PROJECT MANAGEMENT

UNIT 1

What is a project? Project Management Institute, USA A project is a one shot, time limited, goal directed, major undertaking, requiring the commitment of varied skills & resources

A project is an interrelated set of activities that has definite starting and ending points and that result in a unique product or service A project is an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources. It has a well-defined objective stated in terms of scope, schedule, and costs. Project s are born when a need is identified by the customer the people or organization willing to provide funds to have the need satisfied.

Every project has three attributes Input characteristics What the project will consume? Raw material, energy, manpower, finance & organization Necessary to evaluate nature & magnitude of inputs

Output characteristics

May generate goods & services Must have clear idea about quantity & quality Also assess financial aspects Social cost benefit characteristics Large projects impacts the equilibrium of the society Careful evaluation of the sacrifice the society will make and benefit that will accrue have to be done

EXAMPLES OF PROJECTS Planning a wedding Designing and implementing a computer system Hosting a holiday party Designing and producing a brochure Executing an environmental clean-up of a contaminated site Holding a high school reunion Performing a series of surgeries on an accident victim

CHARACTERISTICS OF PROJECT A project is a big work basically it is a work one whole thing there can be contributions from many different people Special features that will distinguish a project from any ongoing activity e.g., production, are summarized below Objectives: Fixed set, once achieved the project ceases to exist Life Span: Has to end, can not go on endlessly

 Single entity: main responsibility lies with Project Manager Team work: calls for team work Life cycle: Growth, Maturity & Decay, also has a learning component Uniqueness: No two projects are exactly similar Change: Due to environmental factors or technology a project sees many changes Successive principle: Details of a project are revealed as the project progresses over time Made to order: Always made to the order of the customer Unity in Diversity: Interrelated set of activity but diverse

High level of subcontracting Risk & Uncertainty: Every project has risk & uncertainty; Ill defined projects will have high degree of risk

Types of Project Geo Spread National & International Sector Industrial & Non Industrial Technology Non Conventional, High Tech, Conventional Technology, Low Tech Size Mega, Major, Medium, Mini New or Existing Expansion, Modification

PROJECT MANAGEMENT

 Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Project management is accomplished through the use of the following 5 processes: 1. Initiation 2. Planning 3. Execution 4. Controlling and 5. Closure

IMPORTANCE OF PROJECT MANAGEMENT Better control of financial, physical, and human resources. Improved customer relations. Shorter development times. Lower costs. Higher quality and increased reliability. Higher profit margins. Improved productivity. Better internal coordination. Higher worker morale (less stress).

MANAGEMENT PRINCIPLES APPLIED TO PROJECT MANAGEMENT

Project Scope Management describes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. It consists of initiation, scope planning, scope definition, scope verification, and scope change control. Project Time Management describes the processes required to ensure timely

completion of the project. It consists of activity definition, activity sequencing, activity duration estimating, schedule development, and schedule control. Project Cost Management describes the processes required to ensure that the project is completed within the approved budget. It consists of resource planning, cost estimating, cost budgeting, and cost control. Project Quality Management describes the processes required to ensure that the project will satisfy the needs for which it was undertaken. It consists of quality planning, quality assurance, and quality control. Project Human Resource Management describes the processes required to make the most effective use of the people involved with the project. It consists of organizational planning, staff acquisition, and team development. Project Communications Management describes the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. It consists of communications planning, information distribution, performance reporting, and administrative closure. Project Risk Management describes the processes concerned with identifying, analyzing, and responding to project risk. It consists of risk management planning, risk identification, qualitative risk analysis, quantitative risk analysis, risk response planning, and risk monitoring and control.

PROJECT MANAGEMENT LIFE CYCLE

The first phase involves the identification of a need, problem, or opportunity. The need and requirements are usually written by the customer into a document called a request for proposal The second phase is the development of a proposed solution to the need or problem. This phase results in the submission of a proposal. The customer and the winning contractor negotiate and sign a contract (agreement). The third phase is performing the project. Different types of resources are utilized Results in the accomplishment of the project objective

 The final phase is terminating the project. Perform close-out activities Evaluate performance Invite customer feedback

PROJECT RISK A project risk is an uncertain event that, if it occurs, has a positive or negative effect on the prospects of achieving project objectives Three aspects of the definition are especially important: uncertain event: something may or may not happen, e.g. somebody becomes ill or the temperature drops below a certain point making a chemical process impossible. positive or negative effect: project risk is not necessarily negative (increased costs, decreased quality etc.); It can also be positive (new valuable product features due to the use of new technology or opening up a new market segment due to some project adjustments). project objectives: the project goals are at stake if a risk occurs. Severe negative risks can lead to the cancellation of a project whereas minor risks may slightly increase the completion time of a project. IMPORTANCE OF PROJECT RISK MANAGEMENT Project risk management is the art and science of identifying, analyzing, and responding to risk throughout the life of a project and in the best interests of meeting project objectives Risk management is often overlooked in projects, but it can help improve project success by helping select good projects, determining project scope, and developing realistic estimates

Project Risk Management Processes

 Risk management planning: deciding how to approach and plan the risk management activities for the project Risk identification: determining which risks are likely to affect a project and documenting the characteristics of each Qualitative risk analysis: prioritizing risks based on their probability and impact of occurrence Quantitative risk analysis: numerically estimating the effects of risks on project objectives Risk monitoring and control: monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating the effectiveness of risk strategies throughout the life of the project

TYPES OF RISK and their MANAGEMENT Schedule Risk Risk related to timely completion of the project or any time bound activity being a part of project, are called schedule risks. For ex

Not enough people Too much parallelism - dependencies Equipment delays Information delays Permission delays - export license Management pushes too much Schedule Risk Management

Reduce scope of work Extend schedule Do more work in parallel Jump start project by purchasing technology

Financial Risks Any risk that occurs due to limitations of funds or involves mo

Additional and unforeseen expenses Inflation issues due to schedule issues Contract penalties - late on delivery Reduction of funding Availability of necessary equipment Financial Risk Management

Find ways to cut corners Less expensive hardware Reduce overheads Negotiate additional funds Change labour mix

Technical Risks - Risk due to lackings in operational efficiency of the business caused due to technology for ex- technological change in the production process.

Just cant be done o equipment availability o technology availability Technology has surpassed your assumptions Availability of technically competent People Technical Risk Management

Invest in Research and Development Hire experts Change approach Dont do it!

Customer Risks Customer or people risk is created when the expectations and requirements of the customer are not met.

Sophistication of customer o Too high o Too low

Customer Risk Management

Formal reviews Specific agreements in writing

Major Risk Factors

Resources not yet part of project inventory Possibility of changes in project requirements Potential alteration of fixed project dates Unexpected losses of critical personnel Reduction of funding Technological achievements not realized Improper budgets or scheduling factors

TOOLS & TECHNIQUES OF PROJECT MANAGEMENT The Most commonly used methods are :-

GANTT CHART NETWORK DIAGRAMS (PERT/ CPM)

GANTT CHART A graphical representation of a Project that shows each task as a horizontal bar whose length is proportional to its time for completion. A GANTT Chart is a horizontal bar chart that illustrates a Project schedule. In the GANTT Chart Time is displayed on the horizontal axis and the Tasks/ Activities are arranged vertically from top to bottom, in order of their start dates. GANTT Chart is often more useful to for depicting relatively simple projects or sub projects of a large project, the activities of a single worker, or for monitoring the progress of activities compared to scheduled completion dates..

NETWORK DIAGRAM Is a graphical depiction of Project tasks and their inter- relationships. The distinguishing feature of a Network Diagram is that the ordering of Tasks is shown by connecting with its predecessor and successor tasks. Network Diagramming is a Critical Path Scheduling Technique used for controlling resources. CRITICAL PATH METHOD A scheduling technique whose order and duration of a sequence of task activities directly affect the Completion Date of a Project

PROGRAM EVALUATION AND REVIEW TECHNIQUE One of the most difficult and most error prone activities when constructing a Project Schedule is the determination of the TIME DURATION for each task within a Work Breakdown Structure (WBS), specially when there is a high degree of complexity and uncertainty about a task. PERT is a technique used to calculate the Expected Time for a tasks. PERT is a technique that uses Optimistic time (O), Pessimistic time (P) and Realistic Time (R) estimates to calculate the EXPECTED TIME (ET) or a particular task.

BELOW GIVEN ARE THE SAMPLE DIAGRAMS FOR BETTER UNDERSTANDING OF STUDENTS DIAGRAM (a) - Gantt charts DIAGRAM (b) Network paths

UNIT 1 ( PART 2) PROJECT PLANNING

Project Planning Planning is of major importance to a project because the project involves doing something that has not been done before. As a result, there are relatively more processes in this section. However, the number of processes does not mean that project management is primarily planningthe amount of planning performed should be commensurate with the scope of the project and the usefulness of the information developed. Planning is an ongoing effort throughout the life of the project. Project scope The scope is what must be done to produce the project's end result the system you need meeting your requirements! Project scope deals with following questions Why this project? Is it feasible? Who are possible partners in this project? What should the results be? What are the boundaries of this project (what is outside the scope of the project)?

Problem Statement: Problem statement involves a combination of problem definition and decision-making. Problem definition requires distinguishing between causes and symptoms. Problems may be internal (a key employee is reassigned to another project) or external (a permit required to begin work is delayed). Problems need not necessarily be technical in nature (differences of opinion about the best way to design a product), they may pertain to managerial (a functional group is not producing according to plan), or interpersonal (personality or style clashes) issues. Decision-making includes analyzing the problem to identify viable solutions, and then making a choice from among them. Decisions can be made or obtained (from the customer, from the team, or from a functional manager).

Once made, decisions must be implemented. Decisions also have a time element to themthe right decision may not be the best decision if it is made too early or too late.

PROJECT FEASIBILITY Feasibility should be evaluated by identifying project characteristics, studying the project implementation & environment

APPROVAL PROCESS Approval process deals with influencing the organization. Influencing the organization involves the ability to get things done. It requires an understanding of both the formal and informal structures of all the organizations involvedthe performing organization, customer, partners, contractors, and numerous others, as appropriate. Influencing the organization also requires an understanding of the mechanics of power and politics. Both power and politics are used here in their positive senses. Pfeffer defines power as the potential ability to influence behavior, to change the course of events, to overcome resistance, and to get people to do things that they would not otherwise do.

PROJECT GOALS Project goals refers to the objectives of the business whether long term and short term for which the business operates. Goals help in measuring the actual performance with the desired one.

SUCCESS CRITERIA - Following are the reasons of success of a project : 1. 2. 3. 4. 5. 6. Sound project management processes Project tied to the organizations business goals Senior management commitment Good change management Detailed requirements Realistic schedule

7. Good stakeholder relationships 8. Empowered project manager 9. Skilled and appropriate team members with defined roles and responsibilities 10. Availability of funding ( PLEASE EXPLAIN THE ABOVE POINTS IN YOUR OWN WORDS , DEPENDING UPON THE MARKS OF THE QUESTION )

SOCIAL COST BENEFIT ANALYSISSocial cost refers to all those harmful consequences and damages which the community on the whole sustains as a result of productive processes. Under social cost benefit analysis the the focus in on social costs and benefits of the project. Features of SCBA are Assessing the desirability of projects in public. Identification and measurement of costs and benefits. The effect of risk and uncertainity in investement.