978 1 133 52685 8

I N F ORMAT I O N T ECHNOLOGY PRO J EC T MANAGEMEN T

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I N F ORMAT I O N T ECHNOLOGY PRO J EC T MANAGEMEN T

Seventh Edition

Kathy Schwalbe, Ph.D., PMP Augsburg College

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Information Technology Project Management, Seventh Edition Kathy Schwalbe

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BRIEF CONTENTS

Preface xix

Chapter 1

Introduction to Project Management 1

Chapter 2

The Project Management and Information Technology Context 43

Chapter 3

The Project Management Process Groups: A Case Study 81

Chapter 4

Project Integration Management 139

Chapter 5

Project Scope Management 187

Chapter 6

Project Time Management 225

Chapter 7

Project Cost Management 271

Chapter 8

Project Quality Management 311

Chapter 9

Project Human Resource Management 359

Chapter 10

Project Communications Management 405

Chapter 11

Project Risk Management 439

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Chapter 12

Project Procurement Management 479

Chapter 13

Project Stakeholder Management 509

Appendix A

Guide to Using Microsoft Project 2010 A.1

Appendix B

(Available on CengageBrain.com)

Appendix C

(Available on CengageBrain.com)

Glossary G.1

Index I.1

viii Brief Contents

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TABLE OF CONTENTS

Preface xix

Chapter 1 Introduction to Project Management 1 Introduction 2 What Is a Project? 4

Examples of IT Projects 4 Project Attributes 6 Project Constraints 7

What Is Project Management? 9 Project Stakeholders 10 Project Management Knowledge Areas 11 Project Management Tools and Techniques 12 Project Success 14

Program and Project Portfolio Management 16 Programs 17 Project Portfolio Management 17

The Role of the Project Manager 21 Project Manager Job Description 21 Suggested Skills for Project Managers 22 Importance of People Skills and Leadership Skills 24 Careers for IT Project Managers 25

The Project Management Profession 26 History of Project Management 26 The Project Management Institute 30 Project Management Certification 30 Ethics in Project Management 32 Project Management Software 33

Chapter Summary 36 Quick Quiz 37 Quick Quiz Answers 38 Discussion Questions 38 Exercises 39 Key Terms 40 End Notes 41

Chapter 2 The Project Management and Information Technology Context 43 A Systems View of Project Management 45

What Is a Systems Approach? 45 The Three-Sphere Model for Systems Management 46

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Understanding Organizations 47 The Four Frames of Organizations 47 Organizational Structures 49 Organizational Culture 51

Stakeholder Management 52 The Importance of Top Management Commitment 54 The Need for Organizational Commitment to Information Technology 55 The Need for Organizational Standards 56

Project Phases and the Project Life Cycle 56 Product Life Cycles 59 The Importance of Project Phases and Management Reviews 62

The Context of Information Technology Projects 64 The Nature of IT Projects 64 Characteristics of IT Project Team Members 64 Diverse Technologies 65

Recent Trends Affecting Information Technology Project Management 65 Globalization 65 Outsourcing 66 Virtual Teams 67 Agile Project Management 69

The Manifesto for Agile Software Development 70 Scrum 70 Agile, the PMBOK® Guide, and a New Certification 71

Chapter Summary 73 Quick Quiz 74 Quick Quiz Answers 75 Discussion Questions 75 Exercises 76 Key Terms 77 End Notes 78

Chapter 3 The Project Management Process Groups: A Case Study 81 Project Management Process Groups 82 Mapping the Process Groups to the Knowledge Areas 87 Developing an IT Project Management Methodology 88 Case Study 1: JWD Consulting’s Project Management Intranet Site Project (Predictive Approach) 91

Project Pre-Initiation and Initiation 91 Pre-Initiation Tasks 92 Initiating 96

Project Planning 100 Project Execution 109 Project Monitoring and Controlling 114 Project Closing 117

Case Study 2: JWD Consulting’s Project Management Intranet Site Project (Agile Approach) 120

Scrum Roles, Artifacts, and Ceremonies 121 Project Pre-Initiation and Initiation 123 Planning 124

x Table of Contents

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Executing 127 Monitoring and Controlling 127 Closing 129 Templates by Process Group 129

Chapter Summary 133 Quick Quiz 133 Quick Quiz Answers 135 Discussion Questions 135 Exercises 136 Key Terms 137 End Notes 138

Chapter 4 Project Integration Management 139 What Is Project Integration Management? 140 Strategic Planning and Project Selection 143

Strategic Planning 143 Identifying Potential Projects 145 Aligning IT with Business Strategy 146 Methods for Selecting Projects 148

Focusing on Broad Organizational Needs 148 Categorizing IT Projects 148 Performing Net Present Value Analysis, Return on Investment, and Payback Analysis 149 Net Present Value Analysis 149 Return on Investment 152 Payback Analysis 153 Using a Weighted Scoring Model 154 Implementing a Balanced Scorecard 156

Developing a Project Charter 157 Developing a Project Management Plan 161

Project Management Plan Contents 161 Using Guidelines to Create Project Management Plans 164

Directing and Managing Project Work 166 Coordinating Planning and Execution 166 Providing Strong Leadership and a Supportive Culture 167 Capitalizing on Product, Business, and Application Area Knowledge 167 Project Execution Tools and Techniques 168

Monitoring and Controlling Project Work 169 Performing Integrated Change Control 171

Change Control on IT Projects 172 Change Control System 173

Closing Projects or Phases 175 Using Software to Assist in Project Integration Management 175 Chapter Summary 178 Quick Quiz 178 Quick Quiz Answers 180 Discussion Questions 180

Table of Contents xi

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Exercises 181 Running Case 182 Tasks 183 Key Terms 184 End Notes 185

Chapter 5 Project Scope Management 187 What Is Project Scope Management? 188 Planning Scope Management 189 Collecting Requirements 191 Defining Scope 194 Creating the Work Breakdown Structure 198

Approaches to Developing Work Breakdown Structures 203 Using Guidelines 203 The Analogy Approach 204 The Top-Down and Bottom-Up Approaches 204 Mind Mapping 205

The WBS Dictionary 206 Advice for Creating a WBS and WBS Dictionary 207

Validating Scope 208 Controlling Scope 210

Suggestions for Improving User Input 212 Suggestions for Reducing Incomplete and Changing Requirements 212

Using Software to Assist in Project Scope Management 214 Chapter Summary 216 Quick Quiz 216 Quick Quiz Answers 218 Discussion Questions 218 Exercises 219 Running Case 220 Tasks 221 Key Terms 221 End Notes 222

Chapter 6 Project Time Management 225 The Importance of Project Schedules 226 Planning Schedule Management 229 Defining Activities 229 Sequencing Activities 232

Dependencies 232 Network Diagrams 233

Estimating Activity Resources 236 Estimating Activity Durations 237 Developing the Schedule 238

Gantt Charts 238 Adding Milestones to Gantt Charts 240 Using Tracking Gantt Charts to Compare Planned and Actual Dates 241

Critical Path Method 243 Calculating the Critical Path 243 Growing Grass Can Be on the Critical Path 244

xii Table of Contents

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Using Critical Path Analysis to Make Schedule Trade-Offs 245 Using the Critical Path to Shorten a Project Schedule 247 Importance of Updating Critical Path Data 248

Critical Chain Scheduling 248 Program Evaluation and Review Technique (PERT) 251

Controlling the Schedule 252 Reality Checks on Scheduling and the Need for Discipline 253

Using Software to Assist in Project Time Management 255 Words of Caution on Using Project Management Software 256

Chapter Summary 258 Quick Quiz 259 Quick Quiz Answers 261 Discussion Questions 261 Exercises 261 Running Case 265 Tasks 265 Key Terms 265 End Notes 268

Chapter 7 Project Cost Management 271 The Importance of Project Cost Management 272

What Is Cost? 274 What Is Project Cost Management? 274

Basic Principles of Cost Management 275 Planning Cost Management 279 Estimating Costs 280

Types of Cost Estimates 280 Cost Estimation Tools and Techniques 282 Typical Problems with IT Cost Estimates 283 Sample Cost Estimate 284

Determining the Budget 289 Controlling Costs 291

Earned Value Management 291 Project Portfolio Management 297

Using Project Management Software to Assist in Project Cost Management 299 Chapter Summary 301 Quick Quiz 301 Quick Quiz Answers 303 Discussion Questions 303 Exercises 304 Running Case 305 Tasks 305 Key Terms 306 End Notes 308

Chapter 8 Project Quality Management 311 The Importance of Project Quality Management 312 What Is Project Quality Management? 314 Planning Quality Management 316 Performing Quality Assurance 318

Table of Contents xiii

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Controlling Quality 319 Tools and Techniques for Quality Control 320

Statistical Sampling 327 Six Sigma 328

How Is Six Sigma Quality Control Unique? 329 Six Sigma and Project Selection and Management 330 Six Sigma and Statistics 331

Testing 333 Modern Quality Management 335

Deming and His 14 Points for Management 336 Juran and the Importance of Top Management Commitment to Quality 336 Crosby and Striving for Zero Defects 337 Ishikawa’s Guide to Quality Control 338 Taguchi and Robust Design Methods 338 Feigenbaum and Workers’ Responsibility for Quality 338 Malcolm Baldrige National Quality Award 338 ISO Standards 339

Improving IT Project Quality 340 Leadership 340 The Cost of Quality 341 Organizational Influences, Workplace Factors, and Quality 343 Expectations and Cultural Differences in Quality 343 Maturity Models 344

Software Quality Function Deployment Model 344 Capability Maturity Model Integration 344 Project Management Maturity Models 345

Using Software to Assist in Project Quality Management 347 Chapter Summary 348 Quick Quiz 348 Quick Quiz Answers 350 Discussion Questions 350 Exercises 351 Running Case 352 Tasks 352 Key Terms 352 End Notes 355

Chapter 9 Project Human Resource Management 359 The Importance of Human Resource Management 360

The Global IT Workforce 360 Implications for the Future of IT Human Resource Management 361

What Is Project Human Resource Management? 363 Keys to Managing People 365

Motivation Theories 365 Maslow’s Hierarchy of Needs 365 Herzberg’s Motivation-Hygiene Theory 366 McClelland’s Acquired-Needs Theory 367 McGregor’s Theory X and Theory Y 368

Thamhain and Wilemon’s Influence and Power 368

xiv Table of Contents

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Covey and Improving Effectiveness 370 Developing the Human Resource Plan 373

Project Organizational Charts 374 Responsibility Assignment Matrices 376 Staffing Management Plans and Resource Histograms 377

Acquiring the Project Team 378 Resource Assignment 379 Resource Loading 381 Resource Leveling 383

Developing the Project Team 384 Training 385 Team-Building Activities 386

The Myers-Briggs Type Indicator 386 The Social Styles Profile 388 DISC Profile 389

Reward and Recognition Systems 390 Managing the Project Team 390

Tools and Techniques for Managing Project Teams 391 General Advice on Managing Teams 393

Using Software to Assist in Human Resource Management 394 Chapter Summary 396 Quick Quiz 397 Quick Quiz Answers 399 Discussion Questions 399 Exercises 399 Running Case 400 Key Terms 401 End Notes 402

Chapter 10 Project Communications Management 405 The Importance of Project Communications Management 406 Keys to Good Communications 408

Focusing on Group and Individual Communication Needs 409 Formal and Informal Methods for Communicating 410 Distributing Important Information in an Effective and Timely Manner 411 Setting the Stage for Communicating Bad News 412 Determining the Number of Communication Channels 412

Planning Communications Management 414 Managing Communications 416

Using Technology to Enhance Information Creation and Distribution 416 Selecting the Appropriate Communication Methods and Media 417 Reporting Performance 420

Controlling Communications 420 Suggestions for Improving Project Communications 421

Developing Better Communication Skills 421 Running Effective Meetings 423 Using E-Mail, Instant Messaging, Texting, and Collaborative Tools Effectively 424 Using Templates for Project Communications 427

Using Software to Assist in Project Communications 430

Table of Contents xv

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Chapter Summary 433 Quick Quiz 433 Quick Quiz Answers 435 Discussion Questions 435 Exercises 435 Running Case 436 Key Terms 437 End Notes 437

Chapter 11 Project Risk Management 439 The Importance of Project Risk Management 440 Planning Risk Management 447 Common Sources of Risk on IT Projects 448 Identifying Risks 452

Suggestions for Identifying Risks 453 The Risk Register 455

Performing Qualitative Risk Analysis 457 Using Probability/Impact Matrixes to Calculate Risk Factors 457 Top Ten Risk Item Tracking 459

Performing Quantitative Risk Analysis 461 Decision Trees and Expected Monetary Value 461 Simulation 463 Sensitivity Analysis 465

Planning Risk Responses 467 Controlling Risks 469 Using Software to Assist in Project Risk Management 469 Chapter Summary 471 Quick Quiz 472 Quick Quiz Answers 474 Discussion Questions 474 Exercises 474 Running Case 475 Key Terms 476 End Notes 478

Chapter 12 Project Procurement Management 479 The Importance of Project Procurement Management 480 Planning Procurement Management 483

Types of Contracts 485 Tools and Techniques for Planning Procurement Management 489

Make-or-Buy Analysis 489 Expert Judgment 490 Market Research 490

Procurement Management Plan 491 Statement of Work 491 Procurement Documents 493 Source Selection Criteria 494

Conducting Procurements 495 Controlling Procurements 497 Closing Procurements 499

xvi Table of Contents

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Using Software to Assist in Project Procurement Management 499 Chapter Summary 502 Quick Quiz 503 Quick Quiz Answers 504 Discussion Questions 504 Exercises 505 Running Case 505 Key Terms 506 End Notes 507

Chapter 13 Project Stakeholder Management 509 The Importance of Project Stakeholder Management 510 Identifying Stakeholders 512 Planning Stakeholder Management 516 Managing Stakeholder Engagement 516 Controlling Stakeholder Engagement 519 Using Software to Assist in Project Stakeholder Management 522 Chapter Summary 524 Quick Quiz 524 Quick Quiz Answers 526 Discussion Questions 526 Exercises 526 Running Case 527 Key Terms 527 End Notes 527

Appendix A Guide to Using Microsoft Project 2010 A.1 Introduction A.2

New Features of Project 2010 A.3 Before You Begin A.4

Overview of Project 2010 A.5 Starting Project 2010 and Using the Help Feature A.5 Main Screen Elements A.7 Project 2010 Views A.11 Project 2010 Filters A.15

Project Scope Management A.17 Creating a New Project File A.17 Developing a Work Breakdown Structure A.20

Creating Summary Tasks A.22 Numbering Tasks A.23

Saving Project Files with or without a Baseline A.24 Project Time Management A.24

Manual and Automatic Scheduling A.24 Entering Task Durations A.25 Establishing Task Dependencies A.30 Changing Task Dependency Types and Adding Lead or Lag Time A.33 Gantt Charts A.36 Network Diagrams A.38 Critical Path Analysis A.40

Table of Contents xvii

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Project Cost Management A.42 Fixed and Variable Cost Estimates A.43

Entering Fixed Costs in the Cost Table A.43 Entering Human Resource Costs A.43 Adjusting Resource Costs A.44

Assigning Resources to Tasks A.45 Assigning Resources Using the Entry Table A.45 Assigning Resources Using the Resource Tab A.46 Assigning Resources Using the Split Window A.47 Viewing Project Cost Information A.49

Baseline Plan, Actual Costs, and Actual Times A.51 Establishing a Baseline Plan A.51 Entering Actual Costs and Times A.52

Earned Value Management A.57 Project Human Resource Management A.60

Resource Calendars A.60 Resource Histograms A.61 Resource Leveling A.63 Using the New Team Planner Feature A.65

Project Communications Management A.66 Common Reports and Views A.66 Using Templates and Inserting Hyperlinks and Comments A.68

Discussion Questions A.72 Exercises A.72

Exercise A-1: Homework Assignments A.72 HW1: Project 2010, Part 1 (100 points, 25 points for each item) A.72 HW2: Project 2010, Part 2 (100 points, 25 points for each item) A.73

Exercise A-2: Web Site Development A.73 Exercise A-3: Software Training Program A.75 Exercise A-4: Project Tracking Database A.76 Exercise A-5: Real Project Application A.79

Appendix B (Available on CengageBrain.com)

Appendix C (Available on CengageBrain.com)

Glossary G.1 Index I.1

xviii Table of Contents

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PREFACE

The future of many organizations depends on their ability to harness the power of information technology, and good project managers continue to be in high demand. Colleges have responded to this need by establishing courses in project management and making them part of the information technology, management, engineering, and other curricula. Corporations are investing in continuing education to help develop effective project managers and project teams. This text provides a much-needed framework for teaching courses in project management, especially those that empha- size managing information technology projects. The first six editions of this text were extremely well received by people in academia and the workplace. The Seventh Edition builds on the strengths of the previous editions and adds new, important information and features.

It’s impossible to read a newspaper, magazine, or Web page without hearing about the impact of information technology on our society. Information is traveling faster and being shared by more people than ever before. You can buy just about anything online, surf the Web on a mobile phone, or use a wireless Internet connection at your local coffee shop. Companies have linked their systems together to help them fill orders on time and better serve their customers. Software companies are continually developing new products to help streamline our work and get better results. When technology works well, it is almost invisible. But did it ever occur to you to ask, “Who makes these complex technologies and systems happen?”

Because you’re reading this text, you must have an interest in the “behind-the- scenes” aspects of technology. If I’ve done my job well, you’ll begin to see the many innovations society is currently enjoying as the result of thousands of successful information technology projects. In this text, you’ll read about IT projects around the world that went well, including Mittal Steel Poland’s Implementation of SAP that uni- fied IT systems to improve business and financial processes; Dell Earth and other green computing projects that save energy and millions of dollars; Six Sigma projects such as the project to improve case load management at Baptist St. Anthony’s Hospital in Amarillo, Texas; the systems infrastructure project at the Boots Company in the United Kingdom that takes advantage of supplier competition to cut costs and improve services; and many more. Of course, not all projects are successful. Factors such as time, money, and unrealistic expectations, among many others, can sabotage a promising effort if it is not properly managed. In this text, you’ll also learn from the mistakes made on many projects that were not successful. I have written this book in an effort to educate you, tomorrow’s project managers, about what will help make a project succeed—and what can make it fail. You’ll also see how projects are used in everyday media, such as television and film, and how companies use best practices in project management. Many readers tell me how much they enjoy reading these real- world examples in the What Went Right?, What Went Wrong?, Media Snapshot, and Best Practice features. As practitioners know, there is no “one size fits all” solution to

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managing projects. By seeing how different organizations successfully implement project management, you can help your organization do the same.

Although project management has been an established field for many years, managing information technology projects requires ideas and information that go beyond standard project management. For example, many information technology projects fail because of a lack of user input, incomplete and changing requirements, and a lack of executive support. This book includes suggestions for dealing with these issues. New technologies can also aid in managing information technology projects, and examples of using software to assist in project management are included throughout the book.

Information Technology Project Management, Seventh Edition, is the only text- book to apply all 10 project management knowledge areas and all five process groups to information technology projects. As you will learn, the project management knowledge areas are project integration, scope, time, cost, quality, human resource, communications, risk, procurement, and stakeholder management. The five process groups are initiating, planning, executing, monitoring and controlling, and closing.

This text builds on the PMBOK® Guide, Fifth Edition, an American National Standard, to provide a solid framework and context for managing information tech- nology projects. It also includes an appendix, Guide to Using Microsoft Project 2010, that many readers find invaluable. A second appendix provides advice on earning and maintaining Project Management Professional (PMP) certification from the Project Management Institute (PMI) as well as information on other certification programs, such as CompTIA’s Projectþ certification. A third appendix provides additional case studies and information on using simulation and mind-mapping software to help readers apply their project management skills.

Information Technology Project Management, Seventh Edition, provides practical lessons in project management for students and practitioners alike. By weaving together theory and practice, this text presents an understandable, integrated view of the many concepts, skills, tools, and techniques of information technology project management. The comprehensive design of the text provides a strong foundation for students and practitioners in project management.

N E W T O T H E S E V E N T H E D I T I O N

Building on the success of the previous editions, Information Technology Project Management, Seventh Edition, introduces a uniquely effective combination of fea- tures. The main changes in the Seventh Edition include the following:

• Several changes were made to synchronize the Seventh Edition with the PMBOK® Guide, Fifth Edition. Changes were made based on the exposure draft released in February 2012. The biggest change was the addition of a tenth knowledge area, Project Stakeholder Management. This text includes a new chapter to address this important topic.

• Includes additional information on agile project management. Chapter 2 includes general information on this popular concept, and Chapter 3 provides a second case study illustrating the outputs produced for the JWD Consulting project when using an agile approach. For example, you can see a sample product backlog, a sprint backlog, a burndown chart, and key artifacts or outputs produced when using Scrum, the most popular agile method.