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i have attached the slides for reference it is a group work my part is to do budget breakdown , constraints and assumptions 4 pages  i have also attached text book  thanks  i have attached the project and what is it about  thanks MGMT-640 Summer 2021 section 07 Team assignment one, due by Sunday week 4 Formulate a project document with the following content: · The title · Introduction · Project Scope · Objective · Major milestones · Major deliverables · Work breakdown structure (WBS) · Communication plan · Identification of project risk (two internal and three external risks) · Budget with its breakdown · Assumptions · Constraints · Business need or opportunity · Monitoring and Evaluation plan Using your previous experiences and the course materials, as a team you are expected to work on a detailed project document. Make reference to at least 5 or 6 reference materials. Page limit is 12 excluding the cover page, references and annex. Follow the rubrics and use the APA guidelines. End 1 4 Project Management Plan Nikul Omid Bagheri (2010999) Monica Sneha University Canada West MGMT 640: PROJECT MANAGEMENT Dr. Belay Gaga August 8th, 2021 Contents Moving from SalesForce to ServiceNow 3 Project Scope 4 Objectives 4 Moving from SalesForce to ServiceNow Customer Relationship Management (CRM) is a tool to organize interactions with a company’s customers, either current or potential (Salesforce, n.d.). CRM helps businesses develop and keep in touch with customers in order to gain more profit (Salesforce, n.d.). The CRM system help businesses in various ways, such as improving sales or customer services (Salesforce, n.d.). CRM has the capability to provide an overview of customers to guide businesses (Salesforce, n.d.). One of the CRM applications is Salesforce, which is cloud-based (Agarwal, 2020). Salesforce contains services about the business and customer relationship (Agarwal, 2020). Salesforce is available on Android OS, Apple iOS, Microsoft Windows, and the web (Agarwal, 2020). On the other hand, ServiceNow is also a cloud-based application that helps businesses manage technically (Fitzgibbons, 2020). It provides tools that companies use to organize projects and the relationship with customers (Fitzgibbons, 2020). It also helps manage operations, the business itself, and the service through Information Technology (IT) (Fitzgibbons, 2020). This project results in transferring the system from Salesforce to ServiceNow to improve the businesses’ productivity. This transfer can be helpful since Salesforce is a platform for chasing after customers’ activities, but ServiceNow assists businesses in growing systematic goals (Agarwal, 2020). Besides, ServiceNow allows enterprises to create applications for various approaches, such as customer support app (Agarwal, 2020). Generally, this project is formed for companies who want to switch to ServiceNow, and it is not created for any specific business. After setting the project manager, they are authorized and responsible to implement and organize the project. They also can include staff from relevant departments in the project, such as giving them tasks to do, training them for future activities, etc. The project manager can utilize the resources mentioned in the project plan in order to implement and manage the project. If it is necessary to add something new to the project plan, it should be approved and given authority by the project sponsor. The involved staff must report to the project manager about their activities. The project manager is also responsible for connecting and communicating with the team about the project plan. Project Scope The project’s scope is to migrate data from Salesforce to ServiceNow, adjust and maintain errors and problems in the migration, train the staff for using ServiceNow, map the data to be moved to the right place without losing any part, and integrate the data with the new system. The project is successfully done when the data is transferred entirely without any error, and the staff is trained and ready to use ServiceNow. The ServiceNow tools are enough for executing the project, and there is no need to use sources outside of the company. Objectives · Transferring data from Salesforce to ServiceNow · Integrate the data and system with the new application · Map the data to be placed correctly · Train the staff and managers for using the ServiceNow properly based on ServiceNow instructions References Agarwal, C. (2020, December 13th). Salesforce Vs ServiceNow | What Is The Difference? Techila Services. https://techilaservices.com/blog/salesforce-vs-servicenow/ Fitzgibbons, L. (2020, April 22nd). ServiceNow. SearchITOperations. https://searchitoperations.techtarget.com/definition/ServiceNow Salesforce. (n.d.). What is CRM? | A Definition by Salesforce. Salesforce.Com. Retrieved August 3, 2021, from https://www.salesforce.com/ca/crm/what-is-crm/#:\%7E:text=Customer\%20relationship\%20management\%20(CRM)\%20is,with\%20customers\%20and\%20potential\%20customers.&text=A\%20CRM\%20system\%20helps\%20companies,streamline\%20processes\%2C\%20and\%20improve\%20profitability. 1 Project Management Plan Nikul Omid Bagheri ( 2010999 ) Monica Sneha University Canada West MGMT 640: PROJECT MANAGEMENT Dr. Belay Gaga August 8 th , 2021 1 Project Management Plan Nikul Omid Bagheri (2010999) Monica Sneha University Canada West MGMT 640: PROJECT MANAGEMENT Dr. Belay Gaga August 8 th , 2021 Chapter Five Estimating Project Times and Costs 5–1 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 5–2 Where We Are Now Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-2 Learning Objectives Understand estimating project times and costs are the foundation for project planning and control Describe guidelines for estimating time, cost, and resources Describe the methods, uses, and advantages and disadvantages of top-down and bottom-up estimating methods Distinguish different kinds of costs associated with a project Suggest a scheme for developing an estimating database for future projects Understand the challenge of estimating mega projects and describe steps that lead to better informed decisions Define a “white elephant” in project management and provide examples 5–3 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter Outline 5.1 Factors Influencing the Quality of Estimates 5.2 Estimating Guidelines for Times, Costs, and Resources 5.3 Top-Down versus Bottom-Up Estimating 5.4 Methods for Estimating Project Times and Costs 5.5 Level of Detail 5.6 Types of Costs 5.7 Refining Estimates 5.8 Creating a Database for Estimating 5.9 Mega Projects: A Special Case 5–4 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 5–5 Estimating Projects Estimating The process of forecasting or approximating the time and cost of completing project deliverables The task of balancing expectations of stakeholders and need for control while the project is implemented Types of Estimates Top-down (macro) estimates: analogy, group consensus, or mathematical relationships Bottom-up (micro) estimates: estimates of elements of the work breakdown structure Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-5 5–6 EXHIBIT 5.1 To support good decisions To schedule work To determine how long the project should take and its cost To determine whether the project is worth doing To develop cash flow needs To determine how well the project is progressing Why Estimating Time and Cost Is Important Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-6 5–7 Factors Influencing the Quality of Estimates Quality of Estimates Project Complexity People Project Structure and Organization Padding Estimates Organization Culture Other (Nonproject) Factors Planning Horizon Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-7 5–8 Estimating Guidelines for Times, Costs, and Resources Have people familiar with the tasks make the estimate Use several people to make estimates Base estimates on normal conditions, efficient methods, and a normal level of resources Use consistent time units in estimating task times Treat each task as independent, don’t aggregate Do not make allowances for contingencies. Add a risk assessment to avoid surprises to stakeholders Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-8 5–9 Developing Work Package Estimates Preparing Initial Estimates Use several people to make estimates Assume normal conditions Use consistent time units Assume tasks are independent Make no allowance for contingencies Include a risk assessment Use people familiar with the tasks Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-9 5–10 Top-Down versus Bottom-Up Estimating Top-Down Estimates Are usually derived from someone who uses experience and/or information to determine the project duration and total cost. Are sometimes made by top managers who have little knowledge of the processes used to complete the project. Bottom-Up Approach Can serve as a check on cost elements in the WBS by rolling up the work packages and associated cost accounts to major deliverables at the work package level. Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-10 5–11 Top-Down versus Bottom-Up Estimating TABLE 5.1 Conditions for Preferring Top-Down or Bottom-up Time and Cost Estimates Top-down Bottom-up Condition Estimates Estimates - Strategic decision making X - Cost and time important X - High uncertainty X - Internal, small project X - Fixed-price contract X - Customer wants details X - Unstable scope X Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-11 5–12 Estimating Projects: Preferred Approach Make rough top-down estimates Develop the WBS/OBS Make bottom-up estimates Develop schedules and budgets Reconcile differences between top-down and bottom-up estimates Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-12 5–13 Top-Down Approaches for Estimating Project Times and Costs Consensus methods Ratio methods (sometimes called parametric) Apportion method Function point methods for software and system projects Learning curves Project Estimate Times Costs Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-13 5–14 Apportion Method of Allocating Project Costs Using the Work Breakdown Structure FIGURE 5.1 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-14 5–15 Simplified Basic Function Point Count Process for a Prospective Project or Deliverable TABLE 5.2 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-15 5–16 Example: Function Point Count Method TABLE 5.3 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-16 5–17 Bottom-Up Approaches for Estimating Project Times and Costs Template methods Parametric procedures applied to specific tasks Range estimates for the WBS work packages Phase estimating: A hybrid Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-17 5–18 Range Estimating Template FIGURE 5.2 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-18 5–19 Phase Estimating over Product Life Cycle FIGURE 5.3 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-19 5–20 Top-Down and Bottom-Up Estimates FIGURE 5.4 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-20 5–21 Level of Detail Level of detail in the WBS varies with the complexity of the project, the need for control, the project size, cost, duration, and other factors. Excessive detail is costly. Fosters a focus on departmental outcomes rather than on deliverable outcomes Creates unproductive paperwork Insufficient detail is costly. Lack of focus on goals Wasted effort on nonessential activities Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-21 5–22 Types of Costs Direct Costs Costs that are clearly chargeable to a specific work package. Labor, materials, equipment, and other Direct (Project) Overhead Costs Costs incurred that are directly tied to project deliverables or work packages. Salary, rents, supplies, specialized machinery General and Administrative Overhead Costs Organization costs indirectly linked to a specific package that are apportioned to the project. Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-22 5–23 Contract Bid Summary Costs FIGURE 5.5 Direct costs $80,000 Direct overhead $20,000 Total direct costs $100,000 G&A overhead (20\%) $20,000 Total costs $120,000 Profit (20\%) $24,000 Total bid $144,000 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-23 5–24 Three Views of Cost FIGURE 5.6 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-24 5–25 Refining Estimates Reasons for Adjusting Estimates Interaction costs are hidden in estimates. Normal conditions do not apply. Things go wrong on projects. Changes in project scope and plans Overly optimistic Strategic misrepresentation Adjusting Estimates Time and cost estimates of specific activities are adjusted as the risks, resources, and situation particulars become more clearly defined. Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-25 5–26 Estimating Database Templates FIGURE 5.7 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-26 Mega Projects: A Special Case Mega Projects Are large-scale, complex ventures that typically cost $1 billion or more, take many years to complete, and involve multiple private and public stakeholders. High-speed rail lines, airports, healthcare reform, the Olympics, development of new aircraft Often involve a double whammy. Cost much more than expected but underdelivered on benefits they were to provide. Are sometimes called “White Elephants” Over budget, under value, high cost of maintaining (exceeds the benefits received) 5–27 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Three Steps of the Reference Class Forecasting (RCF) Process Select a reference class of projects similar to your potential projects. Collect and arrange outcome data as a distribution. Create a distribution of cost overruns as a percentage of the original project estimate. Use the distribution data to arrive at a realistic forecast. Compare the original cost estimate for the project with the reference class projects. 5–28 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 5–29 Key Terms Apportionment Bottom-up estimates Delphi method Direct costs Function points Learning curves Overhead costs Padding estimates Phase estimating Range estimating Ratio methods Reference class forecasting (RCF) Template method Time and cost databases Top-down estimates White elephant Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-29 5–30 WBS Figure Exercise Figure 5.1 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-30 5–31 Learning Curves Unit Values TABLE A5.1 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-31 5–32 Learning Curves Cumulative Values TABLE A5.2 Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Project Management 6e. 5-32 page i page ii FOR INSTRUCTORS You’re in the driver’s seat. Want to build your own course? No problem. Prefer to use our turnkey, prebuilt course? Easy. Want to make changes throughout the semester? Sure. And you’ll save time with Connect’s auto-grading too. 65\% Less Time Grading They’ll thank you for it. Adaptive study resources like SmartBook® 2.0 help your students be better prepared in less time. 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Top: Jenner Images/Getty Images, Left: Hero Images/Getty Images, Right: Hero Images/Getty Images mailto:[email protected] http://www.mheducation.com/about/accessibility page iv The McGraw-Hill Series Operations and Decision Sciences SUPPLY CHAIN MANAGEMENT Benton Purchasing and Supply Chain Management Third Edition Bowersox, Closs, Cooper, and Bowersox Supply Chain Logistics Management Fifth Edition Burt, Petcavage, and Pinkerton Supply Management Eighth Edition Johnson Purchasing and Supply Management Sixteenth Edition Simchi-Levi, Kaminsky, and Simchi-Levi Designing and Managing the Supply Chain: Concepts, Strategies, Case Studies Third Edition Stock and Manrodt Fundamentals of Supply Chain Management PROJECT MANAGEMENT Brown and Hyer Managing Projects: A Team-Based Approach Larson Project Management: The Managerial Process Eighth Edition SERVICE OPERATIONS MANAGEMENT Bordoloi, Fitzsimmons, and Fitzsimmons Service Management: Operations, Strategy, Information Technology Ninth Edition MANAGEMENT SCIENCE Hillier and Hillier Introduction to Management Science: A Modeling and Case Studies Approach with Spreadsheets Sixth Edition BUSINESS RESEARCH METHODS Schindler Business Research Methods Thirteenth Edition BUSINESS FORECASTING Keating and Wilson Forecasting and Predictive Analytics Seventh Edition LINEAR STATISTICS AND REGRESSION Kutner, Nachtsheim, and Neter Applied Linear Regression Models Fourth Edition BUSINESS SYSTEMS DYNAMICS Sterman Business Dynamics: Systems Thinking and Modeling for a Complex World OPERATIONS MANAGEMENT Cachon and Terwiesch Operations Management Second Edition Cachon and Terwiesch Matching Supply with Demand: An Introduction to Operations Management Fourth Edition Jacobs and Chase Operations and Supply Chain Management Sixteenth Edition Jacobs and Chase Operations and Supply Chain Management: The Core Fifth Edition Schroeder and Goldstein Operations Management in the Supply Chain: Decisions and Cases Eighth Edition Stevenson Operations Management Fourteenth Edition Swink, Melnyk, and Hartley Managing Operations Across the Supply Chain Fourth Edition BUSINESS MATH Slater and Wittry Practical Business Math Procedures Thirteenth Edition Slater and Wittry Math for Business and Finance: An Algebraic Approach Second Edition BUSINESS STATISTICS Bowerman, Drougas, Duckworth, Froelich, Hummel, Moninger, and Schur Business Statistics in Practice Ninth Edition Doane and Seward Applied Statistics in Business and Economics Sixth Edition Doane and Seward Essential Statistics in Business and Economics Third Edition Lind, Marchal, and Wathen Basic Statistics for Business and Economics Ninth Edition Lind, Marchal, and Wathen Statistical Techniques in Business and Economics Eighteenth Edition Jaggia and Kelly Business Statistics: Communicating with Numbers Third Edition Jaggia and Kelly Essentials of Business Statistics: Communicating with Numbers Second Edition McGuckian Connect Master: Business Statistics page v Project Management The Managerial Process Eighth Edition Eri k W. Lar so n Clif for d F. Gr ay O r e g o n S t a t e U n i v e r s i t y page vi PROJECT MANAGEMENT: THE MANAGERIAL PROCESS, EIGHTH EDITION Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2021 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2018, 2014, and 2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 LWI 24 23 22 21 20 19 ISBN 978-1-260-23886-0 (bound edition) MHID 1-260-23886-5 (bound edition) ISBN 978-1-260-73615-1 (loose-leaf edition) MHID 1-260-73615-6 (loose-leaf edition) Portfolio Manager: Noelle Bathurst Product Developer Manager: Michele Janicek Executive Marketing Manager: Harper Christopher Lead Content Project Manager: Sandy Wille Senior Content Project Manager: Angela Norris Senior Buyer: Sandy Ludovissy Design: Egzon Shaqiri Content Licensing Specialist: Beth Cray Cover Image: Gina Pricope/Getty Images Compositor: SPi Global All credits appearing on page or at the end of the book are considered to be an extension of the copyright page. Library of Congress Cataloging-in-Publication Data Names: Gray, Clifford F., author. | Larson, Erik W., 1952- author. Title: Project management : the managerial process / Erik W. Larson,  Clifford F. Gray, Oregon State University. Description: Eighth edition. | New York, NY : McGraw-Hill Education, [2021]  | Clifford F. Gray appears as the first named author in earlier  editions. | Includes bibliographical references and index. | Summary:  “Our motivation in writing this text continues to be to provide a  realistic, socio-technical view of project management. In the past,  textbooks on project management focused almost exclusively on the tools  and processes used to manage projects and not the human dimension”–  Provided by publisher. Identifiers: LCCN 2019028390 (print) | LCCN 2019028391 (ebook) |  ISBN 9781260238860 (paperback) | ISBN 1260238865 (paperback) |  ISBN 9781260242379 (ebook) Subjects: LCSH: Project management. | Time management. | Risk management. Classification: LCC HD69.P75 G72 2021 (print) | LCC HD69.P75 (ebook) |  DDC 658.4/04–dc23 LC record available at https://lccn.loc.gov/2019028390 LC ebook record available at https://lccn.loc.gov/2019028391 The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw- Hill Education does not guarantee the accuracy of the information presented at these sites. mheducation.com/highered https://lccn.loc.gov/2019028390 https://lccn.loc.gov/2019028391 http://mheducation.com/highered page vii About the Authors Erik W. Larson ERIK W. LARSON is professor emeritus of project management at the College of Business, Oregon State University. He teaches executive, graduate, and undergraduate courses on project management and leadership. His research and consulting activities focus on project management. He has published numerous articles on matrix management, product development, and project partnering. He has been honored with teaching awards from both the Oregon State University MBA program and the University of Oregon Executive MBA program. He has been a member of the Project Management Institute since 1984. In 1995 he worked as a Fulbright scholar with faculty at the Krakow Academy of Economics on modernizing Polish business education. He was a visiting professor at Chulalongkorn University in Bangkok, Thailand, and at Baden-Wuerttemberg Cooperative State University in Bad Mergentheim, Germany. He received a B.A. in psychology from Claremont McKenna College and a Ph.D. in management from State University of New York at Buffalo. He is a certified Project Management Professional (PMP) and Scrum master. Clifford F. Gray CLIFFORD F. GRAY is professor emeritus of management at the College of Business, Oregon State University. He has personally taught more than 100 executive development seminars and workshops. Cliff has been a member of the Project Management Institute since 1976 and was one of the founders of the Portland, Oregon, chapter. He was a visiting professor at Kasetsart University in Bangkok, Thailand, in 2005. He was the president of Project Management International, Inc. (a training and consulting firm specializing in project management) 1977–2005. He received his B.A. in economics and management from Millikin University, M.B.A. from Indiana University, and doctorate in operations management from the College of Business, University of Oregon. He is a certified Scrum master. page viii “Man’s mind, once stretched by a new idea, never regains its original dimensions.” Oliver Wendell Holmes, Jr. To my family, who have always encircled me with love and encouragement—my parents (Samuel and Charlotte), my wife (Mary), my sons and their wives (Kevin and Dawn, Robert and Sally), and their children (Ryan, Carly, Connor and Lauren). C.F.G. “The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” Bernard Shaw, Man and Superman To Ann, whose love and support have brought out the best in me. To our girls Mary, Rachel, and Tor-Tor for the joy and pride they give me. And to our grandkids, Mr. B, Livvy, Jasper Jones!, Baby Ya Ya, Juniper Berry, and Callie, whose future depends upon effective project management. Finally, to my muse, Neil—walk on! E.W.L page ix Preface Our motivation in writing this text continues to be to provide a realistic, socio-technical view of project management. In the past, textbooks on project management focused almost exclusively on the tools and processes used to manage projects and not the human dimension. This baffled us, since people, not tools, complete projects! While we firmly believe that mastering tools and processes is essential to successful project management, we also believe that the effectiveness of these tools and methods is shaped and determined by the prevailing culture of the organization and interpersonal dynamics of the people involved. Thus, we try to provide a holistic view that focuses on both the technical and social dimensions and how they interact to determine the fate of projects. Audience This text is written for a wide audience. It covers concepts and skills that are used by managers to propose, plan, secure resources, budget, and lead project teams to successful completions of their projects. The text should prove useful to students and prospective project managers in helping them understand why organizations have developed a formal project management process to gain a competitive advantage. Readers will find the concepts and techniques discussed in enough detail to be immediately useful in new- project situations. Practicing project managers will find the text to be a valuable guide and reference when dealing with typical problems that arise in the course of a project. Managers will also find the text useful in understanding the role of projects in the missions of their organizations. Analysts will find the text useful in helping to explain the data needed for page x project implementation as well as the operations of inherited or purchased software. Members of the Project Management Institute will find the text is well structured to meet the needs of those wishing to prepare for PMP (Project Management Professional) or CAPM (Certified Associate in Project Management) certification exams. The text has in-depth coverage of the most critical topics found in PMI’s Project Management Body of Knowledge (PMBOK). People at all levels in the organization assigned to work on projects will find the text useful not only in providing them with a rationale for the use of project management processes but also because of the insights they will gain into how to enhance their contributions to project success. Our emphasis is not only on how the management process works but also, and more importantly, on why it works. The concepts, principles, and techniques are universally applicable. That is, the text does not specialize by industry type or project scope. Instead, the text is written for the individual who will be required to manage a variety of projects in a variety of organizational settings. In the case of some small projects, a few of the steps of the techniques can be omitted, but the conceptual framework applies to all organizations in which projects are important to survival. The approach can be used in pure project organizations such as construction, research organizations, and engineering consultancy firms. At the same time, this approach will benefit organizations that carry out many small projects while the daily effort of delivering products or services continues. Content In this and other editions we continue to try to resist the forces that engender scope creep and focus only on essential tools and concepts that are being used in the real world. We have been guided by feedback from reviewers, practitioners, teachers, and students. Some changes are minor and incremental, designed to clarify and reduce confusion. Other changes are significant. They represent new developments in the field or better ways of teaching project management principles. Below are major changes to the eighth edition. All material has been reviewed and revised based on the latest edition of Project Management Body of Knowledge (PMBOK), Sixth Edition, 2017. Discussion questions for most Snapshots from Practice are now at the end of each chapter. Many of the Snapshots from Practice have been expanded to more fully cover the examples. Agile Project Management is introduced in Chapter 1 and discussed when appropriate in subsequent chapters, with Chapter 15 providing a more complete coverage of the methodology. A new set of exercises have been developed for Chapter 5. New student exercises and cases have been added to chapters. The Snapshot from Practice boxes feature a number of new examples of project management in action. The Instructor’s Manual contains a listing of current YouTube videos that correspond to key concepts and Snapshots from Practice. Overall the text addresses the major questions and challenges the authors have encountered over their 60 combined years of teaching project management and consulting with practicing project managers in domestic and foreign environments. These questions include the following: How should projects be prioritized? What factors contribute to project failure or success? How do project managers orchestrate the complex network of relationships involving vendors, subcontractors, project team members, senior management, functional managers, and customers that affect project success? What project management system can be set up to gain some measure of control? How are projects managed when the customers are not sure what they want? How do project managers work with people from foreign cultures? Project managers must deal with all these concerns to be effective. All of these issues and problems represent linkages to a socio-technical project management perspective. The chapter content of the text has been placed within an overall framework that integrates these topics in a holistic manner. Cases and snapshots are included from the experiences of page xi practicing managers. The future for project managers is exciting. Careers will be built on successfully managing projects. Student Learning Aids Student resources include study outlines, online quizzes, PowerPoint slides, videos, Microsoft Project Video Tutorials, and web links. These can be found in Connect. Acknowledgments We would like to thank Scott Bailey for building the end-of-chapter exercises for Connect; Pinyarat Sirisomboonsuk for revising the PowerPoint slides; Ronny Richardson for updating the Instructor’s Manual; Angelo Serra for updating the Test Bank; and Pinyarat Sirisomboonsuk for providing new Snapshot from Practice questions. Next, it is important to note that the text includes contributions from numerous students, colleagues, friends, and managers gleaned from professional conversations. We want them to know we sincerely appreciate their counsel and suggestions. Almost every exercise, case, and example in the text is drawn from a real-world project. Special thanks to managers who graciously shared their current project as ideas for exercises, subjects for cases, and examples for the text. John A. Drexler, Jim Moran, John Sloan, Pat Taylor, and John Wold, whose work is printed, are gratefully acknowledged. Special gratitude is due Robert Breitbarth of Interact Management, who shared invaluable insights on prioritizing projects. University students and managers deserve special accolades for identifying problems with earlier drafts of the text and exercises. We are indebted to the reviewers of past editions who shared our commitment to elevating the instruction of project management. We thank you for your many thoughtful suggestions and for making our book better. Of course, we accept responsibility for the final version of the text. Paul S. Allen, Rice University Victor Allen, Lawrence Technological University Kwasi Amoako-Gyampah, University of North Carolina–Greensboro Gregory Anderson, Weber State University Mark Angolia, East Carolina University Brian M. Ashford, North Carolina State University Dana Bachman, Colorado Christian University Robin Bagent, College of Southern Idaho Scott Bailey, Troy University Nabil Bedewi, Georgetown University Anandhi Bharadwaj, Emory University James Blair, Washington University–St. Louis Mary Jean Blink, Mount St. Joseph University S. Narayan Bodapati, Southern Illinois University at Edwardsville Warren J. Boe, University of Iowa Thomas Calderon, University of Akron Alan Cannon, University of Texas–Arlington Susan Cholette, San Francisco State Denis F. Cioffi, George Washington University Robert Cope, Southeastern Louisiana University Kenneth DaRin, Clarkson University Ron Darnell, Amberton University Burton Dean, San Jose State University Joseph D. DeVoss, DeVry University David Duby, Liberty University Michael Ensby, Clarkson University Charles Franz, University of Missouri, Columbia Larry Frazier, City University of Seattle Raouf Ghattas, DeVry University Edward J. Glantz, Pennsylvania State University Michael Godfrey, University of Wisconsin–Oshkosh Jay Goldberg, Marquette University page xii Robert Groff, Westwood College Raffael Guidone, New York City College of Technology Brian Gurney, Montana State University–Billings Owen P. Hall, Pepperdine University Chaodong Han, Towson University Bruce C. Hartman, University of Arizona Mark Huber, University of Georgia Richard Irving, York University Marshall Issen, Clarkson University Robert T. Jones, DePaul University Susan Kendall, Arapahoe Community College George Kenyon, Lamar University Robert Key, University of Phoenix Elias Konwufine, Keiser University Dennis Krumwiede, Idaho State University Rafael Landaeta, Old Dominion University Eldon Larsen, Marshall University Eric T. Larson, Rutgers University Philip Lee, Lone Star College–University Park Charles Lesko, East Carolina University Richard L. Luebbe, Miami University of Ohio Linh Luong, City University of Seattle Steve Machon, DeVry University–Tinley Park Andrew Manikas, University of Louisville William Matthews, William Patterson University Lacey McNeely, Oregon State University Carol Miller, Community College of Denver William Moylan, Lawrence Technological College of Business Ravi Narayanaswamy, University of South Carolina–Aiken Muhammad Obeidat, Southern Polytechnic State University Edward Pascal, University of Ottawa James H. Patterson, Indiana University Steve Peng, California State University–East Bay Nicholas C. Petruzzi, University of Illinois–Urbana/Champaign Abirami Radhakrishnan, Morgan State University Emad Rahim, Bellevue University Tom Robbins, East Carolina University Art Rogers, City University Linda Rose, Westwood College Pauline Schilpzand, Oregon State University Teresa Shaft, University of Oklahoma Russell T. Shaver, Kennesaw State University William R. Sherrard, San Diego State University Erin Sims, DeVry University–Pomona Donald Smith, Texas A&M University Kenneth Solheim, DeVry University–Federal Way Christy Strbiak, U.S. Air Force Academy Peter Sutanto, Prairie View A&M University Jon Tomlinson, University of Northwestern Ohio Oya Tukel, Cleveland State University David A. Vaughan, City University Mahmoud Watad, William Paterson University Fen Wang, Central Washington University Cynthia Wessel, Lindenwood University Larry R. White, Eastern Illinois University Ronald W. Witzel, Keller Graduate School of Management G. Peter Zhang, Georgia State University In addition, we would like to thank our colleagues in the College of Business at Oregon State University for their support and help in completing this project. In particular, we recognize Lacey McNeely, Prem Mathew, and Jeewon Chou for their helpful advice and suggestions. We also wish to thank the many students who helped us at different stages of this project, most notably Neil Young, Saajan Patel, Katherine Knox, Dat Nguyen, and David Dempsey. Mary Gray deserves special credit for editing and working under tight deadlines on earlier editions. Special thanks go to Pinyarat (“Minkster”) Sirisomboonsuk for her help in preparing the last five editions. Finally, we want to extend our thanks to all the people at McGraw-Hill Education for their efforts and support. First, we would like to thank Noelle Bathurst and Sarah Wood, for providing editorial direction, guidance, and management of the book’s development for the eighth edition. And we would also like to thank Sandy Wille, Sandy Ludovissy, Egzon Shaqiri, Beth Cray, and Angela Norris for managing the final production, design, supplement, and media phases of the eighth edition. Erik W. Larson Clifford F. Gray page xiii Guided Tour Established Learning Objectives Learning objectives are listed both at the beginning of each chapter and are called out as marginal elements throughout the narrative in each chapter. End-of-Chapter Content Both static and algorithmic end-of-chapter content, including Review Questions and Exercises, are assignable in Connect. SmartBook The SmartBook has been updated with new highlights and probes for optimal student learning. Snapshots The Snapshot from Practice boxes have been updated to include a number of new examples of project management in action. New discussion questions based on the Snapshots have been added to the end-of-chapter material and are assignable in Connect. New and Updated Cases Included at the end of each chapter are between one and five cases that demonstrate key ideas from the text and help students understand how project management comes into play in the real world. Cases have been reviewed and updated across the eighth edition. Instructor and Student Resources Instructors and students can access all of the supplementary resources for the eighth edition within Connect or directly at www.mhhe.com/larson8e. http://www.mhhe.com/larson8e page xiv Note to Student You will find the content of this text highly practical, relevant, and current. The concepts discussed are relatively simple and intuitive. As you study each chapter we suggest you try to grasp not only how things work but also why things work. You are encouraged to use the text as a handbook as you move through the three levels of competency: I know. I can do. I can adapt to new situations. The field of project management is growing in importance and at an exponential rate. It is nearly impossible to imagine a future management career that does not include management of projects. Resumes of managers will soon be primarily a description of their participation in and contributions to projects. Good luck on your journey through the text and on your future projects. Chapter-by-Chapter Revisions for the Eighth Edition Chapter 1: Modern Project Management New Snapshot: Project Management in Action 2019. New Snapshot: London Calling: Seattle Seahawks versus Oakland Raiders. New case: A Day in the Life—2019. page xv New section on Agile Project Management. Chapter 2: Organization Strategy and Project Selection Chapter text refined and streamlined. New section describing the phase gate model for selecting projects. Chapter 3: Organization: Structure and Culture New section on project management offices (PMOs). New Snapshot: 2018 PMO of the Year. Chapter 4: Defining the Project Consistent with PMBOK 6th edition, the scope checklist includes product scope description, justification/business case, and acceptance criteria. Discussion of scope creep expanded. New case: Celebration of Color 5K. Chapter 5: Estimating Project Times and Costs Snapshot from Practice on reducing estimating errors incorporated in the text. Snapshot from Practice: London 2012 Olympics expanded. A new set of six exercises. Chapter 6: Developing a Project Schedule Chapter 6 retitled Developing a Project Schedule to better reflect content. New case: Ventura Baseball Stadium. Chapter 7: Managing Risk New Snapshot: Terminal Five—London Heathrow Airport. Consistent with PMBOK 6e, “escalate” added to risk and opportunity responses and “budget” reserves replaced by “contingency” reserves. page xvi Chapter 8 Scheduling Resources and Costs Two new exercises. New case: Tham Luang Cave Rescue. Chapter 9: Reducing Project Duration Snapshot 9.1: Smartphone Wars updated. New case: Ventura Baseball Stadium (B). Chapter 10: Being an Effective Project Manager Effective Communicator has replaced Skillful Politician as one of the 8 traits associated with being an effective project manager. Research Highlight 10.1: Give and Take expanded. Chapter 11: Managing Project Teams A new review question and exercises added. Chapter 12: Outsourcing: Managing Interorganizational Relations Snapshot 12.4: U.S. Department of Defense Value Engineering Awards updated. New exercise added. Chapter 13 Progress and Performance Measurement and Evaluation Expanded discussion of the need for earned value management. New case: Ventura Stadium Status Report. Chapter 14: Project Closure New case: Halo for Heroes II. Chapter 15: Agile Project Management Chapter revised to include discussions of Extreme programming, Kanban, and hybrid models. New Snapshot: League of Legends. New case: Graham Nash. Chapter 16: International Projects Snapshots from Practice: The Filming of Apocalypse Now and River of Doubt expanded. New case: Mr. Wui Goes to America. MCGRAW-HILL CUSTOMER CARE CONTACT INFORMATION At …