UNIT- II PROJECT INTEGRATION MANAGEMENT

PROJECT INTEGRATION MANAGEMENT

Project integration management must coordinate all of the other knowledge areas throughout a projects life cycle Many new project managers have trouble looking at the big picture and want to focus on too many details Project integration management is not the same thing as software integration

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PROJECT INTEGRATION MANAGEMENT PROCESSES

Develop the project charter: working with stakeholders to create the document that formally authorizes a projectthe charter Develop the preliminary project scope statement: further work with stakeholders, especially users of the projects products, services, or results to develop high-level scope requirements Develop the project management plan: coordinating all planning efforts to create a consistent, coherent document the project management plan Direct and manage project execution: carrying out the project management plan by performing the activities included in it
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PROJECT INTEGRATION MANAGEMENT PROCESSES (CONTD)

Monitor and control the project work: overseeing project work to meet the performance objectives of the project Perform integrated change control: coordinating changes that affect the projects deliverables and organizational process assets Close the project or phase: finalizing all project activities to formally close the project or phase

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FIGURE 4-1. PROJECT INTEGRATION MANAGEMENT SUMMARY

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STRATEGIC PLANNING AND PROJECT SELECTION

Strategic planning involves determining long-term objectives, predicting future trends, and projecting the need for new products and services Organizations often perform a SWOT analysis

Analyzing Strengths, Weaknesses, Opportunities, and Threats Identify potential projects Use realistic methods to select which projects to work on Formalize project initiation by issuing a project charter

As part of strategic planning, organizations:

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IDENTIFYING POTENTIAL PROJECTS

Project

initiation starts with identifying potential projects by using realistic methods to select which projects to work on Many organizations follow a planning process for selecting IT projects. Its crucial to align IT projects with business strategy. Research shows that:
Supporting explicit business objectives is the number one reason cited for investing in IT projects. Companies with consolidated IT operations have a 24 percent lower operational cost per end user.

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FIGURE 4-2. MIND MAP OF A SWOT ANALYSIS TO HELP IDENTIFY POTENTIAL PROJECTS
Information Technology Project Management, Sixth Edition

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FIGURE 4-3. INFORMATION TECHNOLOGY PLANNING PROCESS

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METHODS FOR SELECTING PROJECTS

Organizations identify many potential projects as part of their strategic planning, and often rely on experienced project managers to help them make project selection decisions. Methods for selecting projects include:

Focusing on broad organizational needs Categorizing information technology projects Performing net present value or other financial analyses Using a weighted scoring model Implementing a balanced scorecard

Each approach has advantages and disadvantages, and it is up to management to decide the best approach for selecting projects based on their organization.
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FOCUSING ON BROAD ORGANIZATIONAL NEEDS

Projects

that address broad organizational needs are much more likely to be successful because they will be important to the organization. It is often difficult to provide strong justification for many IT projects, but everyone agrees they have a high value Three important criteria for projects: There is a need for the project There are funds available Theres a strong will to make the project succeed
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CATEGORIZING IT PROJECTS

A type of categorization assesses whether the project provides a response to: A problem Undesirable situation that prevents an organization from achieving its goals (e.g. users of an IS may be having trouble getting information in a timely manner because the system reached its capacity) An opportunity Chances to improve the organization (new product to bring in capital) A directive New requirements imposed by management, government or some external influence (projects involving medical technologies must meet rigorous government requirements)
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CATEGORIZING IT PROJECTS (CONTD)

Another categorization is based on the time it will take to complete a project or the date by which it must be done. Another categorization is the overall priority of the project. High, medium or low E.g. if it is crucial to cut operational costs quickly, projects that have the most potential will have high priority

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FINANCIAL ANALYSIS OF PROJECTS

Financial considerations are often an important consideration in selecting projects Three primary methods for determining the projected financial value of projects: Net present value (NPV) analysis Return on investment (ROI) Payback analysis

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NET PRESENT VALUE ANALYSIS

A measure used in capital budgeting to assess the profitability of a proposed investment or project. It is the difference between the sum of a project's benefits over time and the sum of the costs over time. To do this, monetary values are assigned to each benefit and cost. The calculation also recognizes the time value of money: that is, $1 today is not worth the same as $1 five years from now.

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NET PRESENT VALUE ANALYSIS

Net present value (NPV) analysis is a method of calculating the expected net monetary gain or loss from a project by discounting all expected future cash inflows and outflows to the present point in time

the technique of applying a discount rate to convert future monetary amounts to their equivalent value in todays terms, (based on the premise that people prefer to receive benefits in the present rather than in the future)

Projects with a positive NPV should be considered if financial value is a key criterion The higher the NPV, the better

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FIGURE 4-4. NET PRESENT VALUE EXAMPLE

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Information Technology Project Management, Sixth Edition

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FIGURE 4-5. JWD CONSULTING NPV EXAMPLE

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NPV CALCULATIONS
Determine estimated costs and benefits for the life of the project and the products it produces Determine the discount rate (check with your organization on what to use) Calculate the NPV Notes: Some organizations consider the investment year as year 0, while others start in year 1; some people enter costs as negative numbers, while others do not

Check with your organization for their preferences The mathematical calculations for NPV (n is the last year, A is the amount of cash flow each year and R is the discount rate)

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RETURN ON INVESTMENT

Return on investment (ROI) is calculated by subtracting the project costs from the benefits and then dividing by the costs
ROI = (total discounted benefits - total discounted costs) / discounted costs

The higher the ROI, the better Many organizations have a required rate of return or minimum acceptable rate of return on investment for projects Internal rate of return (IRR) can by calculated by finding the discount rate that makes the NPV equal to zero
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PAYBACK ANALYSIS
Another important financial consideration is payback analysis The payback period is the amount of time it will take to recoup, in the form of net cash inflows, the total dollars invested in a project Payback occurs when the net cumulative discounted benefits equals the costs Many organizations want IT projects to have a fairly short payback period

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FIGURE 4-6. CHARTING THE PAYBACK PERIOD

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WEIGHTED SCORING MODEL

A weighted scoring model is a tool that provides a systematic process for selecting projects based on many criteria Identify criteria important to the project selection process Assign weights (percentages) to each criterion so they add up to 100% Assign scores to each criterion for each project Multiply the scores by the weights and get the total weighted scores The higher the weighted score, the better

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FIGURE 4-7. SAMPLE WEIGHTED SCORING MODEL FOR PROJECT SELECTION

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IMPLEMENTING A BALANCED SCORECARD

A balanced scorecard is a methodology that converts an organizations value drivers, such as customer service, innovation, operational efficiency, and financial performance, to a series of defined metric
Organizations record and analyze these metrics to determine how well projects help them achieve strategic goals. It is best used throughout an organization because it aligns business and IT.

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FIGURE 4-8. BALANCED SCORECARD EXAMPLE

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PROJECT CHARTERS
After deciding what project to work on, it is important to let the rest of the organization know A project charter is a document that formally recognizes the existence of a project and provides direction on the projects objectives and management Key project stakeholders should sign a project charter to acknowledge agreement on the need and intent of the project; a signed charter is a key output of project integration management

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FORMAT OF PROJECT CHARTERS

Project title and date of authorization Project manager name and contact information A summary schedule, including the planned start and finish dates A summary of projects budget or reference to budgetary documents Brief description of project objectives A summary of the planned approach for managing the project A roles and responsibilities matrix A sign-off section for signatures of key project stakeholders A comments section

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TABLE 4-1. PROJECT CHARTER FOR THE DNA-SEQUENCING INSTRUMENT COMPLETION PROJECT

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TABLE 4-1. CHARTER (CONTINUED)

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PROJECT MANAGEMENT PLANS

A project management plan is a document used to coordinate all project planning documents and help guide a projects execution and control Plans created in the other knowledge areas are subsidiary parts of the overall project management plan

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COMMON ELEMENTS OF A PROJECT MANAGEMENT PLAN

Introduction or overview of the project Description of how the project is organized Management and technical processes used on the project Work to be done, schedule, and budget information

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INTRODUCTION OR OVERVIEW OF THE PROJECT

The project name A brief description of the project and the need it addresses(outline the goals and reason for the project) The sponsors name The names of the project manager and key team members Deliverables of the project(software packages, pieces of hardware, technical reports and training materials) A list of important reference materials A list of definitions and acronyms

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DESCRIPTION OF HOW THE PROJECT IS ORGANIZED

Organizational charts(to show the lines of authority, responsibilities, and communication for the project) Project responsibilities(describe the major project functions and activities and identify those individuals who are responsible for them) Other organizational or process-related information

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MANAGEMENT AND TECHNICAL PROCESSES USED ON

THE PROJECT

Management objectives Project controls(describes how to monitor project progress and handle changes) Risk management(how the project team identify, manage and control risks) Project staffing(describes the number and types of people required for the project) Technical processes(describes specific methodologies a project might use and explains how to document information)

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WORK TO BE DONE, SCHEDULE, AND BUDGET

INFORMATION

Work to perform and the scope management plan Major work packages Key deliverables Other work-related information Project schedule information Summary schedule Detailed schedule Other schedule-related information Budget information Summary budget Detailed budget Other budget-related information

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TABLE 4-2. SAMPLE CONTENTS FOR A SOFTWARE PROJECT MANAGEMENT PLAN (SPMP)

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PROJECT EXECUTION
Project execution involves managing and performing the work described in the project management plan The majority of time and money is usually spent on execution The application area of the project directly affects project execution because the products of the project are produced during execution Project manager would also need to focus on leading the project team and managing stakeholder relationship to execute the project management plan successfully

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COORDINATING PLANNING AND EXECUTION

Project planning and execution are intertwined and inseparable activities The main function of creating a project management plan and all other project plans is to guide project execution. Those who will do the work should help to plan the work All project need to develop both planning and executing skills and need experience in these areas Project managers must solicit input from the team to develop realistic plans

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PROVIDING LEADERSHIP AND A SUPPORTIVE CULTURE

Strong leadership and a supportive organizational culture are crucial during project execution Project managers must lead by example to demonstrate the importance of creating and then following good project plans Organizational culture can help project execution by:

Providing guidelines and templates Tracking performance based on plans

Project managers may still need to break the rules to meet project goals, and senior managers must support those actions

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IMPORTANT SKILLS FOR PROJECT EXECUTION

General management skills like leadership, communication, and political skills Product, business, and application area skills and knowledge Use of specialized tools and techniques

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PROJECT EXECUTION TOOLS AND TECHNIQUES

Project management methodology: many experienced project managers believe the most effective way to improve project management to follow a methodology that describes not only what to do in managing project, but how to do it. Expert judgment: experts can help project managers and their teams make many decisions related to project execution Project management information systems: there are hundreds of project management software products available on the market today, and many organizations are moving toward powerful enterprise project management systems that are accessible via the Internet

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MONITORING AND CONTROLLING PROJECT WORK

Changes are inevitable on most projects, so its important to develop and follow a process to monitor and control changes Monitoring project work includes collecting, measuring, and disseminating performance information The project team should continuously monitor project performance to assess the overall health of the project and identify areas that require special attention

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INTEGRATED CHANGE CONTROL

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Integrated change control involves identifying, evaluating, and managing changes throughout the project life cycle Three main objectives are:
Influencing the factors that create changes to ensure that changes are beneficial Determining that a change has occurred Managing actual changes as they occur The project management plan provides the baseline for identifying and controlling project changes A baseline is the approved project management plan plus approved changes
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CHANGE CONTROL ON INFORMATION TECHNOLOGY PROJECTS

Former view: the project team should strive to do exactly what was planned on time and within budget Problem: stakeholders rarely agreed up-front on the project scope, and time and cost estimates were inaccurate Modern view: project management is a process of constant communication and negotiation Solution: changes are often beneficial, and the project team should plan for them

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CHANGE CONTROL SYSTEM

A formal, documented process that describes when and how official project documents and work may be changed Describes who is authorized to make changes and how to make them

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CHANGE CONTROL BOARD (CCB)

A formal group of people responsible for approving or rejecting changes on a project CCBs provide guidelines for preparing change requests, evaluate change requests, and manage the implementation of approved changes Includes stakeholders from the entire organization

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MAKING TIMELY CHANGES

Some CCBs only meet occasionally, so it may take too long for changes to occur Some organizations have policies in place for timesensitive changes

48-hour policy allows project team members to make decisions; then they have 48 hours to reverse the decision pending senior management approval Delegate changes to the lowest level possible, but keep everyone informed of changes

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CONFIGURATION MANAGEMENT
Ensures that the descriptions of the projects products are correct and complete Involves identifying and controlling the functional and physical design characteristics of products and their support documentation Configuration management specialists identify and document configuration requirements, control changes, record and report changes, and audit the products to verify conformance to requirements

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TABLE 4-3. SUGGESTIONS FOR PERFORMING INTEGRATED CHANGE CONTROL

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Information Technology Project Management, Sixth Edition

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CLOSING PROJECTS AND PHASES

To close a project or phase, you must finalize all activities and transfer the completed or cancelled work to the appropriate people Main outputs include:

Final product, service, or result transition Organizational process asset updates

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USING SOFTWARE TO ASSIST IN PROJECT INTEGRATION MANAGEMENT

Several types of software can be used to assist in project integration management

Documents can be created with word processing software Presentations are created with presentation software Tracking can be done with spreadsheets or databases Communication software like e-mail and Web authoring tools facilitate communications Project management software can pull everything together and show detailed and summarized information Business Service Management (BSM) tools track the execution of business process flows

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