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Chapter 1. Introduction to projects and project management
Project: A temporary endeavor undertaken to create a unique product or service.
The difference between project activities and other activities is not always crystal clear.
It is false that all details of the work required in a project are always strictly defined prior to project execution.
Any project has to satisfy three feasibility criteria: The technical criterion, the business criterion and the functional criterion.
Chapter 2. A system view of project management.
System: Interrelated parts working in conjunction with each other in order to accomplish a number of goals.
Process: A serie of actions bringing about a result.
Procedure: A formalized set of instructions, written down to inform people about how to do something.
In project management process:
Input: Business need, requirements.
Constraints: Time, quality, technical and other performance, legal.
Output: Project deliverables, products, services.
Fast tracking:
Benefits: Reduces the duration of the project, reduce overhead costs, revenue streams can begin earlier.
Downsides: Expensive rework when things go wrong, additional communication, feedback and management are needed, can lead to confusion, increased uncertainty.
Chapter 4. Investment decision making.
Feasibility study: An assessment of the practicality of a proposed project.
Purpose of the feasibility study: Determine if the business opportunity is possible, practical and viable. Provide a method to identify objectives and evaluate alternatives. Improve confidence. Assure the sponsor.
Business case: A justification for a proposed project. Its purpose is to obtain management commitment and approval for investment, through a clearly presented rationale.
The five main perspectives of business case are strategic fit, options appraisal, achievability, commercial aspects and affordability.
Cost of capital: It is the minimum rate of return required from the project for it to be worthwhile.
It is the opportunity cost of an investment.
In the consideration of different investment opportunities, the internal rate of return IRR has to be larger than the cost of capital.
When using decision tree, in order to maximize the expected payoff, the best option is the one with more average payment.
Project selection is closely related to an organisation's long-term strategy and business plan.
Chapter 5. The project manager, sponsor and other stakeholders.
The role of project manager is 'to attain the project objectives'. In doing so, the project manager must simultaneously see to the needs of the sponsor and other stakeholders, manage the project life cycle and performance of the project team, including his or her own performance.
The core competencies required by the project can be divided into two categories: Soft skills (for example leading, communicating, negotiating, problem solving and influencing the organisation) and hard skills (for example planning, scheduling and controlling).
The senior management decides whether the project will proceed. They also determine the extent of support the project will receive relative to other projects.
The project board oversees the planning and execution of the project.
Chapter 6. Organisation and procurement.
Organizational principles:
1. Departmentalization: Differentiation versus integration.
2. Unity of command: Excessive autonomy versus excessive interdependence.
3. Span of control: Too loose versus too tight control.
4. Division of labor: Vertical and horizontal.
5. Authority and responsibility: Diffuse authority versus over-centralization.
The matrix organisation aims to provide strong customer focus and resource efficiency. There are strong and week forms depending of the level of authority vested in the project manager; it is sometimes seen unstable and conflictual.
Payment structure. Different contract types:
Fixed price
- Fixed firm price FFP
Cost reimbursement
- Cost plus fixed fee CPFF
- Cost plus percentage of cost CPPC
Incentive
- Cost plus incentive fee CPIF: These contracts are a variation of cost reimbursement contracts in which the fee paid depend upon how well the contract satisfies certain performance objectives.
- Fixed price incentive FPI: This contract is a modified form of a fixed price contract. The 'incentive' in the name is a reference to the fact that the contract is structured to reward the contractor for certain performance accomplishment.