when pre-assembled bundles containing hundreds of miles of cabin wiring were delivered from a German factory to the assembly line in France, workers discovered that the bundles, called harnesses, didn't fit properly into the plane. Now Airbus will have to go back to the drawing board and redesign the wiring system.”* Information Technology Project Management, Sixth Edition

10. Strategic Planning and Project Selection Information Technology Project Management, Sixth Edition • 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 to aid in strategic planning (selecting project) • 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

11. Example: SWOT • A group of four people want to start new business in film industry • They create SWOT analysis as follows: • Strengths: • We have numerous contact in the film industry • Two of us have strong sales and interpersonal skills • Two has strong technical skills and familiar with SW tools • We all have impressive samples of completed projects • Weakness • No accounting/financial experience • No clear marketing strategy for product and services Information Technology Project Management, Sixth Edition

12. Example (cont.) • Little money to invest in new projects • No company website and limited use of technology • Opportunities • Current client has mentioned a large project • Film industry continues to grow • Two major conferences this year where we could promote our company • Threats • Other companies can provide services we provide • Customers prefer well established organization • High risk in film business Information Technology Project Management, Sixth Edition

13. Example (cont.) • Identifying Potential Projects • Find an external accountant to help run the business • Hire website developer • Develop a marketing plan • Develop a strong proposal to get the large project of the client • Plan to promote the company at two major conference this year Information Technology Project Management, Sixth Edition

14. Mind Map of a SWOT Analysis to Help Identify Potential Projects Mind mapping- is a technique that uses branches radiating out from a core idea to structure thoughts and ideas. Information Technology Project Management, Sixth Edition

15. Information Technology Strategic Planning Process Information Technology Project Management, Sixth Edition

16. Methods for Selecting Projects Information Technology Project Management, Sixth Edition • 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 (NPV) or other financial analyses • Using a weighted scoring model

17. Focusing on Broad Organizational Needs Information Technology Project Management, Sixth Edition • Project that meet broad organization needs are more likely to be successful • Broad organization needs such as • Improve safety • Increase morale (emotional condition, cheerfulness) • Provide better communications • Improve customer services • Selection based on the following criteria: • There is aneed for the project • There arefunds available • There’s a strong willto make the project succeed

18. Categorizing IT Projects Information Technology Project Management, Sixth Edition • One categorization is whether the project addresses: • A problem: is undesirable situations that prevents organization from achieving its goals (example: slow IS needs processor, memory, and storage upgrade) • An opportunity: a chance to improve the organization (ex: new project that can make the organization better) • A directive: new requirements imposed by management or government (ex: medical tech. must meet rigorous (rigid) government requirements) • It is often easier to get approval and fund for the projects that address problems or directives to avoid hurting the organization

19. Categorizing IT Projects • Another categorization is how long it will take to do the project and when it is needed • Quick project • Project with specific time window • Overall priority of the project • high priority project • medium priority project • low priority project • Always complete high priority project first even med. and low could be finished in less time Information Technology Project Management, Sixth Edition

20. Financial Analysis of Projects Information Technology Project Management, Sixth Edition • 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

21. Net Present Value Analysis Information Technology Project Management, Sixth Edition 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

22. Calculating NPV using Excel Information Technology Project Management, Sixth Edition

23. Information Technology Project Management, Sixth Edition

24. JWD Consulting NPV Example Note: See the template called business_case_financials.xls Information Technology Project Management, Sixth Edition

25. NPV Calculations Information Technology Project Management, Sixth Edition Determine estimated costs and benefits for the life of the project and the products it produces Determine discount rate r (capitalization rate): it is the rate used in discounting future cash flow. Calculate the discount factor, f, of year t as follows:

26. Return on Investment Information Technology Project Management, Sixth Edition • 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 * 100 = npv/discounted cost *100 • 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, r, that makes the NPV equal to zero

27. Payback Analysis Information Technology Project Management, Sixth Edition • Another important financial consideration is payback analysis • The payback period is the amount of time it will take to recoup (reimburse), in the form of net cash inflows, the total dollars invested in a project • Payback occurs when the net cumulative discounted benefits equals the cumulative costs • Many organizations want IT projects to have a fairly short payback period

28. Charting the Payback Period Information Technology Project Management, Sixth Edition

29. Weighted Scoring Model Information Technology Project Management, Sixth Edition • A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria • Identify criteria important to the project selection process • Assign weights (percentages) to each criterion so they add up to 100% • Assign scores to each criterion for each project • Multiply the scores by the weights and get the total weighted scores • The higher the weighted score, the better

30. Sample Weighted Scoring Model for Project Selection Information Technology Project Management, Sixth Edition

31. Project Integration Management Processes Information Technology Project Management, Sixth Edition Develop the project charter: working with stakeholders to create the document that formally authorizes a project—the charter Develop the project management plan: coordinating all planning efforts to create a consistent document—the project management plan Direct and manage project execution:carrying out the project management plan by performing the activities included in it

32. Project Integration Management Processes (continued) Information Technology Project Management, Sixth Edition Monitor and control the project work: overseeing project work to meet the performance objectives of the project Perform integrated change control: coordinating changes that affect the project’s deliverables Close the project or phase: finalizing all project activities to formally close the project or phase

33. Project Integration Management Proceses Information Technology Project Management, Sixth Edition

34. Integration management processes summary Information Technology Project Management, Sixth Edition

35. Project Charters Process Information Technology Project Management, Sixth Edition 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

36. Contents of a project charter Project title and date of authorization Project manager name and contact info A summary schedule include the planned start date and finish date Project budget Project objectives Project success criteria A planned approach for managing the project Roles and responsibilities Sign-off section comments Information Technology Project Management, Sixth Edition

37. Project Charter for the DNA-Sequencing Instrument Completion Project Information Technology Project Management, Sixth Edition

38. Charter (continued) Information Technology Project Management, Sixth Edition

39. Project Management Plan Process Information Technology Project Management, Sixth Edition A project management planis 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 a (scope plan, time plan, cost plan,…) are parts of the overall project management plan

40. Project management plan contents Every project is unique Every project has a unique project management plan depends on its nature and size There are common elements in most project management plans Information Technology Project Management, Sixth Edition

41. Common Elements of a Project Management Plan Information Technology Project Management, Sixth Edition 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 (WBS) Schedule Budget information

42. Introduction Project name A brief description of the project(needs, goals, estimated time, and cost) Sponsor name and contact information Project manager and key team members’ names and contact information Deliverables (SW, HW, technical reports, and training materials) A list of important reference materials (project history and plans in other knowledge area) A list of definition and acronyms Information Technology Project Management, Sixth Edition

43. Description of project organization • Organizational charts: • Company organizational chart • Customers organizational chart • Project organizational chart :authorities, communications, and people • Project responsibilities: functions and activities, people assigned to them • Other organizational information: processes and major steps involved in them Information Technology Project Management, Sixth Edition

44. Management and technical processes • Management objectives: top management’s view, priorities, major assumptions, and constraints • Project control: how to monitor project progress and handle changes • Risk management: how to identify, manage, and control risks • Project staffing: number and types of people required for the project • Technical processes: specific methodologies a project might used • Computer Aided Software Engineering (CASE) tools for software development • Specific format for technical reports Information Technology Project Management, Sixth Edition

45. Work to perform(WBS) Major work packages: use WBS to identify different work packages, provide a scope statement to describe them (refer to scope management plan) Key deliverables: describe key products and their expected quality Other work-related information: for example specific HW and SW used in the project Information Technology Project Management, Sixth Edition

46. Schedule Summary schedule: planned completion dates for key deliverables Detailed schedule: provide more information on project schedule and discuss the dependencies that could affect the schedule (refer to schedule management plan) Other schedule-related information: discuss assumptions in preparing project schedule Information Technology Project Management, Sixth Edition

47. Budget Summary budget: total estimate of the overall project’s budget Detailed budget: more detailed information on the budget (refer to cost management plan) Other budget-related information: assumption, other important information related to financial aspects of the project Information Technology Project Management, Sixth Edition

48. Creating Project Management Plan • Using software tools such as Microsoft Project 7 that provides templates and guidelines for preparing project management plan • Using agencies guidelines • DOD standard 2167, software project management plan • IEEE standard 1058-1998 Information Technology Project Management, Sixth Edition

49. Sample Contents for a Software Project Management Plan (SPMP) Information Technology Project Management, Sixth Edition

50. Project Execution Process Information Technology Project Management, Sixth Edition Project execution 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