PM Unit - 1.pptx

Definition of Project
• A Project is a
Group of exclusive, inter-related activities that
are planned and executed in a certain
Sequence to create a unique Product or
Service.
• According to Project Management
Institute’s a Project is defined as
“A temporary Endeavor undertaken to create
a unique Product or Service”

Definition of Project
• The British standard defines a Project as
“ 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”.

Some Of The Project
Initiatives Include:
• Redesigning or relocating a Production facility
(Manufacturing
Project)
• Implementing a Management Information System
(MIS Project)
• Developing a new alloy required for a Space vehicle.
(Spacecraft
Project)
• Constructing national Highways/ a Dam
(Infrastructure Project)
• Organizing the Olympics (Sports project)
• Developing a system for Cash Management (Finance
Project)
• Launching of new Product (Advertising and

What is Project
Management?
According to PMI
“PM is the application of knowledge, skills, tools
and techniques to Project activities in order to
meet or exceed Stakeholder needs and
expectations”.
PM includes
• defining Project goals,
• specifying how the Goals will be accomplished,
• what Resources are needed, and relating Budgets
and Time for Completion.

Stakeholders in Business
• Shareholders – they will be interested in their dividends
and capital growth of their shares.
• Management and employees – they will be concerned in
their Profits, prospects and pay.
• Customers and suppliers
• Banks and other financial organizations lending money to
the business
• Government – especially the Revenue and the Customs
Department who will be collecting tax from them.
• Trade Unions – who will represent the interests of the
workers?
• Pressure Groups .

Project Management
• Project management is the application of
processes, methods, skills, knowledge and
experience to achieve the Project acceptance
criteria within agreed Parameters.
• Project management has final
Deliverables that are constrained to a finite
Timescale and Budget.

Project Management
Goal
• Coordinate the various interrelated Processes
of the Project.
• Ensure Project includes all the Work
required, to complete the Project
successfully.
• Ensure that the Project is completed on Time
and within Budget.
• Ensure that the Project will satisfy the
Needs for which it was undertaken.
• Ensure the most effective use of the
People involved with the Project.
• Promote effective Communication between

Project Management Lifecycle
1. Project Initiation
Initiation is the first phase of the Project lifecycle.
This is where the Project’s value and Possibility are
measured. Project managers typically use two
evaluation Tools to decide whether or not to
pursue a Project:
i). Business Case Document – This document
justifies the need for the Project, and it includes an
estimate of potential Financial-benefits (Payback
Period, Discounted cash-flow, Cost-benefit Analysis,
Net Present value, Opportunity Cost etc.)

Project Selection Methods
• Method #1: Benefit Measurement Methods
1). Discounted Cash Flow
2). Cost Benefit Analysis
3). Payback Period
4). Net Present Value (NPV)
5). Opportunity Cost
6). Scoring Models
7). Economic Model

ii). Feasibility Study – This is an evaluation of the
Project’s goals, timeline and costs to determine if
the project should be executed. It balances the
requirements of the Project with available
Resources to see if pursuing the Project makes
sense.
• Teams abandon proposed Projects that are
labeled unprofitable and/or unfeasible. However,
Projects that pass these two Tests can be
assigned to a Project Team.

2. Project Planning
• Once the Project receives the green light, it
needs a solid Plan to guide the Project Team
• A well-written Project Plan gives the Project
Team the Directions for communicating
Benefits to Stakeholders, creating acceptance ,
manage Suppliers and produce Quality
outputs

2. Project Planning
• The project plan gives Guidance for obtaining
Resources, acquiring Finance and procure
other required Materials.
• The Project plan also prepares Teams for the
obstacles they might encounter over the
course of the Project

3. Project Execution
• Execution is all about Final Deliverables or
building Blocks of an overall Project.
• Project management involves organizing a
Company's Resources to move a specific
Event, Report,Hardware, Software, other
Product, other Service towards a Task or Duty
completion.

• Project Managers make this Execution
effective by allocating Resources and keeping
Team members focused on their Assigned-
tasks.
• Execution relies heavily on the Planning
Phase. The work and efforts of the Team
during the Execution phase are derived from
the Project plan.

4. Project Monitoring and Control
• As Teams execute their Project plan, they must
constantly monitor their own Progress.
• To guarantee delivery of what was promised,
Teams must monitor tasks to calculate Key
Performance Indicators and track variations
from allotted Cost and Time.
• This constant Vigilance helps keep the Project
move ahead smoothly.

5. Project Closure
• Teams close a Project when they
i). deliver the finished Project to the Customer
ii). communicating Completion to Stakeholders
iii). releasing Resources to other Projects.
• The vital step in the Project lifecycle is to
Document the Project - record Project mistakes,
reference for future Projects and easy to build
stronger Processes and more successful Teams.

Conclusion:
Although Project management may
seem overwhelming at times, breaking it down
into these five Distinct cycles can help your
Team manage even the most complex Projects
by using available Resources more Wisely.

2. Project Planning
4. Project Monitoring and Control
5. Project Closure

• Method #1: Benefit Measurement Methods
• Method #2: Constrained Optimization
Methods

1). Discounted Cash Flow
• Future value of money will not be the same as
it is today. For example, Rs.10,00,000 won’t
have the same worth ten years from now.
• In future Inflation and interest rates will all
come into play

2). Cost Benefit Analysis
• It measures the costs of investing in a project against
the value of the return once it is completed.
• A project that requires RS.280,000 in resources to
complete with an expected Rs.420,000 return would
have a 4:6 (or 2:3) cost benefit ratio.
• Essentially, every Rs.2 invested in this project would
yield Rs.3 in revenue. Projects with a lower cost benefit
ratio (or a higher benefit cost ratio) should be selected
if evaluated only by this method.

3). Payback Period
• The Payback Period Technique takes a look at
how long it will take your company to recoup
its expenses with a particular Project.
• If our Rs.2,40,000 Project were to bring in
Rs.20,000 a Month once it’s completed, the
total payback period would be 1 year.

4). Net Present Value (NPV)
• Predict the lifecycle of the Project in the Mid-stage
• Calculating the earnings for year one of the Project
may return a net Loss of, say, $800. Year two may see a
Loss of $200, while years three, four, and five may
result in Gains of $500, $1000, and $1500.
• The Net Present Value of the project, then, would be
the combination of all of these numbers ($3000 minus
losses of $1000) and would equal $2000.

5). Opportunity Cost
• Opportunity Cost is the Cost that is given up when selecting
another project. During project selection, the Project that has
the lower Opportunity cost is chosen.
• If, for example, Project 1 and Project 2 are worth Rs.75,000
and Rs.85,000 respectively, going with Project 1 would have
an opportunity cost of Rs.10,000 since that’s how much your
company would miss out on.
• Rather than focusing purely on Financials, determine
Qualities of a Project are most important to you, your Team,
and your Company at large.

6). Scoring Models
• Scoring Models may be the most flexible way of comparing
Projects to one another.
For example,
i). look at Profitability
ii). overall Risk
iii). support from Stakeholders
iv). Difficulty of the project.
• Once the criteria are chosen, you’ll want to weight them
according to your priorities and rank each project in terms of
a consistent Scale.
• Make it easier to compare one Projects to one another.

7). Economic Model
• Defined as the net Profit after the Deduction
of Taxes and Capital expenditure.
• If there are several Projects assigned to a
Project manager, the Project that has the
highest Economic Value Added is picked.

• Method #2: Constrained Optimization
Methods
1. Linear Programming
2. Nonlinear Programming
3. Integer Programming
4. Dynamic Programming
5. Multiple Objective Programming

1. Linear Programming
This programming method involves bringing
down the Cost of the Project through reduction
of the Time required to complete it.
2. Nonlinear Programming
Nonlinear Programming aims at solving Projects
wherein some of the constraints or functions
are nonlinear.

3. Integer Programming
This method focuses on Integer values rather than
Fractional ones. Most Variables are restricted to
Integer values to check Feasibility.
4. Dynamic Programming
Simplifies a complex problem by separating it into a
number of simpler problems.
5. Multiple Objective Programming
The Multiple Objective Programming approach
focuses on making a Decision for a number of
problems using Mathematical optimization.

Project Formulation
 Project formulation is a step-by-step
Investigation of Resources and
development of Project idea forachieving
the acts of taking an Investmentdecision.
 It presents Project related facts
before the Interested parties.

Stages of Project Formulation
 Feasibilityanalysis:
 Done to know whether project idea should be developed furtheror
not.
 Carried out in threestages:
 Pre-feasibilitystudy: Preliminaryassessmentof Project idea.
 Feasibilitystudy: Coversall aspectof investmentprojectwith
Alternatesolutions.
 Projectreport: Enables concerned authorities totake objective
decisions onProject.

2). Techno analysis
a. Whether the Technology involved in the Project is
appropriate to meet the objectives,
b. It is not an obsolete Technology;
c. The other terms for the Technical know-how are
reasonable and acceptable as per norms.
d. The Technical collaborator is capable to impart such
Technology

3). Project design and Networkanalysis:
 Defines Individual activities comprising a
Project.
 Presents the Flow of events.
 Allots Project Inputs, Time & Resources
needed for the Project.

4). Inputanalysis:
 Concerned with identification and evaluationof Project
inputs.
• Inputs:
a).Project charter
b). Requirements
c). Stakeholder information
d). Agreements
e). Institutional data
• Uses network plan fordeveloping Inputcharacteristicsof
Project.

Project charter
• A Project charter is a formal, short document
that describes a Project in its entirety —
including the what the Objectives are, how it
will be carried out, and who the
Responsibilities are.
• It is a crucial Component in Planning out the
Project because it is used throughout the
Project lifecycle.

Project Sponsor
• The Project Sponsor is a person or group who allots resources
and support for the Project, Program or Portfolio for
enabling success.”
Eg : In an IT project, the Project Sponsor might be the Chief
Information officer.
• Project Sponsor is employed by the Chairman / Owner of the
Organization
• They are above the Project manager in terms of Project-
Hierarchy.
• The Project Sponsor is responsible for establishing Vision,
Governance and Benefits realization.

5). Economic Analysis
a. The investment for the Project is justified considering
the overall Economical situation and, in particular,
relevant to the Society for which the Project is being
planned.
b. The Project cost is justified as against the Economic
-benefit to be derived from it.
c. Influence upon Interest Rates, Inflation, Tax rates,
unemployment, Governmental activity, Laws, Policies,
etc

6).Financial analysis:
 Fixed assets, Net income, Working capital, Sufficient
Inventory, Accounts receivable of Operating environment
determine the Financial Health of a Project
 One of the most important aspect to be taken care of
before setting up a Project.
 A detailed coverage of Financial aspects such as Cost
estimation, Profit analysis, Productioncost.

 Managerial appraisal:
 Talent of Project Manager is taken into
consideration.
 Also includes assessment of Technical and
Managerialpersonnel working, their
Training , Track records etc.

 Operating Marketappraisal:
 Demand forecasting, Market Analysisare some methods for
anticipating the market.
 Provide deep Insight on Market Segmentation, Positioning,
Pricing, Distribution, Promotional Activities, Market
Competition from similar Products.

Project Formulation
A Project Formulation gives information on the following
• Economic aspects – present Benefit, scope for
Growth, justification for Investment
• Technical aspects – Technology, Machinery, Equipment
needed
• Financial aspects – Total Investment needed, Cost of
Capital and Return on capital
• Input aspects – Inputs include Materials, Equipment,
Machines, Software, Human resources etc.
• Managerial aspects – Qualifications, experience of
Team Members needed for Projects

Roles & Responsibilities of a Project
Manager
1. Activity and Resource planning
• First and foremost, good Project managers
create a clear and concise Plan to both
execute the Project and monitor its Progress
• Define the Project’s scope and determine
available Resources.
• Good Project managers know how to
realistically set Time estimates and evaluate
the Team or Teams’ capabilities.

Manager
2. Cost estimating and developing the Budget
• Good Project managers know how to keep a
Project within its set Budget.
• Even if a Project meets a Client’s expectations
and is delivered on Time, it will still be a Failure if
it goes wildly over-Budget.
• Good project managers frequently review the
Budget plan ahead to avoid any massive Budget
overruns.

Manager
3. Organizing and motivating a Project Team
• Good Project managers put their Teams front and
center.
• They develop clear, straightforward Appraisal
Methods, that stimulate their Teams to reach
their full Potential.
• They cut down on Bureaucracy and steer their
Teams down a clear path to the Projects goal.

Manager
4. Controlling Time management
• Clients usually judge a Project’s success or failure on
whether it has been delivered on Time. Therefore,
meeting Deadlines is non-negotiable.
• Good Project managers know how to set Realistic
Deadlines, and how to Communicate them consistently
to their Teams.
• They know how to effectively do the following:
Sequence activities, Estimate the Duration of
activities,Develop a Schedule,Maintain a Schedule.

Manager
5. Analyzing and managing Project Risk
• The bigger the Project is, the more likely there are to
be hurdles and pitfalls that weren’t part of the Initial
Plan.
• One of the key responsibilities of every Project
manager is to minimize uncertainty, and evaluate
Potential risks before the Project begins.
• Project Managers know how to avoid Risks or at least
minimize the impact of Risk if it is unavoidable

Manager
6. Ensuring Customer satisfaction
• Project managers involve their Clients in the
Project as much as is reasonably possible.
• A Project is only a success if the Customer is
Happy.
• Good Project managers know how to maintain
effective communication and keep the
company’s Clients updated.

Manager
7. Monitoring Progress
• During the initial stages, Project managers have
a clear Vision and high hopes of producing the
desired Result.
• However, When things don’t go according to a
Plan, a Project manager needs to monitor and
analyze both Expenditures and Team
performance and always be ready with
Corrective measures.

Manager
8. Managing Reports and necessary Documentation
• Finally, experienced Project managers know how
essential are the final Reports and proper
Documentation.
• Good project managers can present comprehensive
Reports documenting all Project requirements like:
Project’s History, what was done, who was involved,
and what could be done better in the Future.

Project Team
• A Project team is a team whose members usually
belong to different groups, have different
functions and are assigned to a Project manager
to perform Activities for the same Project.
• Usually Project teams are only used for a defined
period of Time.
• They are disbanded after the Project is deemed
complete.

Selection of Project Team
1). Knowledge of Project Management Principles:
While Team members don’t have to be experts on
every Tactics, tool, and Techs; having a basic
knowledge of Project management Fundamentals
provides them with a solid Foundation to work
with.

2). Strong Ability to Read People
• Project team members work with Individuals in all levels of
the organization
• The best Project team members must be solid Leaders who
know how to motivate people, create a vision for Project
Results and build inspiration.
• Only the Project team members with good Ability to read
People know exactly what it takes to motivate People to
get the Job done.

3). Accurate Estimating Skills
• The Project manager relies on Team members
who provide accurate Estimates for their Project
outcome.
• One delayed Task can result in a Domino effect,
ultimately causing everyone to miss key
Deadlines.
• Time Management & Accurate Estimating Skills
are essential requisites of a Project Team member
to avoid Project timeline-off conditions.

4). Self-Assured
• When faced with Opposition from others in the
organization, it’s important for a Project Team
member to be Polite-but-firmly stand on their
Position
• The Project Team Professionals need to stand up
for the best interests of the Project, convey the
Importance and explain the Benefits of their
Proposal when their Turn arises.

5). Excellent Communicator
• Project team members need to communicate with the
Stakeholders.
• Poor communication may lead to “Loss of support
from Stakeholders”. Poor communication can break
the success of the Project
• The Project management Professionals must have the
ability to effectively communicate with a number of
different Audiences.

6). Highly Organized
• Mass chaos and Project success don’t mix.
• A Project team member must be extremely
organized, know exactly what is going on
with each step of the Project at all times.
• These professionals must know how to
leverage available tools and techniques to
stay Organized, even under significant Stress.

7). Seek Proactive Members
• Pro-active Members are an essential component
of each successful Team. Your Project heavily
depends on the activity of each of your Team
members’ combined.
• Proactive Employees who take Action on their
own are helpful Assets.
• Seek this in your employees, and your Project will
run smoother and faster than you would Expect.

8). Find People who Are Willing to Commit to Their
Role
• For your Project to launch and grow successfully,
you need People who are willing to commit to
work (excluding risks, setbacks, boredom, and
the other negative feelings)
• Project Professionals should handle the situations
Assertively, that can come as a result of Hard and
Smart work.

9). Prioritize Skills and Knowledge Over
Certifications
• Seek skills, knowledge, and experience over
certifications.
• The candidate should prove they are capable of
being Productive by displaying their skills and
knowledge, and not just a paper that only states
the achievement of finishing Courses.
• Never choose solely based on Certifications, as
you risk getting unskilled and inexperienced
Project members which ruins your Project plans.

10). Ability to work in a Virtual Team
• Virtual teams spend no time on face to face
communication and collaboration.
• A Project Team member should have the
Expertise to make use electronic means of
communication (such as Email and video
conferencing) to fulfill Project tasks.
• Project Team members carry out their roles and
responsibilities with required Project
communication Tools to participate in Project.

Importance of a Project Team
• Share a sense of common Purpose
• Have Balanced and shared Roles
• Problem solving Focus – Make effective use of
Individual Talents and Expertise
• Accept differences of Opinion & Expression
• Encourage Risk taking & Creativity
• Sets high Personal Performance Norms

Project Portfolio Process
1: Define Criteria for Projects
• Not all Undertakings are Projects. Much can
be handled as part of operations.
• The Project-worthiness analysis help to
differentiate Projects based on the Project
type (Operation/minor/ major Project).

1: Define Criteria for Projects
• The Project-worthiness analysis determines from what
point an undertaking is to be treated as a Project.
Only Projects are to be added to the Project portfolio
selection process.
• Design individual Project-worthiness analysis
according to your Requirements.
• Possible criteria for this could be: Number of
departments involved, Size of the project team, Staff
costs, Amount of investment, Duration, Inherent
complexity, Novelty for the project team, Quality risk,
External effect

2. Create An Inventory And Establish A Strategy
• Identify all the Projects in the pipeline by
gathering key Project and organizational
information.
• Business strategies are the basis of Project
Portfolio Management - Identify your
company’s Strategic goals and determine if
these Projects support as Strategic objectives.

2. Create An Inventory And Establish A Strategy
• Evaluate each Project individually – Project milestones,
potential ROI, reporting schedule and resource
allocation.
• Categorize these Projects - Canceled projects,
Completed project, Growth Project / Survival projects
• Categorizing will help us to reveal whether there is
Duplication.
• Project portfolio as a whole examines the Probability
of Technical success against the anticipated Benefit
from the Project.

3. Define a Method for Prioritization
• Prioritization is not a one-off activity. Whenever the circumstances
change, you have to adapt your priorities.
• Determine the strategic relevance of the Projects by assigning Business
Drivers proportionally.
• Possible drivers can be:
a). Achieving higher cost efficiency
b). Increasing product quality
c). Achieving a higher customer satisfaction
d). Increasing staff satisfaction
e). Expanding into new markets
• Business Drivers must be as many as necessary.

4). Compare the Planning of New Projects with the Remaining
Capacity and Budget Available
• The degree of the Strategic fit that is growth opportunities,
long-term goals, and the quest for long term Innovation
between the Portfolio and the company.
• Ensuring the Distribution of projects (including the number
and nature of the Projects are aligned) to make sense
Economically.

4). Compare the Planning of New Projects with
the Remaining Capacity and Budget Available
• The Estimation that the end Product will
deliver the ROI
• An evaluation of Associated risks - not only
measure Risks in Financial terms, but also
include Risks in schedule, scope, Resource,
Technology risks etc

5) Keep a Constant Eye on Project Handling
• The PPM work does not end with the selection of the Projects
to be started. It should ensure all the Datas of the Projects
are:
a).Regularly updated
b).Reported back to the central system
• The current data will help us to determine Project
Formulation :
a). Whether New projects can be started in the future.
b). What kind of Projects can be Started
c). Right Time of Starting these Projects

5) Keep a Constant Eye on Project Handling
• You should monitor the Portfolio continuously
ie. keep checking on the Priorities of running
Projects.
• Whenever Strategic guidelines change,
Consider aborting Projects if they are not in
line with the new Strategic direction.

6).Close Projects with a Regulated Project Closure
Process
• Every Project should undergo a closure process. Project
closure includes a final Project review with a comparison
between the original Targets and the actual costs and
Results.
• Project closure should :
a). Communicate the Lessons learned
b). Archive the Project properly

6).Close Projects with a Regulated Project
Closure Process
c). Discharge the responsible Project manager
officially (relieve him or her of the Responsibility
for the Finished Project)
• After the Project has been Formally declared
closed, the Team members can now be
assigned to other Projects.

Benefits Of Project Portfolio Process
• Increased success in Project delivery
• better Decision making
• the ability to prioritize High-value projects
• avoid Overspending
• manage Changes more effectively
• remove Inefficiencies

PM Unit - 1.pptx

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