PowerPoint Presentation
Information Technology
FIT2002
IT Project Management
Lecture 3
Project Integration Management
Video 1:
Learning Objectives
Describe an overall framework for project integration
management as it relates to the other project management
knowledge areas and the project life cycle
Discuss the strategic planning process and apply different
project selection methods
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 2
Project managers must coordinate all of the other knowledge
areas throughout a project’s 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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 3
The Key to Overall Project Success: Good
Project Integration Management
1. Developing the project charter involves working with
stakeholders to create the document that formally
authorises a project —the charter.
2. Developing the project management plan involves
coordinating all planning efforts to create a consistent,
coherent document —the project management plan.
3. Directing and managing project work involves carrying
out the project management plan by performing the
activities included in it.
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 4
Project Integration Management Processes
4. Monitoring and controlling project work involves
overseeing activities to meet the performance objectives of
the project
5. Performing integrated change control involves
identifying, evaluating, and managing changes throughout
the project life cycle.
6. Closing the project or phase involves finalising all
activities to formally close the project or phase.
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 5
Project Integration Management Processes
(cont’d)
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 6
Project Integration Management Summary
Strategic planning involves determining long-term
objectives, predicting future trends, and projecting the need
for new products and services
Organisations often perform a SWOT analysis
– analyzing Strengths, Weaknesses, Opportunities, and
Threats
As part of strategic planning, organisations
– identify potential projects
– use realistic methods to select which projects to work on
– formalize project initiation by issuing a project charter
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 7
Strategic Planning and Project Selection
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 8
Mind Map of a SWOT Analysis to Help
Identify Potential Projects
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 9
Information Technology Planning Process
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 10
Best Practice
A 2013 survey identified companies most admired for their ability
to apply IT-related business capabilities for competitive
advantage
Many organisations rely on effective new product development
(NPD) to increase growth and profitability.
4 important forces behind NPD’s success include the following:
1. A product innovation and technology strategy for the business
2. Resource commitment and focusing on the right projects, or
solid portfolio management
3. An effective, flexible, and streamlined idea-to-launch process
4. The right climate and culture for innovation, true cross-functional
teams, and senior management commitment to NPD
Video 2:
Learning Objective:
Discuss the different methods for project selection
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 11
There are usually more projects than available time and
resources to implement them
Methods for selecting projects include:
– focusing on broad organisational needs
– categorising information technology projects
– performing net present value or other financial analyses
– using a weighted scoring model
– implementing a balanced scorecard
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 12
Methods for Selecting Projects
It is often difficult to provide strong justification for many IT
projects, but everyone agrees they have a high value
“It is better to measure gold roughly than to count pennies
precisely”
Three important criteria for projects:
– There is a need for the project
– There are funds available
– There’s a strong will to make the project succeed
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 13
Focusing on Broad Organisational Needs
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 14
Categorising IT Projects
Selecting projects based on various categorisations:
project’s impetus – whether the project addresses:
– a problem
– an opportunity, or
– a directive
time window
– some potential projects must be finished within a specific
time window; otherwise, they are no longer valid
overall priority of the project
– higher priority projects should be completed first
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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 15
Financial Analysis of Projects
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
Projects with a positive NPV should be considered if financial
value is a key criterion
The higher the NPV, the better
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 16
Net Present Value Analysis
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 17
Net Present Value Example
Discount rate 10%
Discount factor 0.91 0.83 0.75 0.68 0.62
PROJECT 1 Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Benefits $0 $2,000 $3,000 $4,000 $5,000 $14,000
Costs $5,000 $1,000 $1,000 $1,000 $1,000 $9,000
Cash flow ($5,000) $1,000 $2,000 $3,000 $4,000 $5,000
Discounted cash flow ($4,545) $826 $1,503 $2,049 $2,484
Cumulative disc cash flow ($4,545) ($3,719) ($2,216) ($167) $2,316
NPV $2,316.35
PROJECT 2 Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Benefits $1,000 $2,000 $4,000 $4,000 $4,000 $15,000
Costs $2,000 $2,000 $2,000 $2,000 $2,000 $10,000
Cash flow ($1,000) $0 $2,000 $2,000 $2,000 $5,000
NPV $3,201.41
Note that totals
are equal but
NPVs are not
because of the
time value of
money
NPV Calculation
Assuming cash flow starts at end of period 0 (= beginning of Period 1) , i.e. start from Year 0
Discount rate 10%
Discount factor 1.00 0.91 0.83 0.75 0.68
Year 0 1 2 3 4 TOTAL
Benefits $0 $2,000 $3,000 $4,000 $5,000 $14,000
Discounted benefit $0 $1,818 $2,479 $3,005 $3,415 $10,718
Costs $5,000 $1,000 $1,000 $1,000 $1,000 $9,000
Discounted costs $5,000 $909 $826 $751 $683 $8,170
Cash flow ($5,000) $1,000 $2,000 $3,000 $4,000 $5,000
Discounted cash flow ($5,000) $909 $1,653 $2,254 $2,732 $2,548
Cumulative disc cash flow ($5,000) ($4,091) ($2,438) ($184) $2,548
NPV $2,547.98
Assuming cash flow starts at end of period 1 (= end of Period 1), i.e. start from Year 1
Discount rate 10%
Discount factor 0.91 0.83 0.75 0.68 0.62
Year 1 2 3 4 5 TOTAL
Benefits $0 $2,000 $3,000 $4,000 $5,000 $14,000
Discounted benefit $0 $1,653 $2,254 $2,732 $3,105 $9,743
Costs $5,000 $1,000 $1,000 $1,000 $1,000 $9,000
Discounted costs $4,545 $826 $751 $683 $621 $7,427
Cash flow ($5,000) $1,000 $2,000 $3,000 $4,000 $5,000
Discounted cash flow ($4,545) $826 $1,503 $2,049 $2,484 $2,316
Cumulative disc cash flow ($4,545) ($3,719) ($2,216) ($167) $2,316
NPV $2,316.35
ROI 31.2%
1
(1+0.1)0
1
(1+0.1)1
𝑁𝑃𝑉 =
𝑡=0…𝑛
𝐴𝑡/(1 + 𝑟)
𝑡
ROI =
total discounted benefits
– total discounted costs
discounted costs
Or
ROI = NPV
discounted costs
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 19
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
= NPV / discounted costs
The higher the ROI, the better
Many organisations 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
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 organisations want IT projects to have a fairly short
payback period
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 20
Payback Analysis
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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 21
Weighted Scoring Model
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 22
Sample Weighted Scoring Model for Project
Selection
Drs. Robert Kaplan and David Norton developed this
approach to help select and manage projects that align with
business strategy
A balanced scorecard
– is a methodology that converts an organisation’s value
drivers, such as customer service, innovation,
operational efficiency, and financial performance, to
a series of defined metrics
See www.balancedscorecard.org for more information
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 23
Implementing a Balanced Scorecard
Video 3:
Learning Objectives
Explain the importance of creating a project charter to
formally initiate projects
Describe project management plan development,
understand the content of these plans, and review
approaches for creating them
Explain project execution, its relationship to project
planning, the factors related to successful results, and tools
and techniques to assist in directing and managing project
work
Describe the process of monitoring and controlling a project
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 24
A project charter is a document that formally recognizes the
existence of a project and provides direction on the project’s
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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 25
1. Developing a Project Charter
Inputs:
– A project statement of work (SOW)
– A business case
– Agreements
– Enterprise environmental factors
– Organisational process assets, which include formal and
informal plans, policies, procedures, guidelines, information
systems, financial systems, management systems, lessons
learned, and historical information
Tools and Techniques:
– Expert judgement
– Facilitation techniques
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning
Inputs, Tools and Techniques for Developing
a Project Charter
26
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 27
Project Charter – An Example
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 28
Project
Charter
(cont.)
A project management plan is a document used to coordinate
all project planning documents and help guide a project’s
execution and control
Plans created in the other knowledge areas are subsidiary parts
of the overall project management plan
It should be dynamic, flexible, and subject to change when the
environment or project changes.
Main inputs: project charter, outputs from planning processes,
enterprise environment factors, and organisational process
assets
Main tool and technique: expert judgment
Output: project management plan
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 29
2. Developing a Project Management Plan
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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 30
3. Directing and Managing Project Work
Project planning and execution are intertwined and
inseparable activities
Those who will do the work should help to plan the work
Project managers must solicit input from the team to develop
realistic plans
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 31
Coordinating Planning and Execution
Project managers must lead by example to demonstrate the
importance of creating and then following good project plans
Organisational 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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 32
Providing Leadership and a Supportive
Culture
Changes are inevitable on most projects, so it’s important to
develop and follow a process to monitor and control changes
Monitoring project work includes collecting, measuring, and
disseminating performance information
Inputs: The project management plan, schedule and cost
forecasts, validated changes, work performance information,
enterprise environmental factors, and organizational process
assets
A baseline is the approved project management plan plus
approved changes
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 33
4. Monitoring and Controlling Project Work
Video 4:
Learning Objectives
Understand the integrated change control process,
planning for and managing changes on information
technology (IT) projects, and developing and using a
change control system
Explain the importance of developing and following good
procedures for closing projects
Describe how software can assist in project integration
management
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 34
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 35
5. Performing Integrated Change Control
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
Inputs to the integrated change control process:
– project management plan, work performance information,
change requests, enterprise environmental factors, and
organisational process assets
Outputs from the integrated change control process:
– project management plan, work performance information,
change requests, enterprise environmental factors, and
organisational process assets
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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 36
Change Control on Information Technology
Projects
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 37
Change Control System
A change control system is a formal, documented process
that describes when and how official project documents and
work may be changed
Describes who is authorised to make changes and how to
make them
Includes:
– a change control board,
– configuration management, and
– a process for communicating changes
A change control board is 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 organisation
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 38
Change Control Board (CCB)
Some CCBs only meet occasionally, so it may take too long for
changes to occur
Some organisations have policies in place for time-sensitive
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
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 39
Making Timely Changes
Configuration management ensures that the descriptions of
the project’s 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
See www.icmhq.com for more information
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 40
Configuration Management
Communicating changes
Communication is an important factor in change control
Could be formal or informal
– Formal: written and oral performance reports
– Informal: Phone or “Stand-up” meetings
Why is good communication so critical to success?
– Everyone is coordinated and informed
– Easier to integrate all project changes so that the project
stays on track
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 41
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 42
6. Closing Projects or Phases
To close a project or phase, you must finalize all activities and
transfer the completed or cancelled work to the appropriate
people
Main inputs to this process:
– project management plan, accepted deliverables, and
organisational process assets.
The main tool and technique is expert judgment.
Main outputs include
– Final product, service, or result transition
– Organisational process asset updates
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 can facilitate communications
Project management software can pull everything together
and show detailed and summarized information
Schwalbe, K.. (2015). Information Technology Project Management. (8e) Cengage Learning 43
Using Software to Assist in Project Integration
Management