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Project management

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Project management

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Project management

  1. 1. PROJECT MANAGEMENT Dr. ANANDA KUMAR Professor Department of Mgt. Studies Christ College of Engg. & Tech. Puducherry, India. Mobile: +91 99443 42433 E-mail: searchanandu@gmail.com
  2. 2. Unit 1 Project – Meaning – classification – importance of project management – An Integrated Approach – Project Portfolio Management System – The Need – Choosing the appropriate Project Management structure: Organizational considerations and project considerations – steps in defining the project – project Rollup – Process breakdown structure – Responsibility Matrices – External causes of delay and internal constraints.
  3. 3. Project “A project is a one-shot, time-limited, goal-directed, major undertaking, requiring the commitment of varied skills and resources”. A project is temporary in that there is a defined start (the decision to proceed) and a defined end (the achievement of the goals and objectives).
  4. 4. Project Management PM is the application of knowledge, skills, tools and techniques to a broad range of activities in order to meet the requirements of the particular project.  Project Management knowledge and practices are best described in terms of their component processes.  These processes can be placed into five Process Groups: Initiating, Planning, Executing, Controlling and Closing.
  5. 5. Project Management Constraints Manage these or they will manage you! Time Cost Scope
  6. 6. Project Management Activities 1. Planning the work 2. Assessing and justifying risk 3. Estimating resources 4. Organizing the work 5. Acquiring human and material resources 6. Assigning tasks 7. Directing activities 8. Controlling project execution 9. Reporting progress 10.Analyzing the results based on the facts achieved
  7. 7. Project Life Cycle Defining 1.Goal 2.Specifications 3.Tasks 4.Responsibilities Planning 1.Schedules 2.Budgets 3.Resources 4.Risks 5.Staffing Executing 1.Status reports 2.Changes 3.Quality 4.Forecasts Delivering 1.Train Customer 2.Transfer documents 3.Release Resources 4.Lessons learned Levelofeffort Start Time End
  8. 8. Classification of Project 1. On the basis of Expansion 2. On the basis of Magnitude of the resources to be invested. 3. On the basis of Sector 4. On the basis of Objective 5. On the basis of productivity 6. On the basis of nature of benefits 7. On the basis of risk involved in the product 8. On the basis of Economic life of the project
  9. 9. 1. On the basis of Expansion # Project expanding the capacity # Project expanding the supply of knowledge 2. On the basis of Magnitude of the resources to be invested # Giant projects affecting total economy # Big projects affecting at one sector of the economy # Medium size projects # Small size projects (depending on size, investment & impact)
  10. 10. 3. On the basis of Sector # Industrial Project # Agricultural project # Educational project # Health project # Social project 4. On the basis of Objective # Social Objective project # Economic objective project
  11. 11. 5. On the basis of Productivity # Directivity productive project # Interactively productive project 6. On the basis of nature of benefits # Quantifiable project # Non-Quantifiable project
  12. 12. 7. On the basis of risk involved in the project # High risks project # Normal risks project # Low risks project 8. On the basis of economic life of the project # Long term project # Medium term project # Short term project
  13. 13. Importance of Project Management 1. Compression of the Product Life Cycle 2. Global Competition 3. Knowledge Explosion 4. Corporate Downsizing 5. Increased Customer Focus 6. Rapid Development of Third world and Closed Economies 7. Small Projects Represent Big Problems
  14. 14. Project Management Today – An Integrative Approach 1. Integration of Projects with the Strategic Plan 2. Integration within the Process of Managing Actual Projects 3. Implement Strategies through Projects
  15. 15. Customer Environmental Analysis External Internal Firm Mission, Goals, Strategies Priorities Projects System Environment & Culture Project Implementation IntegratedManagementofProject
  16. 16. The Technical & Sociocultural Dimensions of the Project Management Process Socio Cultural Leadership Problem Solving Teamwork Negotiation Politics Customer Expectations Technical Scope WBS Schedules Resource Allocation Baseline Budgets Status reports
  17. 17. Project Portfolio Management Vision Mission Strategy Resource Allocation Project Prioritization Performance Tracking Needs Assessment Project Proposals Project Deliverables Enterprise Management Project Management Portfolio Management
  18. 18. Project Portfolio Management [PPM]  A collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives.  Portfolio Management is the middleware between Strategic Planning and Project Delivery.  It means a systematic process of selecting, supporting, and managing the firm’s collection of projects.  Portfolio management ensures projects are aligned with strategic goals appropriately.  It provides information to make better business decisions.
  19. 19. Project Portfolio Management System Portfolio management requires:  decision making  prioritization  review  realignment  reprioritization
  20. 20. PPM Essentials
  21. 21. Major Phases of PPM 1. Establish 2. Evaluate 3. Prioritize 4. Select 5. Manage
  22. 22. Major Phases of PPM No – Revise & Submit No - Reject yes Cancelled Completed Project Proposal Establish Portfolio strategy Evaluate project alignment to the corporate strategy Prioritize project and hold pending funding Select a balanced portfolio using the prioritized projects Manage Active projects On plan Off plan In Trouble Postponed
  23. 23. Major Phases of PPM 1. Proposed 2. Aligned 3. Prioritized 4. Selected 5. Active 6. Postponed 7. Cancelled 8. Completed
  24. 24. Need for an Effective PPM System Problem 1: The Implementation Gap Problem 2: Organization Polities Problem 3: Resource Conflicts and Multitasking
  25. 25. Problem 1: The Implementation Gap # Conflicts frequently occur among functional managers and cause lack of trust. # Frequent meetings are called to establish or renegotiate priorities. # People frequently shift from one project to another, depending on current priority. Employees are confused about which projects are important. # People are working on multiple projects and feel inefficient. # Resources are not adequate.
  26. 26. Problem 2: Organization Politics Politics exist in every organization and can have a significant influence on which projects receive funding and high priority. This is especially true when the criteria and process for selecting projects are illdefined and not aligned with the mission of the firm. Project selection may be based not so much on facts and sound reasoning, but rather on the persuasiveness and power of people advocating projects.
  27. 27. Problem 3: Resource Conflicts and Multitasking Most project organizations exist in a multi project environment. This environment creates the problems of project interdependency and the need to share resources. Resource sharing also leads to multitasking. Multitasking involves starting and stopping work on one task to go and work on another project, and then returning to the work on the original task. People working on several tasks concurrently are far less efficient, especially where conceptual or physical shutdown and startup are significant.
  28. 28. Choosing the Appropriate Project Mgt Structure 1. Organization Considerations 2. Project Considerations
  29. 29. 1. Organization Considerations If an organization has both standard products and projects, then a matrix arrangement would appear to be appropriate. If an organization has very few projects, then a less formal arrangement is probably all that is required. Temporary task forces could be created on an as-needed basis and the organisation could out-source project work.
  30. 30. 1. Organization Considerations 1. Organizing Projects within the Functional Organisation 2. Organizing Projects within a Matrix Arrangement 3. Organizing Projects within a Network organisation
  31. 31. Organizing Projects within the Functional Organisation Delta manufacturing, inc. President Finance & AdministrationHuman Resources Marketing ProcurementManufacturingEngineering Software Engineering Electronics Engineering Receiving & Inspection PurchasingDesign Mechanical Engineering Customer service Internatio nal Sales Domestic Sales Production Scheduling TestingAssembly Fabricati on
  32. 32. Organizing Projects within a Matrix Arrangement Zeta manufacturing inc. President Human Resources Finance Director of Projects Engineering Manufacturi ng Marketing Project Admin. Testing Assembl y Mechani cal engg. Softwar e engg. Design Engg. Customer Service P – A PM P – B PM P – C PM 1 1 2 2 3 1 1 1 2 1 1 3 2 2 1 1 2
  33. 33. Organizing Projects within a Network organisation Mountain Bicycle Tool & Die firm Parts Supplies Manufact urer Project Manager Bicycle Company Inventor Legal firm Advertisi ng firm Marketin g Firm
  34. 34. 2. Project Considerations At the project level, the question is how much autonomy the project needs in order to be successfully completely. Hobbs and Menard identify seven factors that should influence the choice of project management structure: 1. Size of project 2. Strategic importance 3. Novelty and need for innovation
  35. 35. 4. Need for integration (number of departments involved) 5. Environmental complexity (number of external interfaces) 6. Budget and time constraints 7. Stability of resource requirements
  36. 36. Defining the Project One of the best ways to meet the needs of the customer & major project stakeholders is to use an integrated project planning and control system that requires selective information. Project managers who manage a single, small project can plan and schedule the project tasks without a formal planning and information system.
  37. 37. Steps in Defining the Project Step 1 : Defining the Project Scope Step 2 : Establishing Project Priorities Step 3 : Creating the Work Breakdown Structure Step 4 : Integrating the WBS with the Organization Step 5 : Coding the WBS for the Information System
  38. 38. Step 1 : Defining the Project Scope Defining the project scope sets the stage for developing a project plan. Project scope is a definition of the end result or mission of your project – a product or service for your client/customer. The primary purpose is to define as clearly as possible the deliverable for the end user and to focus project plans. Many research clearly shows that a poorly defined scope or mission is the most frequently mentioned barrier to project success.
  39. 39. Cont…… Before work on the project can be started, it’s necessary to clearly define what the outcomes of the project will be. This involves not only what specifications and criteria the final project must meet, but when it must be completed and what the budget is.  What’s the objective?  What are the expected, required, and desired results?  How will success be measured?  What’s the timeframe?  What are the resource implications?
  40. 40. Step 2 : Establishing Project Priorities Quality and the ultimate success of a project are traditionally defined as meeting and/or exceeding the expectations of the customer and/or upper management in terms of cost (budget), time (schedule), and performance (scope) of the project. Quality Scope TimeCost
  41. 41. Cont…… The interrelationship among these criteria varies. For example, sometimes it is necessary to compromise the performance and scope of the project to get the project done quickly or less expensively. Often the longer a project takes, the more expensive it becomes. However, a positive correlation between cost and schedule may not always be true. Other times project costs can be reduced by using cheaper, less efficient labor or equipment that extends the duration of the project.
  42. 42. Step 3 : Creating the WBS Once the scope and deliverables have been identified, the work of the project can be successively subdivided into smaller and smaller work elements. The outcome of this hierarchical process is called the work breakdown structure (WBS). The WBS is a map of the project. Use of WBS helps to assure project managers that all projects and work elements are identified, to integrate the project with the current organization, and to establish a basis for control. Basically, the WBS is an outline of the project with different levels of details.
  43. 43. Hierarchical Breakdown of the WBS Level Hierarchical breakdown Description 1 Complete project 2 Major deliverable 3 Supporting deliverable 4 Lowest Mgt responsibility level Grouping of work 5 packages for monitoring progress and responsibility Project Deliverable Sub deliverable Lowest subdeliverable Cost Account Work package
  44. 44. Step 4 : Integrating the WBS with the Organization An integral part of the WBS is to define the organizational units responsible for performing the work. In practice, the outcome of this process is the organization breakdown structure (OBS). The OBS depicts how the firm has organized to discharge work responsibility. The purpose of the OBS are to provide a framework to summarize organization unit work performance, identify organization units responsible for work packages, and tie the organizational unit to cost control accounts.
  45. 45. Integration of WBS and OBS Internal Memory BIOS Personal Computer prototype Vendor, software, application Disk storage units Mouse, keyboard, voice Microproc essor unit External USB HardOptical ROM Utilitie s FileI/ORAM Read/writ e head Chassis frame Circuit board Motor
  46. 46. Step 5 : Coding the WBS for the Information System Gaining the maximum usefulness of a breakdown structure depends on a coding system. The codes are used to define levels and elements in the WBS, organization elements, work packages, and budget and cost information. The codes allow reports to be consolidated at any level in the structure. The most commonly used scheme in practice is numeric indention.
  47. 47. Project Rollup The work packages and cost accounts serve as a database from which all other planning, scheduling, and controlling processes are coordinated. Cost accounts include one or more work packages. Each work package has time, budget, resource, responsibility, and control points that can be used to track project progress.
  48. 48. Work Package Estimates WP Description : Final Version Page : 1 of 1 WP ID : 1.1.3.2 Project : PC proto Deliverable : Circuit Board Date : 9/29/xx Original Unit : Software Estimator : RMG WP Duration : 3 work weeks Total Budget $ : 265
  49. 49. Project Planning Once the outcome of the project has been defined, it’s important to develop a plan of what work needs to be done, what resources are needed, who will do it, and when. The level of detail needed in the plan will be determined by the complexity of the project and the number of people involved. The plan will probably not be followed exactly – things will happen that lead to adjustments and modifications.
  50. 50. Steps for Project Planning Identify Parameters / Constraints Identify “Hot Spots” Break the project into ‘hunks, chunks, and bites’ Write down the tasks in sequence Identify who is responsible for each item Determine when each task will be done Determine the projected cost
  51. 51. Planning Steps Answer 1. Identify parameters/constraints What are the requirements for quality /specifications, cost/budget/other resources, and time/schedule? Which of the three is highest priority? 2. Identify ‘hot spots’ Where are the potential problems? How could these problems be addressed? 3. Break the project into ‘hunks, chunks, and bites’ What are the major pieces of the project, the minor pieces that make up the major pieces, and the individual tasks within the minor pieces? 4. Write down the tasks in sequence What tasks can be done concurrently, or in parallel? What tasks cannot be done until others are completed?
  52. 52. 5. Identify who is responsible for each item Do the project manager and team have the resources needed? 6. Determine when each task will be done Which tasks are required, and which may be just nice to have? How long will each task take? What are the start and finish dates, based on sequence and time to complete? 7. Determine the projected cost Based on the schedule, what will be the final cost?
  53. 53. Process Breakdown Structure The WBS is best suited for design and build projects that have tangible outcomes such as an off-shore mining facility or a new car prototype. The project can be decomposed or broken down into major deliverables, subdeliverables, and ultimately to work packages. It is more difficult to apply WBS to less tangible, process-oriented projects in which the final outcome is a product of a series of steps or phases. Here, the big difference is that the project evolves over time with each phase affecting the next phase.
  54. 54. PBS for Software Development Project 1 Level Major phases 2 Level Activities 3 Level Activities Software Development Project RolloutAnalysis Design Construct Test Define user interface Develop detailed design Establish quality requirements Develop technical design Define application architecture Design system interfaces Design logical database structure Define processing flow
  55. 55. Responsibility Matrices In many cases, the size and scope of the project do not warrant an elaborate WBS or OBS. One tool that is widely used by project managers and task force leaders of small projects is the responsibility matrix (RM). The RM (sometimes called a linear responsibility chart) summarizes the tasks to be accomplished and who is responsible for what on a project. In its simplest form an RM consists of a chart listing all the project activities and the participants responsible for each activity.
  56. 56. Responsibility Matrices Project Team Task Richard Dan Dave Linda Elizabeth Identify target customers R S S Develop draft questionnaire R S S Pilot-test questionnaire R S Finalize questionnaire R S S S Print questionnaire R Prepare mailing labels R Mail questionnaires R Receive & monitor returned questionnaires R S Input response data R Analyze results R S S Prepare final report R S
  57. 57. External causes of delay There are several reasons, including socio-political, economic, technological, macro and micro-global reasons, for the delay of several projects according to the response of several project managers. Professional project managers need to identify the real reasons in order to prevent such delays in future. The external constraints arise due to the following reasons:
  58. 58. External causes of delay  global & macro-level government policies influenced by social, economic, political, regional or global pressures affecting currency fluctuations, trade relations, foreign aid, etc. Typical examples are: India- china confrontation, India-Pakistan disputes, Arab- Israel crises, Iran-Iraq war etc.  Indian government policies  import regulations  panic taxation  defense expenditure
  59. 59. External causes of delay  political situation  inflation  law and order problems  natural disasters, like earthquakes, floods, etc.
  60. 60. Internal Contraints The internal constraints, which can be anticipated, planned and controlled relate to the programmes and policies of the company. Some of the important causes for such restraints are listed below. These can be broadly classified into people, funds, and organisation. The corporate culture and the style of leadership are the key areas, as the project manager is not appointed at the conception of the project and is, therefore, not totally involved in the formulation of objectives. The other internal constraints may be listed as under:
  61. 61. Internal Constraints  inappropriate choice of site  disputes with local agencies  inadequacy of foreign collaboration agreements  lack of skilled workers  technical incompetence  inadequate project planning preparation  change of scope because of government regulations  lack of infrastructure of water and electricity  poor monitoring and control etc.
  62. 62. Project Management
  63. 63. Unit 3 Project Evaluation under certainty: Net Present Value (Problems – Case Study), Benefit Cost Ratio, Internal Rate of Return, Urgency, Payback Period, ARR – Project Evaluation under uncertainty – Methodology for project evaluation – Commercial vs. National Profitability – Social Cost Benefit Analysis, Commercial or National Profitability, social or national profitability.
  64. 64. Payback Period Method (PB) Payback period is defined as the length of time required for the stream of cash proceeds produced by an investment to equal the original cash outlay required by the investment. FORMULA Initial Investment in projects Payback period = --------------------------- Annual cash inflow It is the number of years required to recover the investment. Incase of unequal cash inflow, it can be found out by adding up the annual cash inflow till the total is equal to the investment. Many firms use the payback period as a decision criterion because it is easy to calculate. Cash inflow is the sum of net profit after tax and depreciation which is a non-cash expense.
  65. 65. Accounting Rate of Return or Average Rate of Return [ARR] This method take into account the total earnings expected from an investment proposal its full life time. The method is called accounting rate of return method, because it uses the accounting concept of profit i.e., income after deprecation and tax as criterion for calculation of return.
  66. 66. Accounting Rate of Return or Average Rate of Return Computation of A.R.R a.) Total income method; Net Profit after dep & Tax Accounting Rate of Return = --------------------------- x 100 Original investment – scrap value b.) Average investment method; Net Profit after dep & Tax Accounting Rate of Return = --------------------------- x 100 Average investment
  67. 67. Average investment is again a dispute term. The following four alternatives used; Original investment (i) Average investment = --------------------------- or 2 Original investment – scrap value (ii)Average investment = --------------------------- or 2 Original investment + scrap value (iii)Average investment = --------------------------- or 2 Original investment – scrap value (iv)Average investment = --------------------------- + Additional W.C+ scrap 2
  68. 68. Net Present Value [NPV] This method follows the DCF Technique and recognizes the time value of money. It is an index used to ascertain the economic worthiness of the investment proposals. If the investment i.e. cash outflow is made in the initial year, then it is present value will be equal to the amount of cash actually spent. If the cash outflow is made in the second and subsequent year also, its present value also should be found out by applying the appropriate rate of interest which is the firm‘s cost of capital. It is the minimum rate of return expected to be earned by the firm on the investment proposals.
  69. 69. Net Present Value [NPV] Similarly all the cash inflows (i.e. Net profit after tax + Depreciation) are also to be discounted at the above rate in order to find out the present value of cash inflows occurring in the future periods. Then the net present value is to be found out by subtracting the present value of cash outflows from the present value of cash inflows. It is defined as the difference between the present value of cash outflow and present value of cash inflows occurring in the future periods over the entire life of the project.
  70. 70. Net Present Value [NPV] ACCEPTANCE RULE If the NPV is positive or at least equal to zero, the project can be accepted NPV > 0, the project is accepted NPV < 0, the project is rejected NPV = 0, the project is accepted or rejected on non-economic considerations.
  71. 71. Net Present Value [NPV] CALCULATION OF NPV; NPV = Where NPV = Net present value R = Cash inflows K= Cost of capital I = Cash out flows
  72. 72. Internal Rate of Return [IRR] Internal rate of return is the rate of which is the sum of discounted cash inflows equals the sum of discounted cash outflows. In other words it is the rate at which equals the aggregate discounted cash inflow with the aggregate discounted cash outflows. It is the rate of discount which reduces the net present value of an investment to zero. It can be stated in the form of a ratio
  73. 73. Internal Rate of Return [IRR] Cash inflows IRR = --------------------------- = 1 Cash out flows a) Where cash inflows are uniform the internal rate of return can be calculated by locating the factor in annuity table. The factor is calculated as follows. F = I / C Where: F = factor to be located in annuity table I = Investment or cash outflow C = Cash inflows per year
  74. 74. Project Evaluation under Uncertainty Investment decisions have to be based on the knowledge of future expectations, and hence are spun around forecasts, estimates and projections. Generally, there is an irresistible urge in the estimator or planner to invest the projections with a certain degree of definiteness which is most unlikely in a dynamic business setting. It should be appreciated that even the defined estimates and defined return analysis call for continuous and close review for revisions, if necessary.
  75. 75. Convert Uncertainties into Calculated Risks Future always holds surprises. Informed decisions based on comprehensive study of relevant data and trends are sound starts for successful projects, but even these considered assumptions and anticipations have to be constantly reviewed and revalidated or modified, as the case may be, to enable prompt corrective actions during the project implementation and operation phases. Assumptions about political and economic conditions that are likely to prevail, about the market prospects and competitors strategies, about customer preferences and technology developments.
  76. 76. Analysing Uncertainty 1. Break-even analysis 2. Sensitivity analysis 3. Probability analysis
  77. 77. 1. Break-even Analysis Break-even point (BEP) of production and/or sale is that level at which there is neither profit nor loss. Break-even analysis helps to determine the lowest production and/or sales level at which the project has to operate in order to keep out of financial trouble. The break-even point can get defined in terms of the percentage of capacity utilization resulting in given output quantity, or as a volume or sales revenue. It can be further interpreted in terms of the maximum purchase price for inputs or minimum selling price for outputs.
  78. 78. 2. Sensitivity Analysis Sensitivity analysis can be employed to examine how the net present value or the value of any other efficiency criterion changes with variations in the value of any variable, such as sales volume, selling price, unit variable cost. The impact can be expressed in terms of the absolute change in the efficiency criterion divided by a given percentage, or absolute change in a given variable or a given set of variables. If it is observed that reduction in selling price will have serious effect on contribution or on the value added, price emerges as a sensitive factor and great care needs to be taken in arriving at pricing decisions in regard to the products of the project.
  79. 79. 3. Probability Analysis In analysing probability, we are looking at the frequency of occurrence of an event. The number of different ways that the specific event can occur is expressed as a ratio of the total number of possible outcomes. Probability analysis is based on the identification of the possible range of each variable, and attaching a probability of occurrence for each possible value of the variables within this range.
  80. 80. Causes of Uncertainty 1. Inflation 2. Changes in technology 3. Problems in attaining rated capacity 4. Under-estimation of investment cost and time factors.
  81. 81. Project Appraisal Process Small projects get assistance from a single institution, and in the case of larger projects, the institutions extend assistance jointly through syndication. - Single Institution Assistance - Loan Syndication
  82. 82. 1. Single Institution Assistance - Application is received from the promoter - The institution deputes a financial expert and a technical expert to carry out the project appraisal - After a preliminary review, the team submits its report to the management, recommending acceptance or rejection.
  83. 83. Project Management UNIT 4
  84. 84. UNIT 4 Developing a project plan: Developing the project network – constructing a project network (Problems) – PERT – CPM – crashing of project network (Problems - Case Study) – resource leveling and resource allocation – how to avoid cost and time overruns – Steps in Project Appraisal Process – Project Control Process – control issues – project audits – the project audit process – project closure – team, team member and project manager evaluations.
  85. 85. Steps to Creating a Project Plan 1. Explain the project plan to key stakeholders and discuss its key components. 2. Define roles and responsibilities 3. Hold a kickoff meeting 4. Develop a Scope Statement 5. Develop scope baseline 6. Develop the schedule and cost baselines 7. Create baseline management plans 8. Develop the staffing plan 9. Analyze project quality and risks 10. Communicate
  86. 86. 1. Explain the project plan to key stakeholders One of the most misunderstood terms in project management, the project plan is a set of living documents that can be expected to change over the life of the project. Like a roadmap, it provides the direction for the project. And like the traveller, the project manager needs to set the course of the project, which in project management terms means creating the project plan.
  87. 87. 2. Define roles and responsibilities. Not all key stakeholders will review all documents, so it is necessary to determine who on the project needs to approve which parts of the plan. 3. Hold a kickoff meeting. The kickoff meeting is an effective way to bring stakeholders together to discuss the project. It is an effective way to initiate the planning process. It can be used to start building trust among the team members and ensure that everyone’s idea are taken into account. Kickoff meetings also demonstrate commitment from the sponsor for the project.
  88. 88. 4. Develop a Scope Statement The Scope Statement is arguably the most important document in the project plan. It’s the foundation for the rest of the project. It describes the project and is used to get common agreement among the stakeholders about the scope. The scope statement clearly describes what the outcome of the project will be. It is the basis for getting the buy-in and agreement from the sponsor and other stakeholders and decreases the chances of miscommunication.
  89. 89. 5. Develop Scope Baseline Once the deliverables are confirmed in the scope statement, they need to be developed into a work breakdown structure (WBS), which is a decomposition of all the deliverables in the project. 6. Develop the schedule and cost baselines. Identify activities and tasks needed to produce each of the work packages, creating a WBS of tasks, identify resources for each task, estimate how long it will take to complete each task, estimate cost of each task using an average hourly rate for each resource.
  90. 90. 7. Create baseline management plans. Once the scope, schedule, and cost baselines have been established, you can create the steps the team will take to manage variances to these plans. All these management plans usually include a review and approval process for modifying the baselines. 8. Develop the staffing plan. The staffing plan is a chart that shows the time periods, usually month, quarter, year, that each resource will come onto and leave the project. It is similar to other project management charts, like a Gantt chart, but does not show tasks, estimates, begin and end dates, or the critical path.
  91. 91. 9. Analyze project quality and risks. - project quality - project risks 10. Communicate. Once the project plan is complete, it is important not just to communicate the importance of the project plan to the sponsor, but also to communicate its contents once it’s created.
  92. 92. Developing a Project Network i. Project Network is a tool used for planning, scheduling and monitoring project progress. ii. It is a graphical flow chart of the project job plan. iii. Critical path should be identified. iv. It is used to take decision concerning project time, cost and performance. v. The network depicts the project activities that must be completed, logical sequences and their inter dependencies.
  93. 93. From Work Packages to Network 1. An activity include one or more work packages. 2. These activities are placed in a sequence that provides for orderly completion of the project. 3. Network are built using nodes and arrows. Nodes Activity Arrow Project flow 4. This network depicts the actual project flow.
  94. 94. Difficulties in Network Process Integrating work packages and the network represents a point where the management often fails. 1. Different groups are used to define work packages. 2. WBS is poorly constructed.
  95. 95. Constructing a Project Network 1. Activity : An activity is an element of the project. It usually represents one or more tasks from a work package. 2. Merge Activity : An activity that has more than one activity immediately preceding it. 3. Parallel Activity : Activities that can take place at the same time
  96. 96. 4. Burst Activity: An Activity that has more one activity immediately following it 5. Path: Sequence of connected, dependent activities. 6. Critical Path: Longest path through the network. 7. Event: It is a point in time when an activity is started or completed.
  97. 97. Activity-On-Node (AON) In activity-on-node (AON) network, the node depicts an activity of a project. The AON network can be computed using 1. Forward Pass - earliest time 2. Backward Pass - latest time A CB
  98. 98. Activity-On-Node (AON) 1. Forward Pass It starts with the first project activity, trace through all the activities and end with the last project activity. 2. Backward Pass It starts with the last project activity, trace backward on each path to find late start and late finish of each activity.
  99. 99. Activity-On-Arrow (AOA) In AOA network, the arrow depicts the activity of the project and which is connected by start event node and end event node. A Here dummy activities are introduced in case of activities that are parallel and have same start and end node. X D C A B 1 2 1 5 3 42
  100. 100. Difference in PERT & CPM 1. PERT is appropriate where time estimate arte uncertain in the duration of activities as measured by optimistic time, most likely time, and pessimistic time, where as CPM is good when time estimates are found with certainty. CPM assumes that he duration of every is constant and therefore every activity is critical or not. 2. PERT is concerned with events, which are the beginning or ending points of operation while CPM is concerned with activities.
  101. 101. 3. PERT is suitable for non-repetitive projects while CPM is designed for repetitive projects. 4. PERT can be analyzed statistically whereas CPM not. 5. PERT is not concerned with the relationship between time and cost, whereas CPM established a relationship between time and cost is proportionate to time.
  102. 102. Resource Allocation & Leveling through Network Resources allocation means how much resources be diverted to the project concerned day after day as the project progresses.
  103. 103. Days B C D E F G H I Total Labour Needs 1 3 3 2 3 3 3 3 3 4 3 3 5 3 3 6 3 3 7 3 3 8 3 3 9 5 2 7 5 19 10 5 7 5 17 11 3 7 5 15 12 2 5 4 11 13 5 4 9 14 3 3 15 3 2 5 Total
  104. 104. Project Control Process Control is the process of comparing actual performance against plan to identify deviations, evaluate possible alternative course of actions, and take appropriate corrective action.
  105. 105. Steps in Project Control Process 1. Setting a baseline plan 2. Measuring Progress and Performance 3. Comparing plan against actual 4. Taking action
  106. 106. Project Audit Professional management of project needs a methodology to carry out a regular check as to whether the project is progressing as scheduled, in scope and in time. In other words, a good system of project audit will go a long way in facilitating prompt and effective project implementation. Project audit as a formal and systematic examination of the performance of an ongoing project as compared to its requirements. It involves measurement against predefined and relevant standards.
  107. 107. Objectives of Project Audit  Creating awareness among the project staff of the types and magnitude of the problems that are likely to be encountered in completing the project and producing quality products, in planned volume and at competitive costs.  Providing a clean picture, from time to time, of the actual status of the project.  Prompt identification of the factors that might cause product quality problems or lead to time and/or cost overruns.  Timely spotting of a variety of generic problems that are associated with execution of projects.
  108. 108.  Enabling the creation of a good information base for a proper estimation and costing of the project.  Assisting in the establishment of appropriate standards and system and recommending suitable work techniques  Identifying the specific training needs with references to the project tasks
  109. 109. Process of Project Audit 1. Initiation and Staffing 2. Data Collection and Analysis 3. Reporting a. Classification of project b. Analysis of information gathered c. Recommendations d. Lessons Learned e. Appendix f. Summary Booklet 4. Project Closure 5. Closure Decision
  110. 110. Project Closure The project manager is kept extremely busy near a project’s end, monitoring its progress and preparing for shutdown. When walking about and visiting the workstations, he or she must re-emphasize the need for good communication among task leaders; encourage the give and take that supports the internal customer principle; be attentive to the project timetable; actively help task leaders get their tasks started and completed on time; monitor the Gantt chart; and ass some original estimates overrun , alert downstream task leaders to the scheduling changes.
  111. 111. Steps in Closing a Project 1. Getting client acceptance of deliverables 2. Ensuring that all deliverables are installed 3. Ensuring that the documentation is in place 4. Getting client sign-off on final report 5. Conducting the post-implementation audit 6. Celebrating the success
  112. 112. Project Team The project team comprises of section heads of production, electrical and mechanical who are looking after the activities of their respective wings. The project team is like cricket team where we could find players adept in bowling, batting and fielding with the result all the players would put their accomplishing the objective of the team. For any project, success could be attributed to the able support of all the players and the project manager would done the role of a captain of the cricket team or of a captain of ship.
  113. 113. Promoting Teamwork Through Planning A Primary rule of planning is that those individuals who must implement the plan should participate in preparing it. Yet leaders often plan projects by themselves, then wonder why their team members seem to have no commitment to the plans. All planning requires some estimating – for example, how long a task will take, given certain resources.
  114. 114. Team Issues 1. Clarifying the Team’s Mission, Goals and Objectives 2. Defining roles and responsibilities 3. Working out procedures 4. Managing interpersonal relationships
  115. 115. Project Evaluation Project Evaluation appraises the progress and performance of a job and compares it to what was originally planned. That evaluation provides the basis for management decisions on how to proceed with the project. The evaluation must be credible in the eyes of everyone affected or decisions based on it will not be considered valid.
  116. 116. Project Management UNIT 5
  117. 117. Unit 5 Managing versus leading a project - managing project stakeholders – social network building (Including management by wandering around) – qualities of an effective project manager – managing project teams – Five Stage Team Development Model – Situational factors affecting team development – project team pitfalls.
  118. 118. MANAGING VS LEADING PROJECT HOW TO MANAGE A LEADING PROJECT 1. Define the scope. What is it you are supposed to accomplish by managing this project. What is the project objective. 2. Determine available resources. what people, equipment, and money will de available to you to achieve the project objective.
  119. 119. 3. Check the timeline. When does the project have to be completed. If you decide to use overtime hours to meet the schedule, you must weight that against the limitations of your budget. 4. Assemble your project team. Get the people on your team together and start a dialog. They are the technical experts.
  120. 120. 5. List the big steps. What are the major pieces of the project. If you don’t know, start by asking your team. 6. List the smaller steps. List the smaller steps in each of the larger steps. Again, it usually helps you remember all the steps if you list them in chronological order.
  121. 121. 7. Develop a Preliminary Plan. Assemble all your steps into a plan. 8. Create your baseline plan. Get feedback on your preliminary plan from your team and from any other stakeholders. Make any necessary adjustment to the preliminary plan to produce a baseline plan.
  122. 122. 9. Document Everything. Every time you change from your baseline plan, write down what the change was and why it was necessary. Every time a new requirement is added to the project write down. 10. Keep everyone inform. Keep all the project stakeholders inform of progress all along. Let them know of your success as you complete each milestone, but also inform of problem as soon as they come up. If also keep you team informed.
  123. 123. PROJECT MANAGEMENT STAKEHOLDER A stakeholder (in Project Management terms) is anyone who's affected and who can affect, in one way or another, the project. Stakeholder (corporate), a person, group, organization, or system who affects or can be affected by an organization's actions A person, group or organization that has interest or concern in an organization. Some example of key stakeholder are; creditors, directors, employees, government (and its agencies),owner (shareholders), suppliers, unions and the community from which the business draws its resources.
  124. 124. - Identify - Nominate - Feel - Observe - Review - Manage Managing Stakeholders: 6 Steps to Success
  125. 125. Identify A stakeholder is anyone who has a vested interest in the project – someone who wants it to succeed but equally someone who doesn’t. You can’t start managing stakeholders until you know who they are. Who are the main groups or departments affected by your project? Stakeholders can also be external to your organisation like the government and third party providers as well. The identification exercise shouldn’t be done in a vacuum: you won’t be able to complete the list yourself, so get your project team involved too.
  126. 126. Nominate In each groups you have identified pick someone to be the key individual. Choose carefully! You may find that key people nominate themselves, which makes your role easier: it is better to work with people who want to be involved than those who you have to drag into the project. Your key, nominated stakeholders should ideally be people who are directly affected, with enough authority to make decisions about things that touch their departments. They are the person who you will use to channel communication back to their group.
  127. 127. Feel Begin to analyse the attitudes of the people who have been identified as your key stakeholders: those named individuals who represent each stakeholder group. Contact them and explain about the project. Get them onboard and coming to project meetings if necessary. All this will help you understand how they feel about the work you are doing. Do they support the project? Or would they rather it was stopped now? Are they ambivalent? This group can often be the hardest to manage effectively. Your initial stakeholder analysis is now complete.
  128. 128. Observe Having established where your key stakeholders sit in relation to the project you can start to influence their attitudes. The aim is to watch people over time, and help them move towards a positive way of thinking: a way that will help you achieve your aims. Keep a close eye on people as their opinions will swing between positive and negative over the life of a project. A one-off analysis exercise is never enough: you have to continually monitor how people are reacting and manage accordingly.
  129. 129. Review People and job roles change. So do projects. The person who put themselves forward to represent the marketing team six months ago may not be the right person today. If you notice that their influence is slipping away, or they are less inclined to come to meetings or respond to emails, then ask them if they still want to be involved. If they say no, they could suggest someone else who would be a relevant addition to the team. Make sure you brief any new stakeholder representative on their roles and responsibilities, decisions in the pipeline and what decisions you will expect of them in future.
  130. 130. Manage The last step is to monitor and manage your stakeholders and their expectations as the project progresses – not just at the outset and when you need something from them. Put a note in your diary to give your key stakeholder representatives a quick call every now and then just to keep them up to date. This will help promote the project and also ensure the stakeholder concerned is mindful of the work being done. It can also help build your reputation as an excellent project manager! At the end of the project, thank them and manage them out of the team.
  131. 131. Social Network Building Social network is to provide a way for people to communicate and share information with others based on different types of networks. The networks are typically centered on some sort of relationship type. LinkedIn, for example, focuses on building a professional network of colleagues, former co- workers, and other work-related relationships. Face book, on the other hand, is more open and allows for a variety of networks, such as families, schools, businesses, causes, groups, cities, or some other category of relationship.
  132. 132. How does Social Network have to do with project management?  Well, to start with, projects require project teams and teams are a form of relationship.  In the same way that Face book organizes networks on a common cause, a project organizes a team on a common cause; e.g. to complete the project on time and under budget.  The same people that use Face book or Twitter at home are the same team members that come to work every day, want the same thing that a social networking site provides.  They want to be recognized for their accomplishments, feel like their contributing to the cause, and be able to collaborate with their work buddies.
  133. 133. How social network helps to manage projects  Networks could be organized around projects and status updates and photos could be related to the project.  Time could be easily entered, project status quickly reported, and everything automatically submitted to update the project schedule, executive reports, and account for the resources needed to complete the project.  Project and team collaboration would be simpler and would focus on the completing the tasks at hand.  Conversational information would provide additional insight into the true status of the project and team members would be recognized by their peers for a job well done.
  134. 134. LIMITATIONS  Face book, LinkedIn, Twitter, and other social networking sites, as great as they are, don’t provide the tools needed to effectively manage projects.  Executives can’t use Face book to organize multiple projects, identify potential risks, and manage resources.  Project managers can’t simply post an update or send out a Friend Request to keep projects on time and under budget.  Managers need a robust tool that allows them to plan projects, identify tasks, monitor schedules, allocate resources, manage documents, improve processes, collaborate with co-workers, and manage the thousands of other little tasks needed to successfully complete a project.
  135. 135. Project quality management Project quality management includes the process required to ensure that the project satisfies the needs for which it is undertaken. PQM includes all the activities of the overall management function that determine the quality policy, objectives, and responsibilities and implement them within the quality system.
  136. 136. Means of Implementation of PQM  Quality Planning  Quality Assurance  Quality Control  These processes interact with each other as well as with the processes of other knowledge areas  Each process involves an effort of one or more individual or group of individuals based on the need of the project.  Each process occurs at least once in every project phase during the project life cycle.
  137. 137. Quality Planning Quality Planning is identifying which quality standards are relevant to the project and determining how to satisfy them. Quality Assurance Quality assurance is evaluating the overall project performance on a regular basis to provide a confidence that the project will satisfy the relevant quality standards.
  138. 138. Quality Control Quality Control is the monitoring of specific project results to determine if they comply with the relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.
  139. 139. QUALIT PLANNING QUALITY ASSURANCE QUALITY CONTROL PROJECT QUALITY MANAGEMENT 1- INPUTS -Quality policy -Scope statement -Product description -Standards and regulations -Other process outputs 2- TOOLS AND TECH. -benefit/ cost analysis -Benchmarking -Flowcharting -Design of experiments 3- OUTPUTS -Quality management plan -Operational definitions -checklists -Inputs to other processes 1- INPUTS -Quality management plan -result of quality control measurements -Operational definitions 2- TOOLS AND TECH. -Quality planning tools and techniques -Quality audits 3- OUTPUTS -Quality improvement 1- INPUTS -work results -quality management plan -Operational definitions -checklists 2- TOOLS AND TECH. -inspection -Control charts -Pareto diagrams -Statistical sampling -flowcharting -Trend analysis 3- OUTPUTS -Quality improvement -Acceptance decisions -rework -Completed checklist -Process adjustment
  140. 140. MANAGING PROJECT TEAMS High-Performing Teams The magic and power of teams is captured in the term “synergy”, which is derived from the Greek word sunergos: “working together”. There is positive and negative synergy. The essence of positive synergy can be found in the phrase, “the whole is greater than the sum of phrase” conversely, negative synergy occurs when the whole is less than the sum of the parts
  141. 141. MANAGING PROJECT TEAMS High-Performing Teams Synergy 1 + 1 + 1 = 10 (positive synergy) 1 + 1 + 1 = 2 (negative synergy) Characteristics of High-performing Teams 1. Share a sense of common purpose 2. Make effective use of individual talents and expertise 3. Have balanced and shared roles 4. Maintain a problem solving focus 5. Accept differences of opinion and expression 6. Encourage risk taking and creativity 7. Sets high personal performance standards 8. Identify with the team
  142. 142. MANAGING PROJECT TEAMS High-Performing Teams The magic and power of teams is captured in the term “synergy”, which is derived from the Greek word sunergos: “working together”. There is positive and negative synergy. The essence of positive synergy can be found in the phrase, “the whole is greater than the sum of phrase” conversely, negative synergy occurs when the whole is less than the sum of the parts
  143. 143. Situational Factors Affecting Team Development Experience and research indicate that high-performance project teams are much more likely to develop under the following conditions: There are 10 or fewer members per team. Members volunteer to serve on the project team. Members serve on the project from beginning to end.
  144. 144.  Members are assigned to the project full time.  Members are part of an organization culture that fosters cooperation and trust.  Members report solely to the project manager.  All relevant functional areas are represented on the team.  The project involves a compelling objective.  Members are located within conversational distance of each other.
  145. 145. In reality, it is rare that a project manager is assigned a project that meets all of these conditions.  Building High-Performance Project Teams *Project managers play a key role in developing high- performance project teams. *They recruit members, conduct meetings, establish a team identity, create a common sense of purpose or a shared vision, manage a reward system that encourages teamwork, decision-making, resolve conflicts that emerge within the team.
  146. 146.  Recruiting Project Members When selecting and recruiting team members, project managers naturally look for individuals with the necessary experience and knowledge/technical skills critical for project completion. At the same time, there are less obvious considerations that need to be factored into the recruitment process:
  147. 147.  Problem solving ability  Availability  Technological expertise  Credibility  Political connections
  148. 148. Project team pitfalls 1. Undefined Goals: When goals are not clearly identified, it is impossible for the team to meet them. And, since upper management cannot agree to or support undefined goals, the project in question has little chance of succeeding. The project manager must ask the right questions to establish and communicate clear goals from the outset.
  149. 149. 2. Inadequate Skills for the Project A project sometimes requires skills that the project's contributors don't possess. Project management training can help a project leader determine the needed competencies, assess the available workers and recommend training, outsourcing or hiring additional staff.
  150. 150. 3. Improper Risk Management Learning to deal with and plan for risk is an essential piece of project management training. And risk tolerance is a desirable project manager trait - because projects rarely go exactly according to plan. Gathering input, developing trust and knowing which parts of a project are most likely to veer off course are all aspects of the project manager's job.
  151. 151. 4. Poor Communication Project managers provide direction at every step of the project, so each team leader knows what's expected. Effective communication to everyone involved in the project is crucial to its successful completion.
  152. 152. 5. Impossible Deadlines: A strong leader - and successful project manager - knows that repeatedly asking a team for the impossible will result in declining morale and productivity. The odds of successfully completing a project under unreasonable deadlines are not very good.
  153. 153. 6. Resource Deprivation: In order for a project to be run efficiently and effectively, management must provide sufficient resources - human, time and money. Project management training shows how to define needs and obtain approval up front, and helps project managers assign and prioritize resources throughout the duration of a project.

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