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Pe ch 1


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Pe ch 1

  1. 1. Chapter 1Project Management Concepts
  2. 2. WHAT IS A PROJECT?• “A temporary endeavor undertaken to create a unique product or service” (PMI – Project Management Institute, 2000)• It is any undertaking that has definite, final objectives representing specified values to be used in the satisfaction of some need or desire. (Ralph Currier Davis)
  3. 3. Why the emphasis on projectmanagement?• Many tasks do not fit neatly into business- as-usual.• Need to assign responsibility and authority for achievement of organizational goals.• It simplifies the control
  4. 4. What projects do?• A project consists of a combination of organizational resources pulled together to create something that did not previously exist & that will provide a performance capability in the design & execution of organizational strategies.• Projects have a distinct life cycle, starting with an idea & progressing through design, engineering & manufacturing or construction, through use by a project owner.
  5. 5. Characteristics of Projects• Unique• Specific Deliverable• Specific Due Date (temporary)• Might be a part of broader program• Undertaken at all levels of management or at cross organizational levels• Often used as a means of implementing strategy.• Complexity
  6. 6. Key considerations involved inprojects – Three goals• What will it cost?• What time is required?• What technical performance capability will it provide?• How will the project results fit into the design and execution of organizational strategies?
  7. 7. Figure 1-1: Performance, Cost,and Time Project Targets
  8. 8. Definition of Project Management• The art of directing and co-ordination of human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participant satisfaction. (PMI)
  9. 9. Scope of Project Management• Time management • Risk management• Cost management • Procurement• Quality management management• Human resource • Integration management management• Communication • Scope management management
  10. 10. Skills Required for EffectiveProject Management• Conflict Resolution• Creativity and Flexibility• Ability to Adjust to Change• Good Planning• Negotiation – win-win versus win-lose
  11. 11. Formalization of liaison devicesin project management• Individual liaison• Standing committees• Product managers• Managerial liaison• Task forces• Project engineer• Liaison position• Teams
  12. 12. Effects of project management• Decline in midlevel positions• Emergence of a new class – project managers• It is about managing change in organizations• Elusive job security• Pressure on project managers
  13. 13. Project Management vs.General ManagementProject Management General Management• Specific cost, schedule & • Strategic management of technical performance enterprise• Matrix organizational design • Vertical organizational design• Ad hoc in nature • Ongoing enterprise• Focal point for financial & • Seeks enterprise efficiency & enterprise interfaces effectiveness• Concerned with product, • Concerned with enterprise service & project mission, objectives, goals, stakeholders stakeholders• Supports organizational • Integrates functional & strategies product activities
  14. 14. Activities under ProjectManagement• Planning• Organizing• Motivation• Directing• Control
  15. 15. Project Processes• Project management process groups – – Initiating processes – Planning processes – Executing processes – Controlling processes – Closing processes• Product oriented processBoth the processes are essential and complimentary for any project.
  16. 16. PHASES OF LIFE CYCLE OF APROJECT• Idea – generate an idea• Research – have a quick look• Design – have a closure look• Development – do it• Marketing – try it• Production – use it• Post sales service – post implementation review
  17. 17. Figure 1-2 The Project LifeCycle
  18. 18. Figure 1-3 An Alternate ProjectLife Cycle
  19. 19. Criteria to be applied for use ofproject management• Size of the undertaking• Unfamiliarity• Market change• Interdependence• Resource sharing• Importance of the project• Organizational reputation
  20. 20. Reasons for failure of projectmanagement start-up strategies• Failure to design & implement a well- designed & developed strategy for the introduction of project management• Project management is viewed as the fad of the month and is not taken seriously• Project management is viewed as a separate entity in the organization and not as building block in the management of change in the enterprise.
  21. 21. Types of projects• Closed projects or painting by numbers• Semi-closed project or going on a quest• Semi-open project or making movies• Open project or walking in the fog
  22. 22. Representation of types ofprojects Don’t Know know how howKnow Quest Pairs bywhat numberDon’t know Fog Moviewhat
  23. 23. Applications of project typesProject Type of change it ApplicationsType helps create or managePainting by Evolutionary Improving your continuingnumbers business operationsGoing on a Revolutionary Proactively exploring outsidequest current operations and way of workingMaking a Evolutionary Leveraging existing capabilitiesmovieLost in a fog Revolutionary Solve problem or explore area outside your current operations and way of working
  24. 24. Total Project Management LifeCycle• Conceptualization• Formulation – Technical – Organizational – Commercial – Financial – Economic• Evaluation MEM 612 Project Management
  25. 25. Total Project Management LifeCycle Cont…• Feasibility studies report• Investment report• Environmental clearance• Administrative council• Engagement of consultants• Detailed project report• Technical specification• Financial closure• Contracts finalization MEM 612 Project Management
  26. 26. Total Project Management LifeCycle Cont…• Execution of contracts/ project• Monitoring & control• Completion of construction• Commissioning of project• Performance guarantee test• Handing over to operation• Closure of contracts• Completion cost & capitalization• Post project evaluation and report MEM 612 Project Management
  27. 27. Characteristics of investment inprojects• High investment cost• Long implementation schedules• Long gestation period• Dynamic domestic and international market• Government priorities and policies• Development in the technologies• Substantial delays in the past• High cost of capital MEM 612 Project Management
  28. 28. Factors to be considered for newinvestments• Objectives and benefits of investment in projects to be clearly spell out• Adoption of technologies keeping in view the developing technologies & our needs• Exercising care while adopting new technologies• Selection of consultant• Selection of proven suppliers/ turnkey contractors MEM 612 Project Management
  29. 29. Factors to be considered for newinvestments Cont..• Detailed micro plans and strategy of implementation• Faster decision making required• Technology and know-how transfer• Project mix after investment in projects• Continuous up-gradation of technology• Manpower planning and training MEM 612 Project Management
  30. 30. Diagnosis of delays in projects• Project ownership between operation & project authorities in dilemma• Delayed response for corrective measures• Lack of involvement in planning stage• Over dependence on consultants• Contracting agencies competence• Increase in quantities of work with reference to original estimates• Inadequate planning for structural fabrication• Delays in indigenous equipment supplies MEM 612 Project Management
  31. 31. Consequences of Delays in Projects• Interest loss• Higher capital cost due to inflation & change in foreign exchange parity• Loss of profit as envisaged due to deferment of benefits• Risk of outdated technology• Project remains unprofitable throughout its life• Production loss• National loss of resources• Loss of production incentive (in financial terms) to workers MEM 612 Project Management
  32. 32. Types of investment• Additions – To sustain present level of production; To give incremental output/ productivity• Modification – For ease of operation/ maintenance; Technological up-gradation• Replacement – Expansion; Diversification – new products• New Technology – New facility; retrofitting with old facilities• Quality improvement – Customer satisfaction• Pollution Control - Statutory MEM 612 Project Management
  33. 33. Types of Expenditure• Capital Expenditure• Revenue Expenditure MEM 612 Project Management
  34. 34. Confronting Uncertainty – The Management of Risk
  35. 35. What uncertainties are encounteredin project management?• Time required to complete a project• Availability of key resources• Cost of resources• Timing of solutions to technological problems• Actions taken by competitors
  36. 36. Can uncertainty surroundingprojects ever be eliminated?• No, but it can be managed