Solution Manual for Project Management: Achieving Competitive Advantage, 5th Edition

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Solutions ManualForProject Management:Achieving Competitive AdvantageFifth EditionJeffrey K. Pinto,Pennsylvania State UniversityPrepared byJeffrey K. Pinto,Pennsylvania State University

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1CHAPTER ONEIntroductionWhy Project Management?Chapter OutlinePROJECT PROFILECase—Development Projects that are Transforming Africa1.1THE IMPORTANCE OF PROJECTS1.2WHAT IS A PROJECT?General Project CharacteristicsPROJECT PROFILEPresident Obama Signs the Program Management Improvement and AccountabilityAct1.3WHY ARE PROJECTS IMPORTANT?PROJECT PROFILELondon’s Crossrail: Europe’s Largest Construction Project1.4PROJECT LIFE CYCLESPROJECT MANAGERS IN PRACTICETheresa Hinkler, R. Conrader Company1.5DETERMINANTS OF PROJECT SUCCESSPROJECT MANAGEMENT RESEARCH IN BRIEFAssessing Information Technology (IT) Project Success1.6DEVELOPING PROJECT MANAGEMENT MATURITY1.7EMPLOYABILITY SKILLS1.8PROJECT ELEMENTS AND TEXT ORGANIZATIONSummaryKey TermsDiscussion QuestionsCase Study 1.1 MegaTech, Inc.Case Study 1.2 The IT Department at Hamelin HospitalCaseStudy 1.3 Disney’s Expedition EverestCase Study 1.4“Throwing Good Money after Bad”: the BBC’s Digital Media InitiativeInternet ExercisesPMP Certification Sample QuestionsAnswersNotes

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2TRANSPARENCIESNote for Instructors: To present transparencies in class, please download the PowerPointPresentations (available on www.pearsonhighered.com) that accompanies this product.The PPT ISBN is 9780134730479.1.1 GENERAL PROJECT CHARACTERISTICS1.Projects are ad hoc endeavors with a clear life cycle.2.Projects are building blocks in the design and execution of organizationalstrategies.3.Projects are responsible for the newest and most improved products, services, andorganizational processes.4.Projects provide a philosophy and strategy for the management of change.5.Project management entails crossing functional and organizational boundaries.6.The traditional management functions of planning, organizing, motivation,directing, and control apply to project management.7.The principal outcomes of a project are the satisfaction of customer requirementswithin the constraints of technical, cost, and schedule objectives.8.Projects are terminated upon successful completion of performance objectives.1.2 DIFFERENCES BETWEEN PROCESS AND PROJECT MANAGEMENTProcessProjectRepeat process or productNew process or productSeveral objectivesOne objectiveOngoingOne shot—limited lifePeople are homogenousMore heterogeneousWell established systems inSystems must be created toplace to integrate effortsintegrate effortsGreater certainty ofGreater uncertainty ofperformance, cost, scheduleperformance, cost, schedulePart of line organizationOutside of line organizationBastions of establishedViolates establishedpracticepracticeSupports status quoUpsets status quo

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31.3 WHY ARE PROJECTS IMPORTANT?1.Shortened product life cycles.2.Narrow product launch windows.3.Increasingly complex and technical products.4.Global markets.5.An economic period marked by low inflation.1.4 PROJECT LIFE CYCLESPekka RouhiainenMarch 26, 2000Project Life Cycle StagesConceptualizationPlanningExecutionTerminationManhours

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51.5 PROJECT SUCCESS—THE NEW QUADRUPLE CONSTRAINTSuccessClientAcceptanceBudgetSchedulePerformance

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61.6 PROJECT MANAGEMENT MATURITY—A GENERIC MODEL1.7 EMPLOYABILITY SKILLSMastering project management will contribute to key skills employers are looking for:1.Communication2.Critical Thinking3.Collaboration4.Knowledge Application and Analysis5.Business Ethics and Social Responsibility6.Information Technology Application and Computing Skills7.Data LiteracyLow MaturityAd hoc process, no common language, little supportModerate MaturityDefined practices, training programs,organizational supportHighMaturityInstitutionalized,seeks continuousimprovementLow MaturityAd hoc process, no common language, little supportModerate MaturityDefined practices, training programs,organizational supportHighMaturityInstitutionalized,seeks continuousimprovement

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71.8 PMBoK KNOWLEDGE AREAS

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8DISCUSSION QUESTIONS1.1 What are some of the principal reasons why project management has become such apopular business tool in recent years?In today’s market, the length of product life cycles is shortening. This means businessesare under pressure to produce new or improved products at an increasingly rapid pace.Growing global markets, consumer tastes, and competition demand that productsconstantly be improved to be better, faster, and sleeker and offer more features. Mostorganizations are planning their next product or product improvement as their latestinnovation is just on its way out the door. Under conventional business practices,keeping up with this demand for innovation can be difficult. Project management offerscompanies a manner in which to become more innovative and to develop products at afaster pace.1.2 What do you see as the primary challenges to introducing a project managementphilosophy to most organizations? That is, why is it difficult to shift to a project-basedapproach in many companies?Many companies encounter a resistance to change within their personnel that makesimplementing a new approach, such as project based, difficult. Employees have to betrained in the new processes and learn to implement it into their current role. Oftentimes,employees are averse to a large shift in current practices due to uncertainty of theoutcome.1.3What are the advantages and disadvantages of using project management?Advantages:Innovative, produce new ideas and new productsGeared toward accomplishing a specific goalAimed at customer satisfactionDisadvantages:Inaccurate cost estimates during initial stages may cause project to fail due to lackof resourcesLow success rate in some industriesRequires heavy commitment by staff1.4 What key characteristics do all projects possess?Projects:are temporary operations with a defined life spanhelp develop and execute organizational strategies and goalsare sources of innovation and progressstimulate internal collaboration between members of various functional areas

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9are limited by resource and time constraintsend when objectives are successfully reached1.5 Describe the basic elements of the project life cycle. Why is an understanding of thelife cycle relevant for our understanding of projects?The project life cycle includes the stages of the project’s development. The basicelements of the cycle include:conceptualization: outlines project goal, scope of work, identifies requiredresources and stakeholdersplanning: specifications, timetables and other plans are created, work packagesare broken out, assignments are made and process for completion is definedexecution: actual work of project takes place, majority of teamwork is performedand, characteristically, majority of costs are incurredtermination: project is completed and passed on to customer, resources arereassigned and team members disbandedLife cycles provide a guiding point for determining the scope and resource requirementsof specific projects. By outlining a project’s life cycle, many challenges and potentialpitfalls can be pinpointed. More generally, an understanding of life cycles lends itself toa better understanding of how projects function within an organization and how theydiffer from conventional forms of corporate process.1.6 Think of a successful project and an unsuccessful project with which you are familiar.What distinguishes the two, both in terms of the process used to develop them and theiroutcomes?This question is intended for classes with students who have had some experience withprojects in the past. It seeks to get them to examine the causes of success and failurefrom their own experience. Instructors should then begin developing a list of the variouscauses of success and failure as a point of discussion.1.7 Consider the Expedition Everest case at the end of the chapter: what elements inDisney’s approach to developing itstheme rides do you find particularly impressive?How can a firm like Disney balance the need for efficiency and smooth development ofprojects with the desire to be innovative and creative? Based on this case, what principlesappear to guide its development process?This case lets students comment on the particularly appealing elements in Disney’sproject management approach; for example, their attention to detail and willingness notto cut corners in terms of cost or schedule to make sure that the ride offers a memorableexperience. The need to balance efficiency and creativity is an interesting one because itgets to the heart of project trade-offs. There are always more trips to be taken, more timeto be spent, more artifacts that can be gathered to continuously “tweak” the ride;however, ultimately, they must also adhere to a roll-out schedule that gets the projectcompleted. How much is enough? How much is too much? These form the basis of

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10great in-class discussions. Finally, it is important to get the class to consider other factorsthat must weigh into project development decisions, like safety and general appeal. Forexample, creating a ride that is too intense for young children would violate Disney’s“kid friendly” philosophy. Likewise, all new rides must first be completely safe for thepassengers, so any design issues always must be subordinated to safety.1.8 Consider the six criteria for successful IT projects. Why is IT project success often sodifficult to assess? Make a case for some factors being more important than others.IT project success is often difficult to assess because the criteria for success—systemquality, information quality, use, user satisfaction, individual impact, and organizationalimpact—are not easy to accurately measure. Customer feedback related to usersatisfaction, system quality, and impact may vary from user to user.For instance, whilesomeone in insurance claims may find the system user friendly and beneficial toeveryday tasks, an employee in actuary may find it cumbersome and difficult to navigate.When it comes to IT projects and the criterion above, user background, training, andexperience could greatly affect the success rate of the project. These factors may not befully known during initial planning and implementation stages.However, criteria such as system/information quality and use may be easier to assess.The team should be able to determine whether the designed system meets thespecifications of the customer. All specifications should have been determined from thebeginning, so upon completion test runs should determine if the system meets qualitystandards. In the area of use, following implementation, in most cases, it is possible totrack use. Due to their ability to be more concretely measured, these factors, combinedwith the overall satisfaction of the customer, may be more important in determiningsuccess of the project than other more arbitrary measures.1.9 As organizations seek to become better at managing projects, they often engage inbenchmarking with other companies in similar industries. Discuss the concept ofbenchmarking. What are its goals? How does benchmarking work?Benchmarking compares the performance of a company to that of industry competitorsand in some cases, for instance, where procedures or functions are similar, to that ofsuperior performers in other industries. To set benchmarks for a company, first a leaderin the industry is selected. Then, the company gathers data of that leader’s performancemeasures. The data is analyzed and gaps between the leader/benchmarks and thecompany are noted. The company then sets goals and strives to meet the benchmarkingstandards. The goal of benchmarking is, therefore, to seek out weak performance areaswithin the company and set goals for improvement.

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111.10 Explain the concept of a project management maturity model. What purpose does itserve?Implementing project management occurs in phases over time. Companies evolvethrough stages of project management. Project management maturity models are a wayto help ensure that companies do so in the correct method and at a competitive pace.Maturity models provide a starting point for companies new to project management.Project maturity models offer businesses a way to map out necessary steps to becomingcompetitive through project-based work. Maturity models assess a specific company’scurrent practices (related to projects), establish the company’s position in relation to itscompetitors, and provide guidelines for improvement. They use industry data to establisha series of benchmarks. Based on industry competitors, they can then determine stagesrequired as well as how quickly a company should develop. The company can thenfollow the model to achieve the highest level of ability in each pertinent projectmanagement area.1.11 Compare and contrast the four project management maturity models shown in Table1.3. What strengths and weaknesses do you perceive in each of the models?The four models each use five levels beginning with an initial ad hoc or sporadic use ofproject management and ending with a fully integrated project management system withemphasis on innovation and continuous improvement. Other similarities among themodels include an element of benchmarking or use of industry standards to measureproject management performance. The models do vary on the relative pace ofinnovation. For instance,the ESI’s International Project Framework develops moreslowly in early stages than that of Kerzner’s Project Management Maturity Model. Inaddition, some models focus more on learning while others are more directed at control.Kerzner’s discusses training and curriculum while SEI’s Capability Maturity ModelIntegration outlines steps for control and assessment of results.Center for Business PracticesStrengths: It is mapped out at an appropriate pace; there are no broad leaps from onestage to the next. Also, it emphasized the role of project management as corporateprocesses, which means project management becomes part of the working firm, not justpart of the job duties of a specific group or team.Weaknesses: This model lacks direction in management training. It refers tomanagement awareness and support, but does not mention training or formal training.

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12Kerzner’s Project Management Maturity ModelStrengths: Kerzner’s does a much better job of designating atwhat levels managers needto be trained or curriculum developed.Weaknesses: Benchmarking does not come in until level 4, which maybe a little late. Afirm in this model would have already integrated project management processes; trying tomake any significant adjustments (in accordance with benchmarking figures) after thisintegration may be difficult.ESI International’s Project FrameworkStrengths: This model has two strong qualities. The first is its overt emphasis oninnovation and continuous improvement. Secondly, the model emphasizes the need forintegration and understanding throughout the firm.Weaknesses: The movement between levels 1 through 3 may cause problems for a firm.In level 1, processes are ill-defined and have little organizational support; this changeslittle as the corporation moves to level 2, which has no project control processes. Then,in level 3 processes are tailored. Given the undefined nature of processes prior to level 3,it may be hard to reach this goal initially. This may cause companies to become stalled inlevel 3.SEI’s Capability Maturity Model IntegrationStrengths: Quality is a top concern even in early stages of this model. Analysis andinsurance procedures are developed at different stages to ensure standards are met.Weaknesses: On the other hand, the attention to testing may also hinder projectmanagement integration. There may be an overabundance of measures to control,analyze, and qualify in this system. While quality is of importance, the level of timecommitment to those procedures may be the crux of this model. Team members maybecome frustrated with the project process if they (or their work) are constantly beingmeasured, tested, and re-measured.

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13CASE STUDIESCase Study 1.1 MegaTech, Inc.MegaTech, Inc. is designed to highlight some of the reasons why an organization that hadoperated in a relatively stable and predictable environment would seek to move to anemphasis on project-based work. The trigger event, in this case is the advent of theNAFTA treaty, which opened up competition on a more price-competitive basis.Questions1. What is it about project management that offers MegaTech a competitiveadvantage in its industry?Project management techniques will allow the firm to combine the advantages of internalefficiency with external (environmental) responsiveness. For example, it was determinedthat successful firms offer frequent product updates, which MegaTech’s move hasallowed them to exploit. It has also promoted a team-based atmosphere that isencouraging cooperation and unity of effort among the different functional departments.2. What elements of the marketplace in which MegaTech operates led the firm tobelieve that project management would improve its operations?The intense, new competitive nature of the marketplace impels companies to find newmethods for competitive advantage. With many new competitors and serious pricepressure, success will require firms to be fast to market, hold the lid on costs, offerfrequent upgrades and new products—all while encouraging an atmosphere of risk takingand cooperation.Case Study 1.2 The IT Department at Hamelin HospitalThe IT Department case shows the prevalence of projects in settings that are perhaps notas obvious (in this case, a large hospital). The case is designed to get students tounderstand the ubiquitous nature of project-based work in our modern public and privateorganizations. It also demonstrates career paths and how successful work on projects isoften rewarded with corporate success. Projects are not a distraction or a side-line; theyare the principalmeans by which the IT department’s operations are demonstrated.Questions1. What are the benefits and drawbacks of starting most new hires at the help deskfunction?

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14Most new hires start at the help desk function, where they can become familiar with thesystem, learn about problem areas, become sensitive to user’s frustrations and concerns,and understand how the IT department affects all hospital operations. Students may alsonote that though mundane, working at the help desk forces people to “pay their dues” bydemonstrating their commitment to the organization prior to being trusted with enhancedresponsibilities.2. What are the potential problems with requiring project team members to beinvolved in multiple projects at the same time? What are the potential advantages?One serious disadvantage is that it stretches departmental resources very thin; people canbe involved in multiple projects and are likely to start letting commitments slip if they arenot careful. Also, it is often difficult to move from assignment to assignment quickly andseamlessly. Instead, team members experience times when they are not productive asthey try and multitask across several projects at once. Among the advantages are that thisconfiguration allows the project team members to work with many different people,including several project managers, experiencing different managerial styles andinterpersonal relationships. It also keeps team members interest high because theirinvolvement in multiple teams and projects ensures that they do not become bored byroutine.3.What signals does the department send by making “project manager” the highestposition in the department?The main signal is the idea that the career path for successful IT professionals runsdirectly through project-based work. They cannot be successful in this organizationunless they are competent at first serving in and then running projects.Case Study 1.3Disney’s Expedition EverestThe Expedition Everest case is an example of the extreme attention to detail that Disneypays in all of their rides. Their management is a combination of careful planning coupledwith the imagination and knack for visual effects for which the company is well known.The case tells the story of the development of the ride, the numerous steps Disney wentthrough to get every detail as accurate as possible, and reflects on their overall approachto project management.Questions1. Suppose you were a project manager for Disney. Based on the information in thiscase, what do you think the company uses when designing a new ride? That is, howwould you prioritize the needs for addressing project cost, schedule, quality, andclient acceptance? What evidence supports your answer?

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