CONTENTS

Chapter One

INTRODUCTION ............................................................................................................................. 21

Framework Features.................................................................................................. 21 Framework Benefits................................................................................................... 21 Framework Integrity ................................................................................................... 22 Project Lifecycle......................................................................................................... 23 Framework Overview and Characteristics ................................................................. 25 Prince2 and PMBOK............................................................................................... 26 Lifecycles Compared ................................................................................................. 29 Framework Summary ................................................................................................ 29 What Now? ................................................................................................................ 29

Chapter Two

FUNDAMENTALS............................................................................................................................ 35

What is a Project?...................................................................................................... 35 Project Characteristics............................................................................................... 39 What is Project Management?................................................................................... 40 Project Parameters .................................................................................................... 41 Project Stakeholders.................................................................................................. 42 Project Work .............................................................................................................. 44 Project Organisation .................................................................................................. 45 Project Offices ........................................................................................................... 48 Project Sponsor ......................................................................................................... 49 Project Manager ........................................................................................................ 51 Organisation Structures ............................................................................................. 52 Project Management Rewards .................................................................................. 57 Project Management Challenges............................................................................... 58 Project Success......................................................................................................... 60 Project Failure ........................................................................................................... 61 Terminology............................................................................................................... 63 Summary ................................................................................................................... 64

Chapter Three

PROJECT MANAGEMENT PRINCIPLES..................................................................................... 65

Do the right project .................................................................................................... 66 Have competent sponsorship .................................................................................... 66 Select the right project manager ................................................................................ 67 Use a proven framework............................................................................................ 68 Manage the client relationship ................................................................................... 69 Ensure effective communication................................................................................ 70 Be reasonable and realistic ....................................................................................... 70 Manage stakeholders expectations........................................................................... 72

CONTENTS

Chapter One

INTRODUCTION ............................................................................................................................. 21

Framework Features.................................................................................................. 21 Framework Benefits................................................................................................... 21 Framework Integrity ................................................................................................... 22 Project Lifecycle......................................................................................................... 23 Framework Overview and Characteristics ................................................................. 25 Prince2 and PMBOK............................................................................................... 26 Lifecycles Compared ................................................................................................. 29 Framework Summary ................................................................................................ 29 What Now? ................................................................................................................ 29

Chapter Two

FUNDAMENTALS............................................................................................................................ 35

What is a Project?...................................................................................................... 35 Project Characteristics............................................................................................... 39 What is Project Management?................................................................................... 40 Project Parameters .................................................................................................... 41 Project Stakeholders.................................................................................................. 42 Project Work .............................................................................................................. 44 Project Organisation .................................................................................................. 45 Project Offices ........................................................................................................... 48 Project Sponsor ......................................................................................................... 49 Project Manager ........................................................................................................ 51 Organisation Structures ............................................................................................. 52 Project Management Rewards .................................................................................. 57 Project Management Challenges............................................................................... 58 Project Success......................................................................................................... 60 Project Failure ........................................................................................................... 61 Terminology............................................................................................................... 63 Summary ................................................................................................................... 64

Chapter Three

PROJECT MANAGEMENT PRINCIPLES..................................................................................... 65

Do the right project .................................................................................................... 66 Have competent sponsorship .................................................................................... 66 Select the right project manager ................................................................................ 67 Use a proven framework............................................................................................ 68 Manage the client relationship ................................................................................... 69 Ensure effective communication................................................................................ 70 Be reasonable and realistic ....................................................................................... 70 Manage stakeholders expectations........................................................................... 72

Clearly define the project ........................................................................................... 73 Properly plan the work and work the plan.................................................................. 74 Recognise uncertainty and manage risk.................................................................... 75 Maintain quality.......................................................................................................... 75 Lead the team............................................................................................................ 76 Cover all knowledge areas ........................................................................................ 76 Learn from each project............................................................................................. 78 Conclusion................................................................................................................. 78

Chapter Four

STAKEHOLDER MANAGEMENT ................................................................................................ 79

Why do it?.................................................................................................................. 79 Who are they? ........................................................................................................... 79 Project Managers Role ............................................................................................. 80 Identifying Stakeholders ............................................................................................ 81 Analysing Stakeholders ............................................................................................. 82 Understanding Key Stakeholders .............................................................................. 84 Primary and Secondary Stakeholders ....................................................................... 85 Informing Stakeholders.............................................................................................. 86 Stakeholder Strategies .............................................................................................. 89 Managing Angry Stakeholders................................................................................... 89 Stakeholder Resistance............................................................................................. 90 Dealing with Resistance ............................................................................................ 91 Stakeholder Communication...................................................................................... 91 Internal Politics .......................................................................................................... 92 Power and Influence.................................................................................................. 93 Getting Buy-in .......................................................................................................... 95 Some More Considerations ....................................................................................... 98 Leading Change ........................................................................................................ 99 Final Points.............................................................................................................. 104

Chapter Five

CONCEIVE PROJECT .................................................................................................................... 105

Framework............................................................................................................... 105 Recognise Problem, Need or Opportunity ............................................................... 106 Define Possible Project............................................................................................ 108 Project Classification ............................................................................................... 109 Check Feasibility...................................................................................................... 111 Strategic Fit ............................................................................................................. 112 Business Benefits .................................................................................................... 114 Benefits Management.............................................................................................. 115 Business Case......................................................................................................... 120 Cost-benefit Analysis ............................................................................................... 122 Payback Period........................................................................................................ 126 Return on Investment .............................................................................................. 127 Net Present Value (NPV)......................................................................................... 127 Internal Rate of Return (IRR)................................................................................... 131

Clearly define the project ........................................................................................... 73 Properly plan the work and work the plan.................................................................. 74 Recognise uncertainty and manage risk.................................................................... 75 Maintain quality.......................................................................................................... 75 Lead the team............................................................................................................ 76 Cover all knowledge areas ........................................................................................ 76 Learn from each project............................................................................................. 78 Conclusion................................................................................................................. 78

Chapter Four

STAKEHOLDER MANAGEMENT ................................................................................................ 79

Why do it?.................................................................................................................. 79 Who are they? ........................................................................................................... 79 Project Managers Role ............................................................................................. 80 Identifying Stakeholders ............................................................................................ 81 Analysing Stakeholders ............................................................................................. 82 Understanding Key Stakeholders .............................................................................. 84 Primary and Secondary Stakeholders ....................................................................... 85 Informing Stakeholders.............................................................................................. 86 Stakeholder Strategies .............................................................................................. 89 Managing Angry Stakeholders................................................................................... 89 Stakeholder Resistance............................................................................................. 90 Dealing with Resistance ............................................................................................ 91 Stakeholder Communication...................................................................................... 91 Internal Politics .......................................................................................................... 92 Power and Influence.................................................................................................. 93 Getting Buy-in .......................................................................................................... 95 Some More Considerations ....................................................................................... 98 Leading Change ........................................................................................................ 99 Final Points.............................................................................................................. 104

Chapter Five

CONCEIVE PROJECT .................................................................................................................... 105

Framework............................................................................................................... 105 Recognise Problem, Need or Opportunity ............................................................... 106 Define Possible Project............................................................................................ 108 Project Classification ............................................................................................... 109 Check Feasibility...................................................................................................... 111 Strategic Fit ............................................................................................................. 112 Business Benefits .................................................................................................... 114 Benefits Management.............................................................................................. 115 Business Case......................................................................................................... 120 Cost-benefit Analysis ............................................................................................... 122 Payback Period........................................................................................................ 126 Return on Investment .............................................................................................. 127 Net Present Value (NPV)......................................................................................... 127 Internal Rate of Return (IRR)................................................................................... 131

Breakeven Analysis ................................................................................................. 131 Other Project Evaluation Tools ................................................................................ 132 Opportunity Cost...................................................................................................... 133 Project Risk and Success Probability ...................................................................... 133 Selection Criteria ..................................................................................................... 135 Sustainable Development........................................................................................ 137 Selection Models ..................................................................................................... 138 Project Charter ........................................................................................................ 140 Summary ................................................................................................................. 142

Chapter Six

IDENTIFY AND ANALYSE WORK ............................................................................................. 143

Identify Work............................................................................................................ 144 Work Breakdown Structure...................................................................................... 146 Analyse Work .......................................................................................................... 153 Project Costs ........................................................................................................... 154 Budgeting ................................................................................................................ 156 Commonsense Estimating....................................................................................... 158 Estimating Methods ................................................................................................. 162 Underestimating....................................................................................................... 163 Overestimating ........................................................................................................ 163 Type of Contract ...................................................................................................... 164 Value Analysis ......................................................................................................... 164 Project Time and Productivity .................................................................................. 165 Estimating Spreadsheet........................................................................................... 168 Single-point and Range Estimates........................................................................... 170 Summary ................................................................................................................. 173

Chapter Seven

SEQUENCE AND SCHEDULE WORK AND RESOURCES ..................................................... 175

Sequence Work ....................................................................................................... 175 Network Diagrams ................................................................................................... 177 Network Construction .............................................................................................. 177 Network Diagram Analysis....................................................................................... 187 PERT Chart and Probabilities.................................................................................. 191 Project Planning Process......................................................................................... 191 Project Duration....................................................................................................... 194 Critical Chain Project Management ......................................................................... 195 Project Management Software ................................................................................ 199 Schedule Work ........................................................................................................ 203 Schedule Table Format ........................................................................................ 203 Schedule Gantt Chart ........................................................................................... 204 MS Project for Scheduling ....................................................................................... 205 Figure 7.33: Task Schedule Gantt Chart ............................................................. 213 Resources ............................................................................................................... 214 Resource Loading.................................................................................................... 215 Resource Levelling .................................................................................................. 216

Breakeven Analysis ................................................................................................. 131 Other Project Evaluation Tools ................................................................................ 132 Opportunity Cost...................................................................................................... 133 Project Risk and Success Probability ...................................................................... 133 Selection Criteria ..................................................................................................... 135 Sustainable Development........................................................................................ 137 Selection Models ..................................................................................................... 138 Project Charter ........................................................................................................ 140 Summary ................................................................................................................. 142

Chapter Six

IDENTIFY AND ANALYSE WORK ............................................................................................. 143

Identify Work............................................................................................................ 144 Work Breakdown Structure...................................................................................... 146 Analyse Work .......................................................................................................... 153 Project Costs ........................................................................................................... 154 Budgeting ................................................................................................................ 156 Commonsense Estimating....................................................................................... 158 Estimating Methods ................................................................................................. 162 Underestimating....................................................................................................... 163 Overestimating ........................................................................................................ 163 Type of Contract ...................................................................................................... 164 Value Analysis ......................................................................................................... 164 Project Time and Productivity .................................................................................. 165 Estimating Spreadsheet........................................................................................... 168 Single-point and Range Estimates........................................................................... 170 Summary ................................................................................................................. 173

Chapter Seven

SEQUENCE AND SCHEDULE WORK AND RESOURCES ..................................................... 175

Sequence Work ....................................................................................................... 175 Network Diagrams ................................................................................................... 177 Network Construction .............................................................................................. 177 Network Diagram Analysis....................................................................................... 187 PERT Chart and Probabilities.................................................................................. 191 Project Planning Process......................................................................................... 191 Project Duration....................................................................................................... 194 Critical Chain Project Management ......................................................................... 195 Project Management Software ................................................................................ 199 Schedule Work ........................................................................................................ 203 Schedule Table Format ........................................................................................ 203 Schedule Gantt Chart ........................................................................................... 204 MS Project for Scheduling ....................................................................................... 205 Figure 7.33: Task Schedule Gantt Chart ............................................................. 213 Resources ............................................................................................................... 214 Resource Loading.................................................................................................... 215 Resource Levelling .................................................................................................. 216

Rescheduling Options.............................................................................................. 218 Worked Example ..................................................................................................... 220 Resource Schedule ................................................................................................. 222 Multi-project Resourcing .......................................................................................... 222 Summary ................................................................................................................. 223

Chapter Eight

PRE-EMPT PROBLEMS ................................................................................................................. 224

Definitions................................................................................................................ 225 Project Risk Factors................................................................................................. 226 Risk Tolerance......................................................................................................... 228 Risk Management Principles ................................................................................... 229 Risk Mismanagement .............................................................................................. 232 Risk and Project Parameters ................................................................................... 233 Risk Management Process...................................................................................... 233 Step One: Risk Identification .................................................................................. 234 Risk Log................................................................................................................... 235 Johari Window of Risk ............................................................................................. 240 Risk Categories ....................................................................................................... 240 Step Two: Risk Analysis ......................................................................................... 241 Risk Impact and Project Parameters ....................................................................... 244 Step Three: Risk Response.................................................................................... 245 Risk Response Effectiveness .................................................................................. 247 Outsourcing Risk ..................................................................................................... 248 Risk Responsibilities................................................................................................ 248 Risk and Probability ................................................................................................. 249 Monte Carlo Simulation ........................................................................................... 250 Risk Response Plans............................................................................................... 250 Step Four: Risk Control .......................................................................................... 251 Risk and Time.......................................................................................................... 252 Project Risk Tolerance............................................................................................. 254 When Risks Become Issues .................................................................................... 254 Post-implementation Risk Evaluation ...................................................................... 256 Miscellaneous Risk Matters ..................................................................................... 256 Defeating Murphy .................................................................................................... 260 Project Managers Challenge................................................................................... 260 Organisation Challenges ......................................................................................... 261 Summary ................................................................................................................. 262

Rescheduling Options.............................................................................................. 218 Worked Example ..................................................................................................... 220 Resource Schedule ................................................................................................. 222 Multi-project Resourcing .......................................................................................... 222 Summary ................................................................................................................. 223

Chapter Eight

PRE-EMPT PROBLEMS ................................................................................................................. 224

Definitions................................................................................................................ 225 Project Risk Factors................................................................................................. 226 Risk Tolerance......................................................................................................... 228 Risk Management Principles ................................................................................... 229 Risk Mismanagement .............................................................................................. 232 Risk and Project Parameters ................................................................................... 233 Risk Management Process...................................................................................... 233 Step One: Risk Identification .................................................................................. 234 Risk Log................................................................................................................... 235 Johari Window of Risk ............................................................................................. 240 Risk Categories ....................................................................................................... 240 Step Two: Risk Analysis ......................................................................................... 241 Risk Impact and Project Parameters ....................................................................... 244 Step Three: Risk Response.................................................................................... 245 Risk Response Effectiveness .................................................................................. 247 Outsourcing Risk ..................................................................................................... 248 Risk Responsibilities................................................................................................ 248 Risk and Probability ................................................................................................. 249 Monte Carlo Simulation ........................................................................................... 250 Risk Response Plans............................................................................................... 250 Step Four: Risk Control .......................................................................................... 251 Risk and Time.......................................................................................................... 252 Project Risk Tolerance............................................................................................. 254 When Risks Become Issues .................................................................................... 254 Post-implementation Risk Evaluation ...................................................................... 256 Miscellaneous Risk Matters ..................................................................................... 256 Defeating Murphy .................................................................................................... 260 Project Managers Challenge................................................................................... 260 Organisation Challenges ......................................................................................... 261 Summary ................................................................................................................. 262

Chapter Nine

PREPARE PROJECT MANAGEMENT PLAN ............................................................................ 263

Executive Summary................................................................................................. 266 Project Purpose ....................................................................................................... 266 Project Goal ............................................................................................................. 266 Planning Assumptions ............................................................................................. 267 Scope ...................................................................................................................... 267 External Dependencies............................................................................................ 268 Deliverables............................................................................................................. 268 Project Constraints .................................................................................................. 268 Key Stakeholders and Appointments....................................................................... 269 Organisation, Roles and Responsibilities ................................................................ 270 Benefits Realisation................................................................................................. 270 Network Diagram..................................................................................................... 271 Schedule.................................................................................................................. 272 Work Packages........................................................................................................ 273 Procurement ............................................................................................................ 274 Monitoring, Control and Variations........................................................................... 274 Quality Management................................................................................................ 276 Budget ..................................................................................................................... 276 Cashflow Forecast ................................................................................................... 276 Risk and Issues ....................................................................................................... 277 Stakeholder Communication.................................................................................... 278 Public Relations....................................................................................................... 278 User Training ........................................................................................................... 278 Project Closure ........................................................................................................ 279 Document Control.................................................................................................... 280 Reality Check .......................................................................................................... 280 Project Plan Approval .............................................................................................. 281

Chapter Ten

PROCURE RESOURCES AND ASSIGN WORK........................................................................ 283

Employees or Contractors ....................................................................................... 284 Types of Providers................................................................................................... 284 Effective Relationship Benefits ................................................................................ 286 Procurement Options............................................................................................... 286 Procurement Decision Flowchart ............................................................................. 288 Procurement Principles............................................................................................ 290 Contract Managers Responsibilities........................................................................ 291 Ethical Behaviour..................................................................................................... 292 Procurement by Tendering ...................................................................................... 292 Solicitation Process ................................................................................................. 294 Conditions of Tender ............................................................................................... 296 Evaluating Contractors and Suppliers...................................................................... 297 Content of Proposals ............................................................................................... 297 Interviewing Contractors .......................................................................................... 298 What is a Contract? ................................................................................................. 299

Chapter Nine

PREPARE PROJECT MANAGEMENT PLAN ............................................................................ 263

Executive Summary................................................................................................. 266 Project Purpose ....................................................................................................... 266 Project Goal ............................................................................................................. 266 Planning Assumptions ............................................................................................. 267 Scope ...................................................................................................................... 267 External Dependencies............................................................................................ 268 Deliverables............................................................................................................. 268 Project Constraints .................................................................................................. 268 Key Stakeholders and Appointments....................................................................... 269 Organisation, Roles and Responsibilities ................................................................ 270 Benefits Realisation................................................................................................. 270 Network Diagram..................................................................................................... 271 Schedule.................................................................................................................. 272 Work Packages........................................................................................................ 273 Procurement ............................................................................................................ 274 Monitoring, Control and Variations........................................................................... 274 Quality Management................................................................................................ 276 Budget ..................................................................................................................... 276 Cashflow Forecast ................................................................................................... 276 Risk and Issues ....................................................................................................... 277 Stakeholder Communication.................................................................................... 278 Public Relations....................................................................................................... 278 User Training ........................................................................................................... 278 Project Closure ........................................................................................................ 279 Document Control.................................................................................................... 280 Reality Check .......................................................................................................... 280 Project Plan Approval .............................................................................................. 281

Chapter Ten

PROCURE RESOURCES AND ASSIGN WORK........................................................................ 283

Employees or Contractors ....................................................................................... 284 Types of Providers................................................................................................... 284 Effective Relationship Benefits ................................................................................ 286 Procurement Options............................................................................................... 286 Procurement Decision Flowchart ............................................................................. 288 Procurement Principles............................................................................................ 290 Contract Managers Responsibilities........................................................................ 291 Ethical Behaviour..................................................................................................... 292 Procurement by Tendering ...................................................................................... 292 Solicitation Process ................................................................................................. 294 Conditions of Tender ............................................................................................... 296 Evaluating Contractors and Suppliers...................................................................... 297 Content of Proposals ............................................................................................... 297 Interviewing Contractors .......................................................................................... 298 What is a Contract? ................................................................................................. 299

Tender Evaluation.................................................................................................... 300 Weighted-attribute Method ...................................................................................... 300 Pricing the Contract ................................................................................................. 303 Tendering Procedures ............................................................................................. 305 Legal Considerations ............................................................................................... 306 Due Diligence .......................................................................................................... 306 Contract Negotiations .............................................................................................. 307 Negotiation Items..................................................................................................... 308 Contracts and Risk .................................................................................................. 312 New Zealand Contract Law ..................................................................................... 313 Written Contracts ..................................................................................................... 317 Drafting the Contract................................................................................................ 318 Layout of Contract ................................................................................................... 319 Force Majeure ......................................................................................................... 321 Contract Interpretation ............................................................................................. 322 Managing the Contract ............................................................................................ 324 Contractors Perspective.......................................................................................... 325 Working Relationships ............................................................................................. 326 Partnering ................................................................................................................ 327 Alliancing ................................................................................................................. 327 Health and Safety .................................................................................................... 329 Managing Disputes .................................................................................................. 330 Construction Contract Act........................................................................................ 333 Mediation ................................................................................................................. 333 Payment Arrangements ........................................................................................... 334 Cashflow.................................................................................................................. 335 Penalties.................................................................................................................. 337 Extension of Time.................................................................................................... 338 Contract Termination ............................................................................................... 338 Post-contract Evaluation.......................................................................................... 339 Final Points.............................................................................................................. 340

Chapter Eleven

CONTROL PROGRESS.................................................................................................................. 341

Project Managers Activities..................................................................................... 342 Project Control ......................................................................................................... 342 Effective Control Systems........................................................................................ 344 General Points on Control ....................................................................................... 344 Cost-effective Project Control .................................................................................. 346 Scope Control .......................................................................................................... 346 Schedule Control ..................................................................................................... 347 Cost Control............................................................................................................. 348 Quality Control ......................................................................................................... 349 Control Planning ...................................................................................................... 350 Monitoring, Measuring and Reporting...................................................................... 351 Variance .................................................................................................................. 353 Monitoring Considerations ....................................................................................... 354

Tender Evaluation.................................................................................................... 300 Weighted-attribute Method ...................................................................................... 300 Pricing the Contract ................................................................................................. 303 Tendering Procedures ............................................................................................. 305 Legal Considerations ............................................................................................... 306 Due Diligence .......................................................................................................... 306 Contract Negotiations .............................................................................................. 307 Negotiation Items..................................................................................................... 308 Contracts and Risk .................................................................................................. 312 New Zealand Contract Law ..................................................................................... 313 Written Contracts ..................................................................................................... 317 Drafting the Contract................................................................................................ 318 Layout of Contract ................................................................................................... 319 Force Majeure ......................................................................................................... 321 Contract Interpretation ............................................................................................. 322 Managing the Contract ............................................................................................ 324 Contractors Perspective.......................................................................................... 325 Working Relationships ............................................................................................. 326 Partnering ................................................................................................................ 327 Alliancing ................................................................................................................. 327 Health and Safety .................................................................................................... 329 Managing Disputes .................................................................................................. 330 Construction Contract Act........................................................................................ 333 Mediation ................................................................................................................. 333 Payment Arrangements ........................................................................................... 334 Cashflow.................................................................................................................. 335 Penalties.................................................................................................................. 337 Extension of Time.................................................................................................... 338 Contract Termination ............................................................................................... 338 Post-contract Evaluation.......................................................................................... 339 Final Points.............................................................................................................. 340

Chapter Eleven

CONTROL PROGRESS.................................................................................................................. 341

Project Managers Activities..................................................................................... 342 Project Control ......................................................................................................... 342 Effective Control Systems........................................................................................ 344 General Points on Control ....................................................................................... 344 Cost-effective Project Control .................................................................................. 346 Scope Control .......................................................................................................... 346 Schedule Control ..................................................................................................... 347 Cost Control............................................................................................................. 348 Quality Control ......................................................................................................... 349 Control Planning ...................................................................................................... 350 Monitoring, Measuring and Reporting...................................................................... 351 Variance .................................................................................................................. 353 Monitoring Considerations ....................................................................................... 354

Problem Finding....................................................................................................... 356 Reporting Variance .................................................................................................. 357 Earned Value........................................................................................................... 357 Percentage Variance ............................................................................................... 362 Indices ..................................................................................................................... 362 Critical Ratio ............................................................................................................ 363 Economic Value Added ........................................................................................... 364 MS Project 2007 and Earned Value......................................................................... 364 Reporting Progress.................................................................................................. 368 Responding to Variances......................................................................................... 368 Trade-off Analysis.................................................................................................... 371 Accelerating the Project........................................................................................... 372 Brooks Law ............................................................................................................. 372 Cost versus Time..................................................................................................... 373 Keeping on Track..................................................................................................... 377 Variations................................................................................................................. 379 Project Cashflow...................................................................................................... 382 Managing Conflict .................................................................................................... 383 Issues Management ................................................................................................ 384 Project Audit ............................................................................................................ 386 Structured Walk-through.......................................................................................... 389 Status Report........................................................................................................... 392 Project Managers Notebook ................................................................................... 394 Meetings .................................................................................................................. 394 Project Transfer ....................................................................................................... 398

Chapter Twelve

PROJECT LEADERSHIP ................................................................................................................ 401

Leaders and Managers............................................................................................ 401 Leadership Challenge.............................................................................................. 402 Leadership Credentials............................................................................................ 403 Communications...................................................................................................... 404 Motivation ................................................................................................................ 409 Delegation ............................................................................................................... 416 Team Building.......................................................................................................... 422 Making the Team Tangible ...................................................................................... 425 Building a Reward System....................................................................................... 425 Team Spirit .............................................................................................................. 426 Virtual Teams .......................................................................................................... 427 Cross-functional Teams........................................................................................... 429 Developing Trust...................................................................................................... 430 Conclusion............................................................................................................... 431

Problem Finding....................................................................................................... 356 Reporting Variance .................................................................................................. 357 Earned Value........................................................................................................... 357 Percentage Variance ............................................................................................... 362 Indices ..................................................................................................................... 362 Critical Ratio ............................................................................................................ 363 Economic Value Added ........................................................................................... 364 MS Project 2007 and Earned Value......................................................................... 364 Reporting Progress.................................................................................................. 368 Responding to Variances......................................................................................... 368 Trade-off Analysis.................................................................................................... 371 Accelerating the Project........................................................................................... 372 Brooks Law ............................................................................................................. 372 Cost versus Time..................................................................................................... 373 Keeping on Track..................................................................................................... 377 Variations................................................................................................................. 379 Project Cashflow...................................................................................................... 382 Managing Conflict .................................................................................................... 383 Issues Management ................................................................................................ 384 Project Audit ............................................................................................................ 386 Structured Walk-through.......................................................................................... 389 Status Report........................................................................................................... 392 Project Managers Notebook ................................................................................... 394 Meetings .................................................................................................................. 394 Project Transfer ....................................................................................................... 398

Chapter Twelve

PROJECT LEADERSHIP ................................................................................................................ 401

Leaders and Managers............................................................................................ 401 Leadership Challenge.............................................................................................. 402 Leadership Credentials............................................................................................ 403 Communications...................................................................................................... 404 Motivation ................................................................................................................ 409 Delegation ............................................................................................................... 416 Team Building.......................................................................................................... 422 Making the Team Tangible ...................................................................................... 425 Building a Reward System....................................................................................... 425 Team Spirit .............................................................................................................. 426 Virtual Teams .......................................................................................................... 427 Cross-functional Teams........................................................................................... 429 Developing Trust...................................................................................................... 430 Conclusion............................................................................................................... 431

Chapter Thirteen

FINISH PROJECT ........................................................................................................................... 432

Early Termination..................................................................................................... 433 Closedown Activities................................................................................................ 435 Project Handover ..................................................................................................... 436 Closure Meeting....................................................................................................... 436 Closure Issues......................................................................................................... 437 Project Success....................................................................................................... 440 Project Failure ......................................................................................................... 441 Client Debrief ........................................................................................................... 441 Project Evaluation.................................................................................................... 442 Documentation ........................................................................................................ 453 Benefits Review....................................................................................................... 454 Deliverable Maintenance ......................................................................................... 455 Closure Event .......................................................................................................... 455 Final Report ............................................................................................................. 456 Summary ................................................................................................................. 457

Chapter Fourteen

F I N AL COMMENTS .................................................................................................................... 459

Framework............................................................................................................... 459 Communications...................................................................................................... 460 Project Management Office ..................................................................................... 460 Organisation Structure............................................................................................. 462 Project Sponsorship................................................................................................. 462 Project Constraints .................................................................................................. 462 Synergy ................................................................................................................... 463 Stakeholder Management........................................................................................ 464 Project Success....................................................................................................... 465 Politics ..................................................................................................................... 465 Multi-project Management ....................................................................................... 466 Mega-projects.......................................................................................................... 468 Organising for Project Management ........................................................................ 469 Project Management Maturity.................................................................................. 471 Future of Project Management ................................................................................ 472 Tail Piece................................................................................................................. 473

Appendix One

GLOSSARY...................................................................................................................................... 474

Appendix Two

ACRONYMS .................................................................................................................................... 487

Appendix Three

PROJECT CHARTER TEMPLATE................................................................................................ 489

Chapter Thirteen

FINISH PROJECT ........................................................................................................................... 432

Early Termination..................................................................................................... 433 Closedown Activities................................................................................................ 435 Project Handover ..................................................................................................... 436 Closure Meeting....................................................................................................... 436 Closure Issues......................................................................................................... 437 Project Success....................................................................................................... 440 Project Failure ......................................................................................................... 441 Client Debrief ........................................................................................................... 441 Project Evaluation.................................................................................................... 442 Documentation ........................................................................................................ 453 Benefits Review....................................................................................................... 454 Deliverable Maintenance ......................................................................................... 455 Closure Event .......................................................................................................... 455 Final Report ............................................................................................................. 456 Summary ................................................................................................................. 457

Chapter Fourteen

F I N AL COMMENTS .................................................................................................................... 459

Framework............................................................................................................... 459 Communications...................................................................................................... 460 Project Management Office ..................................................................................... 460 Organisation Structure............................................................................................. 462 Project Sponsorship................................................................................................. 462 Project Constraints .................................................................................................. 462 Synergy ................................................................................................................... 463 Stakeholder Management........................................................................................ 464 Project Success....................................................................................................... 465 Politics ..................................................................................................................... 465 Multi-project Management ....................................................................................... 466 Mega-projects.......................................................................................................... 468 Organising for Project Management ........................................................................ 469 Project Management Maturity.................................................................................. 471 Future of Project Management ................................................................................ 472 Tail Piece................................................................................................................. 473

Appendix One

GLOSSARY...................................................................................................................................... 474

Appendix Two

ACRONYMS .................................................................................................................................... 487

Appendix Three

PROJECT CHARTER TEMPLATE................................................................................................ 489

Appendix Four

ESTIMATING TIPS........................................................................................................................ 492

Types of Estimates .................................................................................................. 492 Dont Pad the Estimate ............................................................................................ 494 Use the Right People............................................................................................... 494 History Helps ........................................................................................................... 494 Work Breakdown Structure...................................................................................... 495 Parametric Modelling ............................................................................................... 496 Negotiate the Equilibrium......................................................................................... 497 Staged Estimating.................................................................................................... 497 Learning Curve Allowance....................................................................................... 498 Beware the Mythical Man-month ............................................................................. 498 Some Contractors.................................................................................................... 499 Heed the Mob .......................................................................................................... 499 Allow for Murphy...................................................................................................... 499 Use the Delphi Technique ....................................................................................... 500 Apply the PERT Formula ......................................................................................... 500 Utilisation and Productivity....................................................................................... 501 Burdened Labour Rate ............................................................................................ 501 Unchecked Optimism............................................................................................... 501 Before We Estimate................................................................................................. 502 Check Project Priority .............................................................................................. 502 Use an Estimating Process...................................................................................... 502 Expected Monetary Value........................................................................................ 502 Changes are Inevitable............................................................................................ 503 Beware Bias ............................................................................................................ 503 Top-down and Bottom-up ........................................................................................ 504 Pricing...................................................................................................................... 504 Validate Old Estimates ............................................................................................ 504 Client Reaction ........................................................................................................ 505 Estimating Package................................................................................................. 505 Duration ................................................................................................................... 505 Assumptions ............................................................................................................ 506 Simulation................................................................................................................ 506 Estimating Costs...................................................................................................... 507 Spreadsheet ............................................................................................................ 507 Parkinsons Law....................................................................................................... 507

Appendix Five

PROJECT RISK AND PROBABILITY.......................................................................................... 508

Worked Exercise...................................................................................................... 517

Appendix Six

ESTIMATING CHECKLIST .......................................................................................................... 520

Evaluation................................................................................................................ 522 Productivity .............................................................................................................. 522

Appendix Four

ESTIMATING TIPS........................................................................................................................ 492

Types of Estimates .................................................................................................. 492 Dont Pad the Estimate ............................................................................................ 494 Use the Right People............................................................................................... 494 History Helps ........................................................................................................... 494 Work Breakdown Structure...................................................................................... 495 Parametric Modelling ............................................................................................... 496 Negotiate the Equilibrium......................................................................................... 497 Staged Estimating.................................................................................................... 497 Learning Curve Allowance....................................................................................... 498 Beware the Mythical Man-month ............................................................................. 498 Some Contractors.................................................................................................... 499 Heed the Mob .......................................................................................................... 499 Allow for Murphy...................................................................................................... 499 Use the Delphi Technique ....................................................................................... 500 Apply the PERT Formula ......................................................................................... 500 Utilisation and Productivity....................................................................................... 501 Burdened Labour Rate ............................................................................................ 501 Unchecked Optimism............................................................................................... 501 Before We Estimate................................................................................................. 502 Check Project Priority .............................................................................................. 502 Use an Estimating Process...................................................................................... 502 Expected Monetary Value........................................................................................ 502 Changes are Inevitable............................................................................................ 503 Beware Bias ............................................................................................................ 503 Top-down and Bottom-up ........................................................................................ 504 Pricing...................................................................................................................... 504 Validate Old Estimates ............................................................................................ 504 Client Reaction ........................................................................................................ 505 Estimating Package................................................................................................. 505 Duration ................................................................................................................... 505 Assumptions ............................................................................................................ 506 Simulation................................................................................................................ 506 Estimating Costs...................................................................................................... 507 Spreadsheet ............................................................................................................ 507 Parkinsons Law....................................................................................................... 507

Appendix Five

PROJECT RISK AND PROBABILITY.......................................................................................... 508

Worked Exercise...................................................................................................... 517

Appendix Six

ESTIMATING CHECKLIST .......................................................................................................... 520

Evaluation.....................................................................