Project Management Framework Tutorial

2.1 Lesson 02 - Project Management Framework

Hello and welcome to PMP Certification Course offered by Simplilearn! In this lesson, we will focus on Project Management Framework. Let us begin with the objectives of this lesson.

2.2 Objectives

After completing this lesson, you will be able to: ?Define project, project management, program management, and portfolio management ?Recognize the roles of project management office ?Identify the project constraints and their impact on the project ?Explain the role of a project manager in stakeholder management ?Describe different organization structure ?Differentiate between a project life cycle and a product life cycle Let us begin this lesson with understanding what a project is, in the next screen.

2.3 Project

A project is a temporary endeavor undertaken to create a unique product, service, or result. For example, developing a new product, service, or result; constructing a building, industrial plant, or infrastructure; and implementing, improving, or enhancing existing business processes and procedures. In the next screen, we will focus on the characteristics of a project.

2.4 Characteristics of a Project

A project can be distinguished based on its characteristics. The definition describes two characteristics of a project. First, it is temporary in nature. Temporary here, does not mean short in duration. A project can extend for long duration based on the requirements, for example, creating a new “Indigenous Missile Defense System” for a country. However, there is always a definite planned start and end date for a project. It cannot go on indefinitely. Secondly, the project is supposed to produce a unique output. The output could be a product, service, or result. There can be many common activities between two projects, but the outcome of each project should be unique in some way or the other. Now, let us look at what marks the end of a project. A project ends when either the objectives are met or the project is terminated because the objectives will not or cannot be met. The other reason to terminate the project can be that the need for the output of the project does not exist anymore. Usually, the sponsor of the project takes a call about the closure of the project. It is important to differentiate project work from regular operational work. For example, your office receptionist does the same work every day of picking any incoming call and directing the call to the right person in the office. This is an ongoing repetitive work and can be classified as “Operation”. Operations, unlike projects, are neither temporary, nor unique. Creating a new Software System to effectively track your customer complaint can be an example of a project. When the software is successfully developed, the project objective is met which marks the end of the project. When you start using this software to track customer complaints, you are entering into the operations phase. In the next screen, let us now look into project management.

2.5 Project Management

As defined in the PMBOK® (pronounce as “Pim-bok”) Guide, “Project management is the application of knowledge, skills, and tools and techniques applied to project activities to meet the project requirements.” Project management is achieved by proper application and integration of the 47 processes. Project application and integration means these processes should be executed in the right manner as well as in the right order. In the next screen, let us discuss how to manage a project.

2.6 Project Management Activities

In terms of actual activities, managing a project typically requires the following three steps: identifying project requirements, managing stakeholders, and balancing project’s constraints. Click each step to learn more. (1) At the initiation stage of a project, high-level requirements are identified. However, to meet the project objectives, it is essential to analyze these requirements in detail, failure of which might sometimes lead to the failure of a project. (2) A stakeholder is the one who has an interest in the project. For example, customer, company’s senior management, project team, etc. Managing stakeholder is as important as identifying requirements. All the stakeholders must work towards the single project objective, for the project to be executed successfully. (3) The triple constraints are scope, cost, and time. The balancing act between these constraints also has an impact on the quality of the output. For example, if you want a better quality product, it may require using better raw material, leading to a higher cost. However, your project might have a limited budget, which might restrict your ability to do so. Therefore, change in any one constraint affects the other. These are often called “trade-offs” that a project manager needs to make, while managing a project. Let us now learn about program management in the next screen.

2.7 Project Management

Program management is defined as the application of knowledge, skills, tools, and techniques to a program to meet the program requirements and to obtain benefits and control not available by managing projects individually. As defined in PMBOK® (pronounce as “Pim-bok”) Guide, a program is a group of related projects, which when managed as a group in a coordinated fashion, provides benefits and control that are not available while managing them individually. These benefits could be from decreased risk, economies of scale, improved management of dependencies, delivery of additional capabilities, optimal utilization of shared resources, and so on. Let us now learn the various features of program management.

2.8 Features of Program Management

Random projects cannot be grouped to as a program. The projects in a program should be related in some way or the other and there should be some “value added” in managing them together. A project may not be a part of any program, but a program will always have projects. A project can also be executed as a standalone project. A program is designed to deliver some strategic “benefits” value to the organization. These benefits can be tangible or intangible. Examples of tangible benefit could be increased profit margins, or operational cost savings. Examples of intangible benefits could be “improved team morale” or “building up certain competencies.” While a project manager focuses relentlessly on the fulfillment of the project’s requirements i.e. (pronounce as “that is”), scope, cost, time, quality, a program manager needs to focus on ensuring that the organizational benefits are realized. In the next screen, let us understand what a portfolio is.

2.9 Portfolio

Portfolio is yet another term used along with project and program. A portfolio may have multiple projects and programs that are managed as a group to achieve strategic objectives. Note that all projects and programs in a portfolio may not be necessarily interdependent or directly related. A portfolio can be created based on the business objectives. For example, an IT Service Company can have a portfolio named “Japanese Projects”, which is formed with an aim to take over the Japanese market by giving more attention to these projects. Within this portfolio, similar projects can be managed as a program, and all banking projects from Japan can be managed as a “banking program.” In the next screen, let us discuss portfolio management.

2.10 Portfolio Management

Portfolio management is the centralized management of one or more portfolios. This includes identifying, prioritizing, authorizing, managing, and controlling projects, programs, and other related work to achieve strategic business objectives. Therefore, whether the company should have “Japanese Projects” as portfolio or not, is decided by portfolio management. In the next screen, let us understand the relationship between portfolios, programs and projects.

2.11 Relationship between Portfolios, Programs, and Projects

The image on screen will help to understand the terms portfolios, programs, and projects. A portfolio is part of an organization’s overall strategy. It represents a conscious decision by an organization to invest in the portfolio. The overall objectives of a portfolio are then cascaded down to the lower level components. The components could be sub-portfolios, programs, or projects. These components can further be broken down into smaller components for ease of management. Although a project may not contain operations, a program, or a portfolio, it can include “other work”. This other work may comprise training and development, customer support and services, etc. If the other work has synergy with the overall objectives and adds to the capability to deliver the higher level benefits, then it can be included in the program or portfolio as well. In the next screen, we will discuss Project Management Office.

2.12 Project Management Office

Project Management Office or PMO is a specific type of body, or department, within an organization. PMO performs several roles in the organization and these can broadly be classifies as primary roles and other roles. Typically, the PMO may take up any one or a combination of the three primary roles. It provides the policies, methodologies, and tools and templates for managing projects within the organization; it provides support and training in organization on how to manage projects; and finally it provides project managers for different ongoing projects in the organization. PMO may also help in managing interdependencies between the projects; selecting, managing, and deploying shared or dedicated project resources; if need be, terminating a project; and organizing lessons-learnt sessions and maintaining the project management knowledge base for an organization. In the next screen, we will discuss how to manage the triple constraints.

2.13 Managing the Triple Constraints

Any project can be done successfully, if there is no constraint on time or there is unlimited budget available. Unfortunately, that is not true in real life. A project is performed within some constraint and these constraints are usually competing. Therefore, if you change one, it would affect the other. For example, if the project duration increases, it would lead to increase in the project cost as well. Triple constraint is a term that originally referred to the three competing project constraint within which the projects are performed. These constraints are cost, time, and scope. Quality is a primary concern for a project manager. Therefore, the project manager has to make tradeoffs to keep the scope-cost-time-quality plane in balance. To achieve the balance, the project manager also needs to manage other aspects of the project, for instance, the people, stakeholders, risks, communication, and procurements. The project manager plays the essential role of “integrating” all these different aspects of project management. In the PMP examination, you can expect business scenario based questions focusing on the triple constraints. In the next screen, let us understand who a stakeholder is.

2.14 Stakeholder

A stakeholder can be defined as the one whose interests may positively or negatively be affected or perceive to be affected by the decision, activity, or outcome of the project. As per the definition, the project team, project manager, project sponsor, PMO office, customer, etc. are the stakeholders of the project. A project sponsor is the one who gives a go ahead for a project and provides the necessary resources to execute the project. Therefore, the Head of Projects in the organization, who provides a green signal to start a project and allocates required resources to the project, is the project sponsor. A project sponsor is usually somebody placed high up in the organizational hierarchy of the “performing organization”, i.e. (pronounce as “that is”), the organization in which the work of the project is being carried out. In the next screen, let us look at stakeholder management.

2.15 Stakeholder Management

One of the key responsibilities of a project manager is to manage stakeholders. A project manager has to involve the stakeholders from the beginning of the project until the end, so they are aware of every step. A project manager has to take up specific activities for stakeholder management. Identifying both internal and external stakeholders Missing out any stakeholder can be disastrous for a project. A stakeholder, who is identified towards the end of the project, may come up with his own requirement at that stage, and incorporating them can be risky. Determining stakeholder requirements After identifying all the stakeholders, the project manager also needs to ensure that their requirements are clearly identified. Sometimes, stakeholders might themselves not know of their requirement and it is the job of the project manager to get them right by doing a proper stakeholder requirement analysis. Determining stakeholder expectations Stakeholders might also have some unstated expectations, which need to be clarified to see if it can become a project requirement. It is again the role of the project manager to determine the stakeholder’s expectation. Communicating with stakeholders Once all the stated and unstated stakeholder requirements are known, the project manager as part of stakeholder analysis should focus on communicating them regularly to keep stakeholders involved in the project. Once you understand the practices of stakeholder management, it will be easier for you to answer scenario based questions in the examination. In the next screen, let us look at the various organization structure.

2.16 Organization Structure

Projects are performed in an organization and the functioning of the organization might affect the project. The different organization structure types explained here are based on the level of authority that a project manager gets into those organizations. In a functional type of organization, the organization is grouped by the area of specialization within different functional areas. For instance, marketing, accounting, engineering, etc., are departments within the organization. Each employee typically reports to a functional manager. In such types of organization, normally projects are undertaken within the department itself. If a project requires any assistance from another department, the request moves from the head of the requesting department to the head of the concerned department. The team members do their normal departmental work in addition to the project work. The next type of organization is projectized organization. In such organizations, there are no departments. The organization’s resources mostly work on projects. Team members report to a project manager. The project manager has complete control over the resources. When the project is completed, either they move on to another project, or they look for some job outside the company. They do not have a department for themselves. The third type of organization is a matrix organization, which is a blend of functional and projectized organizational structure. A team member belongs to a department as well as they are part of a project team. In such organization, team members have two bosses, one, their department head and the second, their project manager. Since there are two bosses here, this type of organization is further classified into three different types. They are weak, strong, and balanced matrix organization. So out of the two bosses that team members have in matrix organization, if the project manager has more authority over the team member, such organizations are called strong matrix; where the functional manager has more authority, it’s a weak matrix organization. If they both share equal authority, than it’s a balanced organization. There is another term that you might find in the exam, called “tight matrix”. This generally refers to a “co-located” team, i.e. (pronounce as “that is”), a team that has been placed in the same location to enhance their performance. In the PMP® exam, if there is no mention of the organization type – you can assume it to be a matrix organization. Let us look at each of these organization structures in detail. In the next screen, let us look at functional organization.

2.17 Functional Organization

In a functional organization, the resources of the organization are grouped by “functions” – sometimes called departments. Examples of functions could be “sales”, “finance”, “administration”, “manufacturing”, etc. Each function plays a definite role in the organization and is headed by a functional head or supervisor. All the resources in such an organization report directly into their functions. Therefore, a sales person would report into the sales organizational hierarchy, a purchase executive would report into procurement, and so on. You would notice that in a functional organization, the project manager’s role is not explicitly called out. When a functional organization embarks on a project, each of the functions that are involved may volunteer some resources to work on the project. One of these resources may end up playing the project manager’s role. The resource assignments may not even be full time and sometimes even the project manager is part time. Since the project manager has no authority over any of the resources, they are dependent on the functional heads. This makes it more challenging for the project managers to coordinate in the team. However, functional organizations provide an opportunity for specialization. For example, if a purchase executive was reporting into the purchase department, that executive would have exposure to all the purchasing that happens within the organization and has a well-defined career path. In functional organizations, project management happens at the Functional Head level. Let us now look at the projectized organization in the next screen.

2.18 Projectized Organization

The projectized organization has all the resources aligned around projects. The project managers have complete control over the resources working on their projects. The biggest advantage of the projectized organization is that the resources have loyalty to their projects and project execution becomes easier. This kind of structure is suitable for organizations whose work is in the nature of projects. There are few disadvantages in this structure as well. Firstly, the role of the resource is over once the project is completed. Secondly, highly specialized roles within a project may not be fully occupied all the time. For example, a purchase executive may have work for selected periods on a project while purchase activities are going on. However, for the rest of the period, their capability may not be optimally utilized. There is less scope for functional specialization, as the project boundaries limit the kind of work for the resources. Each project manager is in-charge of a project and its resources. Next, let us look at the matrix organization.

2.19 Matrix Organization

In a matrix organization, the resources report to the functional managers and are managed by the project managers as well. There might even be a function that represents all the project managers in the organization, which provides project management expertise. The matrix structure has three variants commonly referred to as weak, balanced, and strong. In a weak matrix, the authority of the project manager is the weakest, and strongest in a strong matrix structure. The titles given to project managers in functional or weak matrix organizations are project expeditor or project coordinator. They would be called project managers in a balanced or strong matrix structure and have slightly more authority over the time of the team members. The advantage of the matrix structure is that resources can be optimally utilized, while preserving the capacity of the project managers to get projects executed efficiently. Resources can specialize in their functions and have stability in their careers, also contribute to the projects at the same time potentially. The disadvantage of matrix organization is that the communication overhead increases significantly. This is because every resource in the organization belongs into a project and into a function, leading to a dual reporting structure. In a matrix organization, project management happens at Project Resource Level. In the next screen, let us summarize the advantages and disadvantages of different organizational structures.

2.20 Advantages and Disadvantages of Organizational Structures

Each organization structure has its own set of advantages and disadvantages. The advantage of functional organizations is that resources may find clearly defined career paths and achieve specialization and skill development in their respective fields. It will be a flexible work force since only one manager will be responsible, avoiding confusion. The disadvantage of such organization type is that project work is hampered. Department work is always given higher priority than the project work. In addition, there is no career path in project management, which leads to lower interest in projects. In the case of the projectized organization, one of the clear advantages is better communication within the projects. Since project work is the only work team members are doing, it also leads to loyalty towards the project goals. The disadvantage of such organization type is the inefficient use of resources, because every project team has their own support function. Therefore, this might lead to the duplication of effort. It also leads to the resources being left with no work, since their roles are over once the project is completed. It also hampers skill development because the project requirements dictate what kind of work team members perform at different stages on a project. Now, let us look at the matrix organization. It also has the advantage of better coordination and maximum utilization of resources. However, the disadvantage is the higher potential for conflict among the managers, which might lead to communication complexity and overhead management. Business scenario based questions to identify the type of organization structure can be expected in the PMP exam. When the organization type is not mentioned, it can be assumed to be a matrix type of organization. In the next screen, let us focus on the comparison on project lifecycle and product lifecycle.

2.21 Project Lifecycle vs. Product Lifecycle

Project life cycle spans the initiation of a project until the closure of the project. The product life cycle, on the other hand, also encompasses the operational and maintenance phases. A typical product life cycle starts with conception of the product and goes until its withdrawal from the market. The withdrawal might be because it becomes obsolete or there is no further need for the product in the market. A product has a long life cycle. A product can require or spawn many projects over its life. For example, a project in product conception phase could be to determine customer needs, whereas a project during product maturity phase could be used to perform competitive analysis. Typically, a product life cycle is longer than the project life cycle. A project also has its own lifecycle and this lifecycle depends upon the industry and the organization within which the project is being executed. Sometimes different organizations within the same industry use different life cycles. There can be questions in the exam, based on the comparison of project lifecycle and product lifecycle. So understanding the differences will be useful in answering such questions. In the next screen, let us discuss more on project life cycle.

2.22 Project Life Cycles

A life cycle is composed of phases; each phase represents a discrete unit of work required to be done on the project. There are different ways of classifying project life cycles. Let us first discuss the sequential versus overlapping life cycle. In sequential phases, the subsequent phase starts only after the previous phase has been completed whereas in overlapping phases, two or more phases may run in parallel for some time. This could help fast tracking and compressing the amount of time required. The other way of classifying life cycles is how they go about the process of planning. In predictive life cycles, there is a large up-front planning phase, where all the details of scope, cost, time, are planned before beginning the subsequent phases. These phases then are executed in either sequential or overlapping modes. They are suitable for large projects where all the requirements are likely to be known in advance and where up-front planning effort is required to get the necessary approvals. Another feature of predictive life cycles is that each phase may potentially be different in the nature of activities and may require people with different skill sets. For example, traditional software development life cycle has phases like requirements, feasibility, planning, design, construction, testing, and transition. We will continue project life cycles in the next screen.

2.23 Project Life Cycles (contd.)

Incremental and iterative life cycles have a short up-front high-level definition and planning phase. The product is then developed through a series of iterations, where iteration increments (or adds to) the functionality by a little. All the activities are intentionally repeated in iterations. Adaptive or Agile life cycles are variants of incremental and iterative life cycles where iteration is very short (typically 2 to 4 weeks). Agile methodologies are becoming very popular in the software development industry and in other industries where the requirements are highly changeable and frequent feedback is beneficial. Let us now check your understanding of the topics covered in this lesson.

2.24 Quiz

A few questions will be presented in the following screens. Select the correct option and click submit to see the feedback.

2.25 Summary

Here is a quick recap of what was covered in this lesson: ?Project management is the application of knowledge, skills, and tools and techniques applied to project activities to meet the project requirements. ?PMO provides the policies, methodologies, and tools and templates for managing projects within the organization. ?Project manager has to integrate various project aspects, like the people, stakeholders, risks, communication, and procurements with the project constraints (time, scope, cost, and quality). ?Identifying internal and external stakeholders, determining their requirements, and communicating with them regularly is an important role of a project manager. ?Functional, projectized, and matrix are the three types of organization structures, based on the level of authority given to the project manager. ?Project life cycle spans the initiation of a project until the closure while product life cycle, also encompasses the operational and maintenance phases.

2.26 Conclusion

With this, we have come to the end of this lesson. In the next lesson, we will discuss project management processes.

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  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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