2. MID Note_ProMana_Chap 1-6okokokok.pdf

1. PROJECT
MANAGEMENT
MIDTERM REVISION

2. Content For MidtermExam
CHAPTER 1:Introduction Project Management
CHAPTER 2: Strategic Management and Project Selection
CHAPTER 3: The Project Manager
CHAPTER 4: Managing Conflict and the Art of Negotiation
CHAPTER 5: The Project in the Organizational Structure
CHAPTER 6: Project Activity and Risk Planning

3. Chapter 1: Introduction Project
Management
Program: Long-term plan with large and long-term objectives including a set of
projects
Project: process including tasks, and work packages related together which can
be done in order to achieve the goals within the constraint of time, resources,
and budget
Task: short-term effort within weeks or a month done by any organization and this
organization can combine with other tasks to implement the project

4. 7PROJECT'S CHARACTERISTICS
Importance: The most crucial attribute of a project is that it must be important enough in the
eyes of seniormanagement
Scope: A set of desired end results (purposes)
Limited lifetime with common phases: start/ end - life cycle (must be terminated by some due
date.)
Interdependencies: Projects often interact with other projects being carried out simultaneously
by their parent organization.
Resources: Projects have limitedbudgets,
Uniqueness: The results must beunique
Conflict: Projects compete with functional departments for resources and personnel

5. CHAPTER 3: PROJECT MANAGER
Functional Manager
Technical skills
More skilled atanalysis
Analytically oriented
Use the analytic approach
Administratively responsible for
decision making
Responsiblefor a small area
Direct, technical supervisor
Project Manager
Facilitators and generalists
Negotiation skills
More skilled at synthesis
Use a systems approach
Act as facilitator
Responsiblefor the big picture

6. Key criteria for PMselection
Credibility
Sensitivity
Leadership, ethics, and managementstyle
Ability to handlestress
Technical Credibility
Administrative credibility
Political sensitivity
Interpersonal sensitivity
Technically sensitivity

7. CHAPTER 4:CONFLICTS and
NEGOTIATION
Categories of conflicts
1.Groups working on the project may have different goals and expectations.
2. There is significant uncertainty about who has the authority to make decisions.
3.There are interpersonal conflicts between people who are parties at interest
in the project.

8. For example, senior management is apt to fix all three parameters of the project—time,
cost, and scope—and then assume that the PM will be able to achieve all the preset
targets. Underestimation of cost and time is a natural consequence of this practice, and it
leads directly to conflict between the PM, as a representative of the project team, and
senior management
The PM tries to pass the stringent cost and time estimates along to functional managers
whose units are expected to perform certain work on the project. More conflict arises
when the functional managers complain that they cannot meet the time and cost
restrictions
The client’s priorities and schedule, whether an inside or outside client, may differ
radically from those of senior management and the project team.
Source of Conflicts
The different goals and objectives of the project manager, senior management, and
functional managers are amajorand constant source of conflict

9. Flexibility of staff,resources
Better use of resources for multiple projects inside the
department
Exchange of ideas, knowledge, and assistance among experts
inside the department
inside department and
Retain knowledge and know-how
organization; continuity
Incubator for potentialexperts
CHAPTER 5:THE PROJECT INORGANIZATIONAL
STRUCTURE
Functional Organization
The project in organizational structure: is composed of project team members allocated according to the
different functional units ofan organization
ADVANTAGES
(Read more on textbook page 179)

10. DISADVANTAGES
The project may not receive the focus needed
inside the functional dept.,
activities are going on, and
when other daily
slow response to
project issues
Discipline-oriented rather than problem-oriented
No dedicated PM may result in chaos
More priorities are given to tasks related to the
department
Lack of motivation, as project staff are not “seen”
Lack of holistic view to address problems or better
serve the clients
(Read more on textbook page 179)
In-depth application of
technology.
Large capital investment,
especially when that investmentis
concentrated in one functional
area.
Functional organization is good for:

11. Is designed or set up in a way that the project manager is on the top of the hierarchy and
has full power in any decision that is involved in the project.
Projectized Organization
The PM has total authority, a single boss
The staff are also responsible to one boss only
Communications are streamlined, and decision making quicker,
with better responses tochanges
Project identity is promoted
Better commitment andmotivation
better working
The structure is easily understood, the
atmosphere in general
Problems are solved with a holistic approach
ADVANTAGES
(Read more on textbook page 180)

12. DISADVANTAGES
Resources and efforts, not shared but
duplicated and wasted
Excess resources tend to be stored idly in
individual projects to be ready “when
necessary”
Project technical staff might become outdated
with technical advancement, and lack of a
breadth of knowledge as they are away from
the functional dept.
Technical procedure not strictly followed
Mental issues: rivalries among projects, anxiety
for life after projectsfinished
(Read more on textbook page 182)
Projectized organization good for:
Handling a large number of similar
projects.
Handling a one-time project that
requires much control, but is not
focusedon one functional area.

13. Matrix Organization
Keeps desirable features of both standalone and functional
projects
Avoids some of the disadvantages of each type
It is a combination of standalone projectized and functional
organization structures
Can take on a variety of specific forms

14. The project is the point of emphasis
The project has access to the entire organization for labor and
technology
Less anxiety about what happens when the project is completed
Response to client needs is rapid
Access to administrative units of the firm
Better balance of resources
Great deal oforganizational flexibility
ADVANTAGES
(Read more on textbook page 184)

15. Power balance isdelicate
Projects compete for resources
Projectitis is still a serious disease
Division of authority and
responsibility is complex
Matrix management violates the
management principle of unity of
command
DISADVANTAGES (Read more on textbook page 185)
Matrix organization is good for:
Projects that require inputs from
several functional areas.
Projects that use technology
from several functional areas.

17. Factors For Selecting An
Organizational Form
Project size
Project length
Project management experience
Philosophy and visibility ofexecutives
Project location
Available resources
Unique aspects of the project
Situation determined
Each form has pros and cons
No one form is best for all
projects, or even best for one
project throughout its entire
lifecycle.

18. Define what needs to be done in theproject
and the order in which activities and their
tasks should be completed
Determine what resources are required and
when they will be required or in project
terminology “allocated”
Define tasks for delegation and the skill set
required
CHAPTER 6: PROJECT PLANNING
WBS STRUCTURE

19. Steps to compose and useWBS
Using information from the action plan, list the task breakdown in successively
finer levels of detail. Continue until all meaningful tasks or work packages have
been identified
For each such work package, identify the data relevant to the WBS. List the
personnel and organizations responsible for each task.
CHAPTER 6: PROJECT PLANNING
WBS STRUCTURE

20. Visually breaks down Project Scope:
Project
Subproject
Deliverables
Work packages
Tasks

21. PAYBACK PERIOD
The length of time until the original investment
has been recouped by the project
A shorter payback period is better
CHAPTER 2:PROJECT SELECTION

22. CHAPTER 2:PROJECT SELECTION
Example: Ifthe initial investment cost $5,000, and the savings are $100
each month, whatis the payback period?
Payback period =
$5,000 / $100 =
50 months =
4.2 yrs
So, it would take 4.2 years to reach the payback period.

23. CHAPTER 2:PROJECT SELECTION
Example: Ifthe initial investment cost $20,000, and the annual savings
is $4000, whatis the payback period? (FOREQUAL ANNUALSAVING)
Payback period =
$20,000 / $4000 =
5 years
So, it would take 5 years to reach the payback period.

24. CHAPTER 2:PROJECT SELECTION
FOR UNEQUAL CASHFLOW
What is the payback period for the following set of cashflows?

25. CHAPTER 2:PROJECT SELECTION
FOR UNEQUAL CASHFLOW
Calculate:
Payback =3 +1,700/3,000=3.6years
1,700 =
8,000 -6,300
Cash flow during the year is 3,000 (since in year 4 you
can recover your initialinvestment)

26. CHAPTER 2:PROJECT SELECTION
NET PRESENT VALUE (NPV)
The NPV technique is a discounted cash flow method that considers the time value of money in
evaluating capital investments.
Decision rules: if NPV >0 Accepted. If NPV <0 Reject

27. CHAPTER 2:PROJECT SELECTION
NET PRESENT VALUE (NPV)

28. CHAPTER 2:PROJECT SELECTION
NET PRESENT VALUE (NPV),withinflation rate
Consider project A, if the annual inflation rate is 5
%
.What is the newNPV?
WHEN CONSIDERING BETWEEN THE TWO PROJECT, CHOOSE THE ONETHAT
HAS HIGHER NPV

29. CHAPTER 2:PROJECT SELECTION
PROFITABILITYINDEX (
P
I
)
Acceptance rule:
IfPI>
1
:accept the project
IfPI<
1
:reject the project

30. What is the PIof projectA?
Sum of PV of cashflow =
=
124,257.19
=
>
PIof projectA

31. THANK YOU AND GOOD LUCK
FOR YOUR EXAM!