PROJECT MANAGER’S HANDBOOK Applying Best Practices across Global Industries David I. Cleland, Ph.D. Editor Professor Emeritus, School of Engineering University of Pittsburgh Pittsburgh, Pennsylvania Lewis R. Ireland, Ph.D. Editor President American Society for the Advancement of Project Management Clarksville, Tennessee New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. Manufactured in the United States of America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. 0-07-154271-X The material in this eBook also appears in the print version of this title: 0-07-148442-6. All trademarks are trademarks of their respective owners. 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DOI: 10.1036/0071484426 For more information about this title, click here CONTENTS Preface xv Acknowledgments xvii Introduction xix Part 1 Examples of Projects Found in Specific Countries Chapter 1. Software and Other Project Management Practices in India S.Srinivasan,Chinmay Jain and Bopaya Bidanda 3 1.1. Introduction / 3 1.2. Mini Projects in the Corporate Sector / 4 1.3. Small and Medium-Sized Projects in the Government and Public Sectors / 5 1.4. Major Projects in the Corporate and Public Sectors / 6 1.5. Indian Venture Capital Industry / 8 1.6. Future Problems in Public Projects Execution / 11 1.7. Organizational Aspects in Indian Practice / 11 1.8. Project Management Practices and Issues in the Indian Software Industry / 12 1.9. Project Management Education in India / 20 1.10. Conclusion / 20 1.11. Acknowledgments / 21 Chapter 2. The Sydney 2000 Olympic Games Brian R.Kooyman and Jonathan A.Shahady 23 2.1. Preamble / 23 2.2. History of Sydney’s Successful Bid for the 2000 Summer Olympics / 25 2.3. Objectives and Commitment of the Sydney 2000 Games / 26 2.4. The Early Days of Organizing the Games / 26 2.5. The Various Elements of the Project / 31 2.6. The Progression of Games Preparation and Managing Change / 36 2.7. Testing the Planning Theories, Commissioning, and Moving to Shutdown / 39 2.8. The Application of Project Management Principles to Delivering the Games / 41 2.9. The Outcome: A Successful Games! / 44 2.10. References / 44 Chapter 3. Project Management in Aotearoa (New Zealand) Stephen Harrison 47 3.1. National Heritage / 47 3.2. Cultural Roadblocks to Project Management / 48 3.3. Practical Earned Value / 48 3.4. Stakeholder Management / 54 3.5. Results of Implementation / 59 3.6. Conclusion / 60 3.7. References / 60 v vi CONTENTS Chapter 4. An Evaluation of Major Infrastructure Projects in France: A “Project Finance”Perspective Professor Christophe N.Bredillet 61 Abstract / 61 4.1. Setting Up the Project Finance Scene / 61 4.2. Complexity of Project Finance / 62 4.3. Project Finance Categorizations / 65 4.4. A Case Study: The Eiffel Tower, One of the First Modern BOT/PPP / 68 4.5. BOT: A Trendy Model / 69 4.6. Two Different Approaches: French and Anglo-Saxon Models / 70 4.7. Delegation of Public Utility in France from the Middle Ages to the Present / 73 4.8. Conclusion: The Tent Metaphor / 74 4.9. Acknowledgments / 75 4.10. References / 75 Chapter 5. The Role of Project Management in Spanish Projects Alfonso Bucero 77 5.1. Project Management in Spain / 77 5.2. The CG Project / 78 5.3. Customer Background / 78 5.4. Why Change was Needed / 78 5.5. The Project / 80 5.6. Difficulties / 82 5.7. The Process / 82 5.8. The Team / 86 5.9. The Results / 90 5.10. Summary / 92 5.11. References / 93 Part 2 Examples of Projects from Specific Environments Chapter 6. Managing Projects Financed by International Lending Agencies Robert Youker 97 6.1. Introduction / 97 6.2. What are International Development (ID) Projects? / 98 6.3. Problems in Managing ID Projects / 102 6.4. Conclusion / 105 6.5. References / 105 Chapter 7. Managing Transnational Projects Miles Shepherd 107 7.1. Introduction / 107 7.2. Outline of Issues / 108 7.3. Culture / 108 7.4. Leadership / 113 7.5. Communications / 116 7.6. Physical Aspects / 119 7.7. Conclusion / 122 7.8. Further Readings / 122 7.9. Web References / 122 CONTENTS vii Chapter 8. Managing Projects in Health Systems Beaufort B.Longest 123 8.1. Key Definitions and Concepts / 123 8.2. The Core Activities in Project Management / 126 8.3. Summary / 138 8.4. References / 139 Chapter 9. Managing International Project Management Training Clayman C.Myers 141 9.1. Overview / 141 9.2. Bosnia and Herzegovina / 141 9.3. The Occupied Territories (Palestine) / 143 9.4. Ukraine / 146 9.5. Russian TOT Course / 147 9.6. Peoples Republic of China / 148 9.7. Macedonia / 149 9.8. Summary / 150 Chapter 10. Cross-Cultural Project Management on Major-Sized Global Oil and Gas Plant Projects Hiroshi Tanaka 151 10.1. Introduction / 151 10.2. Value Chain of Oil and Gas Plant Projects / 152 10.3. Rationale of Joint Venture Project Organizations / 153 10.4. JV Management Structure / 156 10.5. Project Management Features / 160 10.6. Lessons Learned / 163 10.7. Acknowledgments / 165 10.8. References / 165 Part 3 Project Management Government Organizations Chapter 11. Elements of Successful Project Management at the National Institute of Standards and Technology Thomas R.Rhodes 169 11.1. Introduction / 169 11.2. Nature of NIST Projects and Programs / 171 11.3. NIST Management and Projects / 173 11.4. Practical Considerations and Guidance for Effective Project Management / 175 11.5. Choosing and Justifying a Project / 180 11.6. Key Ingredients and Practices for Successful Projects / 181 11.7. Summary / 187 Chapter 12. Project Management Success at the Central Intelligence Agency Sean E.O’Hara 189 12.1. A Quick Overview of the Central Intelligence Agency / 189 12.2. Project Management Experience and Expertise / 192 12.3. Effective Stakeholder Management / 192 12.4. “Briefing Up”: Project Review Boards / 194 12.5. The Budget Cycle / 196 viii CONTENTS 12.6. Leadership and the Project Manager / 196 12.7. Communications / 197 12.8. Managing with a Project Schedule / 198 12.9. Lessons Learned / 199 12.10. Project Management Methodology / 200 12.11. Project Management Training and Certification / 201 12.12. Project Management Services / 202 12.13. Parting Words / 203 12.14. Acknowledgments / 204 Chapter 13. Strategies and Results in the Design and Implementation of a Project Management Program for a State Government Tim Jaques and Jonathan Weinstein 205 13.1. Introduction / 206 13.2. Leadership: Project Management Success Starts Here / 207 13.3. Project Management Organization and Structure / 211 13.4. Standards and Processes / 215 13.5. Training, Mentoring, and Certification / 219 13.6. Planning and Execution / 221 13.7. Summary / 225 13.8. Acknowledgments / 225 Chapter 14. Evaluating Project Management Effectiveness of Boston Big Dig and Three Gorges Dam in China Young Hoon Kwak 227 Abstract / 227 14.1. Boston Central/Artery Tunnel Project / 227 14.2. Three Gorges Dam in China / 231 14.3. Acknowledgments / 235 14.4. References / 235 Chapter 15. Project Risk Management for Alaska Oil and Gas Capital Projects Mike Fisher and Jang W.Ra 237 Abstract / 237 15.1. Introduction / 238 15.2. Sources of Project Risk / 240 15.3. Risk Analysis and Methodology / 242 15.4. Risk Management Planning / 242 15.5. Risk Identification / 246 15.6. Qualitative Risk Analysis / 248 15.7. Risk Response Planning / 253 15.8. Risk Register / 254 15.9. Conclusion / 264 15.10. References / 265 Part 4 Project Management Organizational Functions Chapter 16. Legal Considerations in Managing a Nuclear Plant Decommissioning Randall L.Speck 269 16.1. Introduction / 269 16.2. Background on Connecticut Yankee / 270 16.3. Project Characteristics and Legal Framework / 271 CONTENTS ix 16.4. Connecticut Yankee’s Reaction to Its Legal Framework / 274 16.5. Lessons Learned / 280 16.6. Conclusion / 282 16.7. References / 282 Chapter 17. Using Integrated Project Management to Improve Outsourcing Strategy and Business Results Gregory A.Garrett 283 Abstract / 283 17.1. Introduction / 284 17.2. Integrated Project Management (IPM) Life Cycle (5 Phases) / 284 17.3. Case Study: NCR / 287 17.4. Case Study: Hewlett-Packard / 288 17.5. Case Study: Lockheed Martin / 288 17.6. Integrated Project Management (IPM) Life Cycle: Lessons Learned / 289 17.7. First Project Element: Customers’Outsourcing Needs and Goals / 289 17.8. Second Project Element: Supplier Value Chain / 291 17.9. Third Project Element: Project Communications / 293 17.10. Fourth Project Element: Project Teamwork / 294 17.11. Fifth Project Element: Integrated PM Discipline / 295 17.12. The Integrated Project Management (IPM) Life Cycle and Model / 296 17.13. References / 296 Chapter 18. Connecting Projects to Corporate Strategy Paul Varella and Kam Jugdev 297 18.1. Overview / 297 18.2. Introduction / 298 18.3. Strategic Management Process / 299 18.4. Crafting Winning Strategies / 301 18.5. Project Management Resources / 304 18.6. Project Management as a Core Competence / 308 18.7. Conclusion / 309 18.8. Bibliography / 310 Chapter 19. PMO Creation within Financial Services Companies Robert Chaves 313 19.1. Introduction / 313 19.2. Genesis / 314 19.3. Mission / 316 19.4. Organizational Design / 317 19.5. Bricks and Mortar / 320 19.6. Professionalization of the PM Staff / 328 19.7. Project and Portfolio Optimization / 329 Chapter 20. The Evolution of Project Office and Portfolio Management at American Modern Insurance Group,Cincinnati,Ohio Mark Heitkamp and Lee Pinkerton 331 20.1. Overview of American Modern Insurance Group / 332 20.2. Project Management Office Objective / 333 20.3. Project Office Certification / 335 20.4. Strategic Planning and the Project Portfolio / 335 20.5. Project Management Office Evolution / 336 x CONTENTS 20.6. Annual Planning Process / 338 20.7. Building and Evaluating the Portfolio / 342 20.8. Project Review Committee / 343 20.9. Project Prioritization / 344 20.10. The Art and Science of Project Management / 345 20.11. Importance of the Business Sponsor / 345 20.12. PMO Feedback and Lessons Learned / 347 Part 5 Remedial Projects Chapter 21. A Faith-Based Response to Catastrophic Disaster: An Overview of Southern Baptist Disaster Relief Planning and Logistics in Hurricane Katrina Jim Burton 351 21.1. Introduction / 352 21.2. History of SBDR / 352 21.3. Beginnings of SBDR / 352 21.4. Organization of SBDR / 354 21.5. Pre-Katrina Landfall / 356 21.6. Post-Katrina Landfall / 358 21.7. Maintaining Recovery in Katrina / 359 21.8. Lessons Learned—Katrina Debrief / 360 21.9. Conclusion / 364 21.10. References / 364 Chapter 22. The Firefly Fiasco:A Case Study in Project Management Failure Dr.Bud Baker 367 22.1. Introduction / 367 22.2. On the Nature of Project Failure / 368 22.3. Birth of the Firefly Project / 368 22.4. The Failed Project Strategy: “Commercial Off-the-Shelf . . . Sort of . . .” / 369 22.5. Moving Ahead / 370 22.6. Testing / 370 22.7. The Fall of the Fireflies / 371 22.8. The Firefly’s Last Days / 371 22.9. Lessons for Project Managers / 372 22.10. Conclusion / 374 22.11. References / 374 Chapter 23. Lessons Learned Always Have a Price Tag Marty Burke 375 23.1. Introduction / 375 23.2. Disasters in the Making / 375 23.3. Process and Rigor / 377 23.4. Defining the Methodology / 377 23.5. Benefits / 378 23.6. Structuring the Responsibility Matrix / 379 23.7. Testing Functionality / 379 23.8. Contractual Agreements / 379 23.8. Data Flow Road Map / 380 23.9. Progress Measurements / 380 23.10. The Hand-Off / 380 23.11. Summing Up / 382 23.12. Recognize and Manage the Risks / 382 CONTENTS xi 23.13. Risk Has Three Dimensions / 382 23.14. Vital Information / 383 23.15. Recommendations / 383 23.16. Success Is What You Make It / 384 Chapter 24. China’s Shenzhou Spaceship Project Xue Yan and Qian Fupei 385 24.1. Introduction / 385 24.2. Project Management Organization Structure / 387 24.3. Project Management System and Elements / 387 24.4. Project Management Processes / 392 24.5. Main Characteristics of Shenzhou Spaceship Project Management / 395 24.6. Shenzhou Spaceship Project Management Maturity Model / 400 24.7. Execution Outcomes of Shenzhou Spaceship Project Management / 402 24.8. References / 404 Part 6 The Theory and Practice of Project Management Chapter 25. Project Management in Connection to Entrepreneurship and Network Organizations Dr.Brane Semolic and Dr.Jure Kovac 407 25.1. Introduction / 407 25.2. Trends in Global Business / 408 25.3. From the Management Theories to the Praxis / 411 25.4. Network Organizations / 414 25.5. Case Study: Experience from Slovenia / 421 25.6. Conclusion / 424 25.7. Bibliography / 425 Chapter 26. Project Management Certification:Frequently Asked Questions and Experiences of the Project Management Community Brigitte Schaden 427 26.1. Introduction: Project Management Certification / 427 26.2. Frequently Asked Questions about Project Management Certification / 428 26.3. Globalization’s Influence on Project Management Business and Its Affect on Project Management Certification Market / 430 26.4. Frequently Asked Questions, II / 430 26.5. Project Managers: Certification and Public Image / 431 26.6. Reasons for Recruiting and Certifying Project Managers / 432 26.7. Correlation between Companies’Aimed Improvements and Certified Project Management Personnel / 434 26.8. Abbreviations and Annotations / 437 Chapter 27. The Chief Architect and the Art of Project Management David Holyoke 439 27.1. Introduction / 439 27.2. The Essentials of Architecture / 440 27.3. A Model for Computer Systems Architecture / 441 27.4. The Software Development Life Cycle / 442 27.5. The First Step: Business Process Architecture / 443 27.6. A Case Study in Developing the Business Process Architecture / 444