Project management planning and control techniques 4e

PROJECT
MANAGEMENT
Planning and Control
Techniques
Fourth

Edition-··----~----- . i
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Ethiopia

. Tel. 56 31 15

Rory Burke

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Copyright

c 2003

Rory Burke

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andforedeck crew.

v


Twenty years ago I remember listening to an academic telling us that we professionally
qualified engineers were our own worst enemies, in that anyone from a CEng to the
lowest unskilled worker in an engineering company could, and did, call themselves
engineers. To an outsider there was no distinction between the professional levels as,
for example, there is in the medical world between doctors and nurses, and as a result
engineers were not generally accorded the status our work and qualifications deserved.
Regrettably, the same can be said today for project managers in that anyone, from
a social worker running a help desk to the manager running a major construction
project, are called project managers. The main reason for this is because the term
'Project Manager' is currently in vogue with regrettably not too many senior managers/
directors having the vaguest idea or understanding of what this really means.
So how do we project managers spread the word about our capability and the
benefits that our profession can deliver? The only route is through education. That is
the education ofour peers, our bosses and all those who work with us and for us, until
all the processes covered in this book become second nature. Rory's books on project
management provide a clear understanding of what project management is all about
and are widely used as standard text books in most colleges that teach the subject. If
you think you are running a project but are not using the majority of the processes in
this book then you are either running your project very badly or, more probably, you

are simply not running a project.

Kirk Phillips
Ramble

vi


This is a techniques book designed to take you step-by-step through the latest planning
and control techniques, particularly those used by the Project Management Software
and the Project Management Body of Knowledge (both APM and PMI).
Project management continues to grow as a profession through a wide range of
projects (both large and small). The project management body ofknowledge (PMBOK
and bok) have both been revised and expanded into nine and 55 knowledge areas
respectively. Employers are increasingly encouraging their managers to gain
professional project management certification to comply with their quality management
systems. Project management techniques are now used outside the traditional project
industries, and a management-by-project approach has been adopted by many large
companies in an effort to keep their work small, innovative and manageable.
Project Management Computing: Despite the advances in the project management
software over the past twenty years (over 200 software packages are reported to be
available), the project manager still needs to understand the basic principles ofproject
management to apply the software successfully. Although there have been no new
project management planning and control techniques introduced since the sixties, the
communication field has developed through computer networking and the Internet both enhancing the project's information and control system, and the mobile office.
Target Market: This book is widely used on university degree programmes, executive
management training courses, planning software courses, and professional certification
(PMP). The undergraduate degree programmes tend to focus on project management
principles and calculations, while the postgraduate degrees and MBA modules focus on
applying project management principles through case studies and academic projects.

vii


The executive management training courses for practising managers focus on the
practical planning and control techniques often using the delegates' projects as a live
case study. The computer planning skills training courses teach clients how to use
proprietary software (often having to explain basic planning techniques first). The
professional certification examinations (project management professional [PMP]) are
structured around the project management body of knowledge (PMBOK and bok) to
give a formal qualification which is internationally recognised.
Academically there is a trend away from knowledge based assessment towards
competency based assessment where you are not assessed on your knowledge alone,
but on your ability to apply your knowledge. In this context project management
competency is the application of project management planning and control techniques
to your projects - developing a plan and guiding your projects towards a successful
completion. An accompanying website with additional exercises, proformas and
worked examples is available for lecturers using this book.

I have derived considerable benefit and ideas from lecturers, students, consultants
and practising project managers who were willing to discuss the commercial application
of project management techniques. The writing of this book was a team effort - I
particularly wish to thank:
Book proposal: Particular thanks to Steve Hardman at John Wiley & Sons for coordinating feedback from lecturers in Britain and Australia, and Michael Hougham at
Henley Management College.
Diagrams and DTP: Sandra Burke
Proof reading for content: Derek Archibald, Bob Bums, Peter Goldsbury, Steve
Hinge, Mark Massyn, and Chris Naude (Chris and Derek also designed the computer
screens).
Proof reading for grammar and spelling: Sandra Burke, Linda Logan, Renee

Bampfield-Duggan, Tony Shapiro and Derek Archibald.
Sketches: Ingrid Franzsen and Buddy Mendis
Foreword: Particular thanks to Kirk Phillips.

Rory Burke
New Zealand

viii


Chapter 1: Introduction to Project Management
Chapter 2: History of Project Management
,
,
, ..
Chapter 3: Project Life-Cycle
Chapter 4: Feasibility Study
Chapter 5: Project Selection
Chapter 6: Project Estimating
Chapter 7: Planning and Control Cycle
Chapter 8: Scope Management
Chapter 9: Work Breakdown Structure (WBS)
Chapter 10: Critical Path Method (CPM)
Chapter 11: Schedule Barchart
Chapter 12: Procurement Schedule
Chapter 13: Resource Planning
Chapter 14: Project Accounts
Chapter 15: Project Control
Chapter 16: Earned Value
Chapter 17: Quality Management

Chapter 18: Project Risk Management
Chapter 19: Project Communications
Chapter 20: Project Organisation Structures
Chapter 21: Project Teams
Chapter 22: Project Leadership
Chapter 23: Project Management Computing
Appendix 1:
Appendix 2:
Appendix 3:
Appendix 4:
Abbreviations
J ••••••••••••••••••••••••••••••••••••••••••••
Bibliography
Index
, '"

1
14
28
43
56
74
94
103
115
131
154
169
180;.\
195

211
224
240
252
270
284
301
309
321
332
339
349
353
363
364
369

ix



Introduction To
Project Management
Project management offers a structured approach to managing projects. The purpose
of this book is to outline the latest planning and control techniques used by industry,
commerce, sport and domestic projects, and particularly those used by the project
planning software and referred to in the Project Management Institute's (PMI)
project management body of knowledge (PMBOK), and the Association of Project
Manager's (APM) body of knowledge (bok).
As the use of projects becomes more pervasive, so more managers are entering

the field of project management. Their success will be helped by their ability to develop
a fully integrated information and control system to plan, instruct, monitor and control
large amounts of data, quickly and accurately to facilitate the problem-solving and
decision-making process. To achieve these goals the project manager needs a
comprehensive toolkit - as a plumber works with a bag oftools, so the project manager
works with a computer producing organisation charts, work breakdown structures,
barcharts, resource histograms and cash-flow statements.
Projects have traditionally been managed through a classic functional hierarchical
type organisation structure, but with the increase of multi-disciplines, multi-departments,
multi-companies and multi-national projects so there has been a move towards
management-by-projects, project teams and
matrix organisation structures. As the project
manager is the single point of responsibility,
it is the project manager's job to set up a
management structure which not only meets the
needs of the project, but the needs of the
organisation, the needs of the stakeholders and
the needs of the individuals working on the
project as well (see figure 1.1).
Figure 1.1: Intersecting Needs
(OBS = Organisation Breakdown Structure)
1


PROJECT MANAGEMENT: PLANNING AND CONTROL TECHNIQUES

1. What is a Project?
The main difference between project management and general management (or any
other form of management for that matter) relates to the definition of a project and
what the project intends to deliver to the client and stakeholders. Here are two well

stated and eloquent definitions:
The PMBOK defines a project as: ".... a temporary endeavour undertaken to
create a unique product or service. Temporary means that every project has a
definite end. Unique means that the product or service is different in some
distinguishing way from all similar products or services. "
!
Turner defines a project as: "..... an endeavour in which human, (or machine),
material and financial resources are organised in a novel W0J, to undertake a unique
. scope of work, of given specification, within constraints of cost and time, so as to
deliver beneficial change defined by quantitative and qualitative objectives. "
Traditionally work in the construction industry and defence procurement were
seen as projects, but in recent years most proactive companies are structuring their
work as projects (management-by-projects) and using project management techniques
to ensure successful completion.
Projects range in size, scope, cost and time from mega international projects costing
millions of dollars over many years - to small domestic projects with a low budget
taking just a few hours to complete. Consider the following projects:
• Career development (education and training courses)
• The transition period during which a change occurs.
• Designing and constructing a building, a house or a yacht.
• Designing and testing a new prototype (a car or a washing machine).
The launch of a new product (advertising and marketing project).
• Implementing a new computer system (IT project, or upgrade).
Designing and implementing a new organisational structure (human resource
project).
• Planning and conducting an audit (quality management project).
• Improving productivity within a target period.
• Disaster recovery (limiting the damage offires, floods or any type ofaccident).
• Olympics, or Springboks' tour of New Zealand (a sports project).
• Rolling Stones' world tour (an entertainment project).

• Moving house or going on holiday (a domestic project).

j

Other distinctive features of a project include:
A start and finish (although they may be difficult to define - the start may
have crystallised over a period of time and the end may be a slow phase out).
A life-cycle (a beginning and an end, with a number of distinct phases in
between).
A budget with an associated cash-flow.
Activities that are essentially unique and non-repetitive.
Use of resources, which may be from different departments and need coordinating.

2


INTRODUCTION TO PROJECT MANAGEMENT

• A single point of responsibility (i.e. the project manager).
• Fast tracking - getting your product to market before your competitors.
• Team roles and relationships that are subject to change and need to be
developed, defined and established (team building).
Within the context ofthis book a project may be defined as a beneficial change which
uses the special project management techniques to plan and control the scope of
work in order to deliver a product to satisfy the client's and stakeholder's needs and
expectations.

II

2. Project Management

!

V

Project management is defined by the PMBOK as: "..... the application ofknowledge,
skills, tools and techniques to project activities in order to meet stakeholder's
needs and expectations from a project. " In other words the project manager must do
whatever is required to make the project happen - one could not have a wider all
encompassingjob description!
This definition clearly identifies that the purpose of the project is to meet the
stakeholders needs and expectations. It is therefore a fundamental requirement for
the project manager to establish who are the stakeholders (besides the client) and
analyse their needs and expectations to define, at the outset, the purpose ofthe project,
its scope ofwork and objectives (this will be developed in the Feasibility Study chapter).
The discipline of project management can be described in terms of its component
processes, conveniently defined by the PMBOK as nine knowledge areas:
• Integration
Scope·
Communication
• Time
Cost
Procurement
• Quality
•
HRM
Risk
See page 7 for a brief description of the nine knowledge areas.
The APM bok defines project management as 'the most efficient way ofintroducing
change .... achieved by:
• Defining what has to be accomplished, generally in terms of time, cost, and

various technical and quality performance parameters;
• Developing a plan to achieve these and then working this plan, ensuring
that progress is maintained in line with these objectives;
• Using appropriate project management techniques and tools to plan, monitor
and maintain progress;
• Employing persons skilled in project management - including normally a
project manager - who are given [single} responsibility for introducing the
change and are accountable for its successful accomplishment. '
Peter Morris describes project management as: '..... the process of integrating
everything that needs to be done (typically using a number of special project
management techniques) as the project evolves through its life cycle [from concept
to handover] in order to meet the project s objectives.'

3


PROJECT MANAGEMENT: PLANNING AND CONTROL TECHNIQUES

Companies performing projects will generally subdivide their projects into several
phases or stages to provide better management control. Collectively these project
phases are called the project life-cycle. Along with the project life-cycle some of
the other special project management techniques that form part of the project
management integrative process are:
• Work breakdown structure (WES) • Earned value
• Critical path method (CPM)
• Configuration control.
• Resource smoothing

3. Management-by-Projects
Many organisations are changing in nature as more of them are accomplishing their

business through projects. This management-by-projects approach has been used in
engineering, construction, aerospace and defence for many years, and now we see
other organisations buying into the process; pharmaceutical, medical,
telecommunications, software development, systems development, energy,
manufacturing, educational and service organisations. The management-by-projects
approach encourages:
• organisationflexibility
• decentralised management responsibility
• holistic view of problems
goal-orientated problem solution processes.
Time Magazine identifies these profound changes happening in the job market. 'Fulltime, full-year workers are no longer as dominant as they were. There is more
self-employment, more part-time employment and the beginnings of what might
be called task employment.' I would call this project employment. Therefore for
employer and employee to make the most ofthe new employment patterns a working
understanding of management-by-projects and project team dynamics is essential.
Oracle: 'The business world is moving increasingly towards projects orientation
operation to measure the true costs and perfectibility of any business endeavour.'
It is very difficult, ifnot impossible, to quantify costs ifthey are grouped together and
shared - the only way would be a sharing percentage.
The importance and acceptance of the trend towards management-by-projects
was endorsed by the International Project Management Association (IPMA) Project
Management Conference in Vienna (1990) that adopted management-by-projects
as its theme.
Programme Management: Where the project office is managing a large capital
project (e.g. Channel Tunnel), it may be subdivided into a number of smaller related
projects to achieve a single common goal:
Portfolio Management: Defines a project office that is running a number of unrelated
projects. This could be managing the repairs and maintenance of; a large telecom type
company, a power station or a water utility.

4


INTRODUCTION TO PROJECT MANAGEMENT

Small Projects: Managing small projects have their own unique problems, although
they may appear to be simple, they are often associated with a lack of definition (no
drawings,no specificationsand no contact), instructionsare givenverbally,and minimum
standards are not established. There are no arbitration mechanisms, no exit strategies
and the small projects may only be for a short duration that does not give you time to
establish a management system.
General Management: Although this book is about project management, the
successful project manager must also be competent in a wide range of general
management skills in addition to the nine knowledge areas. These would include:
• recruiting and personnel
• economICS
• computer systems
legal contracts
• personnel and human resources
sales and marketing
• accounts and salaries.
The project manager would obviously not be expected to be an expert in all these
fields, but for a project to be successful they may all need to be addressed at one time
or another and as the single point of responsibility, the project manager will be
responsible for either performing the work, or delegating it (see figure 1.2).
Production Management: Although projects are deemed to be unique, in reality
they usually consist of groups of repetitive tasks. Henry Ford emphatically showed
years ago that production lines are the quickest, and most cost effective way to
manufacture a car. The same applies to projects, if there are repetitive tasks, then
setup a production process to carry them out at the same time.

Technical Management: The technical aspects of the project also need to be
managed. On smaller projects the project manager may be expected to be the technical
expert as well as the manager. In fact early on in your career you will probably only be
appointed as project manager if you are a technical expert.
There is usually a certain amount ofoverlap
between project management, general
management and technical management. This
PROJECT
can
be simply presented as intersecting circles
MANAGEMENT
SKILLS
(figure 1.2).

Figure 1.2: Intersecting Management Skills

5


PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES

Project Management Environment: The project environment directly affects the
project and how it should be managed. Projects are not carried out in a vacuum, they
are influenced by a wide range of stakeholders and issues. Consider the following:
Stakeholders (all interested parties)
• Client / sponsor's requirements
• Your own company's organisation structure
• Market requirements
• Competitors
• New technology

• Rules and regulations (Health and safety)
• Politics (both internal and external)
• Economic cycle.
For project managers to be effective they must have a thorough understanding of the
project environment which may well be changing and so continually shifting the goal
posts. The project environment consists of the numerous stakeholders and players
that have an input or are effected by the project. All must be managed as anyone
person could derail the project (see stakeholder analysis in the Feasibility Study
chapter).

4. Project Management Software
Today, powerful but inexpensive project management software is readily available for
the personal computer. This availability has essentially moved project management
computing away from the data processing department to the project manager's desk.
This represents a major shift in the management of information.
Whilst project planning software will certainly help the project manager plan and
control their projects, its application will only be effective if the planning and control
techniques are clearly understood. The purpose of this text is therefore to develop
these techniques through manual exercises, but with the assumption that computer
systems will be used later - see the project management computing chapter.

ONE.

MANy
D\SC \p,-,NES

6


INTRODUCTION TO PROJECT MANAGEMENT

5. Project Management Associations
A number of project management associations and institutions have formed chapters
around the world to encourage the development ofproject management as a profession.
These chapters organise regular meetings and newsletters to keep their members
informed about project management issues:
• body of knowledge
• certification of project managers (PMP)
• unit standards
• ethics
• global forum.

Body of Knowledge: Over the past fifty years a considerable body of knowledge
has built up around project management tools, skills and techniques. This database of
information has been developed into the following:
• The APM's bok - Association of Project Managers (UK)
• The PMl's PMBOK - Project Management Institute (USA)
• The IPMA's BOK - International Association of Project Managers (formerly
called INTERNET)
• The AIPM's Competency Standards for Project Management (Australia)
• ISO 10006 'Guideline to Quality in Project Management' - this will assist
clients evaluating the effectiveness of the project management system
• South African unit standards.
The purpose of the body of knowledge is to identify and describe best practices that
are applicable to most projects most of the time. There is widespread consensus about
their value and usefulness. They are also intended to provide a common lexicon and
terminology within the profession ofproject management -locally and internationally.
As a relatively young international profession there is still a need to converge on a
common set of terms. The PMBOK describes project management under the following
nine knowledge areas:

• Project Integration: integrates the three main project management processes
ofplanning, execution and control- where inputs from several knowledge areas
are brought together.
• Project Scope Management: includes the processes required to ensure that
the project includes all the work required, and only the work required, to complete
the project successfully. It is primarily concerned with defining and controlling
what is or is not included in the project, to meet the sponsors' and stakeholders'
goals and objectives. It consists ofauthorisation, scope planning, scope definition,
scope change management and scope verification.
• Project Time Management: includes the process required to ensure timely
performance ofthe project. It consists ofactivity definition, activity sequencing,
duration estimating, establishing the calendar, schedule development and time
control.

7


PROJECT MANAGEMENT: PLANNING AND CONTROL TECHNIQUES

• Project Cost Management: includes the process required to ensure that the
project is completed within the approved budget. It consists ofresource planning,
cost estimating, cost budgeting, cash-flow and cost control.
• Project Quality Management: includes the process required to ensure that
the project will satisfy the needs for which it was undertaken. It consists of
determiningthe required condition,quality planning,quality assurance and quality
control.
• Project Human Resource Management: includes the process required to
make the most effective use ofthe people involved with the project. It consists
of organisation planning, staff acquisition and team development.
• Project Communications Management: includes the process required to

ensure proper collection and dissemination of project information. It consists of
communication planning, information distribution, project meetings, progress
reporting and administrative closure.
• Project Risk Management: includes the process concerned with identifying,
analysing, and responding to project risk. It consists of risk identification, risk
quantification and impact, response development and risk control.
• Project Procurement Management: includes the process required to acquire
goods and services from outside the performing project team or organisation. It
consists of procurement planning, solicitation planning, solicitation, source
selection, contract administration and contract closeout.
The body of knowledge can be subdivided into four core elements which determine
the deliverable objectives of the project:
Scope
• Time
• Cost
• Quality
The other knowledge areas provide the means of achieving the deliverable objectives,
namely:
• Integration
• Human resources
• Communication
• Risk
• Procurement and contract.
APM bok: The APM bok takes a much broader approach than the PMBOK, by
subdividing project management into 55 knowledge areas. It incorporates not only
inward focused project management topics (such as planning and control techniques),
but also broader topics in which the project is being managed (such as social and
ecological environment), as well as specific areas (such as technology, economics,
finance, organisation, procurement and people, as well as general management). The
topics are described at an outline level, leaving the details to recommended texts (on

their book list) to explain the working ofthe knowledge areas (see www.apm.org.uk).

8


INTRODUCTION TO PROJECT MANAGEMENT

Certification of Project Managers (pMP): The certification process offers a means
for experienced project managers to gain a formal qualification in project management.
There is a trend away from the knowledge based examinations which assess a person's
knowledge, towards competence based examinations which assess a person's ability
to perform. The PMT's certification is called the Project Management Professional
(PMP). There is an increasing recognition of certification and for some projects it is
being made a mandatory pre-qualification.
Competency is a mixture of explicit knowledge derived from formal education,
tacit knowledge and skills derived from experience. For young professionals, explicit
knowledge is more important, but the other competencies will become increasingly
important as they progress in their careers. The PMI's (PMP) is a single level certificate
programme, which measures explicit knowledge directly through a multi-choice test,
and tacit knowledge and skill indirectly by assessing the candidate's work experience.
It is therefore aimed at an early to mid-career professional.
The IPMA and AIPM (Australia), on the other hand, have developed a multi-stage
programme. At the first stage explicit knowledge is measured directly through a multiquestion test. This is aimed at the professional managers starting their careers. At the
second stage tacit knowledge and skill are measured directly. This is early to mid
stage certification, equivalent to PMP. At the third stage, the programme measures
performance of senior project managers directly, and IPMA has a fourth stage to
measure the performance of project directors.
The key issue is ensuring equivalence, so that client organisations can compare
the competence of project managers against different programmes. In Europe the
integration ofthe EU is encouraging a growing number ofcross-border projects, which

not only require collaboration, but a need to converge on common practices, legal
systems and, not least, a common business language.
Global Project Management
Forum: Project management has
been an international profession for
many years, but only recently have
the global issues of project
management been discussed. The first
global project management forum was
held in New Orleans in 1995 where
30 countries were represented. Some
of the key topics discussed at the
forum included:
• What industries or types of
projects are the main users of
modern project management in
your country?
• What industries or areas of
applicationinyour countryhave
the greatest need for more or
better project management?


PROJECT MANAGEMENT: PLANNING AND CONTROL TECHNIQUES

• What industries or organisations offer the greatest opportunities for growth of
professional project management in your country?
The answers to these and other questions relating to standards, certification, a global
PMBOK and advancing the project management profession were published by the
PMI as The Global Status of the Project Management Profession.

6. Benefits of Project Management
The benefits of using a project management approach, obviously follows on from
addressing the needs ofthe project. The project manager is responsible for developing
a plan through which the project can be tracked and controlled to ensure the project
meets preset objectives. To do this effectively the project manager requires accurate
and timely information. This information should be supplied by the planning and control
system, which outlines the scope of work and measures performance against the
original plan.
Although the planning and control systems will incur additional management costs,
it should be appreciated that lack of information could be even more expensive if it
leads to poor management decisions, mistakes, rework and overrun. Listed below are
some of the main benefits associated with a fully integrated project planning and
control system:
• Client: The project manager is the project's single point of responsibility
and the company's representative to the client (and other stakeholders). During
meetings with the client the planning and control system will provide information
about every aspect ofthe project. Clients prefer to deal with one person - the
project manager - who is accountable. This gives them confidence that problems
will be addressed and the project will be completed on time.
• Single Point of Responsibility: With the project manager responsible for the
complete project, this should limit scope overlap and scope underlap.
• Estimating: The estimate forms the basis of the project plan. If you cannot
estimate and measure it, how can you manage it?
• CPM: The critical path method calculates all the activities start dates, finish
dates and floats. Activities with zero float form the critical path which determines
the duration ofthe project - delaying a critical activity will delay the project.
• Fast Track: Bring a new product to the market quickly before your competitors.
• Schedule Barchart: Communicates the what, where, when and who.
• Project Integration: Co-ordinates and integrates the contribution of all the

project participants.
• Reporting Interfaces: The planning and control system's database can be
structured around the work breakdown structure (WBS) for project reporting
and around the organisation breakdown structure (OBS) for corporate reporting.
Without an integrated system the two reporting requirements would have to be
processed separately.

10


INTRODUCTION TO PROJECT MANAGEMENT

• Response Time: Timely response on project performance is essential for
effective project control. The project planning and control system can adjust
the content and frequency of the feedback to address the needs of the project,
while the corporate systems may be less flexible. Consider the accounts
department for example - they generally use a monthly reporting cycle where
feedback on invoices may be four to six weeks behind timenow.
• Trends: Projects are best controlled by monitoring the progress trends oftime,
cost and performance. This information may not be available to the project
manager if the trend parameters are derived from a number ofdifferent functional
sources and not communicated.
• Data Capture: Ifthe project progress reporting is based on information supplied
by the functional departments, the project manager cannot control the accuracy
ofthis information. The problem here is that it may only become obvious towards
the end ofthe project, that the reporting is inaccurate, by which time it may be
too late to bring the project back on course to meet the project's objectives (see
Project Control chapter).
• Procedures: The planning and control system enables the project manager to
develop procedures and work instructions which are tailored to the specific

needs of the project.
• Project Office: Offers a centre for project management excellence.
• Closeout Report: The performance of the current project will form the
estimating database for future projects. Ifthis data is not collected by the planning
and control system it may be lost forever and you will live to repeat your mistakes.
The closeout provides an effective mechanism to learn by mistakes, and strive
for continuous improvement.
• Marketing: Vendors can distinguish themselves by marketing their project
management systems. If two vendors are offering similar products at similar
prices - then their selection may be based on the vendor who can demonstrate
they can effectively manage the project.
Although there are many benefits from using project management techniques, senior
management should tread carefully if the project management culture is not already
established within the company, because the resistance to change could derail the
project.

7. Role of the Project Manager
It is appropriate to conclude this chapter with a few words on the role of the project

manager. Experience has shown that the selection of the project manager is a key
appointment which can influence the success or failure of the project. As the single
point ofresponsibility, it is the project manager who integrates and co-ordinates all
the contributions, and guides them to successfully complete the project.

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PROJECT MANAGEMENT: PLANNING AND CONTROL TECHNIQUES

The role of the project manager should be outlined in the project charter (see

Scope Management chapter) along with the purpose of the project. The following
lists some desirable "project manager attributes:
• Ability to select and develop an operational team from a standing start
• Leadership and management ability
• Ability to anticipate problems, solve problems and make decisions
• Ability to integrate the project stakeholders
Operational flexibility
• Ability to plan, expedite and get things done
• Ability to negotiate and persuade
• Understand the environment within which the project is being managed
• Ability to review monitor and apply control
• Ability to administer the contract, the scope of work and scope changes
• Ability to manage within an environment of constant change
• Ability to keep the client happy.
We are witnessing a silent revolution - the transition from conventional functional
management to project management. It is Goodbye MBA - hello MSc Project
Management. I hope you are on-board!
Key Points:
•
•

The project management body ofknowledge (PMBOK) and APM (bok) define
project management under a number of knowledge areas.
Project management has become a recognised profession with international
accreditation of its members.
Many companies are adopting a management-by-project approach with the
project manager as the single point of responsibility.

Further Reading:
Morris, Peter, The Management of Projects, Thomas Telford

Oosthuizen, Pieter, Goodbye MBA, International Thomson
Project Management Institute (PMI)., The Global Status of the Project
Management Profession, PMI publication
Turner, R., Handbook of Project Based Management, McGraw-Hill
Global PM Forum <www.pmforum.org>
PMI <www.pmi.org>
APM <www.apm.org.uk>
IPMA <www.ipma.ch>
APM <www.apm.org.uk>
Australian AIPM <www.dab.uts.au/aipm/competencystandards/index.html>
SA Qualifications Authority <www.saqa.org.za>

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INTRODUCTION TO PROJECT MANAGEMENT

Case Study and Exercises:

You have been appointed by the CEO ofan international telecommunications company
to make a short presentation to the board of directors about the benefit of using a
management-by-projects approach on the company's next project. Your short
presentation (written and/or verbal) should consider the following:
1. Explain what project management is, and why it is different to other forms of
management.
2. Explain how project management can be applied to your company's projects.
3. Point out the trend towards professional project management and your local
project management society / association who are supporting certification.
4. Outline the role of the project manager.
S. Suggest a small pilot project on which you can develop your project management

systems.

))

13


History of Project
Management

The history of project management is often associated with the construction of the
massive Egyptian Pyramids and the Great Wall of China. They were certainly large
complex structures, built to high standards, that have stood the test of time and must
have required an enormous workforce. But with no documented evidence the
management techniques used can only be based on conjecture. Although archeologists
are starting to suggest that the construction ofthe pyramids were the largest fill-in job
the world has ever seen - when the River Nile flooded annually the workforce would
move off the land to work on the pyramids. They were not slaves as Hollywood
suggests, but willing workers who were probably paid. And when the annual floods
subsided they would return to their farms.
Modern day project management is associated with Henry Gantt's development of
the barchart (early 1900s), and special project management techniques developed
during the military and aerospace projects of the 1950s and 1960s in America and
Britain. It is these special distinctive project management tools and techniques which
are referred to in the body of knowledge, used by the planning software and developed
in this book.
Traditionally the management of projects was considered more of an art than
science, but with the growing number of project management institutions, associations
and academic establishments, project management has become more of a science
and discipline as accepted practices are captured and formalised in the global body

of knowledge and certificate programmes.
Today, rapidly changing technology, fierce competitive markets and a powerful
environmental lobby have all encouraged companies to change their management
systems - in this sink or swim, adopt or die environment, project management and
management-by-projects are offering a real solution.

14


HISTORY OF PROJECT MANAGEMENT

1. Gantt Chart -19005
The history of the barchart can be traced back to World War 1 when an American,
Henry Gantt (1861 - 1919), designed the barchart as a visual aid for planning and
controlling his shipbuilding projects. In recognition, planning barcharts are often called
after his name - Gantt charts. The Handbook oflndustrial Engineers (1982, p.ll)
acknowledges the Gantt chart for significantly reducing the time to build cargo ships
during World War 1.
Figure 2.1 indicates the format of a Gantt chart, where the top line is a calendar
time-scale in days [1] and the activities [2] are listed on the left hand column. The
scheduling of each activity is represented by a horizontal line [3], from the activity's
start to finish date. The length ofthe activity line is therefore, proportional to its estimated
duration.
Gantt further used this barchart to track progress by drawing a second line alongside
the planned schedule to indicate work done [4]. The relative position of the progress
line to the planned line indicates percentage complete and remaining duration, while
the relative position between the progress line and Timenow [5] indicates actual progress
against planned progress.

Figure 2.1: Gantt Chart

The Gantt chart has stood the test of time and is widely acknowledged today as the
most effective method ofcommunicating planning information - people find them easy
to use and understand. A survey by Microsoft Project users found that 80% ofmanagers
preferred the barchart to the network diagram for planning and controlling their projects.

Henri Fayol: In 1916 Fayol, a French industrialist, presented a management process
that consisted of:
• Planning (forecasting)
• Organising (staffing)
• Commanding (motivation)
• Directing (co-ordinating)
• Controlling (monitoring).
Fayol 's principles are fundamentally universal and apply to all types of management,
whether ongoing or project, and ifyou add initiation and closing, then you have the key
components of the planning and control cycle developed in chapter 7.

15


PROJECT MANAGEMENT PLANNING AND CONTROL TECHNIQUES

2. Project Management 19505 and 19605
Nearly all ofthe special project management techniques we use today were developed
during the 1950s and 1960s by the US defence-aerospace industry (DoD and NASA)
- this includes program evaluation and review technique (PERT), earned value
(EV), configuration management, value engineering and work breakdown
structures (WBS). The construction industry also made its contribution to the
development of the critical path method (CPM) and the precedence diagram method
(PDM), using network diagrams and resource smoothing - the motivation was
scheduling urgency and engineering management. During this period large scale projects

were effectively shielded from the environment, society, and ecology issues. The Apollo
space programme and the construction of nuclear power stations typified projects of
this period. Some ofthe key achievements during this period are chronologically listed
below:
1950s - Development of PERT and CPM.
1950s - Development of the concept of a single point of responsibility for
multi-disciplined projects where one person is made responsible for
completing the project. Coupled with this approach came the project team,
secondment and resource sharing through a matrix organisation structure.
1960 - NASA experiments with matrix organisation structures.
1962 - NASA introduces a PERT type system that emphasised the need for cost
control and the WBS.
1963 - Earned value adopted by the USAF.
1963 - Project life-cycle adopted by the USAF.
1963 - Polaris was the first British project on which the sub-contractors were
required contractually to use advanced project management systems.
1964 - Configuration management adopted by NASA to review and document
proposed changes.
1965 - DoD and NASA move from cost-plus contracts towards incentive type
contracts such as firm fixed price or cost plus incentive fee.
1965 - The mid 1960s saw a dramatic rise in the number of projects in the
construction industry that used modem project management techniques.
1965 - The TSR-2 (swing-wing bomber) highlighted the problems of concurrency,
i.e. starting the development and production before the design was stable.
Increasing the scope ofwork led to cost overrun and delays - eventually
the project was scrapped.
1966 - A report in 1966 stated that not enough time was spent on front-end definition
and preparation (of the project life-cycle); there were wide variations in
standards of cost and schedule control; and inadequate control over design
changes.

1967 - International Project Management Association (IPMA) founded (formerly
called INTERNET). Grouping of over 20 international associations.
1969 - Project Management Institute (PMI) formed, certification and the PMBOK
(1987, 1996,2000) were to follow.

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