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MB0049 ProMgmt

MB0049 ProMgmt

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Published by: Mohammed Ismail on Feb 13, 2013
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Q1. Discuss the various steps of PMIS planning.

The planning of PMIS includes the following steps: 1. Identify the information needed 2. Capture data 3. Process data into information and store it 4. Communicate information to stakeholders Identify the information needed Identification of the information that is needed is necessary for improving the decision making and the structure of the PMIS. Information requirements of project stakeholders include the recipients of information, the type of information that is needed, which includes format, contents, and level of details, the time the information is required and how (by what media) will it be communicated to them. (i) Who needs information? Recipients of information may include any stakeholder of a project. (ii) What type of information is needed ? The information need of various stakeholders differ in contents and time of need. (iii) When information is needed? Time of need of each stakeholder may be different. Some may need it on daily, weekly, or monthly basis. Capture data Term “Capture data” is used to state a process of preparing and collecting data i.e., as element of a process improvement or similar project. The function of data collection is to attain information to maintain record, to make decisions for vital issues, and to pass information on to others. Data can come from actual observation or from records. Data collected from records is known as secondary data. Data collected from direct observation is known as primary data. It should be ensured that all relevant groups are represented in the data. Process data into information An organisation, to achieve its aims, needs to process the data collected into meaningful information. It should be presented in its most useful formats. Data must be processed in a context to give it meaning. Data is transformed into information using mathematical, statistical, or other tools including computer software. Information can be stored in electronic form or hard copies represented in the most useful form. Communicate information to stakeholders Communication is the process by which information is exchanged between individuals through a common system of symbols, signs, or behaviour. To show the importance of communication, Cleland quotes the following statements: • Peter Drucker states that the ability to communicate, heads the list of criteria for success. • Harvard Business Review reports that the ability to communicate was at the top among 22 personnel attributes in promotions. • A project manager uses communication more than any other force to manage the project.

Q2. What are the different phases of contract management? Ans: Contract Management
Contract management is the management of contracts which is entered with clients, sellers, partners, or employees. 1 Contract planning Contract planning should be done at the project schedule stage. The process of contract planning includes the preparation of resource plans. The following points should be considered for preparing the contract planning: • Work Break Down (WBS) and packaging • Requirement of resources, mainly equipment and manpower for various work packages • Type and numbers of contracts to be awarded and approximate to whom. • Technical, financial, and operational capabilities of the contractor • Scope of work for each contractual job • Method of contracting - ICB, LCB, open tender, limited tender, etc • Choosing among suitable and comparable parties • Obligations of both parties should be reasonable 2 Contract negotiations The negotiator brings the buyer and the seller face to face. All assumptions and parameters related to price are analysed. Eventually, a more realistic picture emerges, which is agreed to by both the buyer and the seller. The following aspects should be kept in mind at the time of contract negotiations: • Price-related terms: Price could be fixed or adjustable during the contract period. • Payment terms: Any of the payment terms which include advance, credit for specified period, cash on delivery, and retiring document through bank may be selected mutually. • Delivery conditions: These may include which mode to be used, how much quantity to be delivered, and when. • Agency for inspection: It is to be agreed whether inspection is to be done by a third party or by buyers or supplier's own inspection. • Cancellation: Cancellation of contract may be done due to default by the vendor in failing to perform as agreed in contract while making deliveries, convenience of the buyers, or mutual consent. • Quantity: Quantity may be fixed or variable in case of variable quantity; the lower and upper bound needs to be specified. 3 Contract administration Various problems may arise during the execution of the contract such as: • Extra work including excess quantities of work • Deleted work including lower quantities of work • Non-compliance with specifications • Delays in time schedules • Late payments • Taking over of completed works • Warranties • Contract close out

Q3. Describe the process of project performance evaluation Ans:
Process of project performance evaluation It is very useful tool to find out the reasons behind a failure to achieve intended outcomes. Project identification Identification of appropriate projects (or project ideas) is the first and the most important stage in project management. This is done through appropriate type of opportunity studies. Area studies: About a given geographical area Sectoral studies: About specific economic sector such as power plants, food processing, etc. Resource-based studies: Studies about renewable and non-renewable national resources, industrial products like minerals, etc. Pre-feasibility studies After the identification stage, the project ideas are screened through prefeasibility studies. Pre-feasibility studies are the intermediate studies between the opportunity studies and detailed project report. This is basically carried out to check for the viability of the project and have a rough estimate of the cost of project and profitability. An outline of a pre-feasibility study is given below: Executive summary About the report Project sponsor's background and history Location and site, for example, the report recommends the location and site along with essential related activities and their cost estimates Requirement of raw materials and their sources Requirement of utilities and auxiliary services such as power, water, steam, compressed air, transportation, etc Selection of the conversion process (technology) Fixation of overall plant capacity based on technology selected Selection of plant equipment and machinery based on capacity proposed An outline of the production process and plant layout Capital cost estimate Plant organisation and manpower requirement and their cost estimates Production costs Profitability analysis Construction schedule General layout and flow sheets (supporting drawings) Detailed project report Techno-economic feasibility study Preparation of Detailed Project Report (DPR) is a further step in examining the feasibility of the project from all angles: Technical, financial, economical, managerial, and also the Environmental Impact Analysis (EIA). This is a major proposal and is necessary as per government directives and is considered as a bankable report based on which banks can advance loans. Appraisal and evaluation Appraisal and evaluation are essential parts of good financial management. The general principles should apply to any proposal – whether project, programme, or policy related – with implications for expenditure/use of resources. The effort that should go into them and the detail to be considered, however, is a matter of judgment. For example, the proposals involving modest expenditure/use of resources may merit less detailed appraisal and evaluation. The major techniques for financial appraisal

criteria are: Pay Back period (PBP) Net Percent Value (NPV) Internal Rate of Return (IRR) Accounting Rate of Return (ARR) Cost-benefit ratio Cash flow considerations.

Q4. Discuss the various elements of project control. Ans: Project Control Process
Control of the project is exercised through formal and informal processes exercised by the project manager, project team, and stakeholders. The process of conducting reviews and monitoring reports exerts a degree of control over the project. 1 Identify output and performance objective There are three basic performance objectives/standards for a project which a manager is expected to control. These include time schedule (project duration), project cost, and conformance to design specifications which ensure quality. Two common methods to evaluate these objectives are variance analysis and earned value method. However, variance and earned value analysis are not applied to the objective, quality, as there is difficulty in quantifying it. 2 Performance monitoring for schedule and cost This tells who is to monitor the information and at what frequency. Normally, for a moderate size project, a separate project monitoring cell is created for collecting, analysing, and reporting information to all concerned for the purpose of information and controlling the project. 3 Cost and schedule performance measure – Earned Value Method (EVM) The Earned Value Method (EVM) is a useful tool that allows the calculations of cost and schedule performance measures including cost variance, schedule variance, cost and time over-runs for a project. • Budgeted Cost of Work Schedule (BCWS): This is the budgeted cost of work scheduled up to status date and calculated as: BCWS = Σ (Budgeted cost of work/day × Scheduled days of work up to status date for each activity) Budgeted Cost of Work Actually Performed (BCWP) or Earned Value (EV): This is budgeted cost of work actually accomplished up to the status date and calculated as: BCWP = Σ (Budgeted cost of an activity x proportion of it actually accomplished up to status date). Where, Proportion of an activity = (work completed in physical units)/(Total work planned in physical units) Actual Cost of Work Performed (ACWP): This is the cumulative actual cost of work performed up to the status date and calculated as: ACWP = Σ (Actual cost of work performed for each activity up to status date) Using above parameters, performance measures can be calculated as: Cost Variance = BCWP – ACWP 4 Choose/implement corrective measures The findings about variance and forecast are compiled in the form of report. The report is circulated to all concerned and discussed in a review meeting. Various options including re-planning, reallocating resources or changing the way the project is managed, etc are discussed to resolve the variances. Of these, a set of options are chosen. Plan to implement these options are drawn and executing agencies are identified. The progresses of such plans are monitored in the review meeting.

Q5.a. What could be the reasons for project termination? Ans: Project Termination
Project termination is one of the most serious decisions of a project management team and its control board. The decision of project termination affects all the stakeholders of the project and can put some negative impact on the organisation’s growth. So it is important to critically evaluate all the aspects before taking the decision. The project manager and his or her team members will feel that they personally failed. It can also put a negative impact on the team member’s motivation level and their productivity. The following are the key reasons to terminate a project: Technological reasons Results of project requirements or specifications are not clear or impractical Fundamental change in project requirements or specifications, so that the underlying contract cannot be changed accordingly Lack of project planning, especially risk management The planned result or product of the project turn into obsolete, is not any longer needed Sufficient human resources, tools, or material are not accessible The increase in project cost leads lower profit than expected The parent organisation do not exist longer The change in strategy of parent organisation, leads towards the project does not support the new strategy Essential conditions disappear Lack of management support Insufficient customer support Strategy to avoid the negative impact of project termination The following are the key strategies that should be followed to avoid the negative impact of project termination decision: There should be a clear strategy for project termination, and it should be communicated to all the stakeholders The criteria of project success and termination should be clear and communicated to every stakeholders High level management attention, even for smaller projects, and in times when everything seems to be on track There should be periodical review meetings with the control board before taking the decision There should be open discussions with the control board about the problems and possible solutions or alternatives, including termination There should be a clear commitment of control board and high level management towards the project management team in order to enable the team to follow the project closure procedures Upon successful termination, the project manager and his or her team should be appreciated for regular project closure 5b. Write a note on project follow up

Ans: Project Follow-up
Traditionally, this stage is considered as a part of project completion phase but now it is considered as a separate phase of project life cycle. This is particularly so in very political environments, and/or where project benefits have relatively low visibility and meaning to stakeholders (staff, customers, investors, etc), especially if the project also has very high costs. For example, ICT (Information and Communications Technology) projects often are like this – low visibility of benefits but very high costs, and also

very high stress and risk levels too. After delivery or completion of the project, the staff performance has to be evaluated. The tasks involved in this phase are: Documenting the lessons learnt from the project Analysing project feedback Preparing project execution report Analysing the problems encountered during the project

Q6. Discuss the advantages of using PM software package. What are the common features available in PM software packages Ans: Advantages of Using Project Management Software
The following are the key advantages of using project management software: • Speed, effort, and accuracy: For a large project, manually carrying out activities like drawing a network, carrying out time analysis, reporting project progress, generation of various types of reports, updating network, and maintaining records is quite time and effort consuming. Accuracy level is also below par. Use of the software package greatly reduces the time and effort needed for these activities and at the same time enhances accuracy. • Ability to carry out special functions: The software has the ability to carry out some special functions like resource scheduling, what if experiment, and export and import of data with ease and within reasonable time. Manually carrying out these functions is extremely difficult or not feasible. • Affordability: The price of PC-based software is under $500 which is affordable for an organisation. • Easy to use: Over the years, the project management software packages have become easy to use. The package can be handled with minimum training. • Maintenance of record: A project generates a lot of data, reports, documents, etc. Manually archiving and retrieving these are time and effort consuming. The software package can handle these functions with relatively less time, effort, and cost.

Common Features available in Most of the Project Management Software
Before knowing the practical use of project management software, we should study some of the common features available in most of the project management software. An attempt is made to present an overview of generic features associated with various project management software packages available today. These generic features include: Data entry features o Project data and calendar: A project start date is specified. A calendar can be used to define the working days and hours for each individual resource on a project. The calendar is used in calculating the schedule for the project. Most systems provide a default for the standard working period, such as Monday to Friday from 8:00 AM to 5:00 AM, with an hour for lunch. The calendar can be modified for each resource. o Human resources: Suppose a particular activity needs 2 unskilled

person and 1 skilled person to complete the task. These two resources may be entered separately and will appear as 2L and 1S on activity description in network. Graphics: For a project involving a large number of activities, drawing a correct network, manually takes a lot of time and effort. One of the important features of PM software is its ability to generate a variety of charts including network diagram, activity-linked Gantt chart, and Gantt chart quickly. Further, changes in base line plan are quite easy. Time analysis: If there is unlimited and flexible resource or if resource can be outsourced, the network may be prepared at the earliest start time of activities. In the real world, many projects are managed on this basis. PM packages carry out time analysis which includes calculation of early start, early finish, late start, and late finish; free slack and total slack with ease. Manually carrying out time analysis is tedious. Resources scheduling: Resources scheduling problems are of two types: o Resource leveling where unlimited and flexible resources are available o Resource allocation problem where resources are limited In resource leveling, activities are scheduled to minimise the variation in level of resource deployment. Resource allocation problem is concerned with scheduling activities in such a way so as to find the shortest project schedule. Output reports: Most PM software packages have extensive report generation capabilities. They can generate a range of reports in various forms (graphical, tabular, or textual). The reports are standard or customised. Project schedule: Network (based on AON systems), linked Gantt chart, Gantt chart o Work-to list Cost related report: Budgeted vs. actual cost (daily and cumulative) o Resources utilisation report Progress report: Overall project, milestone chart, critical path o Chart showing responsibility of department/function to carry out particular activities o Progress summary report Updating: Updating is the process of producing a fresh set of schedule and other reports to take account of one or more of the following: Importing/exporting: The process of bringing information into the PM software from other application such as word processing, spread sheet, etc is called importing. Project monitoring and tracking: Tracking the progress about schedule and cost is an important aspect of project management. What if analysis: This is a useful feature of PM software. This permits to know the effect of changes in project variable (people, cost, and change in scope) on project objective.

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