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Project Work and Traditional Functional Work Differ in Many Ways. It Is Important To Understand These
Project Work and Traditional Functional Work Differ in Many Ways. It Is Important To Understand These
Ans:
Project Management: A project has a definite start and end date with a clearly mentioned
deliverable produced and project management is the application of knowledge, skills, tools, techniques
and processes to effectively manage a team to achieve this final deliverables, which means the
management of a specific project. Project management focuses on delivering the specific objectives of
the project.
Program Management: A program is a group of related projects which are managed together to
obtain specific benefits and which cannot be obtain if the projects are managed individually. Program
management is focused on achieving the strategic objectives of the integrated project. Portfolio
Management: A portfolio is the collection of projects or programs grouped together to facilitate
effective management of effort to meet strategic business objectives and this typically includes
identifying, and prioritising projects and programs to achieve specific strategic business objectives. If
you consider projects as the bottom of a hierarchy then programs sit above them in the middle of the
hierarchy and address a related set of projects. This allows the portfolio management level to stand at
the top of this hierarchy. The primary roles of a project manager, program manager and portfolio
manager differs, however, many organisations blend these roles together and treat them as basic
project management.
(b) Differences between Project Work and Traditional Functional Work
Project work and traditional functional work differ in many ways. It is important to understand these
differences. Functional work is routine ongoing work. Each day machine operators, car salesmen,
secretaries, accountants, financial analysts and quality inspectors perform functional work that is
routine, notwithstanding some variations from day to day. The functional worker gets training from a
manager assigned to the specific function, and the manager supervises and manages the worker
according to standards of productivity and quality set for the particular function. In contrast to
functional work, project work is a temporary endeavour undertaken to create a unique, non-routine
product or service. A project manager manages a specific project with people and other resources
assigned to him only for project management support on the specific project, and not on an ongoing
basis. The project manager is responsible for the approved objectives of a project such as budget,
schedule and specifications. Project terms are typically not organised in the same hierarchical
structure as that of functional group.
Q.2 Compare Operation and project procurement. Also list and explain the project
procurement process.
Ans.
Comparision between Operation and project procurement :
Project Management Body of Knowledge (PMBoK) defines project procurement management as the
process of acquiring goods, services or results needed from outside the project team to perform the
work as well as the contract management processes. Procurement is formalised by a contract between
buyer and seller. Project procurement management is a part of the project management process. In
this process, products or services are acquired or purchased from outside of the organisation in order
to complete the task or project. The differences between the procurement carried out for the overall
operation of an organisation, and the procurement carried out for a specific project, are shown below:
Fig: Differences between Operations Procurement and Project Procurement
Project Procurement Management Process :
The project procurement method varies depending on the category of the contracted product or
service. The broad categories are:
- Materials or products
- Equipment or tools
- Labours
- Professional services
- Totally engineered systems
- Total project
Project Procurement Management generally involves the following:
- Deciding to “Make or Buy”
- Outsourcing the work for a “Buy” decision.
- Managing risk (although risk management is often addressed separately, it is noteworthy
that contracts are, at their core, risk management tools.)
All procurement requires some level of planning. The intensity and the effort required in planning
depend on the complexity of the scope of work in the procurement package.
Ans: Risk is defined as the possibility of an outcome being different from the expected outcome. The
PMBoK defines risk as the totality effect of outcomes (i.e. states of nature) that can be described
within established confidence limits (i.e. probability distributions)
Instill confidence in the project team as well as project stakeholders and third parties
Risk management is not a one-off activity of risk identification, but a cyclical process that must be
repeated regularly during the course of the project. The manner in which risk management is applied
will depend on the nature of the project e.g. the risks identified in a 200 km. railway line laying
project will be different from those in the construction of a side-walk along roads to be implemented
by a municipal body.
In summary, risk management is a structured form of risk control that unearths possible bottlenecks
early by looking ahead, and thus ensures that a project is both better managed and controlled. The
known risks of a project can be managed. The unknown risks have to be managed by contingency
plans based on past experience. Risk management’s objective is to reduce the impact of a potentially
adverse event.
The extent of investment in risk management will not exceed the benefit that may accrue because of
the non-occurrence of the risk Organizations accept only those risks which are associated with
opportunities i.e. they take only those risks which are balanced with the reward that may be gained by
accepting the risk. This means that different organizations have differing degrees of risk tolerance –
an organization can be risk-averse, risk-prone or risk-neutral depending on how it views the risks.
Finally, it is important to note that Risk management is not a separate project activity; rather, it is an
aspect of project implementation.
Ans:
Cost reimbursable and its variation
A cost-reimbursable contract is a variant of a contract that involves making a payment from the buyer
to the seller in reimbursement for the seller’s actual costs. Added to that is a fee that typically
represents the seller’s profit. When analyzing costs they are typically broken down into two categories.
Those categories are direct costs and indirect costs. Direct costs are defined as the costs that have
been incurred only for the purpose of the project. One example of this type of cost can be the salaries
of the full time staff members, or equipment purchased exclusively for use in the project. Indirect
costs represent costs that refer to more general, more broad types of costs, such as administrative
costs and general overhead costs. Cost-reimbursable contracts often contain incentive-based contracts
in which the seller will receive a bonus payment or incentive if the seller meets or exceeds a series of
pre-determined target objectives, such as meeting a particular schedule or keeping the activity below
a certain cost.
The term firm fixed price or lump sum contract refers specifically to a type or variety of fixed price
contract where the buyer or purchaser pays the seller or provider a fixed total amount for a very well-
defined product, however there is the allowance within these for a variance in the event there are
incentives attained through project incentives achieved or targets met. There are benefits of this type
of contract to both the buyer and the seller, and these are similar to those for the fixed price incentive
fee contract. To the seller, it is beneficial because it typically allows for the seller or provider to charge
a reasonable base fee, yet also allows for exceptional performance to be rewarded further. However,
for the buyer that also provides a very tangible benefit. The buyer typically will be paying a very
reasonable base fee up front, but there is of course the chance that the price will go up in the future if
certain conditions are met.
In a time & material (T&M) contract, both parties agree to unit rates that have been predetermined by
both parties in advance for the category of senior engineers. This is also the case in fixed-price
arrangements. In project management, this type of contractual arrangement contains aspects of both
cost-reimbursable and fixed-price contracts, and could be considered a hybrid of the two. Like a cost-
reimbursable arrangement, the time & material (T&M) contract has no definite end. The full value of
the contract is not defined at the time the contract is awarded. Therefore, similar to cost-
reimbursement contract, time and material (T&M) contract can grow in value over the period they are
in effect. The inherent flexibility of the time and material (T&M) contract makes it an attractive
alternative for those involved in project management, as well as for the individuals involved.
Q.3 Describe the factors to be considered when feasibility of a project is examined. Also explain the
various qualities that a good project management process encompasses.
Ans: Feasibility studies aim to objectively and rationally uncover the strengths and weaknesses of
the existing business or proposed venture, opportunities and threats as presented by the
environment, the resources required to carry through, and ultimately the prospects for success.
Five common factors
The assessment is based on an outline design of system requirements in terms of Input, Processes,
Output, Fields, Programs, and Procedures. This can be quantified in terms of volumes of data, trends,
frequency of updating, etc. in order to estimate whether the new system will perform adequately or
not. Technological feasibility is carried out to determine whether the company has the capability, in
terms of software, hardware, personnel and expertise, to handle the completion of the project
Economic feasibility
Economic analysis is the most frequently used method for evaluating the effectiveness of a new
system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits
and savings that are expected from a candidate system and compare them with costs. If benefits
outweigh costs, then the decision is made to design and implement the system. An entrepreneur must
accurately weigh the cost versus benefits before taking an action.
Cost-based study: It is important to identify cost and benefit factors, which can be categorized as
follows: 1. Development costs; and 2. Operating costs. This is an analysis of the costs to be incurred
in the system and the benefits derivable out of the system.
Time-based study: This is an analysis of the time required to achieve a return on investments. The
future value of a project is also a factor.
Legal feasibility
Determines whether the proposed system conflicts with legal requirements, e.g. a data processing
system must comply with the local Data Protection Acts.
Operational feasibility
Operational feasibility is a measure of how well a proposed system solves the problems, and takes
advantage of the opportunities identified during scope definition and how it satisfies the requirements
identified in the requirements analysis phase of system development. [4]
Schedule feasibility
A project will fail if it takes too long to be completed before it is useful. Typically this means
estimating how long the system will take to develop, and if it can be completed in a given time period
using some methods like payback period. Schedule feasibility is a measure of how reasonable the
project timetable is. Given our technical expertise, are the project deadlines reasonable? Some
projects are initiated with specific deadlines. You need to determine whether the deadlines are
mandatory or desirable.
Market Feasibility Study typically involves testing geographic locations for a real estate development
project, and usually involves parcels of real estate land. Developers often conduct market studies to
determine the best location within a jurisdiction, and to test alternative land uses for given parcels.
Jurisdictions often require developers to complete feasibility studies before they will approve a permit
application for retail, commercial, industrial, manufacturing, housing, office or mixed-use project.
Market Feasibility takes into account the importance of the business in the selected area.
Resource feasibility
This involves questions such as how much time is available to build the new system, when it can be
built, whether it interferes with normal business operations, type and amount of resources required,
dependencies,
Cultural feasibility
In this stage, the project's alternatives are evaluated for their impact on the local and general culture.
For example, environmental factors need to be considered and these factors are to be well known.
Further an enterprise's own culture can clash with the results of the project.
PMBoK defines quality as ‘the degree to which a set of inherent characteristics fulfill the requirements’.
MBoK also emphasizes that product quality measures and techniques are specific to the particular type
of product, while project quality management must address both the management of the project and
he product of the project e.g. quality management of a software project entails different approaches
and measures than a highway building project. But project quality management approaches apply to
both. In the context of a project, stakeholders’ needs, wants and expectations form a critical element
of quality management.
For a company, this is a document created by quality experts and backed by the top management. It
states the quality objectives of the company, responsibilities of the project team, and, by providing
guidelines for important quality matters; it promotes consistency of quality throughout the
organization. The quality policy should be disclosed to all stakeholders. It should be implemented for
all specific projects and top management should periodically review the performance of lower and
middle management to ensure that the activities are in line with the overall quality objective of the
firm.
PMBoK of PMI, USA details the project quality management processes under the following heads:
· Quality Planning
· Quality Assurance
· Quality Control
This is a monitoring and control process.
This process is for monitoring project results with respect to the set standards as well as for
identifying ways to eliminate the causes of unsatisfactory variances. Quality control focuses on
correctness of work and includes inspections.
Total Quality management (TQM) is a non-proprietary management approach that started in the
1950s in the Japanese industry after the Second World War. It aims at involving every individual in
the firm to be involved in the quality improvement in every stage of the project management process
or production process. The concept of TQM focuses on involving everyone in an organization in a
continual effort to improve quality and achieve customer satisfaction. The methods for implementing
TQM approach have been developed from the teachings of many Quality leaders as Philip B. Crosby,
W. Edwards Deming, Armand V. Fiegenbaum, Kaoru Ishikawa and Joseph M. Juran.
1. Customer satisfaction
2. Leadership
3. Quality policy
4. Organization structure
5. Employee involvement
6. Quality costs
7. Supplier selection and development
8. Recognition and reward