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the textbook: project management for engineering business and technology 5th by John Nicolas

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Project Management for Engineering, Business and Technology FIFTH EDITION

Project Management for Engineering, Business and Technology, 5th edition, addresses project management across all industries. First covering the essential background, from origins and philosophy to methodology, the bulk of the book is dedicated to concepts and techniques for practical application. Coverage includes project initiation and proposals, scope and task definition, scheduling, budgeting, risk analysis, control, project selection and portfolio management, program management, project organization, and all-important “people” aspects—project leadership, team building, conflict resolution and stress management.

The Systems Development Cycle is used as a framework to discuss project management in a variety of situations, making this the go-to book for managing virtually any kind of project, program or task force. The authors focus on the ultimate purpose of project management—to unify and integrate the interests, resources, and work efforts of many stakeholders, as well as the planning, scheduling, and budgeting needed to accomplish overall project goals.

This new edition features:

• Updates throughout to cover the latest developments in project management methodologies

• New examples and 18 new case studies to help students develop their understanding and put principles into practice

• A new chapter on agile project management and lean • Expanded coverage of program management, stakeholder engagement,

buffer management, and managing virtual teams and cultural differences in international projects.

• Alignment with PMBOK terms and definitions for ease of use alongside PMI certifications



• Cross-reference to IPMA, APM, and PRINCE2 methodologies • Extensive instructor support materials, including an Instructor’s Manual,

PowerPoint slides, answers to chapter review questions, problems and cases, and a test bank of questions.

Taking a technical yet accessible approach, Project Management for Business, Engineering and Technology, 5th edition, is an ideal resource and reference for all advanced undergraduate and graduate students in project management courses as well as for practicing project managers across all industry sectors.

John Nicholas, PhD, is Professor of Operations Management at Loyola University, Chicago, USA.

Herman Steyn, PhD, is a Professor in the Graduate School of Technology Management, University of Pretoria, South Africa where he specializes in project management.



“As a Professor who has taught Project Engineering for the last 14 years, I have also performed large scale Project Engineering throughout my first career (over 20 years) in Aerospace, Defense and Information Technology. When deciding on a textbook for my graduate Project Engineering class, I looked long and hard. I wasn’t finding what I was looking for and was going to write my own, until I found Project Management for Engineering, Business and Technology. This is the textbook I would have written. It is robust, complete and easy to follow. The graphics, charts and figures are all very descriptive and real. And my students like the paperback nature of the book. I highly recommend this textbook for anyone teaching Engineering, Business or Technology Project Management/Engineering. I also recommend it as a ‘keeper’ for students who will be guiding projects in the future.”

Mark Calabrese, University of Central Florida, USA

“The publication of the 5th edition of Project Management for Engineering, Business and Technology by John Nicholas and Herman Steyn is an important milestone in a continuing conversation between the authors and the current and future practitioners of project management around the world. This book has long been a comprehensive but accessible publication that provides valuable insights into the strategic and day-today management of projects both large and small. There are numerous publications in this field but Nicholas and Steyn have found the balance between the needs of experienced practitioners looking for ways to improve project outcomes, and the needs of students who are new to the project management field. The concepts are clearly and logically laid out, and the language is appropriate for a wide range of audiences. It continues to be a benchmark in a crowded field of publications offering both practical and strategic insights into the art and craft of project management.”

Barrie Todhunter, University of Southern Queensland, Australia

“I have been using the earlier editions of this book in my Project Management teaching to working executives of a major engineering company employing close to 40000 people in various types of projects. I have evaluated the current 5th edition of the book from the perspective of (a) a teaching resource (b) study material and (c) as a resource for case studies and references. I find that the 5th edition has been thoroughly revamped and incorporates several relevant resources and is presented in a very lucid and structured way. I have absolutely no hesitation in recommending this book as a standard resource for teaching students in a university set up and/or for working executives in a project environment. The book is also a good resource as a study material for certification courses.”

Krishna Moorthy, Ex-Dean, Larsen & Toubro Institute of Project Management, India

“Project Management for Engineering, Business and Technology is one of the most comprehensive textbooks in the field. Nicholas and Steyn explain the matter in a readable and easy-to-understand way, illustrated with interesting examples. The authors combine the ‘hard matter’ of project management with relevant behavioural aspects. Overall, a useful work for anyone new to the field or as reference for the more advanced project manager.”

Martijn Leijten, Delft University of Technology, The Netherlands

“Project management plays a vital role in achieving project objectives. Projects bring change and project management is recognised as the most effective way to managing such change. This book encourages readers to become interested and involved in the change towards renewed project management and management of projects.”



Benita Zulch, University of the Free State, South Africa

“A very comprehensive text. An excellent mix of materials to enable students to learn techniques and engage in discussion of scenarios.”

Richard Kamm, University of Bath, UK



Project Management for Engineering, Business and Technology


John M. Nicholas Loyola University Chicago

Herman Steyn University of Pretoria



Fifth edition published 2017

by Routledge

2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge

711 Third Avenue, New York, NY 10017

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

© 2017 John Nicholas and Herman Steyn

The right of John Nicholas and Herman Steyn to be identified as authors of this work has been asserted by

them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any

electronic, mechanical, or other means, now known or hereafter invented, including photocopying and

recording, or in any information storage or retrieval system, without permission in writing from the


Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used

only for identification and explanation without intent to infringe.

Fourth edition published by Routledge 2012

Third edition published by Elsevier Inc. 2008

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication Data

A catalog record for this book has been requested

ISBN: 978-1-138-93735-2 (hbk)

ISBN: 978-1-138-93734-5 (pbk)

ISBN: 978-1-315-67631-9 (ebk)

Typeset in Joanna by Servis Filmsetting Ltd, Stockport, Cheshire

Visit the companion website: www.routledge.com/cw/nicholas



To Sharry, Julia, Joshua, and Abigail J.M.N.

To Karen and Janine H.S.




Brief Contents


PART I: PHILOSOPHY AND CONCEPTS 1 What Is Project Management? 2 Systems Approach

PART II: PROJECT LIFE CYCLE 3 Project Life Cycle and Project Conception 4 Project Definition and System Definition

PART III: SYSTEMS AND PROCEDURES FOR PLANNING AND CONTROL 5 Basic Project Planning Techniques 6 Project Schedule Planning and Networks 7 Advanced Project Network Analysis and Scheduling 8 Cost Estimating and Budgeting 9 Project Quality Management 10 Project Risk Management 11 Project Execution, Monitoring, and Control 12 Project Evaluation, Communication, Implementation, and Closeout 13 Agile Project Management and Lean

PART IV: ORGANIZATION BEHAVIOR 14 Project Organization Structure and Integration 15 Project Roles and Stakeholders 16 Managing Participation, Teamwork, and Conflict

PART V: PROJECT MANAGEMENT IN THE CORPORATE CONTEXT 17 Meta-Management of Projects and Program Management



18 Project Selection and Portfolio Management 19 International Project Management

Appendix A: RFP for Midwest Parcel Distribution Company Appendix B: Proposal for Logistical Online System Project (LOGON) Appendix C: Project Evaluation Plan for Logistical Online System





Cover Title Copyright Dedication Brief Contents Contents Preface Acknowledgements About the Authors Introduction

I.1 In the Beginning… I.2 What Is a Project? I.3 All Projects are Not the Same I.4 Project Management: The Need I.5 Project Goal: Time, Cost, and Performance I.6 Project Management: The Person, The Team, The Methodology I.7 Project Management Standards of Knowledge and Competencies I.8 About This Book I.9 Study Project Appendix: Relation Between Professional Standards and Chapters of This Book Review Questions Case I.1 The Denver Airport Questions About the Case





1 What Is Project Management?

1.1 Functions of Management 1.2 Features of Project Management 1.3 Evolution of Project Management 1.4 Where is Project Management Appropriate? 1.5 Management by Project: A Common Approach 1.6 Different Forms of Project-Related Management 1.7 Project Environments 1.8 New Product and Systems Development Projects 1.9 Construction Projects 1.10 Service-Sector Projects 1.11 Public-Sector and Governmental Projects and Programs 1.12 Miscellaneous Projects 1.13 Summary Review Questions Questions About the Study Project Case 1.1 Disaster Recovery at Marshall Field’s Case 1.2 Flexible Benefits System Implementation at Shah Alam Medical Center Endnotes

2 Systems Approach

2.1 Systems and Systems Thinking 2.2 Systems Concepts and Principles 2.3 Systems Approach 2.4 Systems Engineering 2.5 Project Management: A Systems Approach 2.6 Summary



Review Questions Questions About the Study Project Case 2.1 Glades County Sanitary District Case 2.2 Life and Death of an Aircraft Development Project Case 2.3 Jubilee Line Extension Project Case 2.4 Santa Clara County Traffic Operations System and Signal Coordination Project Endnotes


3 Project Life Cycle and Project Conception

3.1 Project Life Cycle 3.2 Systems Development Cycle 3.3 Phase A: Conception 3.4 Project Feasibility 3.5 The Project Proposal 3.6 Project Contracting 3.7 Summary Appendix: Kinds of Contracts Review Questions Questions About the Study Project Case 3.1 West Coast University Medical Center Case 3.2 X-Philes Data Management Corporation: RFP Matters Case 3.3 Proposal Evaluation for Apollo Spacecraft Case 3.4 Contract Mess-Up at Polanski Developers Endnotes

4 Project Definition and System Definition

4.1 Phase B: Definition 4.2 Project Definition



4.3 Phased (Rolling Wave) Project Planning 4.4 System Definition 4.5 Summary Appendix A: Stages of Systems Engineering Appendix B: Quality Function Deployment Review Questions Questions About the Study Project Case 4.1 Star-Board Construction and Santaro Associates: Requirements Snafu Case 4.2 Revcon Products and Welbar, Inc.: Client– Contractor Communication Case 4.3 Lavasoft.com: Interpreting Customer Requirements Case 4.4 Proposed Gold Mine in Canada: Phased Project Planning Endnotes


5 Basic Project Planning Techniques

5.1 Planning Steps 5.2 The Project Execution Plan 5.3 Scope and Statement of Work 5.4 Work Definition 5.5 Project Organization and Responsibilities 5.6 Scheduling 5.7 Planning and Scheduling Charts 5.8 Line of Balance (Linear Scheduling Method) 5.9 Procurement Management 5.10 Summary Review Questions Questions About the Study Project Case 5.1 Barrage Construction Company: Sean’s WBS



Case 5.2 Startrek Enterprises, Inc.: Deva’s Project Plan Case 5.3 Walter’s Project Plan Case 5.4 Planning the Boca Implementation at Kulczyński Products Endnotes

6 Project Schedule Planning and Networks

6.1 Network Diagrams 6.2 The Critical Path 6.3 Converting to Gantt Calendar Schedules 6.4 Management Schedule Reserve 6.5 Alternative Relationships 6.6 Scheduling with Resource Constraints 6.7 Criticisms of Network Methods 6.8 Summary Appendix A: AOA Diagrams Appendix B: Alternate Scheduling Method: Project Starts at Day 1 Review Questions and Problems Questions About the Study Project Case 6.1 Network Diagram for a Large Construction Project Case 6.2 Melbourne Construction Company, A Case 6.3 Melbourne Construction Company, B Case 6.4 Melbourne Construction Company, C Endnotes

7 Advanced Project Network Analysis and Scheduling

7.1 CPM and Time-Cost Tradeoff 7.2 Variability of Activity Duration 7.3 PERT 7.4 Allocating Resources and Multiple Project Scheduling



7.5 Theory of Constraints and Critical Chain Method 7.6 TOC Method for Allocating Resources to Multiple Projects 7.7 Discussion and Summary Summary List of Symbols Review Questions and Problems Questions About the Study Project Case 7.1 Bridgecon Contractors Case 7.2 LOGON Project Case 7.3 Papua Petera Village Project Endnotes

8 Cost Estimating and Budgeting

8.1 Cost Estimates 8.2 Cost Escalation 8.3 Cost Estimating and the Systems Development Cycle 8.4 Cost Estimating Process 8.5 Elements of Estimates and Budgets 8.6 Project Cost Accounting Systems 8.7 Budgeting Using Control (or Cost) Accounts 8.8 Cost Summaries 8.9 Cost Schedules and Forecasts 8.10 Life Cycle Costs 8.11 Summary Review Questions and Problems Questions About the Study Project Case 8.1 Life Cycle Costs for Fleet of Tourist Spaceships Case 8.2 Estimated Costs for the Chunnel Project Case 8.3 Fiona’s Estimate for the Gorgy Project Case 8.4 Melbourne Construction Company, D Endnotes



9 Project Quality Management

9.1 The Concept of Quality 9.2 Project Quality Management Processes 9.3 Techniques for Quality Assurance in System Development 9.4 Techniques for Quality Control 9.5 Summary Review Questions Questions About the Study Project Case 9.1 Ceiling Panel Collapse in the Big Dig Project Case 9.2 FIFA 2010 World Cup South Africa Case 9.3 Airbag Adversity Endnotes

10 Project Risk Management

10.1 Risk Concepts 10.2 Risk Identification 10.3 Risk Assessment 10.4 Risk Response Planning 10.5 Risk Monitoring and Response 10.6 Project Management Is Risk Management 10.7 Summary Appendix: Risk Analysis Methods Review Questions and Problems Questions About the Study Project Case 10.1 The Sydney Opera House Case 10.2 Infinity & Beyond, Inc. Case 10.3 The Nelson Mandela Bridge Endnotes

11 Project Execution, Monitoring, and Control

11.1 Phase C: Execution



11.2 Detail Design Stage 11.3 Production/Build Stage 11.4 Monitoring and Control Process 11.5 Work Packages and Control Accounts 11.6 Project Monitoring and Control Emphasis 11.7 Performance Analysis and Earned Value Management 11.8 Issue Management 11.9 Change Control 11.10 Contract Administration 11.11 Problems with Monitoring and Controlling Projects 11.12 Summary Summary of Variables Review Questions and Problems Questions About the Study Project Case 11.1 Cybersonic Project Case 11.2 SA Gold Mine: Earned Value After a Scope Change Case 11.3 Change Control Process at Dynacom Company Endnotes