Chapter 1 An Overview Of Project Management


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Chapter 1 An Overview Of Project Management

  1. 1. Chapter 1 An Overview of Project Management <ul><li>Definition of Project </li></ul><ul><li>What is Project Management? </li></ul><ul><li>Why Project Management? </li></ul><ul><li>The Life Cycle of a Project. </li></ul><ul><li>Managing the Project Scope. </li></ul><ul><li>Who should be the Project Manager and who should not be? </li></ul><ul><li>Project Manager v/s Line Managers </li></ul><ul><li>Project Communication Management </li></ul><ul><li>The Growth of Project Management </li></ul><ul><li>Project Management in India </li></ul><ul><li>Ethics in Project Management </li></ul><ul><li>Management of International Projects </li></ul>
  2. 2. Two Important Questions <ul><li>Managing a project is called Project Management. </li></ul><ul><li>Q1: What is a project? </li></ul><ul><li>Q2: Why did project management become a separate branch of study, away from the general management? </li></ul>
  3. 3. Definition of Project <ul><li>A project is a </li></ul><ul><li>Group of unique, inter-related activities that are planned and executed in a certain sequence to create a unique product or service, within a specific time frame, budget and the clients specifications. </li></ul><ul><li>According to Project Management Institute’s a Project is defined as </li></ul><ul><li>“ A temporary endeavor undertaken to create a unique product or service” </li></ul><ul><li>The British standard defines a project as </li></ul><ul><li>“ A unique set of coordinated activities, with definite starting and finishing points, undertaken by an individual or organization to meet specific objectives within defined schedule, cost and performance parameters”. </li></ul>
  4. 4. <ul><li>A project means “ any undertaking that has definite, final objectives representing specified values to be used in the satisfaction of some need or desire” </li></ul><ul><li>A commercial project involves the following key considerations; </li></ul><ul><ul><li>What is the cost? </li></ul></ul><ul><ul><li>What is the time required? </li></ul></ul><ul><ul><li>What are the capabilities that it provides to the organizations? </li></ul></ul><ul><ul><li>Whether it will fit into the strategies of the organization? </li></ul></ul>
  5. 5. Some Of The Project Initiatives Include: <ul><li>Redesigning or relocating a production facility (Manufacturing Project) </li></ul><ul><li>Implementing a management information system (MIS Project) </li></ul><ul><li>Developing a new alloy required for a space vehicle. (Spacecraft Project) </li></ul><ul><li>Constructing national highways (Infrastructure Project) </li></ul><ul><li>Organizing the Olympics (Sports project) </li></ul><ul><li>Constructing a dam for better irrigation facilities. (Infrastructure Project) </li></ul><ul><li>Launching of new product (Advertising and Marketing Project) </li></ul><ul><li>Implementing a new computer system (IT project or upgrade) </li></ul><ul><li>Designing and Implementing a new organizational structure (HR Project) </li></ul><ul><li>Designing and Constructing a house or colony (Construction Project) </li></ul>
  6. 6. Project Parameters <ul><li>Some common constraints that influence a project are: </li></ul><ul><ul><ul><li>Scope </li></ul></ul></ul><ul><ul><ul><li>Quality </li></ul></ul></ul><ul><ul><ul><li>Cost </li></ul></ul></ul><ul><ul><ul><li>Time </li></ul></ul></ul><ul><ul><ul><li>Resources </li></ul></ul></ul>
  7. 7. Relationship between Project Parameters <ul><li>The scope and quality of a project are influenced by a variety of constraints like </li></ul><ul><ul><li>Time </li></ul></ul><ul><ul><li>Cost and </li></ul></ul><ul><ul><li>Availability of resources </li></ul></ul>
  8. 8. The Scope Triangle Resource Availability C A Time B Cost Project Scope and Quality
  9. 9. Project Success or Failure formula S = W i r i t=1 Where: 1 to 3 = Time, Cost and Performance Wi = Weight assigned to each factor: time, cost and performance Ri = degree of success in each factor
  10. 10. Difference between Project and Program Project Program Project includes all activities to complete a given job. A program is defined as an ongoing process or ongoing operation indefinitely. It has narrow scope and has shorter duration It has broader scope and has longer duration Project is a part of Program It is a main activity Projects is individual activity. A program is a group of projects managed in a coordinated way to obtain benefits not available from managing them individually
  11. 11. Types of Projects <ul><li>Project Typology: Uncertainty and Complexity </li></ul><ul><li>First step in classification of projects is to recognize the class of project involved, so as to determine the type of organization system and leadership style to set up. </li></ul><ul><li>Next most important is to consider “ How much” project management to apply. This depend upon the level of risk involved and the degree of project complexity. </li></ul>
  12. 12. Shenhar(1996) has proposed the following project classification dimensions . Shenhar Classification : Source :
  13. 13. What is Project Management? <ul><li>Managing a project is called Project Management. </li></ul><ul><li>According to PMI </li></ul><ul><li>“ PM is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations”. </li></ul><ul><li>PM includes </li></ul><ul><li>defining project goals, </li></ul><ul><li>specifying how the goals will be accomplished, </li></ul><ul><li>what resources are needed, and relating budgets and time for completion. </li></ul>
  14. 14. Project Management Objectives <ul><li>Coordinate the various interrelated processes of the project. </li></ul><ul><li>Ensure project includes all the work required, and only the work required, to complete the project successfully. </li></ul><ul><li>Ensure that the project is completed on time and within budget. </li></ul><ul><li>Ensure that the project will satisfy the needs for which it was undertaken. </li></ul><ul><li>Ensure the most effective use of the people involved with the project. </li></ul><ul><li>Promote effective communication between the projects team members and key stakeholders. </li></ul><ul><li>Ensure that project risks are identified, analyzed, and responded. </li></ul>
  15. 15. Why Project Management? <ul><li>The decision on whether or not to set up a separate project management division is subjective as it depends upon various factors some of them are: </li></ul><ul><ul><li>Interactions or interdependencies between various departments. </li></ul></ul><ul><ul><li>Sharing of common resources </li></ul></ul><ul><ul><li>The importance of the project to the organization </li></ul></ul><ul><ul><li>Size of the project </li></ul></ul><ul><ul><li>Degree of unfamiliarity with the work involved and its complexity </li></ul></ul><ul><ul><li>Changes in the market and </li></ul></ul><ul><ul><li>The reputation of the organization </li></ul></ul>
  16. 16. Four Phases in the Life of a Project <ul><li>The Project Life Cycle refers to a logical sequence of activities to accomplish the project’s goals or objectives. </li></ul><ul><li>Regardless of scope or complexity, any project goes through a series of stages during its life. </li></ul><ul><li>Phase I : Conception and Selection </li></ul><ul><li>Phase II : Planning and Scheduling </li></ul><ul><li>Phase III : Implementation, Monitoring and Control </li></ul><ul><li>Phase IV : Evaluation and Termination </li></ul>Project Life Cycle
  17. 17. Functions Performed in Phase I Conception & Selection Phase II Planning & Scheduling Phase III Implementation, Monitoring and Control Phase IV Evaluation & Termination <ul><li>Identifying a need for a project </li></ul><ul><li>Establishing goals to be achieved by the project. </li></ul><ul><li>Estimating the amount that the firm will have to commit for the project. </li></ul><ul><li>Presenting the project idea or various alternative ideas to the management and get their approval </li></ul><ul><li>Set up a technical team to decide on how the project can e implemented. </li></ul><ul><li>Plan for the requirements of personnel, finance, materials etc. </li></ul><ul><li>Prepare a schedule. </li></ul><ul><li>Procuring materials </li></ul><ul><li>Building and testing the tools </li></ul><ul><li>Developing support systems </li></ul><ul><li>Producing the system that is aimed at. </li></ul><ul><li>Verifying whether the performance is up to the laid down standard. </li></ul><ul><li>Making modification if required. </li></ul><ul><li>Training operational Staff </li></ul><ul><li>Transfer of materials </li></ul><ul><li>Transferring the responsibilities </li></ul><ul><li>Releasing surplus resources, that remain after use </li></ul><ul><li>Releasing the project staff for the next assignment. </li></ul>
  18. 18. Managing the Project Scope <ul><li>The scope of the project determines the boundaries of the project. </li></ul><ul><li>The scope specifies what features/ a characteristic of the project product is included and what is not included. </li></ul><ul><li>In project management there are actually two different scopes. </li></ul><ul><ul><li>Product Scope, which is what the end result of the project will create. </li></ul></ul><ul><ul><li>The product scope is what customers focus on—what they are envisioning the firm to create. </li></ul></ul><ul><ul><li>The product scope describes the thing or service that will exist as a result of undertaking the project. </li></ul></ul><ul><ul><li>Project Scope, on the other hand, describes all the work to create the product scope. </li></ul></ul><ul><ul><li>It includes all of the work, and only the required work, to complete the project deliverable. </li></ul></ul>
  19. 19. <ul><li>Project Manager and the client prepares project scope and deliverables. </li></ul><ul><li>The project manager then prepares a Project Overview Statement based on the list of deliverables. </li></ul><ul><li>The POS will be sent to the firms top management for approval. </li></ul><ul><li>The PM prepares a Project Definition Statement with his team members that can be used as a reference in executing the project. </li></ul>Managing the Project Scope Continued….
  20. 20. Who should be the Project Manager? <ul><li>In any organization we find two types of people: </li></ul><ul><li>1. Those who give excellent ideas from their knowledge and experience but are not very good at getting things done and </li></ul><ul><li>2. Those whose are good at handling men and matters, but are not as sound as the former in technical matters. </li></ul><ul><li>People who have great ideas are not necessarily good implementers. </li></ul><ul><li>The manager of a project should be one who can work effectively with different groups of people, interact with various departmental heads, and integrate all the functions to get the project move. </li></ul><ul><li>Harold Kerzner calls the first type of people ‘ Project Champions’ and the Second ‘Project Manager”. </li></ul>
  21. 21. Project Manager Vs Line Managers <ul><li>There is always a constant tussle between the line managers and the project manager to share the organizations resources like; </li></ul><ul><ul><li>Money, Manpower, Equipment, Facilities and Information Technology. </li></ul></ul><ul><li>Manpower is controlled by Line Managers. </li></ul><ul><li>Allocation of manpower will be done by Line Managers based on the request made by Project Manager. </li></ul><ul><li>Employees provided to Project Manager continue to report to Line Manager and give preference to the commands of the Line Manager over the Project Manager. </li></ul><ul><li>Success of Project depends on good working relationship between PM and LM </li></ul>
  22. 22. Project Communication Management <ul><li>Effective communication is crucial for the success of a project. </li></ul><ul><li>Project communication , which includes both formal and informal communication at various levels, involves all the activities and behavior by which information is exchanged between the project manager and his team members. </li></ul><ul><li>Project Communication Management includes all those processes that are required to ensure that information pertaining to the project is generated, collected, disseminated, stored and ultimately disposed of, in a timely and appropriate manner. </li></ul>
  23. 23. <ul><li>Project communication planning involves determining the information and communication requirements of the various stakeholders of a project. </li></ul><ul><li>Steps in communication planning are: </li></ul><ul><ul><li>Identifying information requirements </li></ul></ul><ul><ul><li>Choosing the appropriate communication technology </li></ul></ul><ul><ul><li>Stakeholder analysis </li></ul></ul><ul><ul><li>Communication management plan </li></ul></ul>
  24. 24. Growth of Project Management <ul><li>Phase I: Before 1950s </li></ul><ul><ul><li>PM was only informal </li></ul></ul><ul><ul><li>Projects were handled on an informal basis by some people chosen from various departments. </li></ul></ul><ul><ul><li>No formal project management departments. </li></ul></ul><ul><ul><li>Handling projects was also done by Line Managers </li></ul></ul><ul><ul><li>Formal Lines of Communication were unnecessary </li></ul></ul><ul><ul><li>Sophisticated organization structure was non-existent. </li></ul></ul>
  25. 25. <ul><li>Phase II : Late Sixties </li></ul><ul><ul><li>PM gained widespread acceptance. </li></ul></ul><ul><ul><li>Complexity of the tasks and the sizes of the organizations increased. </li></ul></ul><ul><ul><li>Formal Project Management Departments came into force </li></ul></ul><ul><ul><li>Clear cut distinction between the role of Project Manager and Line Manager were established </li></ul></ul><ul><ul><li>All the departments started involving in the project activities </li></ul></ul><ul><ul><li>Effective communication system were in place. </li></ul></ul><ul><ul><li>Resistance from the people involved was very high on account of Pay packets, Power in the organization and visibility to the top management. </li></ul></ul>
  26. 26. Phase III - Late Seventies <ul><li>Project Management started spreading further and further and following benefits started to accrue from it. </li></ul><ul><ul><li>Unhindered flow of work horizontally and vertically </li></ul></ul><ul><ul><li>Improvement in the orientation towards customer problems. </li></ul></ul><ul><ul><li>Easier demarcation of responsibilities </li></ul></ul><ul><ul><li>Better adaptation to a dynamic environment </li></ul></ul><ul><ul><li>Ability to handle a multi-disciplinary activity within specified constraints. </li></ul></ul><ul><ul><li>Improvement in organizational design. </li></ul></ul>
  27. 27. Project Management Institute(PMI) <ul><li>To meet the industrial requirements , to improve the skills and standards and to make project manager more professional , an international institution the Project Management Institute was set up in 1969. </li></ul><ul><li>PMI is a non-profitable professional organization dedicated to promoting Project Management. </li></ul><ul><li>It has more then 150000 members over 150 countries. </li></ul><ul><li>Role of PMI </li></ul><ul><ul><li>To Set industry standards </li></ul></ul><ul><ul><li>Conducts research and provides education </li></ul></ul><ul><ul><li>Certification Program </li></ul></ul><ul><ul><li>Conducts Seminars and International Workshops to discuss the present context and improve the standards of project management. </li></ul></ul>
  28. 28. Project Management In India <ul><li>Project Management has been adopted in India after Independence. </li></ul><ul><li>Right from the inception, it has been a failure in India. </li></ul><ul><li>Severe time and cost overruns have been the characteristic features of projects, particularly in the public sector. </li></ul><ul><li>Commonly quoted reasons for the overruns are: </li></ul><ul><ul><li>Internal Reasons </li></ul></ul><ul><ul><li>External Reasons </li></ul></ul>
  29. 29. Internal Reasons <ul><li>Disputes with local people on acquisition of land and compensation. </li></ul><ul><li>Bad choice of technology </li></ul><ul><li>Non-availability of skilled personnel </li></ul><ul><li>Lack of proper planning </li></ul><ul><li>Non-availability of the equipment of required quality at the required time. </li></ul><ul><li>Poor quality of the inputs purchased </li></ul><ul><li>Labor disputes </li></ul><ul><li>Lack of proper handling of organizational issues such as appointment of the project manager </li></ul><ul><li>Absence of proper co-ordination between different departments involved, such as customs, sales tax. Etc. </li></ul><ul><li>Lack of proper monitoring and follow up. </li></ul>
  30. 30. External Reasons <ul><li>Funds not being released by the concerned department on time. </li></ul><ul><li>Changes in foreign exchange rates </li></ul><ul><li>Inflation </li></ul><ul><li>Political instability and lack of Political Will to implement projects quickly and efficiently </li></ul><ul><li>Budget deficits </li></ul><ul><li>Diversion of funds to other unforeseen uses like meeting a natural calamity. </li></ul>
  31. 31. Ethics in Project Management <ul><li>Ethics means science of conduct. </li></ul><ul><li>Doug Wallace and John Pekel define Ethics as the basic ground rules by which humans live. </li></ul><ul><ul><li>These ground rules differ from society to society and individual to individual, and similarly from a project executed in one country to one executed in another. </li></ul></ul><ul><li>Therefore, ethics refer to the moral principles that are accepted by the majority of the members of the society. </li></ul><ul><li>Project Manager should exercise care when dealing with ethical issues that arise during the development and implementation of a project. </li></ul>
  32. 32. Ethics and Project Management <ul><li>The decision taken by project management professionals will have an impact on the quality of life of various stakeholders of the project. </li></ul><ul><li>Some common ethical mistakes committed by businesses; </li></ul><ul><ul><li>Taking shortcuts in order to meet the schedule or budget </li></ul></ul><ul><ul><li>Using inferior quality materials </li></ul></ul><ul><ul><li>Compromising on safety measures </li></ul></ul><ul><ul><li>Violation of standards </li></ul></ul>
  33. 33. Management of International Projects <ul><li>Globalization has a significant impact on the way the projects are managed. </li></ul><ul><li>According t Rudd Lubbers, </li></ul><ul><ul><li>Globalization is a process of minimizing the significance of geographical distance, in developing and maintaining international economic, political and socio-cultural relations. </li></ul></ul><ul><li>There are 3 basic models of project management based on the project management styles in different geographic locations. </li></ul><ul><ul><li>The European Model- Fully structured and systematic procedure for handling technical issues </li></ul></ul><ul><ul><li>The North American Model : The system is not as formal and rigid as it is in Europe. </li></ul></ul><ul><ul><li>The Japanese Model : They believe that superior technology brings in superior core competency. </li></ul></ul>
  34. 34. Impact of the Business Environment on International Projects <ul><li>The fundamental difference between an international project and a domestic project is that international projects require an in-depth analysis of the various constituents of the macro and micro environments. </li></ul><ul><li>The Major constituents are; </li></ul><ul><ul><li>Language </li></ul></ul><ul><ul><li>Culture </li></ul></ul><ul><ul><li>Political Environment </li></ul></ul><ul><ul><li>Economic conditions </li></ul></ul><ul><ul><li>Government regulations </li></ul></ul><ul><ul><li>Availability of infrastructure </li></ul></ul><ul><ul><li>Human capital </li></ul></ul><ul><li>The success or failure of an international project is based on the pre-analysis of the micro and macro environment of the country, where the project is to be implemented. </li></ul>
  35. 35. Challenges in International Projects <ul><li>Political disturbances </li></ul><ul><li>Economic instability </li></ul><ul><li>Sudden changes in Tax laws </li></ul><ul><li>Time consuming government procedures </li></ul><ul><li>Cultural barriers </li></ul><ul><li>Patent laws </li></ul><ul><li>Dispute settlements </li></ul><ul><li>Lack of physical proximity </li></ul>
  36. 36. Thank You