PMBOK, Project Management/Project Management

The Project Management Institute (PMI) is an organization that attempts to establish a standard order and criteria for project management.

To this end, PMI maintains the Project Management Book of Knowledge (PMBOK) where a whole set of tools and good practices are established that every project manager should know and apply.

In contrast to other methodologies (e.g. agile methodologies like Scrum), PMBOK is oriented towards predictive project management. The PMBOK presents several phases of a project in a linear way (once a phase is overcome, there is no return to it), where the need/solution, scope and planning (for example, cost and duration of each of the tasks to be executed) is established in the initial phases (which is why it is called predictive management).

Therefore, we could consider PMBOK as belonging to the more classical branch of project management (as well as the complementary PRINCE2 standard, popular in the United Kingdom). However, this fact does not mean that some of the tools it offers cannot be used in combination with other more agile and flexible methodologies.

Before getting into the subject, it is necessary to establish the definition and characteristics of a project according to the PMBOK:

• A project tries to solve a problem (cover a need).
• it's temporary
• It is unique in time and not repeatable under the same circumstances.
• carries uncertainty
• Consumes resources: Time, money, materials and labor.

Projects have their own life cycle, which is divided into the following phases:

• Beginning: The need is identified and the question is whether it is possible to carry out the project.

• Planning:
  • A solution is developed in greater detail.
  • Defining tasks, calendar.
  • Cost estimation in time and money.
  • The question is again whether the project is viable.

• Execution: Monitoring and adjustments to planning.
• Closing: it is verified whether the project meets the need to be addressed

All these phases imply the following general processes:

• Identify the problem or opportunity

• Identify and define the ideal solution

• Identify the tasks and resources needed.

• Prepare the schedule and obtain resources

• Estimate project cost and prepare a budget

• Analyze risks and establish relationships with interested parties (anyone who has a direct or indirect interest in the project): Periodic risk management

• Maintain control and communication at the appropriate level during execution: Periodic meetings to detect and communicate deviations

• Manage a successful closing
  • Punch list: list of tasks to complete the project.
  • Team members tend to spread out when the project is almost closed.

However, a project can be seen from other perspectives, such as from the point of view of interpersonal relationships:

• Motivate the team: Create the right climate
  • Spend time explaining how each role contributes to the project
  • Invest time in meetings to highlight positive contributions from members.
  • Trust delegated work
  • Assign goals to individuals and allow them to choose the path.
  • Recognize efforts that go beyond what is requested.
  • Lead by example

• manage diversity
  • Identify possible personal goals to minimize them or convert them into group goals.
  • Seek group cohesion (harmonize customs, cultures, etc.).

In turn, in addition to internal project management and interpersonal relationship processes, projects are developed and executed within the scope of an organization. Currently we can find companies whose main business is the execution of projects, for example in the Consulting and Auditing sector. This is the most positive scenario, as the entire organization is focused on project management.

However, most companies have a hierarchical structure made up of departments with different functions and employees who perform specific tasks, whose mobility tends to be quite sporadic. In this type of scenario, executing a project (which, as established, is temporary) with internal collaborators presents a more difficult scenario to manage (this is one of the reasons why projects are often contracted to external consultants and auditors) .

This second situation can provide employees with a “Silo Mentality”, that is, people whose objectives are linked to their functional area and not to the project to which they were allocated; they may not care about the success of the project, giving preference to fulfilling their stable departmental unit obligations. This problem can block the cooperation of the work team (horizontal thinking).

In short, the organization's degree of maturity and the established internal procedures can contribute to the success or failure of the project:

• If the organization usually works on projects, there are already defined guidelines.

• Formal communication channels: If they are too rigid, they can hinder work

• Informal communication channels (friends, acquaintances, etc.): If they are too frequent, they can produce misinformation

Finally, the PMBOK establishes that to consider a project successful, the following expectations must be met:

• Level I. Achieve project objectives

• Level II. Project efficiency.
  • Level of interruption to the client's work.
  • Efficiency in the use of resources
  • Growth in the number of team members
  • Management conflict

• Level III. Utility for the end user/client.
  • Has the initial problem been resolved?
  • Have benefits increased or have there been real savings?
  • Is the user currently using the product?
• Level IV. Organizational improvement: learning from experience

Project head

A project manager or project manager has the following responsibilities:

• The project: Cost, calendar, functionality and quality objectives.
  • The organization
  • Return on investment.

• Information flow: provide proactively, if a supervisor is surprised by some information, it means we did not inform correctly.

• The team: Provide feedback and recognition.

• About yourself: Personal growth.

On the other hand, the project manager constantly faces challenges, among which we can find the following:

• Responsibility vs. Absence of Authority
  • High level of responsibility.
  • I work with people over whom I have no direct authority.

• Unrealistic goals
  • It is one of the most common problems.
  • Reinforces the idea of correctly analyzing and planning the project scope.

• Functional orientation
  • People will tend to focus on their functional area of knowledge.
  • Its functional area is more important than the project given its temporality.

• Fundamental conflict over uncertainty
  • Make quick decisions with little information.
  • Range estimates (e.g. costs)
  • Try to make estimation difficulties understood by superiors and team members.

To successfully face the responsibilities and challenges that project management presents, a project manager must constantly improve the following skills:

• Project management: tools for planning and monitoring.
• Interpersonal relationships
  • Leadership, negotiation and delegation skills.
  • Oral and written communication skills
  • Conflict resolution.
  • Skills to develop the role of mentor (coaching)

• technological knowledge
  • Knowledge of industry and technological areas
  • Knowledge of the product and/or processes
  • design skills

• Personal skills
  • Honesty, integrity
  • Think globally
  • High tolerance for uncertainty and ambiguity
  • Persuasive and assertive
  • open and accessible
  • Decisive
  • Commercial. Ability to sell ideas or the virtues of the project.
  • Teacher. Transmit knowledge to team members.

Project definition

The project definition consists of the following phases:

• Phase I. Understand the problem or opportunity.
• Phase II. Identify the most optimal solution
• Phase III. Develop the solution and create a plan
• Phase IV. Project launch

Phase I. Understand the problem or opportunity.

It is essential to identify the real need that the project intends to meet. Work will be evaluated based on whether or not this need has been met satisfactorily.

Firstly, it is necessary to differentiate between a need and a solution.

A necessity:

• Describes the objective to the customer

• Specify goals and objectives

• Leave open the question of how to do it.

• The answer to why this is being done should point to a business justification.

Instead, a solution:

• Describes the means for the team
• Specify strategies and ideas to achieve goals and objectives.
• Specify how to do it.
• The answer to why this is being done should point to the customer's need.
• Asking to identify the real need can make third parties feel uncomfortable because they don't trust your criteria.

Based on these definitions, this phase should have as its output the generation of the project requirements document, which does not offer a solution, but only describes a need. This document must contain the following sections:

• Description of the problem or opportunity
• Impact or effect of the problem
• Identify who or what is affected by the issue
• Impact of ignoring the problem
• desired situation
• Benefits associated with achieving the desired situation
• Alignment with the organization's strategy
• Compatibility conflict with other areas of the organization
• uncertainties
• main assumptions
• Limitations of the Solution
• environmental considerations
• Historical support information

After collecting all this information, it is necessary to reevaluate whether the problem is worth solving and determine if there is a potential solution.

Phase II. Identify the most optimal solution

To identify solutions that cover the identified need, the following procedure can be followed:

• Group brainstorming with future work team members or stakeholders.
• Check to what degree they satisfy the statements in the project requirements document.
• Select between 2 and 5 candidate solutions.

For the selected candidate solutions, a detailed analysis must be carried out to identify which one best suits the need to be covered and implies an affordable cost.

Financial analysis (Costs x Benefits):

To validate the financial viability of the project, it is necessary to identify the cash inflows that it can generate, for example, benefits obtained from the implementation of the project (increased sales, reduced costs, etc...) and the expenses that the start-up represents Project Progress and Management.

Thus, by estimating the magnitude of the different cash flows and calculating the 4 basic indicators, we can identify which project provides us with greater financial profitability.

At least the following indicators should be studied:

• Net Present Value (NPV). Determine how much money the project will generate taking into account the time value of money.
• Internal Rate of Return (IRR) ​​. Determine the return on investment.
• Period return. Determines when the investment will be recovered (NPV = 0).
• money hole . Determine the maximum investment required.

Non-Financial Analysis (Weighted Factor Scoring Model – Decision Matrix)

Analysis using the weighted factorial scoring model (“Decision Matrix”) begins with the preparation of a list of attributes to be valued. A weighting is established for each of them and scores are assigned that denote the degree of compliance with each of the candidate solutions:

Advantage:

• Allows the use of various data, including financial data.
• Allows management involvement and sensitivity analysis.

Disadvantages:

• Highly subjective process.
• It shows the attractiveness of the project, but does not represent a commercial justification.

In addition to financial or matrix analysis, the final decision on which solution to choose can be based on the use of other tools:

• market studies
• Pilot tests. Test in limited area.
• Prototyping. Construction of a small part of the project to validate correct predictions.
• Computer simulation.

In short, the analyzes performed will not only help choose a solution, but will also allow us to determine whether the solutions are viable and whether the project is worth continuing with.