The Complete Project Management Office Handbook, Second Edition 9781420046809, 1420046802

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T HE C OMPLETE P ROJECT M ANAGEMENT O FFICE H ANDBOOK

ESI International Project Management Series Series Editor

J. LeRoy Ward, Executive Vice President ESI International Arlington, Virginia

Practical Guide to Project Planning Ricardo Viana Vargas 1-4200-4504-0 The Complete Project Management Office Handbook, Second Edition Gerard M. Hill 1-4200-4680-2 Determining Project Requirements Hans Jonasson 1-4200-4502-4

Other ESI International Titles Available from Auerbach Publications, Taylor & Francis Group

PMP® Challenge! Fourth Edition J. LeRoy Ward and Ginger Levin ISBN: 1-8903-6740-0 PMP® Exam: Practice Test and Study Guide, Seventh Edition J. LeRoy Ward ISBN: 1-8903-6741-9 The Project Management Drill Book: A Self-Study Guide Carl L. Pritchard ISBN: 1-8903-6734-6 Project Management Terms: A Working Glossary, Second Edition J. LeRoy Ward ISBN: 1-8903-6725-7 Project Management Tools CD, Version 4.3 ESI International ISBN: 1-8903-6736-2 Risk Management: Concepts and Guidance, Third Edition Carl L. Pritchard ISBN: 1-8903-6739-7

T HE C OMPLETE P ROJECT M ANAGEMENT O FFICE H ANDBOOK

G ERARD M. H ILL

Boca Raton New York

Auerbach Publications is an imprint of the Taylor & Francis Group, an informa business

Auerbach Publications Taylor & Francis Group 6000 Broken Sound Parkway NW, Suite 300 Boca Raton, FL 33487-2742 © 2008 by Taylor & Francis Group, LLC Auerbach is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed in the United States of America on acid-free paper 10 9 8 7 6 5 4 3 2 1 International Standard Book Number-10: 1-4200-4680-2 (Hardcover) International Standard Book Number-13: 978-1-4200-4680-9 (Hardcover) his book contains information obtained from authentic and highly regarded sources. Reprinted material is quoted with permission, and sources are indicated. A wide variety of references are listed. Reasonable efforts have been made to publish reliable data and information, but the author and the publisher cannot assume responsibility for the validity of all materials or for the consequences of their use. No part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information storage or retrieval system, without written permission from the publishers. For permission to photocopy or use material electronically from this work, please access www. copyright.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC) 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For organizations that have been granted a photocopy license by the CCC, a separate system of payment has been arranged. Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Library of Congress Cataloging-in-Publication Data Hill, Gerard M. he complete project management office handbook / Gerard M. Hill. -- 2nd ed. p. cm. -- (ESI international project management series) Includes bibliographical references and index. ISBN-13: 978-1-4200-4680-9 (alk. paper) 1. Project management--Handbooks, manuals, etc. I. Title. HD69.P75H54 2008 658.4’04--dc22 Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the Auerbach Web site at http://www.auerbach-publications.com

2007011249

Contents Acknowledgments..................................................................................................... xv Introduction............................................................................................................. xvii

Section I Practice Management 1 Project Management Methodology .............................................3 Project Environment Interface Concepts......................................................... 4 Business Environment Interface Concepts...................................................... 5 Project Management Methodology Activities across the PMO Continuum....................................................................................................... 6 Project Management Methodology Function Model ...................................... 8 Establish Basis for Project Management Methodology ............................. 9 Convene Methodology Development Team ......................................... 9 Prepare Methodology Deployment Strategy ....................................... 12 Examine Current Practices.................................................................... 20 Develop Methodology Solution ................................................................ 24 Identify Methodology Components ..................................................... 25 Design Life-Cycle Processes ................................................................. 26 Develop Project Management Practices .............................................. 33 Introduce Methodology Platform ......................................................... 35 Conduct Methodology Implementation.................................................... 38 Plan Methodology Implementation...................................................... 38 Plan Project Transition .......................................................................... 42 Conduct Methodology Training and Implementation ........................ 45 Manage Methodology Maturity ................................................................. 46 Evaluate Methodology Implementation ............................................... 46 Analyze Methodology Performance..................................................... 47 Manage Methodology Maintenance ..................................................... 49 Postscript for the Smaller PMO ..................................................................... 50 Establish Simple, Critical Processes for Project Management............ 50 Gain Increased Support for Process Expansion ................................. 51 Expand and Incorporate Technical and Business Processes............. 52

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2 Project Management Tools ........................................................55 Project Environment Interface Concepts....................................................... 56 Business Environment Interface Concepts.................................................... 58 Project Management Tools Activities across the PMO Continuum ............. 60 Project Management Tools Function Model ................................................. 61 Select Project Management Tools ............................................................. 63 Identify the Need for Project Management Tools .............................. 63 Examine General Types of Project Management Tools..................... 65 Assess Specific Project Management Tools ......................................... 67 Acquire Project Management Tools ..................................................... 69 Implement Project Management Tools..................................................... 70 Plan Tool Implementation .................................................................... 70 Plan Tool Transition.............................................................................. 71 Conduct Tool User Training................................................................. 72 Conduct Tool Implementation ............................................................. 72 Evaluate Tool Performance ....................................................................... 73 Identify and Resolve Utilization Problems .......................................... 73 Identify and Resolve Functional Problems ......................................... 74 Assess Overall Tool Effectiveness ........................................................ 74 Postscript for the Smaller PMO ..................................................................... 75

3 Standards and Metrics ...............................................................77 Project Environment Interface Concepts....................................................... 78 Business Environment Interface Concepts.................................................... 79 Standards and Metrics Activities across the PMO Continuum .................... 80 Standards and Metrics Function Model......................................................... 82 Implement Project Management Standards.............................................. 83 Examine Standards Sources.................................................................. 83 Identify Applicable Standards .............................................................. 87 Introduce Preferred Standards.............................................................. 89 Conduct Benchmarking ........................................................................ 92 Determine Project Metrics Requirements ................................................. 93 Identify Process Management and Improvement Metrics.................. 94 Identify Project Performance Metrics................................................... 97 Identify Business Management Metrics ............................................. 101 Introduce and Use Project Metrics ......................................................... 102 Establish Metrics Measurements Plan ................................................ 103 Compare Metrics Performance ........................................................... 104 Establish Corrective Actions ............................................................... 104 Postscript for the Smaller PMO ................................................................... 105

4 Project Knowledge Management ............................................109 Project Environment Interface Concepts..................................................... 110 Business Environment Interface Concepts.................................................. 111 Project Knowledge Management Activities across the PMO Continuum................................................................................................... 112 Project Knowledge Management Function Model ..................................... 114

Contents 䡲 vii Establish Knowledge Management Framework..................................... 115 Information Management.................................................................... 116 Document Management...................................................................... 119 Process Management........................................................................... 121 Collaboration Management................................................................. 122 Project Archive and Reference Library Management ....................... 125 Introduce Knowledge Management System........................................... 129 Conduct Installation and Establish Connectivity .............................. 129 Perform Function and Feature Customization .................................. 130 Introduce Project Knowledge Management Content ....................... 133 Implement Knowledge Management System......................................... 134 Develop Project Management Information System (PMIS).............. 134 Develop Executive Dashboard........................................................... 144 Construct Project Management Library.............................................. 145 Implement Online Project Collaboration........................................... 146 Implement Other Knowledge Management Tools ........................... 148 Postscript for the Smaller PMO ................................................................... 149

Section II Infrastructure Management 5 Project Governance ..................................................................153 Project Environment Interface Concepts..................................................... 154 Business Environment Interface Concepts.................................................. 155 Project Governance Activities across the PMO Continuum ...................... 156 Project Governance Function Model........................................................... 158 Prepare and Maintain PMO Charter ....................................................... 158 Define Business Purpose .................................................................... 160 Specify Organizational Alignment...................................................... 162 Highlight Functional Responsibility ................................................... 163 Specify PMO Authority ....................................................................... 164 Identify PMO Funding ........................................................................ 165 Develop Project Management Policies ................................................... 165 Evaluate Policy Needs ........................................................................ 166 Demonstrate Senior Management Support........................................ 167 Prepare Policy Guidance .................................................................... 168 Develop Project Classification Guidance ............................................... 169 Examine Project Classification Purpose............................................. 170 Identify Project Classification Criteria ................................................ 170 Implement Project Classification Guidance....................................... 173 Establish Project Manager Authority....................................................... 173 Establish Executive Control Board ......................................................... 175 Determine Executive Oversight Requirements ................................. 176 Set Control Board Parameters ............................................................ 178 Prepare Control Board Operating Procedures.................................. 178 Align Business and Technical Committees ............................................ 180 Postscript for the Smaller PMO ................................................................... 181

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6 Assessment ................................................................................183 Project Environment Interface Concepts..................................................... 184 Business Environment Interface Concepts.................................................. 185 Assessment Activities across the PMO Continuum .................................... 185 Assessment Function Model......................................................................... 187 Conduct Competency Assessments......................................................... 187 Identify Competency Assessments ..................................................... 188 Conduct Competency Assessments.................................................... 189 Implement Competency Improvement Plans.................................... 190 Conduct Capability Assessments............................................................. 191 Identify Capability Assessments ......................................................... 192 Conduct Capability Assessments ........................................................ 194 Implement Capability Improvement Plans........................................ 196 Conduct Maturity Assessments................................................................ 198 Identify Maturity Assessments ............................................................ 198 Conduct Maturity Assessments ........................................................... 200 Implement Maturity Advancement Plans........................................... 202 Postscript for the Smaller PMO ................................................................... 203

7 Organization and Structure .....................................................205 Project Environment Interface Concepts..................................................... 206 Business Environment Interface Concepts.................................................. 206 Organization and Structure Activities across the PMO Continuum .......... 207 Organization and Structure Function Model .............................................. 209 Set Up the PMO Structure....................................................................... 209 Identify Staff Needs for PMO Functions ........................................... 210 Introduce PMO Staff ........................................................................... 214 Analyze and Establish PMO Relationships........................................ 215 Establish Project Team Structure............................................................. 216 Specify Project Team and PMO Relationship ................................... 217 Define Standard Project Team Structure ........................................... 221 Define Extended Project Team Alignment........................................ 225 Develop Stakeholder Participation ......................................................... 228 Manage Internal Project Team Stakeholders..................................... 229 Manage Internal Oversight Stakeholders........................................... 230 Manage Internal-Support Stakeholders.............................................. 231 Manage Customer Stakeholders ......................................................... 233 Manage Vendor and Contractor Stakeholders .................................. 234 Manage Other Project Stakeholders................................................... 235 Postscript for the Smaller PMO ................................................................... 237

8 Facilities and Equipment Support ..........................................239 Project Environment Interface Concepts..................................................... 240 Business Environment Interface Concepts.................................................. 241 Facilities and Equipment Support Activities across the PMO Continuum................................................................................................... 242 Facilities and Equipment Support Function Model.................................... 242

Contents 䡲 ix Establish Project Team Requirements..................................................... 244 Establish Workspace Requirements.................................................... 245 Establish Equipment Requirements.................................................... 246 Manage Project Facilities ......................................................................... 250 Manage Facility Acquisition Options ................................................. 251 Monitor Facility Utilization ................................................................. 253 Ensure Adequacy of Facilities ............................................................ 253 Monitor Facility Disposition ............................................................... 255 Manage Project Equipment ..................................................................... 257 Manage Equipment Acquisition ......................................................... 258 Manage Equipment Assignments ....................................................... 260 Monitor Equipment Assignments ....................................................... 261 Manage Equipment Disposition ......................................................... 262 Postscript for the Smaller PMO ................................................................... 263

Section III Resource Integration 9 Resource Management .............................................................267 Project Environment Interface Concepts..................................................... 268 Business Environment Interface Concepts.................................................. 269 Resource Management Activities across the PMO Continuum.................. 269 Resource Management Function Model ...................................................... 270 Acquire Project Resources ....................................................................... 272 Identify Resource Providers................................................................ 272 Establish Resource Requirements....................................................... 275 Fulfill Resource Requests.................................................................... 277 Assign Project Resources ......................................................................... 278 Prepare Resource Assignment Notifications...................................... 279 Obtain Individual Resource Commitments ....................................... 279 Introduce Resources to the Project Team ......................................... 279 Deploy Project Resources........................................................................ 280 Perform Deployment Administration ................................................. 281 Identify and Arrange Relevant Training ............................................ 282 Monitor Travel Arrangements............................................................. 284 Manage Resource Performance............................................................... 284 Develop Performance Management Guidance ................................. 284 Conduct Project Resource Performance Reviews ............................. 286 Monitor Project Resource Performance ............................................. 288 Close Project Resource Assignments ...................................................... 289 Coordinate Resource Extensions........................................................ 289 Facilitate Resource Transfers and Reassignments ............................. 289 Manage Resource Terminations ......................................................... 290 Postscript for the Smaller PMO ................................................................... 290

10 Training and Education ...........................................................293 Project Environment Interface Concepts..................................................... 294 Business Environment Interface Concepts.................................................. 294

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䡲 The Complete Project Management Office Handbook Training and Education Activities across the PMO Continuum ................ 295 Training and Education Function Model .................................................... 297 Establish Training Program...................................................................... 298 Assess Training Needs ........................................................................ 298 Determine Training Requirements ..................................................... 300 Identify Training Resources ................................................................ 302 Prepare Training Plan ......................................................................... 305 Select and Develop Training Courses ............................................... 306 Manage Training Program ....................................................................... 308 Establish Training Registration Capability ......................................... 308 Publicize and Promote Training Program ......................................... 310 Conduct Project Management Training ............................................. 311 Evaluate Training Program ...................................................................... 313 Evaluate Training Plan Implementation ............................................ 313 Evaluate Training Resources............................................................... 314 Update Training Program ................................................................... 315 Postscript for the Smaller PMO ................................................................... 315

11 Career Development ................................................................317 Project Environment Interface Concepts..................................................... 318 Business Environment Interface Concepts.................................................. 319 Career Development Activities across the PMO Continuum..................... 320 Career Development Function Model ......................................................... 320 Develop Project Management Career Path ............................................ 322 Establish Project Management as a Professional Discipline ............ 323 Define Career Advancement Model................................................... 327 Construct Position Descriptions and Qualifications ......................... 334 Integrate New Career Path into the Organization............................ 336 Support Project Management Career Planning...................................... 338 Provide General Career Guidance ..................................................... 338 Promote Business Skill Development................................................ 339 Implement Career Planning Support ................................................. 341 Establish Professional Certification ......................................................... 341 Develop Project Management Certification Program ....................... 342 Facilitate Technical and Professional Certification ........................... 345 Postscript for the Smaller PMO ................................................................... 346

12 Team Development ..................................................................347 Project Environment Interface Concepts..................................................... 348 Business Environment Interface Concepts.................................................. 348 Team Development Activities across the PMO Continuum ...................... 349 Team Development Function Model........................................................... 351 Facilitate Cohesive Team Formation ...................................................... 351 Examine Project Team Composition.................................................. 353 Develop Project Team Orientation Program..................................... 355 Integrate Vendors and Contractors .................................................... 356 Facilitate Virtual Team Management ...................................................... 358 Establish Virtual Team Alignment ...................................................... 359

Contents 䡲 xi Facilitate Virtual Team Interactions.................................................... 360 Introduce Virtual Team Technology .................................................. 364 Enable Project Team Development ........................................................ 365 Promote Team Skill Learning ............................................................. 365 Develop Project Manager Tools and Techniques............................. 366 Facilitate Leadership Development .................................................... 367 Monitor Project Team Performance........................................................ 369 Assess Team Dynamics....................................................................... 369 Examine Team Effectiveness .............................................................. 370 Conduct Team Improvement Activities ............................................. 371 Postscript for the Smaller PMO ................................................................... 373

Section IV Technical Support 13 Mentoring..................................................................................377 Project Environment Interface Concepts..................................................... 378 Business Environment Interface Concepts.................................................. 380 Mentoring Activities across the PMO Continuum ...................................... 381 Mentoring Function Model........................................................................... 383 Establish Project Management Mentoring Program............................... 383 Develop the Mentoring Approach ..................................................... 383 Identify Mentor–Protégé Roles and Responsibilities ........................ 390 Determine Mentor Sourcing Process ................................................. 396 Engage Project Management Mentors .................................................... 400 Identify Mentor Candidates ................................................................ 400 Conduct Mentor Candidate Qualification.......................................... 402 Prepare Project Management Mentors............................................... 403 Conduct Project Management Mentoring ............................................... 404 Identify Engagement ........................................................................... 405 Assign Mentor (or Mentors) ............................................................... 405 Prepare for Mentoring Engagement................................................... 406 Perform Mentoring Engagement Activities........................................ 407 Closeout Mentor–Protégé Relationship.............................................. 408 Evaluate Mentoring Program................................................................... 408 Evaluate Mentor Performance ............................................................ 408 Monitor Mentoring Program Results .................................................. 409 Postscript for the Smaller PMO ................................................................... 410

14 Project Planning .......................................................................413 Project Environment Interface Concepts..................................................... 414 Business Environment Interface Concepts.................................................. 415 Project Planning Activities across the PMO Continuum............................ 416 Project Planning Function Model ................................................................ 418 Establish Project Planning Capability ..................................................... 419 Define Project Plan Components....................................................... 419 Implement Project Planning Processes and Tools............................ 421 Establish Planning Facilitation and Support Capability.................... 426

xii 䡲 The Complete Project Management Office Handbook Facilitate Project Planning Workshop ..................................................... 431 Manage Planning Workshop Arrangements ...................................... 431 Facilitate Project Workplan Development ......................................... 434 Perform Follow-Up Planning Support ............................................... 436 Administer Project Planning .................................................................... 438 Specify Primary Project Management Plans ...................................... 439 Recommend Essential Project Support Plans.................................... 453 Prepare Project Plan Content Guidance............................................ 457 Evaluate Project Planning ................................................................... 458 Postscript for the Smaller PMO ................................................................... 462

15 Project Auditing ........................................................................465 Project Environment Interface Concepts..................................................... 466 Business Environment Interface Concepts.................................................. 467 Project Auditing Activities across the PMO Continuum ............................ 467 Project Auditing Function Model................................................................. 470 Set Up Project Auditing Capability ......................................................... 470 Determine Project Auditing Needs .................................................... 471 Identify Project Auditing Resources................................................... 481 Establish Project Audit Performance Points ...................................... 485 Conduct Project Auditing ........................................................................ 487 Prepare for Project Audits and Reviews ........................................... 487 Conduct Project Audit......................................................................... 489 Prepare Project Audit Report ............................................................. 491 Manage Project Auditing Results ............................................................ 492 Review Project Audit Results.............................................................. 492 Analyze Aggregate Program Results .................................................. 494 Monitor Project Audit Follow-Up Actions ......................................... 495 Postscript for the Smaller PMO ................................................................... 496

16 Project Recovery.......................................................................499 Project Environment Interface Concepts..................................................... 500 Business Environment Interface Concepts.................................................. 501 Project Recovery Activities across the PMO Continuum ........................... 501 Project Recovery Function Model................................................................ 503 Develop Recovery Assessment Process.................................................. 505 Identify Recovery Indicators............................................................... 505 Assess Project and Identify Problem Areas....................................... 506 Prepare Project Recovery Decision Package .................................... 514 Coordinate Project Recovery Decision .............................................. 515 Plan and Conduct Project Recovery ....................................................... 516 Establish Project Recovery Team ....................................................... 516 Develop Project Recovery Plan.......................................................... 522 Stabilize Project Using Recovery Solution......................................... 524 Conclude Project Recovery................................................................. 527 Capture Recovery Lessons Learned ........................................................ 529 Examine Project Management Indicators .......................................... 529 Examine Project Selection Criteria ..................................................... 530

Contents 䡲 xiii Examine Project Recovery Process .................................................... 531 Update Routine and Project Recovery Remedies ............................. 531 Postscript for the Smaller PMO ................................................................... 532

Section V Business Alignment 17 Project Portfolio Management ................................................537 Project Environment Interface Concepts..................................................... 538 Business Environment Interface Concepts.................................................. 538 Portfolio Management Activities across the PMO Continuum .................. 539 Project Portfolio Management Function Model .......................................... 541 Set Up Project Portfolio Management .................................................... 541 Validate Business Strategy and Interests ........................................... 543 Identify Project Selection Criteria....................................................... 544 Determine Project Selection Mechanism ........................................... 549 Identify Project Portfolio Management Roles.................................... 556 Establish a Supportive Project Environment ..................................... 561 Perform Project Selection ........................................................................ 563 Conduct Project Screening ................................................................. 564 Develop Project Business Plan .......................................................... 566 Develop Project Resource Allocation Plan........................................ 572 Conduct Project Selection................................................................... 576 Integrate Projects in the Portfolio........................................................... 577 Validate Project Selection.................................................................... 578 Determine Project Priority .................................................................. 579 Approve Initial Project Funding......................................................... 579 Conduct Project and Portfolio Reviews ................................................. 580 Compile Project Performance Information........................................ 580 Conduct Project Gateway Reviews .................................................... 581 Conduct Portfolio Reviews ................................................................. 586 Manage Portfolio Attrition ....................................................................... 588 Perform Project Closeout.................................................................... 589 Assess Strategic Advantage ................................................................. 590 Assess Customer Satisfaction .............................................................. 591 Postscript for the Smaller PMO ................................................................... 592

18 Customer Relationship Management .....................................595 Project Environment Interface Concepts..................................................... 596 Business Environment Interface Concepts.................................................. 597 Customer Relationship Management Activities across the PMO Continuum................................................................................................... 597 Customer Relationship Management Function Model ............................... 598 Manage Customer Relationships ............................................................. 600 Manage Customer Project Information.............................................. 600 Manage Customer Business Information........................................... 602 Manage Customer Project Participation............................................. 603 Manage Customer Contracts.................................................................... 605

xiv 䡲 The Complete Project Management Office Handbook Produce and Manage Customer Proposals ....................................... 606 Establish Customer Contracts ............................................................. 611 Conduct Customer Contract Administration...................................... 612 Manage Customer Satisfaction................................................................. 620 Measure Customer Satisfaction........................................................... 620 Conduct Customer Relationship Programs........................................ 623 Implement Customer-Centric Improvements..................................... 624 Postscript for the Smaller PMO ................................................................... 626

19 Vendor and Contractor Relationship Management ..............629 Project Environment Interface Concepts..................................................... 630 Business Environment Interface Concepts.................................................. 630 Vendor and Contractor Relationships Activities across the PMO Continuum................................................................................................... 631 Vendor and Contractor Relationships Function Model .............................. 631 Manage Vendor/Contractor Relationships .............................................. 633 Identify Vendor and Contractor Needs.............................................. 633 Manage Vendor and Contractor Information .................................... 636 Prescribe Vendor and Contractor Participation................................. 638 Manage Vendor/Contractor Acquisition.................................................. 640 Identify and Qualify Vendors and Contractors ................................. 640 Solicit Vendor and Contractor Proposals........................................... 642 Prepare Vendor and Contractor Contracts ........................................ 646 Manage Vendor and Contractor Performance ....................................... 647 Administer Vendor and Contractor Contracts ................................... 647 Monitor Vendor and Contractor Performance .................................. 652 Postscript for the Smaller PMO ................................................................... 655

20 Business Performance Management ......................................657 Project Environment Interface Concepts..................................................... 658 Business Environment Interface Concepts.................................................. 659 Business Performance Management Activities across the PMO Continuum................................................................................................... 659 Business Performance Management Function Model ................................ 662 Develop Integrated Business Solutions .................................................. 662 Demonstrate Project Management Business Value........................... 663 Generate Executive Value Awareness................................................ 669 Align Business and Project Management Performance.................... 673 Manage Business Collaboration .............................................................. 675 Conduct Operational Business Collaboration ................................... 675 Conduct Tactical Business Collaboration .......................................... 677 Conduct Strategic Business Collaboration ......................................... 678 Manage PMO Business Fulfillment ......................................................... 679 Manage PMO Business Function Evolution ...................................... 680 Develop PMO and Enterprise Business Alignment.......................... 685 Postscript for the Smaller PMO ................................................................... 688

Acknowledgments It was a distinct pleasure to perform the extensive review and revision of The Complete Project Management Office Handbook, per the publisher’s request to do so. To that end, I would like to extend my appreciation to all readers, as well as to all those who have reviewed and promoted or endorsed this publication. A few years have passed since the original work was released, and there were definitely some topical areas of this book that benefited from my further attention and examination as I prepared this second edition. The review and revision process prompted me to recall the effort put into my original work. In particular, I remember the names and faces that provided the early encouragement, counsel, and support that enabled my work to be published in the first place. Paul Shaltry, among several manuscript reviewers, served as the primary technical advocate for what was right or wrong about my content; and his valuable advice and guidance were revisited and remained intact as I prepared this second edition. My tenure with ESI International, as Vice President of Technical Services, was also brought to mind, and I recall that period of my career with genuine appreciation for that affiliation, but especially for the encouragement and support provided by other members of the executive management team, which enabled the original publication of The Complete Project Management Office Handbook. Today my focus is on pursuing professional project management and business interests through the establishment and efforts of the Hill Consulting Group. The depth of my ongoing interest in the concepts and practices of modern project management continues to amaze me, and my current work reflects a desire to devise concepts and solutions that can be shared with others. In that light, my recent work provided distinct xv

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contributions to the preparation of this second edition. For example, during much of the past year or so, I have been delving into r esearch that supported development of the new, matrix-based ProjectPRISM™ Methodology for Project Management. This particular work effort alone contributed to major revisions across several chapters of this second edition, notably the first chapter dealing with project management methodology. As well, my recent professional activities included serving as chairperson for a couple of national project portfolio management conferences; and those professional forums, among others, facilitated topical discussions and personal learning that certainly influenced my content review and revision efforts across many chapters of this book. I hope that my professional efforts will provide extended value for other professionals in the project management and business environments across industries. Finally, and once again, this second edition was made possible by the love, encouragement, and support of my wife, Rita, who continues to shine a persistent light on the paths I take to pursue my life’s work and my professional interests. Gerard M. Hill [email protected]

PRACTICE MANAGEMENT

© 2008 by Taylor & Francis Group, LLC

I

Chapter 1

Project Management Methodology A project management methodology provides a standard, repeatable process to guide project performance from concept to completion. It introduces and applies generally accepted project management techniques and practices that fit within the culture and business needs of the relevant organization. It includes identification of the roles and responsibilities associated with each process step, as well as specification of the input and output for the prescribed sequence of process steps. In essence, a project management methodology conveys to project managers and project team members what to do and how to do it. The organization can begin fulfilling methodology needs by first introducing just a series of simple processes for use in the project management environment. This will ensure that the activities of project management that are most essential to the relevant organization are being completed. Then, having this foundation, the organization should aim toward developing a more complete and comprehensive process that specifies activities for the entire project management life cycle. This “complete” methodology should address five general project management functions: (1) initiation, (2) planning, (3) executing, (4) controlling, and (5) closing. A methodology is developed to apply adopted standards and practices to project management, such as that contained in A Guide to the Project Management Body of Knowledge (PMBOK®*). The specification of standards * PMBOK is a trademark of the Project Management Institute, Inc. (PMI), which is registered in the United States and other nations. 3 © 2008 by Taylor & Francis Group, LLC

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and practices is what differentiates the project management methodology from a technical methodology. The project management methodology is a set of processes that can be applied to all types of projects in the relevant organization. In contrast, a technical methodology applies technical standards and deals primarily with the technical aspects of work associated with projects. In larger organizations, there may be one or more technical methodologies needed to accomplish work in different business units. Conversely, the project management methodology can be the same one used across all business units in the relevant organization. Ideally, the organization’s project management methodology will be constructed to integrate one or more technical processes for seamless use. This “project management methodology” function enables the Project Management Office (PMO) to: 䡲 Establish the standard approach to project management that is to be used by all project managers within the relevant organization. 䡲 Introduce project management practices incrementally, beginning with those that have the greatest impact on project and business success. 䡲 Achieve consensus for implementing a common project management life cycle across the relevant organization’s technical and business areas. 䡲 Provide for collection of pertinent project data used in individual and aggregate analyses of project performance. 䡲 Identify and incorporate technical and business processes into the project management methodology. The “project management methodology” function requires coordination and collaboration with key stakeholders — predominantly project managers — in the project management environment. It is imperative that any project management methodology grows to be supportive of technical and business efforts, so it is essential to involve project engineers, product managers, and other technical and business specialists, as simple processes are expanded to life-cycle processes. Furthermore, because policies for methodology deployment are formulated and communicated to all project participants at the executive level, the development and deployment of a standard project management methodology within the relevant organization distinctly requires executive level and senior management buy-in and support.

Project Environment Interface Concepts A project management methodology is central to the project management environment. As such, it should be responsive to the needs of all project © 2008 by Taylor & Francis Group, LLC

Project Management Methodology 䡲 5

stakeholders and guide them through the key activities of project management. An effective project management methodology conveys to all stakeholders “how we manage projects.” It accomplishes this by establishing a common frame of reference for everyone participating or having interest in project performance. To that end, it should support all interactions among business, technical, and project management participants. It also provides an immediate reference for those stakeholders on the periphery of or outside the immediate project involvement, to inform them and set expectations about what will be achieved through prescribed project management activities. Accordingly, the project management methodology introduces the relevant organization’s philosophy, concepts, standard approach, and common terminology for project work. This allows cross-functional project managers and project team members to understand and share the same project management experience. Consequently, each project manager does not have to create and convey a tactical approach for each new project and for each new team member. As a result, over time, cross-functional teams become more efficient, more productive, and more successful in producing project deliverables and in accomplishing project objectives.

Business Environment Interface Concepts Inasmuch as the PMO itself functions as an integrator for the organization, the project management methodology is a central mechanism for project and business management integration. A prominent aspect of this integration is seen when each business unit in the relevant organization adapts and incorporates its technical and business processes so that it will be consistent with the methodology. This is an important concept that requires broad organization buy-in. Once a methodology is set in place, business units having specific business function or technical area responsibilities can no longer practice old behaviors that may misalign with or be counterproductive to the project management methodology. To that end, each business unit should examine the standards and practices prescribed by the project management methodology, and use them to help produce both technical and business results. The project management methodology provides a foundation for