Project Management Course Lecture 2

Project Management Course Information

• Course number: 364.1.1251
• Lecture 2: Initiating
• Topics covered: Organizational structures, PMO, multi-criteria decision-making (AHP)
• Date: 11/11/2024

Project Definition

• Project: A temporary endeavor to create a unique product, service, or result. (PMBOK® Guide, 2021)
• Key project phases: Initiation, Execution, Planning, Monitoring & Controlling, Closing

Course Goals

• Academia-oriented: Students will grasp theoretical and state-of-the-art terms, methods, and models in project management (PM).
• Industry-oriented: Students will create and practice hands-on tools, drawing insights from real-world best practices and case studies in PM.

Exit Criteria for Lecture 2

• Classify project management (PM) environmental characteristics.
• Outline project management office (PMO) types and roles.
• Understand the initiating process components.
• Practice multiple-criteria decision-making (AHP) methodology for evaluating alternatives.

Project Management Environments

• Internal characteristics: Aspects within the organization (e.g., process assets, governance documentation, data assets, knowledge assets, security & safety, organizational culture, infrastructure, resources availability).
• External characteristics: Aspects outside the organization (e.g., marketplace conditions, social & cultural issues, regulations, financial aspects, physical environment).

PM Internal Environment Examples

• Process assets: Tools, methods, templates, project management office (PMO) resources
• Governance documentation: Organization policies
• Data assets: Databases, libraries, metrics
• Knowledge assets: Lessons learned from past projects, subject matter experts
• Security and safety: Data protection, facility access, confidentiality
• Organizational culture: Vision, mission, values, norms, ethics, leadership style
• Infrastructure: Equipment, IT hardware, IT software, collaboration tools
• Resource availability: People, materials, contracting & procurement constraints, approved contractors

PM External Environment Examples

• Marketplace conditions: Competitors, market share, technology trends
• Social & cultural issues: Political climate, local traditions, holidays
• Regulations: National and international laws on security, employment, licensing
• Commercial database: Standardized cost data, industry risk information
• Academic research: Industry studies, publications, benchmarking
• Financial aspects: Exchange rates, interest, taxes
• Physical environment: Weather, working conditions

PM Organizational Structures

• Functional organization: Departments specialize in areas, projects managed through the management hierarchy.
• Matrix organization: Project manager coordinates project efforts through functional units for specific tasks.
• Projectized organization: Self-sufficient project team with complete control of resources to achieve project goals (used for complex, long-term, disparate projects).

Project Management Office (PMO)

• PMO: A management structure standardizing project-related governance processes and promoting resource, methodology, tool, and technique sharing. (PMBOK® Guide, 2021)

PM initiating documents and abbreviations

• Request for Information (RFI): Document used to get information from a seller regarding a product, service or skill.
• Request for Proposal (RFP): Document for requesting proposals on products or services.
• Statement of Work (SOW): Defines the work expected in a contract.

Multiple-Criteria Methodology for Evaluating Alternatives

• Analytical Hierarchy Process (AHP): A multi-criteria methodology for evaluating and ranking project alternatives used in the initiating phase before project start. (developed by Thomas Saaty)

Multiple-Criteria Decisions

• Project alternatives/approaches/solutions
• Deciding on contractors/suppliers
• Ranking and weighting decision criteria

Analytical Hierarchy Process (AHP) Algorithm

• Define problem and objective.
• Structure hierarchy from top to criteria.
• Construct pairwise comparison matrices.
• Calculate weights and consistency.

AHP Scale for Pair-wise Comparison

• Numerical scale (1 to 9) to assess importance of factors. E.g., 1=Equal importance, 3=Moderate Importance, 7=Very strong importance

AHP Scale for Consistency Ratio Calculation

• Scale for consistency ratio calculations used for assessing decision consistency.

AHP Examples

• Example 1: US Army cargo handling.
• Example 2: Selecting the most suitable contractor.
• Example 3: Project selection from a portfolio.

AHP Tools

• Online and Microsoft Excel templates.

Wrap-up and Exercise 1

• Key topics from lecture: People, Technology & Engineering, Processes.
• Assignment Exercise 1

Closing Words

• Focus on people, decision-making, and human motivation.

Inspirational Closing

• A quote by PJ Abdul Kalam emphasizes the importance of learning from mistakes and persevering through challenges.