Project Management

Table of contents:

Introduction:
Though its application came from the different roots of business practices, the emergence of
project management became vital in recent years. It has become one of the key issues regarding
project success and better business environment. Project management includes application of
knowledge, skills and technique of the project team in planning, organizing resources and
attaining the project objectives. It is a complex task of organizing the people and resources and
setting goals, vision, mission and objectives for the temporary project. In this report, a project of
building new train and tunnel for Jubilee Line Extension in London is discussed briefly with
emphasis on project management and its successful use.

P1. Background and Principles of Project Management

The term Project can be defined as organization with defined resources and goal. Project
management is managing the temporary organization for the attainment of its goals and
objectives. So, the project management includes all the managerial steps that are taken in
business organizations. The history of project management is ancient. Building pyramids in
Middle East are assumed to be the first practice of project management (David L. Cleland &
Lewis R. Ireland,2002). Then, in the period of Second World War 2, the practice of project
management increased in military management discipline. In late 1950s the NASA implemented
the project management tools and techniques for their business (Holland, 2011).
Project management is concerned with some principles. The hierarchy principle suggests a
proper maintenance of hierarchical structure in the project management team. Hierarchy clarifies
the way people in the project team are connecting and communicating with each other. There
should be a proper allocation of responsibilities and the reporting trail should be clear to people
working in the project. Without a proper structure of reporting, miscommunication will increase
and will lead to conflicts between the employees. Therefore, hierarchy type varies from project
to project depending on the purpose. The planning principle suggests that there should be a
structural framework of what to do and how to do with proper solutions and alternative ideas.
Commitment principle implies that, the members working in the project are committed to the
success of it. Lack of commitment among the members cause lack of efficiency and involvement
in the task he/she is assigned to. In Metro Cammell, the members are given the flexibility of
performing a curtained job assigned and after that, they are to leave. This lowers their desire to
participate, invent, or think about the project in their own way. Thus, commitment is not
developed. Another principle is life cycle principle. A project is done with a targeted time and
defined goal. The life cycle implies that a structured framework must be followed to utilize this
time to make the best outcome. The project must also ensure satisfaction of the parties involved.
The success of the project depends highly on the satisfaction of the people for whome it was
targeted to.

P2. Appraisal of viability

For the evaluation of the project, the capital budgeting tools and techniques
are to be accessed. The cash outflows and inflows will be accessed to
determine the project viability. The projects quantitative analysis will be
done with different capital budgeting tools and techniques and qualitative
information will be provided from that. A long term estimation of the
investment will be retrieved through the capital budgeting tools.
The capital budgeting tools are described below:

Payback techniques:
Payback techniques measure the time period taken to retrieve the invested
amount. Time period taken to equal the cash inflow and cash outflow is the
main theme of this capital budgeting method (Ross, Westerfield, & Jeffe,
2009). In this method, project that takes less time to recover the invested
amount is considered the best one. It is calculated with the following
formulaCash payback period=

Capital Investment
Average annualnet cash flow

Shorter payback period is taken as the better one. The less the payback
period is the more profitable it is according to the payback period capital
budgeting technique.

Internal Rate of Return:

Internal rate of return determines the interest yield of the proposed project at which
the net present value equals zero. This is calculated by dividing the investment
amount by the annual net cash flow.

P3. The principles behind project management systems

and procedures
Project management is used to attain temporary objectives. It is a temporary
organization following all the management practices with technical skills and
knowledge. But there are always some proper processes of doing these things. The
methodologies of project management varies from organization to organization and
there different procedures for different purposes and criteria. The marketing
oriented project management requires the process including product launch,
initiation, arranging, execution and implementation and finishing the project.
Whereas, another methodology considering infrastructure activities will require
planning, alternative planning, arranging resources needed, test run of the project
and finally implementing the best plan.