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 Explain basic project cost management principles,  Cost is a resource sacrificed or

concepts, and terms foregone to achieve a specific objective
 Describe the process of planning cost management or something given up in exchange.
 Discuss different types of cost estimates and  Costs are usually measured in
methods for preparing them monetary units like dollars.
 Understand the processes of determining a budget  Project cost management includes
and preparing a cost estimate for an information the processes required to ensure that
technology (IT) project the project is completed within an
approved budget.

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  [Link] cost management :determining the
policies, procedures, and documentation that will be
used for planning, executing, and controlling project
cost.
 [Link] costs: developing an approximation or
estimate of the costs of the resources needed to
complete a project
 [Link] the budget: allocating the overall cost
estimate to individual work items to establish a baseline
for measuring performance
 [Link] costs: controlling changes to the
project budget
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 Tangible costs or benefits are those costs or

benefits that an organization can easily measure in
 Most members of an executive board better dollars
understand and are more interested in financial terms  Intangible costs or benefits are costs or benefits
than IT terms , so IT project managers must speak that are difficult to measure in monetary terms
their language  Direct costs are costs that can be directly related to
◦ Profits are revenues minus expenditures producing the products and services of the project
◦ Profit margin is the ratio of revenues to profits  Indirect costs are costs that are not directly related
to the products or services of the project, but are
◦ Life cycle costing considers the total cost of
indirectly related to performing the project
ownership, or development plus support costs, for a
 Sunk cost is money that has been spent in the past;
project when deciding what projects to invest in or continue,
you should not include sunk costs
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  The project team uses expert judgment, analytical  Project managers must take cost estimates
techniques, and meetings to develop the cost seriously if they want to complete projects within
management plan budget constraints
 A cost management plan includes:  It’s important to know the types of cost estimates,
◦ Level of accuracy and units of measure how to prepare cost estimates, and typical problems
◦ Organizational procedure links associated with IT cost estimates
◦ Control thresholds
◦ Rules of performance measurement
◦ Reporting formats
◦ Process descriptions
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 Basic tools and techniques for cost estimates:

◦ Analogous or top-down estimates: use the
actual cost of a previous, similar project as the
basis for estimating the cost of the current project
◦ Advantages: Fast, archive
◦ Disadvantages:

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 ◦ Bottom-up estimates: involve estimating  Estimates are done too quickly
individual work items or activities and summing  People lack estimating experience
them to get a project total  Human beings are based toward underestimation
◦ Advantages: exactlty  Management desires accuracy
◦ Disadv: Slowly
◦ Parametric modeling uses project characteristics
(parameters) in a mathematical model to estimate
project costs

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 Cost budgeting involves allocating the project cost

estimate to individual work items over time
 The WBS is a required input to the cost budgeting
process since it defines the work items
 Important goal is to produce a cost baseline
◦ a time-phased budget that project managers use to
measure and monitor cost performance

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  Project cost control includes  EVM is a project performance measurement
◦ Monitoring cost performance technique that integrates scope, time, and cost data
◦ Ensuring that only appropriate project changes  Given a baseline (original plan plus approved
are included in a revised cost baseline changes), you can determine how well the project is
◦ Informing project stakeholders of authorized meeting its goals
changes to the project that will affect costs  You must enter actual information periodically to use
 EVM - Earned Value Management is a popular tool EVM
that used for controlling Cost

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 The Budget at Completion(BAC) is determined at the

start of the project based on the project estimates and
assumptions. As the project progresses the BAC may
need to be revisited based on the project forecast.
 Ex:
A project has a budget of $10,000,
BAC = $10,000

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  The planned value (PV), called the budget, is  Ex:
that portion of the approved total cost estimate
planned to be spent on an activity during a given
Mar 1 Mar 5 Mar 8 Mar 10

period.
PV = BAC * % Complete (Planned )  If it’s March 5 today
Planned Value (PV)= 50% x $10,000 = $5,000.
 If it’s March 8,
Planned Value (PV) = 80% x $10,000 = $8,000.

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 The earned value (EV) is the amount of the task  Actual cost (AC) is the total of direct and
that is actually completed indirect costs incurred in accomplishing work on
EV = % Complete (Actual) x BAC an activity during a given period
EX:  Ex:
The actual percent complete is 75% and the task The actual cost is $200 for software subscriptions
budget is $10,000, and $1,000 for labor
Earned Value (EV) = 75% x $10,000 = $7,500.
AC = $200 + $1,000 = $1,200.

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  Schedule Performance Index – SPI
SPI = EV/PV
◦ SPI < 1, the task is behind schedule.
◦ SPI =1 one, the task is on schedule
◦ SPI > 1, the task is ahead of schedule.
 Schedule variance – SV
SV = EV - PV

EAC
ETC

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 Cost Performance Index - CPI

CPI = EV / AC
◦ CPI < 1, the task is over budget.
◦ CPI =1, the task is on budget.
◦ CPI > 1, the task is under budget.
 Cost Variance (CV)
CV = EV - AC

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  Estimate at Completion – EAC is the full task or  To Complete Performance Index-TCPI
project cost expected AT completion (the new
project budget).
EAC = BAC / CPI
 Estimate to Complete - ETC represents the  Variance at Complete-VAC
expected cost required TO complete the project. VAC = BAC – EAC
ETC = EAC – AC VAC > 0 : the project will be under budget
VAC = 0 : the project will be on budget
VAC < 0 : the project will be over budget
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 Project cost management is a traditionally weak

area of IT projects, and project managers must work
to improve their ability to deliver projects within
approved budgets
 Main processes include
◦ Plan cost management
◦ Estimate costs
◦ Determine the budget
◦ Control costs
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  Bạn là người quản lý dự án tại một công ty thiết kế  BAC=55.000
công nghiệp. DA được cấp vốn tổng cộng 55.000$.  Time = 4
Kế hoạch của bạn kêu gọi sáu người làm việc trong
 Kế hoạch hoàn thành tuần thứ 3 (planned): ¾= 75%
dự án 8 tiếng một ngày, 5 ngày một tuần trong 4
tuần. Theo lịch trình, nhóm của bạn phải hoàn thành  → Planned Value (PV) = 75% *55.000= 41.250
khối lượng công việc vào tuần thứ ba của dự án.  Thực tế hoàn thành 50% : 50%
Khi bạn xem lại những gì nhóm đã làm cho đến nay,  → Earned Value: EV= 50% *55.000=27500
bạn thấy rằng nhóm đã hoàn thành 50% công việc,  Thực tế chi phí sử dụng: AC= 25.000
với chi phí 25.000 đô la.
 SPI = EV/PV= 27500/41250 <1
 BAC, AC, PV, EV ?
 CPI= EV/AC= 27500/25000>1
 CPI, SPI → Kết luận ?
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 Dự án hiện tại của bạn là một nỗ lực phát triển  Bạn đang quản lý dự án xây dựng triển khai hệ thống
phần mềm trị giá 800.000 đô la, với hai nhóm lập CNTT cho các trường TH trong một tỉnh. Tổng ngân
sách của bạn là 650 triệu, và có tổng cộng 7.500 giờ
trình viên sẽ làm việc được sáu tháng, tổng cộng là
làm việc dự kiến. Tại thời điểm hiện tại bạn đã chi 400
10.000 giờ. Theo kế hoạch dự án, nhóm của bạn
triệu và 5% giá trị phát sinh giá thiết bị tăng so với chi
thực hiện với 38% công việc. Bạn thấy rằng dự án
phí thực tế. Theo kế hoạch, đội DA của bạn cần làm
hiện đã hoàn tất 40%. Bạn đã dành 50% ngân sách việc 4.500 giờ, nhưng cả đội làm việc thêm giờ (OT)
cho đến thời điểm này. lên tới 5.100 giờ làm việc.
 Tính BAC, AC, SV, SPI, PV, EV, CV, CPI  Tính các giá trị BAC, PV, AC, EV, SPI, CV, CPI?
 Kết luận về thời gian thực hiện và ngân sách cho  Kết luận về thời gian thực hiện và ngân sách cho DA
DA
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  Trường hợp 1:
 Bạn là người quản lý dự án làm việc trong một dự
◦ AC=1650000, CPI=0.875 -> EAC=BAC/CPI=4800000
án lớn dự kiến kéo dài trong hai năm với tổng ngân
◦ VAC = BAC-EAC= - 600.000
sách cho dự án của bạn là $ 4,200,000.
◦ → ETC=EAC-AC=3150000
 Trường hợp 1: ◦ → Chi phí tại thời điểm hoàn thành vượt ngân sách
Trong 9 tháng đầu dự án đã chi 1.650.000 đô la, $600.000
và bạn đã có một CPI là 0.875.  Trường hợp 2:
 Trường hợp 2: ◦ AC= 2.625.000
Trong sáu tháng tiếp theo, bạn đã chi tổng số là ◦ Hoàn thành : 70% → EV=70%* 4,200,000= 2.940.000
2.625.000 đô la, dự án hoàn thành 70%. ◦ CPI = EV/AC= 2.940/2.625= 1.12
 Bạn có thể đưa ra một dự báo cho dự án của mỗi ◦ EAC=BAC/CPI= 4.200.000/1.12= 3.750.000
trường hợp. ◦ VAC = BAC – EAC =4.200.000- 3.750.000= 450.000
◦ → Chi phí đạt được khi hoàn thành dự còn lại : $450.000
37 38
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Start 22/09/2023 48 ngày

tại thời điểm 30/10/2023
Task Name Predecessors Cost ($)/day % Complete Actual Cost

A 2000 100% $ 2,000

B 1 1500 100% $ 1,500

C 1 200 100% $ 200

D 1,2 450 83% $ 374

E 3 620 100% $ 620

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F 4 700 0% $ -
G 1,4 1000 0% $ -

H 5 600 100% $ 600

Management, Seventh Edition
I 6 700 0% $ -
J 7,8,9 1200 0% $ -
8970 5293.5

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Management, Seventh Edition 39
  Explain the importance of good human resource
management on projects
 Define project human resource management and
understand its processes
 Understand important issues involved in project staff
acquisition and explain the concepts of resource
assignments, resource loading, and resource leveling
 Assist in team development with training, team-building
activities, and reward systems

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[Link] human resource management: identifying

 Many corporate executives have said, “People are our and documenting project roles, responsibilities, and
most important asset” reporting relationships
 People determine the success and failure of organizations [Link] the project team: getting the needed
and projects personnel assigned to and working on the project
[Link] the project team: building individual and
group skills to enhance project performance
[Link] the project team: tracking team member
performance, motivating team members, providing timely
feedback, resolving issues and conflicts, and coordinating
changes to help enhance project performance.
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  Important areas related to project management include
◦ motivation theories
◦ influence and power
◦ effectiveness

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 Intrinsic motivation causes people to participate in an  Abraham Maslow argued that humans possess unique
activity for their own enjoyment qualities that enable them to make independent choices,
 Extrinsic motivation causes people to do something for thus giving them control of their destiny
a reward or to avoid a penalty  Maslow developed a hierarchy of needs which states
 For example, some children take piano lessons for that people’s behaviors are guided or motivated by a
intrinsic motivation (they enjoy it) while others take them sequence of needs
for extrinsic motivation (to get a reward or avoid
punishment)

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  Frederick Herzberg wrote several famous books and
articles about worker motivation. He distinguished
between
◦ motivational factors: achievement, recognition, the
work itself, responsibility, advancement, and growth,
which produce job satisfaction
◦ hygiene factors: cause dissatisfaction if not present,
but do not motivate workers to do more.
Examples include larger salaries, more supervision, and
a more attractive work environment

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 Involves identifying and documenting

project roles, responsibilities, and
reporting relationships
 Contents include
◦ project organizational charts
◦ staffing management plan
◦ responsibility assignment matrixes
◦ resource histograms
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  A responsibility assignment matrix (RAM) is a matrix
that maps the work of the project as described in the
WBS to the people responsible for performing the work
as described in the OBS
 Can be created in different ways to meet unique project
needs

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 RACI charts to show four key roles for project

stakeholders:
Responsibility: Who does the task?
Accountability: Who signs off on the task or has authority
for it?
Consultation: Who has information necessary to
complete the task?
Informed: Who needs to be notified of task status and
results?

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 Project Project
Function Developer Analyst
Sponsor Manager

Project Initiation R,P R,P

Establish Project
R,P
Plan
Collate User
R,P
Requirements

Define Technical
R,P
Requirements

Develop Software
R = responsibility Tools
R,P
A = accountability, only one A per task
Test Software R,P
C = consultation
I = informed Install Software R,P
Note that some people reverse the definitions of responsible and accountable.

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Project Project
Function Developer Analyst
Sponsor Manager

Project Initiation C A,R

Establish
Project Plan
I A,R C C  A staffing management plan describes when and how
Collate User people will be added to and taken off the project team
I A I R
Requirements
 A resource histogram is a column chart that shows the
Define Technical
I A R number of resources assigned to a project over time
Requirements

Develop
I A R C
Software Tools

Test Software I A C R

Install Software C A C R

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  Acquiring qualified people for teams is crucial
 The project manager who is the smartest person on the
team has done a poor job of recruiting!
 It’s important to assign the appropriate type and number
of people to work on projects at the appropriate times

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 Resource leveling is a technique for resolving resource

conflicts by delaying tasks
 The main purpose of resource leveling is to create a
smoother distribution of resource usage and reduce
overallocation

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  When resources are used on a more constant basis,  The main goal of team development is to help people
they require less management work together more effectively to improve project
 It may enable project managers to use a just-in-time performance
inventory type of policy for using subcontractors or other  It takes teamwork to successfully complete most projects
expensive resources
 It results in fewer problems for project personnel and
accounting department
 It often improves morale

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 Forming  Training can help people understand themselves,

 Storming each other, and how to work better in teams
 Norming  Team building activities include
 Performing ◦ physical challenges
 Adjourning
◦ psychological preference indicator tools

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  Project managers must lead their teams in performing  Observation and conversation
various project activities  Project performance appraisals
 After assessing team performance and related  Interpersonal skills
 Conflict management
information, the project manager must decide
◦ if changes should be requested to the project
◦ if corrective or preventive actions should be
recommended
◦ if updates are needed to the project management plan
or organizational process assets.

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1. Confrontation: Directly face a conflict using a problem-

solving approach  Conflict often produces important results, such as new
2. Compromise: Use a give-and-take approach ideas, better alternatives, and motivation to work harder
and more collaboratively
3. Smoothing: De-emphasize areas of difference and
emphasize areas of agreement  Groupthink: Conformance to the values or ethical
standards of a group. Groupthink can develop if there are
4. Forcing: The win-lose approach
no conflicting viewpoints
5. Withdrawal: Retreat or withdraw from an actual or potential
disagreement  Research suggests that task-related conflict often
improves team performance, but emotional conflict often
6. Collaborating: Decision makers incorporate different
depresses team performance
viewpoints and insights to develop consensus and
Informationcommitment
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  The five dysfunctions of teams are
1. Absence of trust  Project human resource management includes the
2. Fear of conflict processes required to make the most effective use of the
people involved with a project
3. Lack of commitment
 Main processes include
4. Avoidance of accountability
◦ Plan human resource management
5. Inattention to results
◦ Acquire project team
◦ Develop project team
◦ Manage project team
*Lencioni, Patrick, “Overcoming the Five Dysfunctions of a Team,” Jossey-Bass:
San Francisco, CA (2005), p. 3.

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 Understand the importance of good

communications on projects and the need to
develop soft skills, especially for IT project
managers and their teams
 Review key concepts related to communications
 Explain the elements of planning project
Information Technology Project communications and how to create a
Management, Seventh Edition communications management plan
 Describe how to manage communications,
including communication technologies, media, and
performance reporting

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  Discuss methods for controlling communications ▪ The greatest threat to many projects is a failure to
to ensure that information needs are met communicate
throughout the life of the project
▪ Our culture does not portray IT professionals as
 List various methods for improving project
being good communicators
communications, such as running effective
meetings, using various technologies effectively, ▪ Research shows that IT professionals must be able
and using templates to communicate effectively to succeed in their
 Describe how software can enhance project positions
communications management ▪ Strong verbal and non-technical skills are a key
factor in career advancement for IT professionals

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▪ Planning communications management:

Determining the information and communications
needs of the stakeholders
 Managing communications: Creating,
distributing, storing, retrieving, and disposing of
project communications based on the
communications management plan
 Controlling communications: Monitoring and
controlling project communications to ensure that
stakeholder communication needs are met

5
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  Project managers say they spend as much as 90
percent of their time communicating  People are not interchangeable parts
 Need to focus on group and individual
communication needs  As illustrated in Brooks’ book The Mythical Man-
 Use formal and informal methods for Month, you cannot assume that a task originally
communicating scheduled to take two months of one person’s time
can be done in one month by two people
 Distribute important information in an effective and
timely manner
 Nine women cannot produce a baby in one month!
 Set the stage for communicating bad news
 Determine the number of communication channels

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 Introverts like more private communications, while

▪ Research says that in a face-to-face interaction:
▪ 58 percent of communication is through body language. extroverts like to discuss things in public
▪ 35 percent of communication is through how the words are  Intuitive people like to understand the big picture,
said while sensing people need step-by-step details
▪ 7 percent of communication is through the content or
words that are spoken  Thinkers want to know the logic behind decisions,
▪ Pay attention to more than just the actual words while feeling people want to know how something
someone is saying affects them personally
▪ A person’s tone of voice and body language say a  Judging people are driven to meet deadlines while
lot about how he or she really feels perceiving people need more help in developing
and following plans

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 Amusing examples of miscommunications are common, especially when
they involve the use of new technologies. For example, I was teaching
an introductory course in information systems several years ago. Other
▪ Short, frequent meetings are often very effective in instructors would often sit in on the course to learn how to use the latest
IT projects software applications. One day, students were learning how to adjust
settings and use short cuts on their computers. I would tell the students
to “right-click” and then select Properties, or “right-click” and then select
▪ Stand-up meetings force people to focus on what Copy. At the end of the class, an instructor quietly approached, waited
until the other students were gone, and then said, “I don’t know what I’m
they really need to communicate
doing wrong.” She held up a piece of paper on which she had written the
word “click” about a dozen times. In other words, she literally did write
▪ Some companies have policies preventing the use “click” when told to do so instead of right-clicking. I asked, “Are you a
Mac user?” Macintosh computers do not normally have a mouse with
of e-mail between certain hours or even entire days two buttons, so users never have to right-click. I showed the instructor
of the week how to right-click a mouse, and in future classes made sure to point out
operations that were different on PCs than Macs.

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 Rarely does the receiver interpret a message

▪ Don’t bury crucial information exactly as the sender intended

▪ Don’t be afraid to report bad information  Geographic location and cultural background affect
the complexity of project communications
▪ Oral communication via meetings and informal talks
◦ Different working hours
helps bring important information—good and bad—
out into the open ◦ Language barriers

◦ Different cultural norms

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 Dear Mom and Dad, or should I say Grandma & Grandpa,
Yes, I am pregnant. No, I’m not married yet since Larry, my boyfriend, is out of a
job. Larry’s employers just don’t seem to appreciate the skills he has learned since  As the number of people involved increases, the
he quit high school. Larry looks much younger than you, Dad, even though he is complexity of communications increases because
three years older. I’m quitting college and getting a job so we can get an apartment
before the baby is born. I found a beautiful apartment above a 24-hour auto repair
there are more communications channels or
garage with good insulation so the exhaust fumes and noise won’t bother us. pathways through which people can communicate.
I’m very happy. I thought you would be too.  Number of communications channels = n(n-1)
Love, Ashley 2
P.S. There is no Larry. I’m not pregnant. I’m not getting married. I’m not where n is the number of people involved
quitting school, but I am getting a “D” in Chemistry. I just wanted you to have
some perspective.

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▪ Every project should include some type of

communications management plan, a document
that guides project communications
 The communications management plan varies
with the needs of the project, but some type of
written plan should always be prepared
 For small projects, the communications
management plan can be part of the team contract
 For large projects, it should be a separate
document

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 1. Stakeholder communications requirements
2. Information to be communicated, including format,
content, and level of detail
3. Who will receive the information and who will produce it
4. Suggested methods or technologies for conveying the
information
5. Frequency of communication
6. Escalation procedures for resolving issues
7. Revision procedures for updating the communications
management plan
8. A glossary of common terminology

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 Managing communications is a large part of a  Technology can facilitate the process of creating
project manager’s job and distributing information, when used properly
 Getting project information to the right people at  It is important to select the appropriate
the right time and in a useful format is just as communication method and media
important as developing the information in the first
place
 Important considerations include the use of
technology, the appropriate methods and media to
use, and performance reporting

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  Natural disasters often disrupt communications  Interactive communication: Two or more people interact
around the world. For example, the scale of the to exchange information via meetings, phone calls, or
damage to Japan’s communications infrastructure video conferencing. Most effective way to ensure
common understanding
after a 9.0 magnitude earthquake in March 2011
 Push communication: Information is sent or pushed to
was unprecedented. Fortunately, thousands of
recipients without their request via reports, e-mails,
employees from NTT East worked around the faxes, voice mails, and other means. Ensures that the
clock to restore communications. As a result of information is distributed, but does not ensure that it was
their efforts, 4.75 million public phone calls were received or understood
made on the day after the disaster.  Pull communication: Information is sent to recipients at
their request via Web sites, bulletin boards, e-learning,
knowledge repositories like blogs, and other means

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 Collaboration is a key driver of overall performance of

companies around the world
 Of all the collaboration technologies that were studied, three
were more commonly present in high-performing companies
than in low-performing ones: Web conferencing, audio
conferencing, and meeting-scheduler technologies
 “This study reveals a powerful new metric business leaders
can use to more successfully manage their companies and
achieve competitive advantage,” said Brian Cotton, a vice
president at Frost & Sullivan*
 The study also showed that there are regional differences in
how people in various countries prefer to communicate with
one another
*Frost & Sullivan, “New Research Reveals Collaboration Is a Key Driver of Business
Performance Around the World,” Microsoft PressPass (June 5, 2006).

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 Performance reporting keeps stakeholders informed  The main goal of controlling communications is to ensure
about how resources are being used to achieve the optimal flow of information throughout the entire project
project objectives life cycle
 The project manager and project team should use their
◦ Status reports describe where the project stands at a various reporting systems, expert judgment, and meetings
specific point in time to assess how well communications are working. If
problems exist, the project manager and team need to take
◦ Progress reports describe what the project team has
action, which often requires changes to the earlier
accomplished during a certain period of time
processes of planning and managing project
◦ Forecasts predict future project status and progress based communications
on past information and trends  It is often beneficial to have a facilitator from outside the
project team assess how well communications are working

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 Most companies spend a lot of money on technical

 Develop better communication skills
training for their employees, even when employees
might benefit more from communications training
 Run effective meetings
 Individual employees are also more likely to enroll
voluntarily in classes to learn the latest technology
 Use e-mail and other technologies effectively
than in classes that develop soft skills
 Use templates for project communications  As organizations become more global, they realize
they must invest in ways to improve communication
with people from different countries and cultures
 It takes leadership to improve communication
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Management, Seventh Edition Copyright 2014 29 Management, Seventh Edition Copyright 2014 30
  Communications technology, such as using e-mail and
searching the Web, should help improve project  Determine if a meeting can be avoided
communications, but it can also cause conflict
 Define the purpose and intended outcome of the
 How? Cyberslackers are people who should be working,
but instead spend their time online doing non-work-related meeting
activities, such as annoying friends or co-workers by  Determine who should attend the meeting
sending unimportant e-mails  Provide an agenda to participants before the
 A study by Websense suggested that employees are using meeting
the Web more and more for personal reasons, and it is  Prepare handouts and visual aids, and make
costing U.S. companies $178 billion annually, or $5,000
logistical arrangements ahead of time
per employee
 A 2008 survey found that more than a quarter of U.S.  Run the meeting professionally
employers have fired workers for misusing e-mail and one-  Set the ground rules for the meeting
third have fired workers for misusing the Internet on the job  Build relationships
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 Make sure that e-mail, instant messaging, texting,  A SharePoint portal allows users to create
or collaborative tools are an appropriate medium custom Web sites to access documents and
for what you want to communicate applications stored on shared devices
 Be sure to send information to the right people  Google Docs allow users to create, share, and
 Use meaningful subject lines and limit the content edit documents, spreadsheets, and presentations
of emails to one main subject, and be as clear online
and concise as possible  A wiki is a Web site designed to enable anyone
 Be sure to authorize the right people to share and who accesses it to contribute or modify Web page
edit your collaborative documents content

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  Alaska Airlines uses secure project wikis to
facilitate project communications and  Many technical people are afraid to ask for help
collaborations
 Providing examples and templates for project
 Benefits include:
communications saves time and money
◦ Better documentation
◦ Improved trust and information sharing  Organizations can develop their own templates, use
◦ Sustained growth some provided by outside organizations, or use
 The Alaska Airlines IT department even created a samples from textbooks
“Mother of All Wikis” to serve as an index for all the
known project wikis  Recall that research shows that companies that
excel in project management make effective use of
templates

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  The project manager and project team members
should each prepare a lessons-learned report
◦ A reflective statement that documents important things an
individual learned from working on the project

 The project manager often combines information

from all of the lessons-learned reports into a
project summary report

 See template and sample in Chapter 3

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 It is also important to organize and prepare project  Many project teams create a project Web site to
archives store important product documents and other
 Project archives are a complete set of organized information
project records that provide an accurate history of  Can create the site using various types of
the project software, such as enterprise project management
 These archives can provide valuable information software
for future projects as well

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  There are many software tools to aid in project
communications
 Today many people telecommute or work remotely at least
part-time. TechCast at George Washington University
forecasts that by 2019, 30 percent of U.S. private-sector
workers could work from home
 Project management software includes new capabilities to
enhance virtual communications
 While technology can aid in the communications process, it
is not the most important. Far more important is improving
an organization’s ability to communicate, which often
involves cultural change

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 The goal of project communications management

is to ensure timely and appropriate generation,
collection, dissemination, storage, and disposition
of project information
 Main process include:
◦ Plan communications management
◦ Manage communications
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◦ Control communications Management, Seventh Edition

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Management, Seventh Edition Copyright 2014 45
  Explain the concept of risk as it relates to project
management, and list the advantages of managing
project risks according to best practices
 Describe the process of identifying risks and create a
risk register and risk report
 Explain quantitative risk analysis and how to apply
decision trees, simulation, and sensitivity analysis to
quantify risks

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Management, Seventh Edition 2
Management, Seventh Edition Copyright 2014

 Project risk management is the art and [Link] risk management: deciding how to
science of identifying, analyzing, and approach and plan the risk management activities for the
responding to risk throughout the life of a
project
project and in the best interests of meeting
[Link] risks: determining which risks are likely
project objectives
to affect a project and documenting the characteristics of
◦ Risk management is often overlooked in
projects, but it can help improve project
each
success by helping select good projects, [Link] qualitative risk analysis: prioritizing
determining project scope, and risks based on their probability and impact of occurrence
developing realistic estimates

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Management, Seventh Edition Copyright 2014 Management, Seventh Edition Copyright 2014
 [Link] quantitative risk analysis:
numerically estimating the effects of risks on project
objectives
[Link] risk responses: taking steps to enhance
opportunities and reduce threats to meeting project
objectives
[Link] risk: monitoring identified and residual
risks, identifying new risks, carrying out risk response
plans, and evaluating the effectiveness of risk strategies
throughout the life of the project

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Management, Seventh Edition
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 Main output of this process is a risk management plan Topic Questions to Answer
◦ Documents the procedures for managing risk throughout a Methodology How will risk management be performed on this project?
What tools and data sources are available and
project applicable?
 The project team should review project documents as well as Roles and Which people are responsible for implementing specific
corporate risk management policies, risk categories, lessons- responsibilities tasks and providing deliverables related to risk
management?
learned reports from past projects, and templates for creating Budget and What are the estimated costs and schedules for
a risk management plan schedule performing risk-related activities?
◦ It is also important to review the risk tolerances of various Risk categories What are the main categories of risks that should be
addressed on this project? Is there a risk breakdown
stakeholders structure for the project? (See the information on risk
breakdown structures later in this chapter.)

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Management, Seventh Edition Copyright 2014 Management, Seventh Edition Copyright 2014
 Risk probability How will the probabilities and impacts of risk items be  Other broad categories of risk help identify potential risks
and impact assessed? What scoring and interpretation methods will
be used for the qualitative and quantitative analysis of ◦ Market risk
risks? How will the probability and impact matrix be
developed? ◦ Financial risk
Revised Have stakeholders’ tolerances for risk changed? How will ◦ Technology risk
stakeholders’ those changes affect the project?
tolerances
◦ People risk
Tracking How will the team track risk management activities? How ◦ Structure/process risk
will lessons learned be documented and shared? How will
 A risk breakdown structure is a hierarchy of potential risk
risk management processes be audited?
Risk What reporting formats and processes will be used for
categories for a project
documentation risk management activities?

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Management, Seventh Edition
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  Brainstorming
◦ Group attempts to generate ideas or find a solution for a
specific problem by amassing ideas spontaneously and
 Understanding what potential events might hurt or enhance a without judgment
particular project ◦ An experienced facilitator should run the brainstorming
 Another consideration is the likelihood of advanced discovery session
 Suggestions for identifying risks: tools and techniques ◦ Be careful not to overuse or misuse brainstorming
◦ Brainstorming  Psychology literature shows that individuals produce a
◦ The Delphi Technique greater number of ideas working alone than they do
◦ Interviewing through brainstorming in small, face-to-face groups
◦ SWOT analysis  Group effects often inhibit idea generation

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 Delphi Technique  Interviewing

◦ Used to derive a consensus among a panel of experts who ◦ Fact-finding technique for collecting information in face-to-
make predictions about future developments face, phone, e-mail, or virtual discussions
◦ Provides independent and anonymous input regarding ◦ Interviewing people with similar project experience is an
future events important tool for identifying potential risks
◦ Uses repeated rounds of questioning and written responses  SWOT analysis
and avoids the biasing effects possible in oral methods ◦ Strengths, weaknesses, opportunities, and threats
◦ Helps identify the broad negative and positive risks that
apply to a project

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 Triển khai:
S: Kinh nghiệm…., đi công tác xa,
W: Ko hiểu rõ sản phẩm (function, framework,…),
T: có user không hiểu, gặp trở ngại trên đường di chuyển, …
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Management, Seventh Edition
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 Lập bảng danh sách các rủi ro cho bài tập Nhóm (ít nhất 5 rủi  Assess the likelihood and impact of identified risks to
ro) determine their magnitude and priority
 Lập bảng phân tích định tính cho danh sách các rủi ro trên  Risk quantification tools and techniques
◦ Probability/impact matrixes
◦ Expert judgment

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Management, Seventh Edition Copyright 2014 Management, Seventh Edition Copyright 2014
  Lists relative probability of a risk occurring on one side of a
matrix or axis on a chart and the relative impact of the risk
occurring
◦ List the risks and then label each one as high, medium, or
low in terms of its probability of occurrence and its impact if
it did occur
 Calculates risk factors
◦ Numbers that represent the overall risk of specific events
based on their probability of occurring and the
consequences to the project if they do occur

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 Often follows qualitative risk analysis, but both can be done  A decision tree is a diagramming analysis technique used to
together help select the best course of action in situations in which
◦ Large, complex projects involving leading edge future outcomes are uncertain
technologies often require extensive quantitative risk ◦ Estimated monetary value (EMV) is the product of a risk
analysis event probability and the risk event’s monetary value
 Main techniques  You can draw a decision tree to help find the EMV
◦ Decision tree analysis
◦ Simulation
◦ Sensitivity analysis

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Management, Seventh Edition Copyright 2014 Management, Seventh Edition Copyright 2014
  Uses a representation or model of a system to analyze the
expected behavior or performance of the system
◦ Monte Carlo analysis simulates a model’s outcome many
times to provide a statistical distribution of the calculated
results
 Predict the probability of finishing by a certain date or the
probability that the cost will be equal to or less than a
certain value
 You can use several different types of distribution
functions when performing a Monte Carlo analysis

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 Steps of a Monte Carlo analysis

◦ Collect the most likely, optimistic, and pessimistic estimates
for the variables in the model
◦ Determine the probability distribution of each variable
◦ Select a random value based on the probability distribution
for each variable
◦ Run a deterministic analysis or one pass through the model
◦ Repeat steps three and four many times to obtain the
probability distribution of the model’s results

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Management, Seventh Edition Copyright 2014 Management, Seventh Edition Copyright 2014
  Used to show the effects of changing one or more variables
on an outcome
◦ For example, many people use it to determine what the
monthly payments for a loan will be given different interest
rates or periods of the loan
 Spreadsheet software, such as Microsoft Excel, is a common
tool for performing sensitivity analysis

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 Risk avoidance  Risk acceptance  Involves ensuring the appropriate risk responses are
 Risk transference  Risk mitigation performed, tracking identified risks, identifying and analyzing
new risk, and evaluating effectiveness of risk management
throughout the entire project
◦ Project risk management does not stop with the initial risk
analysis

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Management, Seventh Edition Copyright 2014 Management, Seventh Edition Copyright 2014
  Carrying out individual risk management plans involves  Risk is an uncertainty that can have a negative or
monitoring risks based on defined milestones and making positive effect on meeting project objectives
decisions regarding risks and their response strategies
 Risk management is an investment
◦ Project teams sometimes use workarounds—unplanned
 Implementing risk responses involves putting the
responses to risk events—when they do not have
appropriate risk response plans into action
contingency plans in place
 Monitoring risks involves monitoring implementation of
risk response plans, tracking identified risks, identifying
and analyzing new risks, and evaluating effectiveness of
risk management throughout the entire project

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 Understand the importance of project procurement

management and the increasing use of outsourcing
for information technology (IT) projects
 Describe the work involved in planning
procurements for projects, including determining the
proper type of contract to use and preparing a
Information Technology Project procurement management plan, statement of work,
Management, Seventh Edition source selection criteria, and make-or-buy analysis
 Discuss how to conduct procurements and
strategies for obtaining seller responses, selecting
sellers, and awarding contracts

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Management, Seventh Edition Copyright 2014 2
  Understand the process of controlling
procurements by managing procurement
relationships and monitoring contract performance  Procurement means acquiring goods and/or
 Describe the process of closing procurements services from an outside source
 Discuss types of software that are available to  Other terms include purchasing and outsourcing
assist in project procurement management  Experts predict that global spending on computer
software and services will continue to grow
 People continue to debate whether offshore
outsourcing helps their own country or not

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 Some companies, such as Wal-Mart, prefer to do no  U.S. companies are transferring more work
outsourcing at all, while others do a lot of abroad, especially in the areas of IT infrastructure,
outsourcing. GM recently announced plans to switch application development and maintenance, and
from outsourcing 90% of IT service to only 10% innovation processes
 Most organizations do some form of outsourcing to  India, China, and the Philippines are the preferred
meet their IT needs and spend most money within locations for outsourcing, and Latin America is
their own country growing in popularity
 The U.S. temporary workforce continues to grow as  A shortage of qualified personnel, not cost
people work for temporary job agencies so they can savings, is the top reason for global outsourcing of
more easily move from company to company IT services

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Management, Seventh Edition Copyright 2014 5 Management, Seventh Edition Copyright 2014 6
  A contract is a mutually binding agreement that
 To access skills and technologies obligates the seller to provide the specified products
 To reduce both fixed and recurrent costs or services and obligates the buyer to pay for them
 To allow the client organization to focus on its core  Contracts can clarify responsibilities and sharpen
business focus on key deliverables of a project
 To provide flexibility
 Because contracts are legally binding, there is more
 To increase accountability accountability for delivering the work as stated in
the contract
 A recent trend in outsourcing is the increasing size
of contracts

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 In 2011, New York City’s mayor, Michael Bloomberg,

acknowledged that City Hall had mismanaged its
 Project procurement management: Acquiring
major IT projects and vowed to improve their
goods and services for a project from outside the
oversight performing organization
 For example, prosecutors said the $700 million price  Processes include:
tag for the CityTime payroll system was inflated by ◦ Planning procurement management: Determining
fraud, and the mayor demanded $600 million back what to procure and when and how to do it
from the main contractor ◦ Conducting procurements: Obtaining seller responses,
selecting sellers, and awarding contracts
 The automated personnel system, Nycaps, suffered
◦ Controlling procurements: Managing relationships with
significant delays and cost overruns due to leadership sellers, monitoring contract performance, and making changes
issues, increasing from an original estimate of $66 as needed
million to over $363 million ◦ Closing procurements: Completing and settling each contract
or agreement, including resolving of any open items
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Management, Seventh Edition Copyright 2014 9 Management, Seventh Edition Copyright 2014 10
  Identifying which project needs can best be met
by using products or services outside the
organization

 If there is no need to buy any products or

services from outside the organization, then there
is no need to perform any of the other
procurement management processes

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 Different types of contracts can be used in different

situations:
 Several organizations, such as The Boots ◦ Fixed price or lump sum contracts: Involve a fixed total
Company PLC in England, outsource their IT price for a well-defined product or service
services to save money compared with the cost of ◦ Cost reimbursable contracts: Involve payment to the
seller for direct and indirect costs
running the systems themselves
◦ Time and material contracts: Hybrid of both fixed price
and cost reimbursable contracts, often used by
 Carefully planning procurement can also save consultants
millions of dollars, as the U.S. Air Force did by ◦ Unit price contracts: Require the buyer to pay the seller a
using a unit pricing strategy for a large office predetermined amount per unit of service
automation project  A single contract can actually include all four of these
categories, if it makes sense for that particular
procurement
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Management, Seventh Edition Copyright 2014 13 Management, Seventh Edition Copyright 2014 14
  The Point of Total Assumption (PTA) is the cost at  Cost plus incentive fee (CPIF): The buyer pays
which the contractor assumes total responsibility for the supplier for allowable performance costs plus a
each additional dollar of contract cost predetermined fee and an incentive bonus
 Contractors do not want to reach the point of total  Cost plus fixed fee (CPFF): The buyer pays the
assumption, because it hurts them financially, so supplier for allowable performance costs plus a
they have an incentive to prevent cost overruns fixed fee payment usually based on a percentage
 The PTA is calculated with the following formula: of estimated costs
PTA = (ceiling price – target price)/government share + target cost  Cost plus percentage of costs (CPPC): The
buyer pays the supplier for allowable performance
costs plus a predetermined percentage based on
total costs
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 Contract incentives can be extremely effective. On August

1, 2007, tragedy struck Minneapolis, Minnesota, when a
bridge on I-35W collapsed, killing 13 motorists, injuring 150
people, and leaving a mass of concrete and steel in the
river and on its banks
 Peter Sanderson, project manager for the joint venture of
Flatiron-Manson led his team in completing the project.
The contractors earned $25 million in incentive fees on top
of their $234 million contract for completing the bridge
three months ahead of schedule
 MnDOT justified the incentive payment by saying that each
day the bridge was closed it cost road users more than
$400,000

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Management, Seventh Edition Copyright 2014 17 Management, Seventh Edition Copyright 2014 18
  Contracts should include specific clauses to take
 Expert judgment
into account issues unique to the project
 Market research
 Can require various educational or work
 Make-or-buy analysis: General management
experience for different pay rights
technique used to determine whether an
 A termination clause is a contract clause that
organization should make or perform a particular
allows the buyer or supplier to end the contract
product or service inside the organization or buy
from someone else

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 Assume you can lease an item you need for a  Set up an equation so both options, purchase and
lease, are equal
project for $800/day. To purchase the item, the
 In this example, use the following equation. Let d be
cost is $12,000 plus a daily operational cost of the number of days to use the item:
$400/day $12,000 + $400d = $800d
Subtracting $400d from both sides, you get:
 How long will it take for the purchase cost to be $12,000 = $400d
the same as the lease cost? Dividing both sides by $400, you get:
d = 30
 If you need the item for more than 30 days, it is more
economical to purchase it

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Management, Seventh Edition Copyright 2014 21 Management, Seventh Edition Copyright 2014 22
  Describes how the procurement processes will be  A statement of work is a description of the work
managed, from developing documentation for required for the procurement
making outside purchases or acquisitions to  If a SOW is used as part of a contract to describe
contract closure only the work required for that particular contract, it
is called a contract statement of work
 Contents varies based on project needs
 A SOW is a type of scope statement
 A good SOW gives bidders a better understanding
of the buyer’s expectations

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 Request for Proposals: Used to solicit proposals

from prospective sellers
◦ A proposal is a document prepared by a seller when
there are different approaches for meeting buyer needs
 Requests for Quotes: Used to solicit quotes or
bids from prospective suppliers
◦ A bid, also called a tender or quote (short for
quotation), is a document prepared by sellers providing
pricing for standard items that have been clearly
defined by the buyer

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  It’s important to prepare some form of evaluation
criteria, preferably before issuing a formal RFP
or RFQ
 Beware of proposals that look good on paper;
be sure to evaluate factors, such as past
performance and management approach
 Can require a technical presentation as part of a
proposal

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 Deciding whom to ask to do the work  Organizations can advertise to procure goods and
 Sending appropriate documentation to potential services in several ways:
sellers ◦ Approaching the preferred vendor
 Obtaining proposals or bids ◦ Approaching several potential vendors
◦ Advertising to anyone interested
 Selecting a seller
 A bidders’ conference can help clarify the buyer’s
 Awarding a contract
expectations

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  Organizations often do an initial evaluation of all
proposals and bids and then develop a short list of
potential sellers for further evaluation
 Sellers on the short list often prepare a best and
final offer (BAFO)
 Final output is a contract signed by the buyer and
the selected seller

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 Ensures that the seller’s performance meets  A recent trend is to hire people in rural areas of the
contractual requirements same country to perform work, often at less cost.
Rural sourcing uses two simple premises: Smaller
 Contracts are legal relationships, so it is important
towns need jobs, and workers there often charge 25
that legal and contracting professionals be involved in
to 50 percent less than their urban counterparts.
writing and administering contracts
◦ Onshore Technology Services recruits workers from low-
 It is critical that project managers and team members paying jobs and gives them intensive training in IT
watch for constructive change orders, which are specialties. The company employs 65 people in IT centers in
oral or written acts or omissions by someone with the rural Missouri towns of Macon, Lebanon, and Joplin
actual or apparent authority that can be construed to ◦ CrossUSA recruits older IT workers who are nearing
have the same effect as a written change order retirement and want to enjoy a small-town quality of life. The
company has 100 employees in Sebeka, Minnesota
(population 700) and Eveleth, Minnesota (population 3,000)

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  Changes to any part of the project need to be
reviewed, approved, and documented by the same  Project managers and teams should stay closely
people in the same way that the original part of the involved to make sure the new system will meet
plan was approved business needs and work in an operational
 Evaluation of any change should include an impact environment
analysis. How will the change affect the scope,  Have backup plans
time, cost, and quality of the goods or services  Use tools and techniques, such as a contract
being provided? change control system, buyer-conducted
 Changes must be documented in writing. Project performance reviews, inspections and audits, and
team members should also document all important so on
meetings and telephone phone calls

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 Accenture developed a list of best practices from  Involves completing and settling contracts and
experienced outsourcers throughout the world: resolving any open items
1. Build in Broad Business Outcomes Early and Often  The project team should:
2. Hire a Partner, Not Just a Provider  Determine if all work was completed correctly and
3. It’s More Than a Contract, It’s a Business Relationship satisfactorily
4. Leverage Gain-Sharing  Update records to reflect final results
5. Use Active Governance  Archive information for future use
6. Assign a Dedicated Executive  The contract itself should include requirements for
7. Focus Relentlessly on Primary Objectives formal acceptance and closure

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Management, Seventh Edition Copyright 2014 37 Management, Seventh Edition Copyright 2014 38
  Procurement audits identify lessons learned in the  Word processing software helps write proposals
procurement process and contracts, spreadsheets help evaluate
 Negotiated settlements help close contracts more suppliers, databases help track suppliers, and
smoothly presentation software helps present procurement-
 A records management system provides the ability related information
to easily organize, find, and archive procurement-  E-procurement software does many procurement
related documents functions electronically
 Organizations also use other Internet tools to find
information on suppliers or auction goods and
services

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 Project procurement management involves

acquiring goods and services for a project from
outside the performing organization
 Processes include:
◦ Plan procurement management
◦ Conduct procurements Information Technology Project
◦ Control procurements
Management, Seventh Edition
◦ Close procurements

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Management, Seventh Edition Copyright 2014 41
  Understand the importance of project  Understand the process of managing stakeholder
stakeholder management throughout the life of a engagement and how to use an issue log
project effectively
 Discuss the process of identifying stakeholders,  Explain methods for controlling stakeholder
how to create a stakeholder register, and how to engagement
perform a stakeholder analysis  Discuss types of software available to assist in
 Describe the contents of a stakeholder project stakeholder management
management plan

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 Projects often cause changes in organizations, and

 Because stakeholder management is so important some people may lose their jobs when a project is
to project success, the Project Management completed. Project managers might be viewed as
Institute decided to create an entire knowledge area enemies if the project resulted in job losses for some
devoted to it as part of the Fifth Edition of the stakeholders
PMBOK® Guide in 2012  By contrast, they could be viewed as allies if they
 The purpose of project stakeholder management is lead a project that helps increase profits, produce
to identify all people or organizations affected by a new jobs, or increase pay for certain stakeholders
project, to analyze stakeholder expectations, and to  In any case, project managers must learn to identify,
effectively engage stakeholders understand, and work with a variety of stakeholders

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  Changing the way work is done can send a shock
wave through an organization, leaving many people  Identifying stakeholders: Identifying everyone involved in
afraid and even thinking about ways to stop or the project or affected by it, and determining the best ways
sabotage a project to manage relationships with them.
 Donald White, founder and program manager at  Planning stakeholder management: Determining
Defense Systems Leaders in Washington, D.C., strategies to effectively engage stakeholders
described situations that can lead to project sabotage:  Managing stakeholder engagement: Communicating and
◦ Buy-in blues working with project stakeholders to satisfy their needs and
◦ Short-term profits
expectations, resolving issues, and fostering engagement in
project decisions and activities
◦ Overachieving
◦ Lack of respect  Controlling stakeholder engagement: Monitoring
stakeholder relationships and adjusting plans and strategies
for engaging stakeholders as needed

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 Internal project stakeholders generally include the

project sponsor, project team, support staff, and
internal customers for the project. Other internal
stakeholders include top management, other
functional managers, and other project managers
because organizations have limited resources
 External project stakeholders include the project’s
customers (if they are external to the organization),
competitors, suppliers, and other external groups that
are potentially involved in the project or affected by it,
such as government officials and concerned citizens

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  A stakeholder register includes basic information on
 [Link] lists other
stakeholders:
stakeholders including:
◦ Identification information: The stakeholders’ names, positions,
◦ Program director
locations, roles in the project, and contact information
◦ Project manager’s family
◦ Assessment information: The stakeholders’ major
◦ Labor unions
requirements and expectations, potential influences, and
◦ Potential customers
phases of the project in which stakeholders have the most
 It is also necessary to focus on stakeholders with interest
the most direct ties to a project, for example only ◦ Stakeholder classification: Is the stakeholder internal or
key suppliers external to the organization? Is the stakeholder a supporter of
the project or resistant to it?

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 After identifying key project stakeholders, you can

use different classification models to determine an
approach for managing stakeholder relationships
 A power/interest grid can be used to group
stakeholders based on their level of authority
(power) and their level of concern (interest) for
project outcomes

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  Unaware: Unaware of the project and its potential
impacts on them
 Resistant: Aware of the project yet resistant to change
 Neutral: Aware of the project yet neither supportive
nor resistant
 Supportive: Aware of the project and supportive of
change
 Leading: Aware of the project

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 Instead of just saying “no” when your project sponsor asks for
something unreasonable, it is better to explain what is wrong  After identifying and analyzing stakeholders,
with the request and then present a realistic way to solve the project teams should develop a plan for
problem at hand
management them
 For example, Christa Ferguson, a PMP and independent
program manager in San Francisco, described how she  The stakeholder management plan can include:
handled a request from a project sponsor to deliver a new ◦ Current and desired engagement levels
tablet device in two months when she knew she would need ◦ Interrelationships between stakeholders
more time. Based on her experience, she knew the RFQ for ◦ Communication requirements
the effort alone would take almost a month. Christa quickly ◦ Potential management strategies for each stakeholders
researched the facts to propose a realistic delivery schedule. ◦ Methods for updating the stakeholder management plan
 The project sponsor reset expectations once he learned what
it took to produce the tablets

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  Because a stakeholder management plan often
includes sensitive information, it should not be part
of the official project documents, which are
normally available for all stakeholders to review
 In many cases, only project managers and a few
other team members should prepare the
stakeholder management plan
 Parts of the stakeholder management plan are
not written down, and if they are, distribution is
strictly limited

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 Project success is often measured in terms of

customer/sponsor satisfaction
 Project sponsors often rank scope, time, and cost
goals in order of importance and provide guidelines
on how to balance the triple constraint
 This ranking can be shown in an expectations
management matrix to help clarify expectations

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  Understanding the stakeholders’ expectations can
help in managing issues
 Issues should be documented in an issue log, a
tool used to document, monitor, and track issues
that need resolution
 Unresolved issues can be a major source of
conflict and result in stakeholder expectations not
being met
 Issue logs can address other knowledge areas as
well

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 Project managers are often faced with challenges,  You cannot control stakeholders, but you can
especially in managing stakeholders control their level of engagement
 Sometimes they simply cannot meet requests  Engagement involves a dialogue in which people
from important stakeholders seek understanding and solutions to issues of
 Suggestions for handling these situations include mutual concern
the following:  Many teachers are familiar with various
◦ Be clear from the start techniques for engaging students
◦ Explain the consequences  It is important to set the proper tone at the start of
◦ Have a contingency plan a class or project
◦ Avoid surprises
◦ Take a stand

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  Many students today like to interact via text messages. Ellen
DeGeneres, a popular comedian with her own television
 If a teacher (or manager) does nothing but lecture
show, likes to poke fun at text messages in a segment based
on the first day of class (or at meetings) or on amusing errors caused by cell phone auto-correct
criticizes the first person who offers a comment, features. For example, a father had the following text
students (or workers) will quickly decide that their exchange with his daughter:
best strategy is to keep quiet and maybe not even
attend the class (or meetings)
 On the other hand, if the teacher (or manager)
uses a lot of activities to get all participants to
speak or use technology to participate, they will
expect to be active participants in future classes
(or meetings)
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Management, Seventh Edition Copyright 2014 26 Management, Seventh Edition Copyright 2014 27

 Key stakeholders should be invited to actively

 In addition to watching out for auto-correct errors participate in a kick-off meeting rather than merely
when messaging, users must also be careful who attending it
they reply to and what they say in reply  The project manager should emphasize that a
 See the text for an example from an actual college dialogue is expected at the meeting, including texts or
student who forgot about an exam. The professor whatever means of communication the stakeholders
called the student’s cell phone shortly after the exam prefer. The project manager should also meet with
started. Her policy was to assign a grade of zero if important stakeholders before the kick-off meeting
students did not show up without a valid excuse  The project schedule should include activities and
 The student did not answer the phone call, but he deliverables related to stakeholder engagement, such
sent several texts, which were obviously not true as surveys, reviews, demonstrations, and sign-offs.

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  On some IT projects, important stakeholders are  Productivity software, communications software,
invited to be members of the project teams and collaboration tools can promote stakeholder
 For example, when Northwest Airlines (now Delta) engagement
was developing a new reservation system called  Social media can also help engage stakeholders.
ResNet, it interviewed reservation agents for For example, LinkedIn has thousands of groups
positions as programmers on the project team for project management professionals
 Northwest made sure that user needs were  Some project management software includes
understood by having them actually develop the functionality like Facebook’s to encourage
system’s user interface relationship building on projects, like giving high
fives for a job well done

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 Not all software implementations go well, and

 Elizabeth Harrin, author of Social Media for Project managing stakeholders is a major challenge
Managers, describes the pros and cons of several  The U.K. government scrapped its £11.4 billion
social media tools, including blogs, collaboration national healthcare IT initiative in September 2011
tools, instant messaging, microblogs like Twitter and after it failed to deliver the promised benefits.
Facebook, podcasts, RSS, social networks, Unfortunately, this project was just one in a series of
vodcasts (video podcasts), webinars, and wikis high-profile failures in the U.K.
 Harrin provides advice for when to use social media  In response, the government decided to send its
and when not to use it project managers back to school! They partnered
 As the saying goes, “A fool with a tool is still just a with the University of Oxford and the Deloitte
fool.” A lot of stakeholder engagement requires old- consulting firm to establish the Major Projects
fashioned techniques like talking to someone! Leadership Academy in Oxford, England
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Management, Seventh Edition Copyright 2014 32 Management, Seventh Edition Copyright 2014 33
  Managing stakeholders is now the tenth
knowledge area in the PMBOK® Guide.
 Processes include:
◦ Identify stakeholders
◦ Plan stakeholder management
◦ Manage stakeholder engagement
◦ Control stakeholder engagement

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