Semester III Assgn I Project Management | Project Management | Business Process

Assignment 1

PROJECT MANAGEMENT
(5577) MBA Executive

ZAHID NAZIR
Roll # AB523655 Semester: Autumn 2009 ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD.

PROJECT MANAGEMENT

QUESTION 1
Explain “Project” and “Project Management Process”, why a project is initiated? Also discuss the Project Life Cycle in detail. (20)

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PROJECT
According to the PMI (Project Management Institute) definition: “A project is a temporary endeavor consisting of a series of activities and tasks undertaken to create a unique product or service”. A project is a planned activity. A project is usually a onetime activity with a well defined set of desired end results. It can be divided into subtasks that must be accomplished in order to achieve the project goals. Projects are different from standard business operational activities as they: Are unique in nature. They do not involve repetitive processes. Every project undertaken is different from the last, whereas operational activities often involve undertaking repetitive (identical) processes. Have a defined timescale. Projects have a clearly specified start and end date within which the deliverables must be produced to meet a specified customer requirement. Have an approved budget. Projects are allocated a level of financial expenditure within which the deliverables must be produced to meet a specified customer requirement. Have limited resources. At the start of a project an agreed amount of labor, equipment and materials is allocated to the project. Involve an element of risk. Projects entail a level of uncertainty and therefore carry business risk.

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Achieve beneficial change. The purpose of a project, typically, is to improve an organization through the implementation of business change. Examples of Projects are: Construction of a building Manufacturing of product Development of a payroll software package Computerization of a office

PROJECT MANAGEMENT
“Project Management is the skills, tools and management processes required to undertake a project successfully”. Project Management comprises: A set of skills. Specialist knowledge, skills and experience are required to reduce the level of risk within a project and thereby enhance its likelihood of success A suite of tools. Various types of tools are used by project managers to improve their chances of success. Examples include document templates, registers, planning software, modeling software, audit checklists and review forms A series of processes. Various management techniques and processes are required to monitor and control time, cost, quality and scope on
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projects. Examples include time management, cost management, quality management, change management, risk management and issue management.

PROJECT MANAGEMENT PROCESS
Project Management Processes define, organize and complete the work defined for the project. There are five project management process areas that apply to most projects and are defined in the PMBOK i.e. Project Management Body of Knowledge:

Initiating Processes: authorizing the project or phase. Planning Processes: defining the project objectives and selecting the most appropriate approach for the project to attain the objectives. Executing Processes: managing the resources required to carry out the projects as defined in the plan. Controlling Processes: ensuring that project objectives are met as defined by monitoring, measuring progress against plan, identifying variance from plan and taking corrective action. Closing Processes: formalizing acceptance of a phase and or the project and closing all associated activities. Project management is integrative and to effectively manage a project, a project manager uses all of the body of knowledge areas and all of the processes throughout the life cycle of a project.
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WHY A PROJECT
Planning is the determining in advance of what is to be done, how it is to be done, when it is to be done and who will do it. It encompasses setting objectives, and making day-to-day decisions on how these objectives can best be achieved. Projects never go according to plan. Things arrive late, there are deviations, and production falls behind schedule and resources are suddenly not available. This is not a reason not to plan. In fact, it is a good reason to plan. Planning gives direction to leaders and teams. It focuses on the objectives of the Project and/or the organization. If the team is aware of the objectives for which the project strives, coordination, cooperation and team work will most likely be enhanced. Planning can reduce duplication of work and unnecessary activities. When team members know exactly what to do, inefficiencies become more apparent. One of the most effective ways of planning an action programme is to work systematically through the elements of project formulation: rationale; goal; objective; strategy; outputs and targets; activities; inputs;
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timetable and work plan; monitoring; evaluation A methodical approach makes it possible to: determine how realistic the project is and whether it can be implemented with locally available resources and expertise; anticipate problems; check on the progress of the work (monitoring) and on whether the project has achieved its aims (evaluation).

PROJECT LIFE CYCLE
A project has specific objectives to be completed within certain specifications. It has defined start and end dates, is performed by human and non-human resources (people, materials, money etc), is planned, executed and controlled, and is constrained by limited resources (limited budget, people, equipment, time etc). Companies performing projects will generally sub-divide their projects into several phases or stages to provide better management control. Collectively these project phases are called the Project Life Cycle. Project Lifecycle consists of four phases: 1. Project Initiation 2. Project Planning 3. Project Execution 4. Project Closure

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Fig: Four Phases of Project LifeCycle

Fig: Project LifeCycle

1. Project Initiation
The initiation phase essentially involves the project ‘start-up’. It is the phase within which the business problem or opportunity is identified, the solution is agreed, a project formed to produce the solution and a project team appointed. The following diagram depicts the activities undertaken:
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1.1

Develop Business Case

Once a business problem or opportunity has been identified, a Business Case is prepared. This includes: A detailed definition of the problem or opportunity An analysis of the potential solution options available. For each option, the potential benefits, costs, risks and issues are documented. A formal feasibility study may be commissioned if the feasibility of any particular solution option is not clear The recommended solution and a generic implementation plan. The Business Case is approved by the Project Sponsor and the required funding is allocated to proceed with the project. 1.2

Perform Feasibility Study

At any stage during (or after) the development of a Business Case, a formal Feasibility Study may be commissioned. The purpose is to assess the likelihood of a particular solution option’s achieving the benefits outlined in the Business Case. The Feasibility Study will also investigate whether the forecast costs are reasonable, the solution is achievable, the risks are acceptable and/or any likely issues are avoidable.

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1.3

Establish Project Charter

After the solution has been agreed and funding allocated, a project is formed. The Project Charter defines the vision, objectives, scope and deliverables for the project. It also provides the organization structure (roles and responsibilities) and a summarized plan of the activities, resources and funding required to undertake the project. Finally, any risks, issues, planning assumptions and constraints are listed. 1.4

Appoint Project Team

At this point the scope of the project has been defined in detail and the project team are ready to be appointed. Although a Project Manager can be appointed at any stage of the project, s/he will need to be appointed prior to the establishment of the project team. The Project Manager documents a detailed Job Description for each project role and appoints a human resource to each role based on his/her relevant skills and experience. Once the team are ‘fully resourced’, the Project Office is ready to be set-up. 1.5

Set up Project Office

The Project Office is the physical environment within which the team will be based. Although it is usual to have one central project office, it is possible to have a ‘virtual project office’ environment, with project team members in various locations around the world. Regardless of the location, a successful project office environment will comprise the following components: Location (either physical or virtual) Communications (telephones, computer network, email, internet access, file storage, database storage and backup facilities) Documentation (methodology, processes, forms and registers) Tools (for accounting, project planning and risk modeling).
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1.6

Perform Phase Review

At the end of the Initiation Phase, a Phase review is performed. This is basically a checkpoint to ensure that the project has achieved its stated objectives as planned.

2. Project Planning
By this stage, the benefits and costs of the project have been clearly documented, the objectives and scope have been defined, the project team has been appointed and a formal project office environment established. It is now time to undertake detailed planning to ensure that the activities performed in the execution phase of the project are properly sequenced, resourced, executed and controlled.

2.1

Develop Project Plan

The first step is to document the Project Plan. A ‘Work Breakdown Structure’ (WBS) is identified, which includes a hierarchical set of phases, activities and tasks to be undertaken on the project. After the WBS has been agreed, an assessment of the effort required to undertake the activities and tasks is made. The activities and tasks are sequenced, resources are allocated and a

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detailed project schedule is formed. This project schedule will become the primary tool for the Project Manager to assess the progress of the project. 2.2

Develop Resource Plan

Immediately after the Project Plan is formed, it is necessary to allocate the resources required to undertake each of the activities and tasks within the Project Plan. Although general groups of resources may have already been allocated to the Project Plan, a detailed resource assessment is required to identify the: Types of resources (labor, equipment and materials) Total quantities of each resource type Roles, responsibilities and skill-sets of all human resources Items, purposes and specifications of all equipment resource Items and quantities of material resource. A schedule is assembled for each type of resource so that the Project Manager can assess the resource allocation at each stage in the project. 2.3

Develop Financial Plan

Similar to the Resource Plan, a Financial Plan is prepared to identify the quantity of money required for each stage in the project. The total cost of labor, equipment and materials is quantified and an expense schedule is defined which provides the Project Manager with an understanding of the forecast spending vs. the actual spending throughout the project. Preparing a detailed Financial Plan is extremely important as the project’s success will depend on whether or not it is delivered within the ‘time, cost and quality’ estimates for this project.

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2.4

Develop Quality Plan

Meeting the quality expectations of the customer is critical to the success of the project. To ensure that the quality expectations are clearly defined and can reasonably be achieved, a Quality Plan is documented. The Quality Plan: Defines what quality means in terms of this project Lists clear and unambiguous quality targets for each deliverable. Each quality target provides a set of criteria and standards which must be achieved to meet the expectations of the customer Outlines a plan of activities which will assure the customer that the quality targets will be met (i.e. a Quality Assurance Plan) Identifies the techniques used to control the actual level of quality of each deliverable as it is built (i.e. a Quality Control Plan). Finally, it is important to review the quality not only of the deliverables produced by the project but also of the management processes which produce them. A summary of each of the management processes undertaken during the execution phase is identified, including Time, Cost, Quality, Change, Risk, Issue, Procurement, Acceptance and Communications Management. 2.5

Develop Risk Plan

The foreseeable project risks are then documented within a Risk Plan and a set of actions to be taken formulated to both prevent each risk from occurring and reduce the impact of the risk should it eventuate. Developing a clear Risk Plan is an important activity within the planning phase as it is necessary to mitigate all critical project risks prior to entering the Execution phase of the project.

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2.6

Develop Acceptance Plan

The key to a successful project is gaining acceptance from the customer that each deliverable produced meets (or exceeds) his/ her requirements. To clarify the criteria used to judge each deliverable for customer acceptance, an Acceptance Plan is produced. The Acceptance Plan provides the criteria for obtaining customer acceptance, a schedule of acceptance reviews within which customer acceptance will be sought and a summary of the process used to gain acceptance of each deliverable from the customer. 2.7

Develop Communications Plan

Prior to the Execution phase, it is also necessary to identify how each of the stakeholders will be kept informed of the progress of the project. The Communications Plan identifies the types of information to be distributed, the methods of distributing information to stakeholders, the frequency of distribution and responsibilities of each person in the project team for distributing information regularly to stakeholders. 2.8

Develop Procurement Plan

The last planning activity within the Planning phase is to identify the elements of the Project which will be acquired from external suppliers to the project. The Procurement Plan provides a detailed description of the Products (i.e. goods and services) to be procured from suppliers, the justification for procuring each product externally, as opposed to from within the business, and the schedule for procurement. It also references the process for the selection of a preferred supplier (“Tender Process”) and the

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process for the actual order and delivery of the procured products (“Procurement Process”). 2.9

Contract Suppliers

Although external suppliers may be appointed at any stage of the project, it is usual to appoint suppliers after the Project Plans have been documented but prior to the Execution phase of the project. Only at this point will the Project Manager have a clear idea of the role of the supplier and the expectations for his/her delivery. A formal Tender Process is invoked to identify a short-list of interested suppliers and select a preferred supplier to meet the procurement needs of the project. The Tender Process involves creating a Statement of Work, a Request for Information and Request for Proposal to obtain sufficient information from each potential supplier to select a preferred supplier. Once a preferred supplier has been chosen, a Supplier Contract is agreed for the delivery of the requisite product. 2.10 Perform Phase Review At the end of the Planning phase, a Phase review is performed. This is basically a checkpoint to ensure that the project has achieved its stated objectives as planned.

3. Project Execution
The Execution phase is typically the longest phase of the project (in terms of duration). It is the phase within which the deliverables are physically constructed and presented to the customer for acceptance. To ensure that the customer’s requirements are met, the Project Manager monitors and
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controls the activities, resources and expenditure required to build each deliverable throughout the execution phase. A number of management processes are also undertaken to ensure that the project proceeds as planned.

3.1

Build Deliverables

This phase requires the physical construction of each deliverable for acceptance by the customer. The actual activities undertaken to

construct each deliverable will vary, depending on the type of project (e.g. engineering, building computer

development,

infrastructure or business process re-engineering projects).

Deliverables may be constructed in a ‘waterfall’ fashion (where each activity is undertaken in sequence until the deliverable is finished) or an ‘iterative’ fashion (where iterations of each deliverable are constructed until the deliverable meets the requirements of the customer). Regardless of the method used to construct each deliverable, careful monitoring and control processes should be employed to ensure that the quality of the final deliverable meets the acceptance criteria set by the customer.
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3.2

Monitor and Control

Whilst the Project Team are physically producing each deliverable, the Project Manager implements a series of management processes to monitor and control the activities being undertaken. An overview of each management process follows. Time Management Time Management is the process within which time spent by staff undertaking project tasks is recorded against the project. As time is a scarce resource on projects, it is important to record the time spent by each member of the team on a Timesheet to enable the Project Manager to control the level of resource allocated to a particular activity. A Timesheet Register provides a summary of the time currently spent on the project and enables the Project Plan to be kept fully up to date. Cost Management Cost Management is the process by which costs (or expenses) incurred on the project are formally identified, approved and paid. Expense Forms are completed for each set of related project expenses such as labor, equipment and materials costs. Expense Forms are approved by the Project Manager and recorded within an Expense Register for audit purposes. Quality Management Quality is defined as “the level of conformance of the final deliverable to the customer’s requirements”. Quality Management is the process by which the quality of the deliverables is assured and controlled for the project, using

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Quality Assurance and Quality Control techniques. Quality reviews are frequently undertaken and the results recorded within a Quality Register. Change Management Change Management is the process by which changes to the project’s scope, deliverables, timescales or resources are formally defined, evaluated and approved prior to implementation. A core aspect of the Project Manager’s role is to manage change within the project successfully. This is achieved by understanding the business and system drivers requiring the change, documenting the benefits and costs of adopting the change and formulating a structured plan for implementing the change. To formally request a change it is often necessary to complete a Change Form. The change request details may then be recorded within a Change Register. Risk Management Risk Management is the process by which risks to the project (e.g. to the scope, deliverables, timescales or resources) are formally identified, quantified and managed during the project. A project risk may be identified at any stage of the project by completing a Risk Form and recording the relevant risk details within the Risk Register. Issue Management Issue Management is the method by which issues currently affecting the ability of the project to produce the required deliverable are formally managed. After completion of an Issue Form (and logging the details within the Issue Register), each issue is evaluated by the Project Manager and a set of actions undertaken to resolve the issue at hand.

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Procurement Management Procurement Management is the process by which product is sourced from an external supplier. To request the delivery of product from a supplier, a Purchase Order must be approved by the Project Manager and sent to the supplier for confirmation. The status of the purchase is then tracked using a Procurement Register until the product has been delivered and accepted by the project team. Acceptance Management Acceptance Management is the process by which deliverables produced by the project are reviewed and accepted by the customer as meeting his/her specific requirements. To request the acceptance of a deliverable by the customer, an Acceptance Form is completed. The Acceptance Form describes the criteria from which the deliverable has been produced and the level of satisfaction of each criterion listed. Communications Management Communications Management is communications communicated messages within a are project.

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communicating the status of the project is via a Project Status Report. Each communication item released to the project stakeholders is captured within a Communications Register. 3.3

Perform Phase Review

At the end of the Execution Phase, a Phase review is performed. This is basically a checkpoint to ensure that the project has achieved its stated objectives as planned.
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4. Project Closure
Following the completion of all project deliverables and acceptance by the customer, a successful project will have met its objectives and be ready for formal closure. Project Closure is the last phase in the project and must be conducted formally so that the business benefits delivered by the project are fully realized by the customer.

4.1

Perform Project Closure

Project Closure involves undertaking a series of activities to wind up the project, including: Assessing whether the project completion criteria have been met Identifying any outstanding items (activities, risks or issues) Producing a hand-over plan to transfer the deliverables to the customer environment Listing the activities required to hand over documentation, cancel supplier contracts and release project resources to the business Communicating closure to all stakeholders and interested parties. A Project Closure Report is submitted to the Customer and/or Project Sponsor for approval. The Project Manager is then responsible for undertaking each of the activities identified within the Project Closure Report on time and according to budget. The project is closed only when all activities identified in the Project Closure Report have been completed.

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4.2

Review Project Completion

The final activity undertaken on any project is a review of its overall success by an independent resource. Success is determined by how well it performed against the defined objectives and conformed to the management processes outlined in the planning phase. To determine performance, a number of questions are posed. For example: Did it result in the benefits defined in the Business Case? Did it achieve the objectives outlined in the Project Charter? Did it operate within the scope of the Project Charter? Did the deliverables meet the criteria defined in the Quality Plan? Was it delivered within the schedule outlined in the Project Plan? Was it delivered within the budget outlined in the Financial Plan? To determine conformance, a review is undertaken of the level of conformity of the project activities to the management processes outlined in the Quality Plan. The above results, key achievements and lessons learnt are documented within a Post Implementation Review report and presented to the Project Sponsor for approval.

References: www.scribd.com www.method123.com Fundamentals of Project Management by James Lewis Project Management AIOU ####################

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QUESTION 2
Every business activity as carried out for profit making and one of the principles of profit making is cost minimization and effective cost management. All the business activities need strong financial support for its smooth and effective completion. Financial resources are the key factors among all the given resource of any business organization, therefore the success of a project depends on effective cost management. You are required to write a detailed note on project cost management. (20)

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PROJECT COST MANAGEMENT
“Project Cost Management includes the processes required to ensure that the project is completed within the approved budget.” Cost is one of the three pillars supporting project success or failure, the other two being schedule and performance. Projects that go significantly “over budget” are often terminated without achieving the project goals because stakeholders simply run out of money or perceive additional expenditures as “throwing good money after bad.” Projects that stay within budget are the exception, not the rule. A project manager who can control costs while achieving performance and schedule goals should be viewed as somewhat of a hero, especially when we consider that cost, performance, and schedule are closely interrelated. Cost management consists of the four main activities or processes as shown in Figure below. 1. Resource Planning: determining what resources (people, equipment, materials) and what quantities of each should be used to perform project activities. 2. Cost Estimating: developing an approximation (estimate) of the costs of the resources needed to complete project activities. 3. Cost Budgeting: allocating the overall cost estimate to individual work items. 4. Cost Control: controlling changes to the project budget.

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Fig: Cost Management Process These processes interact with each other and with the processes in the other knowledge areas as well. Each process may involve effort from one or more individuals or groups of individuals based on the needs of the project. Each process generally occurs at least once in every project phase. Project cost management is primarily concerned with the cost of the resources needed to complete project activities. However, project cost management should also consider the effect of project decisions on the cost of using the project product. For example, limiting the number of design reviews may reduce the cost of the project at the expense of an increase in the customer’s operating costs. This broader view of project cost management is often called life-cycle costing. On some projects, especially smaller ones, resource planning, cost estimating, and cost budgeting are so tightly linked that they are viewed as a single process (e.g., they may be performed by a single individual over a relatively short period of time). They are presented here as distinct processes because the tools and techniques for each are different. 1. Resource Planning Resource planning involves determining what physical resources (people, equipment, materials) and what quantities of each should be used to

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perform project activities. It must be closely coordinated with cost estimating. For example: A construction project team will need to be familiar with local building codes. Such knowledge is often readily available at virtually no cost by using local labor. However, if the local labor pool lacks experience with unusual or specialized construction techniques, the additional cost for a consultant might be the most effective way to secure knowledge of the local building codes. An automotive design team should be familiar with the latest in automated assembly techniques. The requisite knowledge might be obtained by hiring a consultant, by sending a designer to a seminar on robotics, or by including someone from manufacturing as a member of the team.

1.1

Inputs to Resource Planning

1. Work breakdown structure. The work breakdown structure (WBS) identifies the project elements that will need resources and thus is the primary input to resource planning. Any relevant outputs from other planning processes should be provided through the WBS to ensure proper control.

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2. Historical information. Historical information regarding what types of resources were required for similar work on previous projects should be used if available. 3. Scope statement. The scope statement contains the project justification and the project objectives, both of which should be considered explicitly during resource planning. 4. Resource pool description. Knowledge of what resources (people, equipment, material) are potentially available is necessary for resource planning. The amount of detail and the level of specificity of the resource pool description will vary. For example, during the early phases of an engineering design project, the pool may include “junior and senior engineers” in large numbers. During later phases of the same project, however, the pool may be limited to those individuals who are knowledgeable about the project as a result of having worked on the earlier phases. 5. Organizational policies. The policies of the performing organization regarding staffing and the rental or purchase of supplies and equipment must be considered during resource planning.

1.2

Tools and Techniques for Resource Planning

1. Expert judgment. Expert judgment will often be required to assess the inputs to this process. Such expertise may be provided by any group or individual with specialized knowledge or training and is available from many sources including: Other units within the performing organization. Consultants. Professional and technical associations. Industry groups. 2.Alternatives identification.

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1.3

Outputs from Resource Planning

Resource requirements. The output of the resource planning process is a description of what types of resources are required and in what quantities for each element of the work breakdown structure. These resources will be obtained either through staff acquisition or procurement.

2.

Cost Estimating

Cost estimating involves developing an approximation (estimate) of the costs of the resources needed to complete project activities. When a project is performed under contract, care should be taken to distinguish cost estimating from pricing. Cost estimating involves developing an assessment of the likely quantitative result—how much will it cost the performing organization to provide the product or service involved. Pricing is a business decision—how much will the performing organization charge for the product or service—that uses the cost estimate as but one consideration of many. Cost estimating includes identifying and considering various costing alternatives. For example, in most application areas, additional work during a design phase is widely held to have the potential for reducing the cost of the production phase. The cost estimating process must consider whether the cost of the additional design work will offset the expected savings.

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2.1

Inputs to Cost Estimating

1. Work breakdown structure: It will be used to organize the cost estimates and to ensure that all identified work has been estimated. 2. Resource requirements: 3. Resource rates: The individual or group preparing the estimates must know the unit rates (e.g., staff cost per hour, bulk material cost per cubic yard) for each resource in order to calculate project costs. If actual rates are not known, the rates themselves may have to be estimated. 4. Activity duration estimates: Activity duration estimates will affect cost estimates on any project where the project budget includes an allowance for the cost of financing (i.e., interest charges). 5. Historical information: Information on the cost of many categories of resources is often available from one or more of the following sources: Project files—one or more of the organizations involved in the project may maintain records of previous project results that are detailed enough to aid in developing cost estimates. In some application areas, individual team members may maintain such records. Commercial cost estimating databases—historical information is often available commercially. Project team knowledge—the individual members of the project team may remember previous actual or estimates. While such recollections may be useful, they are generally far less reliable than documented results.
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6. Chart of accounts: A chart of accounts describes the coding structure used by the performing organization to report financial information in its general ledger. Project cost estimates must be assigned to the correct accounting category.

2.2

Tools and Techniques for Cost Estimating

1. Analogous estimating: Analogous estimating, also called top-down estimating, means using the actual cost of a previous, similar project as the basis for estimating the cost of the current project. It is frequently used to estimate total project costs when there is a limited amount of detailed information about the project (e.g., in the early phases). Analogous estimating is a form of expert judgment. Analogous estimating is generally less costly than other techniques, but it is also generally less accurate. It is most reliable when (a) the previous projects are similar in fact and not just in appearance, and (b) the individuals or groups preparing the estimates have the needed expertise. 2. Parametric modeling: Parametric modeling involves using project characteristics (parameters) in a mathematical model to predict project costs. Models may be simple (residential home construction will cost a certain amount per square foot of living space) or complex (one model of software development costs uses 13 separate adjustment factors each of which has 5–7 points on it). Both the cost and accuracy of parametric models varies widely. They are most likely to be reliable when (a) the historical information used to develop the model was accurate, (b) the parameters used in the model are readily quantifiable, and (c) the model is scalable (i.e., it works as well for a very large project as for a very small one). 3. Bottom-up estimating: This technique involves estimating the cost of individual work items, then summarizing or rolling-up the individual estimates to get a project total. The cost and accuracy of bottom-up estimating is driven by the size of the individual work items: smaller work items increase both cost and accuracy.
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The project management team must weigh the additional accuracy against the additional cost. 4. Computerized tools: Computerized tools such as project management software and spreadsheets are widely used to assist with cost estimating. Such products can simplify the use of the tools described above and thereby facilitate rapid consideration of many costing alternatives.

2.3

Outputs from Cost Estimating

1. Cost estimates: Cost estimates are quantitative assessments of the likely costs of the resources required to complete project activities. They may be presented in summary or in detail. Costs must be estimated for all resources that will be charged to the project. This includes, but is not limited to, labor, materials, supplies, and special categories such as an inflation allowance or cost reserve. Cost estimates are generally expressed in units of currency (dollars, francs, yen, etc.) in order to facilitate comparisons both within and across projects. Other units such as staff hours or staff days may be used, unless doing so will misstate project costs (e.g., by failing to differentiate among resources with very different costs). In some cases, estimates will have to be provided using multiple units of measure in order to facilitate appropriate management control. Cost estimates may benefit from being refined during the course of the project to reflect the additional detail available. In some application areas, there are guidelines for when such refinements should be made and what degree of accuracy is expected. 2. Supporting detail: Supporting detail for the cost estimates should include: A description of the scope of work estimated. This is often provided by a reference to the WBS. Documentation of the basis for the estimate, i.e., how it was developed. Documentation of any assumptions made.
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An indication of the range of possible results, for example, $10,000 ± $1,000 to indicate that the item is expected to cost between $9,000 and $11,000. The amount and type of additional detail varies by application area. Retaining even rough notes may prove valuable by providing a better understanding of how the estimate was developed. 3. Cost management plan: The cost management plan describes how cost variances will be managed (e.g., different responses to major problems than to minor ones). A cost management plan may be formal or informal, highly detailed or broadly framed based on the needs of the project stakeholders. It is a subsidiary element of the overall project plan. 3.

Cost Budgeting

Cost budgeting involves allocating the overall cost estimates to individual work items in order to establish a cost baseline for measuring project performance.

3.1

Inputs to Cost Budgeting

1. Cost estimates. 2. Work breakdown structure. The work breakdown structure identifies the project elements that costs will be allocated to. 3. Project schedule. The project schedule includes planned start and expected finish dates for the project elements that costs will be allocated to.
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This information is needed in order to assign costs to the time period when the cost will be incurred.

3.2

Tools and Techniques for Cost Budgeting

1. Cost estimating tools and techniques: The tools and techniques already described used for developing project cost estimates are used to develop budgets for work items as well.

3.3

Outputs from Cost Budgeting

1. Cost baseline: The cost baseline is a time-phased budget that will be used to measure and monitor cost performance on the project. It is developed by summing estimated costs by period and is usually displayed in the form of an S-curve, as illustrated in Figure. Many projects, especially larger ones, may have multiple cost baselines to measure different aspects of cost performance. For example, a spending plan or cash flow forecast is a cost baseline for measuring disbursements.

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4.

Cost Control

Cost control is concerned with (a) influencing the factors which create changes to the cost baseline to ensure that changes are beneficial, (b) determining that the cost baseline has changed, and (c) managing the actual changes when and as they occur. Cost control includes: Monitoring cost performance to detect variances from plan. Ensuring that all appropriate changes are recorded accurately in the cost baseline. Preventing incorrect, inappropriate, or unauthorized changes from being included in the cost baseline. Informing appropriate stakeholders of authorized changes. Cost control includes searching out the “whys” of both positive and negative Variances. It must be thoroughly integrated with the other control processes (scope change control, schedule control, quality control). For example, inappropriate responses to cost variances can cause quality or schedule problems or produce an unacceptable level of risk later in the project.

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4.1

Inputs to Cost Control

1. Cost baseline. 2. Performance reports: Performance reports provide information on cost performance such as which budgets have been met and which have not. Performance reports may also alert the project team to issues which may cause problems in the future. 3. Change requests: Change requests may occur in many forms—oral or written, direct or indirect, externally or internally initiated, and legally mandated or optional. Changes may require increasing the budget or may allow decreasing it. 4. Cost management plan.

4.2 Tools and Techniques for Cost Control
1. Cost change control system. A cost change control system defines the procedures by which the cost baseline may be changed. It includes the paperwork, tracking systems, and approval levels necessary for authorizing changes. The cost change control system should be integrated with the overall change control system. 2. Performance measurement. Performance measurement techniques help to assess the magnitude of any variations which do occur. Earned value analysis is especially useful for cost control. An important part of cost control is to determine what is causing the variance and to decide if the variance requires corrective action. 3. Additional planning. Few projects run exactly according to plan. Prospective changes may require new or revised cost estimates or analysis of alternative approaches. 4. Computerized tools. Computerized tools such as project management software and spreadsheets are often used to track planned costs vs. actual costs, and to forecast the effects of cost changes.

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4.3 Outputs from Cost Control
1. Revised cost estimates: Revised cost estimates are modifications to the cost information used to manage the project. Appropriate stakeholders must be notified as needed. Revised cost estimates may or may not require adjustments to other aspects of the overall project plan. 2. Budget updates: Budget updates are a special category of revised cost estimates. Budget updates are changes to an approved cost baseline. These numbers are generally revised only in response to scope changes. In some cases, cost variances may be so severe that “rebaselining” is needed in order to provide a realistic measure of performance. 3. Corrective action: Corrective action is anything done to bring expected future project performance into line with the project plan. 4. Estimate at completion: An estimate at completion (EAC) is a forecast of total project costs based on project performance. The most common forecasting techniques are some variation of: EAC = Actuals to date plus the remaining project budget modified by a performance factor, often the cost performance index. This approach is most often used when current variances are seen as typical of future variances. EAC = Actuals to date plus a new estimate for all remaining work. This approach is most often used when past performance shows that the original estimating assumptions were fundamentally flawed, or that they are no longer relevant due to a change in conditions. EAC = Actuals to date plus remaining budget. This approach is most often used when current variances are seen as atypical and the project management team’s expectation is that similar variances will not occur in the future. Each of the above approaches may be the correct approach for any given work item. 5. Lessons learned: The causes of variances, the reasoning behind the corrective action chosen, and other types of lessons learned from cost
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control should be documented so that they become part of the historical database for both this project and other projects of the performing organization.

References: www.method123.com A Guide to the Project Management Body of Knowledge Condensed GSAM Handbook

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QUESTION 3
Write a detailed note on “Project Quality Management.” (20)

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PROJECT QUALITY MANAGEMENT
Quality management is the process for ensuring that all project activities necessary to design, plan and implement a project are effective and efficient with respect to the purpose of the objective and its performance. Project quality management (QM) is not a separate, independent process that occurs at the end of an activity to measure the level of quality of the output. It is not purchasing the most expensive material or services available on the market. Quality and grade are not the same, grade are characteristics of a material or service such as additional features. A product may be of good quality (no defects) and be of low grade (few or no extra features). Quality management is a continuous process that starts and ends with the project. It is more about preventing and avoiding than measuring and fixing poor quality outputs. It is part of every project management processes from the moment the project initiates to the final steps in the project closure phase. QM focuses on improving stakeholder’s satisfaction through continuous and incremental improvements to processes, including removing unnecessary activities; it achieves that by the continuous improvement of the quality of material and services provided to the beneficiaries. It is not about finding and fixing errors after the fact, quality management is the continuous monitoring and application of quality processes in all aspects of the project.
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The Purpose of Management of Quality
Quality management is not an event - it is a process, a consistently high quality product or service cannot be produced by a defective process. Quality management is a repetitive cycle of measuring quality, updating processes, measuring, updating processes until the desired quality is achieved. The main principle of project quality management is to ensure the project will meet or exceed stakeholder’s needs and expectations. The project team must develop a good relationship with key stakeholders, specially the donor and the beneficiaries of the project, to understand what quality means to them. One of the causes for poor project evaluations is the project focuses only in meeting the written requirements for the main outputs and ignores other stakeholder needs and expectations for the project.

Quality must be viewed on an equal level with scope, schedule and budget. If a project donor is not satisfied with the quality of how the project is delivering the outcomes, the project team will need to make adjustments to scope, schedule and budget to satisfy the donor’s needs and expectations. To deliver the project scope on time and on budget is not enough, to achieve stakeholder satisfaction the project must develop a good working relationship with all stakeholders and understand their stated or implied needs. Project quality management consists of four main processes: Quality Planning Quality Assurance
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Quality Control Quality Improvements These processes interact with each other as well as with the processes of other knowledge areas Each process involves an effort of one or more individual or group of individuals based on the need of the project. Each process occurs at least once in every project phase during the project life cycle.

1. QUALITY PLANNING
Quality Planning is identifying which quality standards are relevant to the project and determining how to satisfy them. Quality Planning involves identifying with quality standards It is a key facilitating process during the Project planning Process In modern quality management quality is planned in and not inspected in Prior to the development of ISO 9000 series, quality planning concepts were widely discussed as part of quality assurance.

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Quality Planning Flowchart
INPUTS TOOLS AND TECHNIQUES
1-Quality policy 2- Scope statement 3- Product description 4- Standards and regulations 5- Other process outputs 1- Benefit/ cost analysis 2- Benchmarking 3- flowcharting 4- Design of experiments 1-Quality Management plan 2- operational; definitions 3- checklists 4-inputs to other processes

OUTPUTS

Quality Planning Inputs
Quality policy the over all intentions and direction of an organization with regard to quality, as formally expressed by the top management. In the case of a joint venture, a quality policy for the individual project should be developed. The management team is responsible for dissipating the quality policy to all project stakeholders through appropriate information distribution channels. Scope Statement The scope statement is a key input to quality planning because it documents major project deliverables as well as project objectives which serve to define important stakeholder requirements.

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Product description Although the elements of the product description may be embodied in the scope statement, the product description often contains details of technical issues and other concerns that may affect quality planning. Standards and Regulations The project management team any application-area-specific standards or regulations that may affect the project. Other Process Outputs In addition to the scope statement and product description, processes in other knowledge areas may produce outputs that should be considered as part of the quality planning. Example: procurement planning outputs may identify contractor quality requirements that should be reflected in the overall Quality Management Plan.

Tools and Techniques for Quality Planning
Benefit / cost analysis The planning process must consider benefit/cost tradeoffs. The Primary Benefit: Is less work, higher productivity, lower costs, and increased stakeholder satisfaction. The Primary Cost: Is the expanses associated with PQM activities. Note: it is elementary that the benefit should outweigh the cost. Benchmarking Benchmarking involves comparing actual or planned project practices to those of other projects to generate ideas to: 1- Generate ideas for improvement 2- provide a standard for measurement of performance

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Note: other projects compared may be within the same organization or out side and may be within the same application area or in another. Flow charting The flowcharting techniques in quality management generally include  cause and effect diagram.  System or process flow charts. Flowcharting can help in anticipating probable quality problems and thus helps to develop approaches for dealing with them. Design of Experiments This is an analytical technique which aims to define variables that have most influence on the overall outcome. This technique is commonly applicable to the product of the project issues. However this technique can also be used in project management issues such as cost and schedule tradeoffs to allow for optima solutions.

Outputs from Quality Planning
Quality Management Plan The quality management plan should describe how a project management team will implement its quality policy. Also called Quality System, (in ISO terminology), the plan should define :  The organizational structure  Roles and responsibilities  Resources needed for implementation of quality management The Quality Plan should address:  Quality Control of the project  Quality Assurance  Quality Improvement of the project
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Note: the project quality plan can be highly detailed or broadly framed based on the needs of the project. Operational Definitions An operational definition describes what something is and how it is measured by the quality control process. For example:  the project management team must indicate the start and end of every activity in a detailed schedule.  Weather the whole activity or certain deliverables are to be measured. Operational definitions are also called Metrics in some areas of application. Checklists A checklist is a structured tool used to verify that a set of required steps or requirements have been performed. Many organizations have standard checklists to ensure consistency of frequently performed activities. Inputs to Other Processes The quality planning process may identify need for further activity in another area.

2. QUALITY ASSURANCE

Quality assurance is evaluating the overall project performance on a regular basis to provide a confidence that the project will satisfy the relevant quality standards.

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Quality assurance encompasses all the planned and systematic activity implemented in a quality system to provide confidence that the project will satisfy the relevant quality standards Quality assurance is provided by a Quality Assurance dept. Quality assurance can be INERNAL ( from the project management team to the performing organization) Quality assurance can be EXTERNAL (provided to the customer and other parties actively involved in the work of the project

Quality Assurance Flowchart
INPUTS TOOLS AND TECHNIQUES
1-Quality management plan 2- Results of quality control measurements 3- Operational definitions 1- Quality planning tools and techniques 2- Quality audits 3- The PDA Cycle 1-Quality improvement

OUTPUTS

Inputs to Quality Assurance
Quality management plan as previously described

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Results of quality control measurements which are records of quality control testing and measurement in a format of comparison or analysis Operational definitions as previously described in the output of the Quality Planning

Tools and Techniques for Quality Assurance
Quality Planning tools and techniques , which can be used for quality assurance as well. Quality Audits which are a structured review of other quality management activities:  they may be timely or carried out randomly.  They may be carried out by properly trained Internal-auditors or by third parties such as quality systems registration agencies. The PDCA Cycle The most popular tool used to determine quality assurance is the Shewhart Cycle. This cycle for quality assurance consists of four steps: Plan, Do, Check, and Act. These steps are commonly abbreviated as PDCA. The four quality assurance steps within the PDCA model stand for: Plan: Establish objectives and processes required to deliver the desired results. Do: Implement the process developed. Check: Monitor and evaluate the implemented process by testing the results against the predetermined objectives Act: Apply actions necessary for improvement if the results require changes. The PDCA is an effective method for monitoring quality assurance because it analyzes existing conditions and methods used to provide the product or service to beneficiaries. The goal is to ensure that excellence is inherent in every component of the process. Quality assurance also helps determine whether the steps used to provide the
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product or service is appropriate for the time and conditions. In addition, if the PDCA cycle is repeated throughout the lifetime of the project helping improve internal efficiency.

Outputs from Quality Assurance
Quality Improvement Quality improvement includes taking action to increase the effectiveness and efficiency of the project to be provide added benefits to the stakeholders of that project . In many cases the implementation of quality improvements will require preparation of change requests or taking corrective actions and will be handled according to procedure for overall change control

3. QUALITY CONTROL
Quality Control is the monitoring of specific project results to determine if they comply with the relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance. Quality control involves monitoring specific project results to determine if they comply with relevant standards and identifying ways to eliminate causes of unsatisfactory results. Project results mentioned include both PRODUCT results such as deliverables and MANAGEMENT results such as cost and schedule performance Quality control is often performed by a quality control department

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The project management team should have a working knowledge of statistical quality control especially sampling and probability to help evaluate and control outputs.

Quality Control Flowchart
INPUTS TOOLS AND TECHNIQUES
1-Work results 2- Quality management plan 3- Operational definitions 4- Checklists 1- Inspection 2- Control charts 3- Pareto diagram 4- Statistical sampling 5- Flowcharting 6-Trend analysis 1-Quality improvement 2- Acceptance decisions 3- Rework 4-Process adjustments

OUTPUTS

Inputs to Quality Control
Work results : including both product results and process results. The quality management plan Operational definitions Checklists

Tools and Techniques for Quality Control
Inspection

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Inspection includes activities such as measuring, examining and testing undertaken to determine whether results conform to requirements. Inspection can be carried out on the level of a single activity or a final product. Inspections can be called reviews, product reviews, audits, and walkthrough. Control Charts These charts are graphical representations that display the result of a process over time and are used to determine if the process is “in control”. When in control the process should not be adjusted , however it may be changed in order to provide improvements. Control charts may be used to monitor any type of output variable. Control charts are most often used to monitor repetitive activity in production but can also be used to monitor cost and schedule variances.

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Pareto Charts Pareto Charts based on Pareto’s rule, which states that 80 percent of the problems are often due to 20 percent of the causes. The assumption is that most of the results in any situation are determined by a small number of causes and helps identify the vital few contributors that account for most quality problems. The chart is a form of histogram that orders the data by frequency of occurrence; it shows how many defects were generated by a type of category of identified cause. For example to determine the errors in the collection of beneficiary data the project team identified five causes and for each cause the frequency they contained errors, the data is plotted as shown in the chart below, the bars represent each category and the line the cumulative percentage of the errors, the chart allows to identify that 80% of the errors could be reduced just by improving the collection of data in two categories instead of focusing efforts to correct all categories.

Statistical Sampling Statistical sampling involves choosing a part of a population of interest for inspection. Appropriate sampling can effectively reduce the cost of quality control.

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There is a vast body of knowledge related to statistical sampling and therefore the management must be aware of the various sampling techniques. Flowcharting Flowcharting is used in quality control to help analyze how a problem occurs. Trend Analysis The trend analysis involves the use of mathematical techniques to forecast future outcomes based on historical results it is often used to monitor:  Technical performance – how many defects have been identified and how many remain uncorrected.  Cost and schedule performance – how many activities in a certain period were completed with significant variances.

Outputs for Quality Control
Quality improvement Acceptance decisions, where the inspected items will either be accepted or rejected and those rejected may be reworked. Rework, which is an action taken to bring defects or nonconforming items into compliance with requirements and specifications. Rework is a frequent cause of project over-runs and the project management team must make an effort to minimize it. Completed Checklists, which become a part of a project record when they are used Process Adjustments, which involves immediate corrective or preventive action as a result of quality control measurements. In some cases the adjustment may need to be handled according to procedures for overall change control.

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4. QUALITY IMPROVEMENT

It is the systematic approach to the processes of work that looks to remove waste, loss, rework, frustration, etc. in order to make the processes of work more effective, efficient, and appropriate. Quality improvement refers to the application of methods and tools to close the gap between current and expected levels of quality by understanding and addressing system deficiencies and strengths to improve, or in some cases, re-design project processes. A variety of quality improvement approaches exists, ranging from individual performance improvement to redesign of entire project processes. These approaches differ in terms of time, resources, and complexity, but share the same four steps in quality improvement: Identify what you want to improve; the project using the data found in the quality control process identifies the areas that need improvement. Analyze the problem or system, the team then investigates the causes for the problem and its implications to the project, the causes may be internal or external to the project. Develop potential solutions or changes that appear likely to improve the problem or system, the team brainstorms ideas and potential solutions to the problem, taking in consideration its impact to the

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project schedule and budget. After careful considerations the team decides and chooses the best alternative. Test and implement the solutions. The team may decide to test the solution on a small scale to verify that it is capable of fixing the problem, it testes for the initial assumptions made about the problem and once it confirms that the solution is a viable alternative, it then proceeds to implement in a full scale the solution.

Cost of Quality
The cost of quality is the sum of costs a project will spend to prevent poor quality and any other costs incurred as a result of outputs of poor quality. Poor quality is the waste, errors, or failure to meet stakeholder needs and project requirements. The costs of poor quality can be broken down into the three categories of prevention, appraisal, and failure costs: Prevention costs: These are planned costs an organization incurs to ensure that errors are not made at any stage during the delivery process of that product or service to a beneficiary. Examples of prevention costs include quality planning costs, education and training costs, quality administration staff costs, process control costs, market research costs, field testing costs, and preventive maintenance costs. The cost of preventing mistakes are always much less than the costs of inspection and correction. Appraisal costs: These include the costs of verifying, checking, or evaluating a product or service during the delivery process. Examples of appraisal costs include receiving or incoming inspection costs, internal production audit costs, test and inspection costs, instrument
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maintenance costs, process measurement and control costs, supplier evaluation costs, and audit report costs. Failure costs: A project incurs these costs because the product or service did not meet the requirements and had to be fixed or replaced, or the service had to be repeated.

References: www.pm4dev.com PMI body of knowledge

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QUESTION 4
There are different levels of management in an organization and every level tries to meet its assigned goals. In every project all the levels of management act jointly for the successful completion of the project. Compare and evaluate the role of these levels, also explain the conflict that can arise between these levels with your proposed solutions of these problems. (20)

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PROJECT CONFLICT MANAGEMENT
Conflict in project management is inevitable. The potential for conflict in information systems development projects is usually high because it involves individuals from different backgrounds and orientations working together to complete a complex task. The cause of conflict in team projects can be related to differences in values, attitudes, needs, expectations, perceptions, resources, and personalities. Proper skills in dealing with conflict can assist project managers and other organization members to handle and effectively resolve conflicts which can lead to a more productive organization as a whole.

Project Management Overview
Project management is a methodological approach to achieving agreed upon results within a specified time frame with defined resources. It involves applying knowledge, skills, tools, and techniques to a wide range of activities in order to meet the requirements of a project. The major objectives of project management include performance, cost, and time goals. The focus is to meet customer expectations, deliver projects within budget, and complete projects on time. Project management is helpful in achieving these objectives by organizing, planning, monitoring, controlling, and correcting the project activities. These activities consist of creating a workable project environment, keeping the work environment healthy, planning the essential activities to build the information system or product, and controlling execution of the plan.

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Using project management principles brings value to an organization. Applying these principles give managers the ability to establish success measures, quantify value proportionate with cost, use optimal organizational resources, allow customer focus and alignment, incorporate quality principles, implement the practice of strategic plans, resolve problems more quickly, work within the scope of the project, address future risk before becoming a problem, and create a higher quality product the first time. The time and resources put into project management will make up for the cost over the life of the project. Project management relies on proven and repeatable processes and techniques. These processes and techniques are utilized to coordinate resources to accomplish predictable results. Although success is never guaranteed, a project is more likely to be successful when conventional project management processes are practiced. The four phases of the project management process are explained below. 1. Project Initiation The first phase of the process involves performing activities to evaluate the project size, scope, and degree of difficulty and to establish procedures for supporting later project activities. Examples of activities at this phase are forming a project initiation team, building the customer relationship, developing effective management procedures, and constructing a project workbook. 2. Project Planning The second phase of the process involves defining clear, distinct activities and work required to complete the activities for each individual project. Examples of activities at this phase are defining the project scope, defining the work breakdown structure, estimating resource requirements, outlining communication procedures among managers,

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team members, and the customer, identifying and evaluating risk, and developing a Baseline Project Plan. 3. Project Execution The third phase of the process involves implementing the plans created in the earlier phases, Project Initiation and Project Planning. Examples of activities at this phase are executing the baseline plan, managing changes to the baseline plan, monitoring project progress, and communicating project status to managers, team members, and the customer. 4. Project Closedown The final phase of the process involves bringing the project to an end. Examples of activities at this phase are evaluating team members, conducting final project reviews, and closing the customer contract. The project manager is responsible for carrying out the initiation, planning, execution, and closedown phases of a project. The success of a project relies strongly on the project manager. The role of this person is to evaluate project feasibility and to create the plan of activities required to meet the objectives. This individual must be able to build an environment in which the project can be executed while protecting the environment from factors that could impede progress, planning the work that has to be completed to reach the goal, and keeping the course of the project in control. It is important for a project manager to possess a diverse set of skills - management, leadership, technical, customer relationship, and conflict management. Managers spend 42% of their time on reaching agreement with others when conflict occurs. Conflict management within a team environment requires the ability to solve problems, set goals, compromise, settle personality
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differences, and resolve conflicts. Training for project managers in this area is necessary for their success, as they are typically responsible for handling conflict during a project. The remainder of this paper will address conflict and its resolution in project management.

Understanding Conflict
“A process that begins when one party perceives that another party has negatively affected, or is about to negatively affects something that first cares about.”

“Conflict occurs when there are two or more competing responses to a single event.”

“Is a process that begins when one party perceives that has negatively affected, or is about to negatively affect, something that the first party cares about.” Conflict is viewed as a cycle: "As with any social process, there are causes; also, there is a core process, which has results or effects. These effects feed back to effect the causes." To understand conflict further, the situation must include elements of interdependence, emotions, perceptions, and behaviors. For example, conflict occurs between parties whose tasks are interdependent, who are angry with each other, who perceive the other party as being at fault, and whose actions cause a business problem. Conflict can be constructive and healthy for an organization. Constructive conflict occurs when people change and grow personally from the conflict, involvement of the individuals affected by the conflict is increased,

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cohesiveness is formed among team members, and a solution to the problem is found. However, if conflict is not managed properly, it can be detrimental to an organization by threatening organizational unity, business partnerships, team relationships, and interpersonal connections. Deconstructive conflict occurs when a decision has not been found and the problem remains, energy is taken away from more important activities or issues, morale of teams or individuals is destroyed, and groups of people or teams are polarized. Destructive conflict has a predictable pattern known as the Drama Triangle. By learning how to identify these unproductive roles and how to effectively handle each role player, managers can prevent some conflicts from occurring and resolve those that do. Most individuals know how to assume the following three roles: 1. Persecutor refers to a person who uses aggressive behavior against another person, attacking the intended victim. An attack can be direct or indirect and be physical, verbal, or both. The persecutor's actions deliver a message that "you are not okay" while making the persecutor feel righteous and superior. 2. Victim refers to a person who uses nonassertive behavior so others view them as "I'm not okay." This behavior encourages others to either rescue or persecute the victim. Victims will feel helpless, inadequate, sad, scared, or guilty. The victim role is often used because the individual is feeling stressed, has low self-esteem, or is being persecuted by another. 3. Rescuer refers to a person who uses either nonassertive or agressive behavior. Individuals become rescuers because they will not say "no" and unwillingly assume the responsibility of solving the victim's problem. In contrast, others will assume the rescuer role to demonstrate superiority over the victim.

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It is important for a project manager to understand the dynamics of conflict before being able to resolve it. The internal characteristics of conflict include perception of the goal, perception of the other, view of the other's actions, definition of problem, communication, and internal group dynamics.

What is Conflict Management?
Conflict may be defined as a struggle or contest between people with opposing needs, ideas, beliefs, values, or goals. Conflict on teams is inevitable; however, the results of conflict are not predetermined. Conflict might escalate and lead to non-productive results, or conflict can be beneficially resolved and lead to quality final products. Therefore, learning to manage conflict is integral to a high performance team. Although very few people go looking for conflict, more often than not, conflict results because of miscommunication between people with regard to their needs, ideas, beliefs, goals, or values. Conflict management is the principle that all conflicts cannot necessarily be resolved, but learning how to manage conflicts can decrease the odds of non productive escalation. Conflict management involves acquiring skills related to conflict resolution, self-awareness about conflict modes, conflict communication skills, and establishing a structure for management of conflict in your environment.

How do people respond to conflict? Fight or Flight?
Physiologically we respond to conflict in one of two ways - we want to “get away from the conflict” or we are ready to “take on anyone who comes our way.” Think for a moment about when you are in conflict. Do you want to leave or do you want to fight when a conflict presents itself? Neither physiological response is good or bad - it’s personal response. What is

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important to learn, regardless of our initial physiological response to conflict, is that we should intentionally choose our response to conflict. Whether we feel like we want to fight or flee when a conflict arises, we can deliberately choose a conflict mode. By consciously choosing a conflict mode instead of to conflict, we are more likely to productively contribute to solving the problem at hand.

STRATEGIES FOR CONFLICT MANAGEMENT
Larson and Gray’s list of five strategies for managing dysfunctional conflict provides a good summary of approaches. Mediation: The goal is to identify multiple possible alternatives and to mutually select one that is acceptable to all involved parties and in the interest of project objectives. Arbitration: This strategy requires the project manager to provide a safe and productive opportunity for the conflicted parties to air their disagreements. After careful attention and fully listening to each party, the project manager should formulate, define, and provide a solution to the parties. This strategy is based on the forcing approach to conflict described earlier. Arbitration can often be effectively combined with mediation by forcing an initial conflict solution and then allowing the parties to negotiate to a more mutually acceptable alternative. Control: Based on the smoothing approach described earlier, this strategy seeks to bring tension and emotions down to a level at which productive discussion

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and negotiation can occur. Humour is often an effective tool, as well as the use of temporary breaks or time-outs in the discussions between conflicted parties. Acceptance: The decision can be made that the conflict consequences are negligible relative to project objectives and, therefore, require no action. This strategy carries significant risk of later escalation and should be combined with specific plans for monitoring the situation to ensure that the conflict remains at an acceptable level. Elimination: Finally, the elimination strategy is reserved for those conflicts that have become so dysfunctional that the project can no longer tolerate any impacts from them. Often a last resort, elimination involves the removal of the conflicted parties from involvement with the project.

Factors affecting Conflict Modes
Gender Self-concept Expectations Situation Position (Power) Practice Determining the best mode Communication skills Life experiences

APPROACHES TO CONFLICT RESOLUTION
In Project Management: A Systems Approach to Planning, Scheduling, and Controlling, five modes for conflict resolution are explained and the

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situations when they are best utilized are identified. These modes are Confronting, Compromising, Smoothing, Forcing, and Avoiding.

The Owl (CONFRONTING)
Confronting is also described as problem solving, integrating, collaborating or win-win style. It involves the conflicting parties meeting face-to-face and collaborating to reach an agreement that satisfies the concerns of both parties. This style involves open and direct communication which should lead the way to solving the problem. Confronting should be used when: Both parties need to win. You want to decrease cost. You want create a common power base. Skills are complementary. Time is sufficient. Trust is present. Learning is the ultimate goal.

The Fox (COMPROMISING)
Compromising is also described as a "give and take" style. Conflicting parties bargain to reach a mutually acceptable solution. Both parties give up something in order to reach a decision and leave with some degree of satisfaction. Compromising should be used when: Both parties need to win. You are in a deadlock. Time is not sufficient. You want to maintain the relationship among the involved parties. You will get nothing if you do not compromise. Stakes are moderate.

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The Teddy Bear (SMOOTHING)
Smoothing is also referred to as accommodating or obliging style. In this approach, the areas of agreement are emphasized and the areas of disagreement are downplayed. Conflicts are not always resolved in the smoothing mode. A party may sacrifice it's own concerns or goals in order to satisfy the concerns or goals of the other party. Smoothing should be used when: Goal to be reached is overarching. You want to create obligation for a trade-off at a later time. Stakes are low. Liability is limited. Any solution is adequate. You want to be harmonious and create good will. You would lose anyway. You want to gain time.

The Shark (FORCING)
Forcing is also known as competing, controlling, or dominating style. Forcing occurs when one party goes all out to win it's position while ignoring the needs and concerns of the other party. As the intesity of a conflict increases, the tendency for a forced conflict is more likely. This results in a win-lose situation where one party wins at the expense of the other party. Forcing should be used when: A "do or die" situation is present. Stakes are high. Important principles are at stake. Relationship among parties is not important. A quick decision must be made.

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The Turtle (AVOIDING)
Avoiding is also described as withdrawal style. This approach is viewed as postponing an issue for later or withdrawing from the situation altogether. It is regarded as a temporary solution because the problem and conflict continue to reoccur over and over again. Avoiding should be used when: You can not win. Stakes are low. Stakes are high, but you are not prepared. You want to gain time. You want to maintain neutrality or reputation. You think problem will go away. You win by delaying.

Conclusion
Conflict in project management is not necessarily unfavorable when properly managed. Several advantages have been identified such as increasing personal growth and morale, enhancing communication, and producing better project outcomes. However, conflict can be the decline of an organization if it is not effectively managed. The challenge for organizational leaders and project managers is to try to maintain the right balance and
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intensity of conflict in project management. By utilizing project management principles, understanding the dynamics of conflict, and learning approaches to conflict resolution, managers will be able to establish an environment in which creativity and innovation is encouraged and project goals are accomplished.

References:

http://www.pmi.org/projectmanagement/success.htm http://itprojmngt.8m.net/projman/pm_what.html http://www.newgrange.org/FTP/pm.ppt

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QUESTION 5
Discuss the following in detail: i). ii). iii). PERT GANNT Charts WBS (20)

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PERT
A PERT chart (program evaluation and review technique) is a graphic representation of a project’s schedule, showing the sequence of tasks, which tasks can be performed simultaneously, and the critical path of tasks that must be completed on time in order for the project to meet its completion deadline. The chart can be constructed with a variety of attributes, such as earliest and latest start dates for each task, earliest and latest finish dates for each task, and slack time between tasks. A PERT chart can document an entire project or a key phase of a project. The chart allows a team to avoid unrealistic timetables and schedule expectations, to help identify and shorten tasks that are bottlenecks, and to focus attention on most critical tasks.

When to use it:
Because it is primarily a project-management tools, a PERT chart is most useful for planning and tracking entire projects or for scheduling and tracking the implementation phase of a planning or improvement effort.

How to use it:
Identify all tasks or project components. Make sure the team includes people with firsthand knowledge of the project so that during the brainstorming session all component tasks needed to complete the project are captured. Document the tasks on small note cards.

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Identify the first task that must be completed. Place the appropriate card at the extreme left of the working surface. Identify any other tasks that can be started simultaneously with task #1. Align these tasks either above or below task #1 on the working surface. Identify the next task that must be completed. Select a task that must wait to begin until task #1(or a task that starts simultaneously with task #1) is completed. Place the appropriate card to the right of the card showing the preceding task. Identify any other tasks that can be started simultaneously with task #2. Align these tasks either above or below task #2 on the working surface. Continue this process until all component tasks are sequenced. Identify task durations. Using the knowledge of team members, reach a consensus on the most likely amount of time each task will require for completion. Duration time is usually considered to be elapsed time for the task, rather than actual number of hours/days spent doing the work. Document this duration time on the appropriate task cards. Construct the PERT chart. Number each task, draw connecting arrows, and add task characteristics such as duration, anticipated start date, and anticipated end date. Determine the critical path. The project’s critical path includes those tasks that must be started or completed on time to avoid delays to the total project. Critical paths are typically displayed in red.
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Sample PERT Chart

GANTT Charts
A Gantt chart is a horizontal bar chart developed as a production control tool in 1917 by Henry L. Gantt, an American engineer and social scientist. Frequently used in project management, a Gantt chart provides a graphical illustration of a schedule that helps to plan, coordinate, and track specific tasks in a project. Gantt Charts (Gant Charts) are useful tools for analyzing and planning more complex projects. They: Help you to plan out the tasks that need to be completed
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Give you a basis for scheduling when these tasks will be carried out Allow you to plan the allocation of resources needed to complete the project, and Help you to work out the critical path for a project where you must complete it by a particular date. When a project is under way, Gantt Charts help you to monitor whether the project is on schedule. If it is not, it allows you to pinpoint the remedial action necessary to put it back on schedule. A Gantt chart is constructed with a horizontal axis representing the total time span of the project, broken down into increments (for example, days, weeks, or months) and a vertical axis representing the tasks that make up the project (for example, if the project is outfitting your computer with new software, the major tasks involved might be: conduct research, choose software, install software). Horizontal bars of varying lengths represent the sequences, timing, and time span for each task. Using the same example, you would put "conduct research" at the top of the verticle axis and draw a bar on the graph that represents the amount of time you expect to spend on the research, and then enter the other tasks below the first one and representative bars at the points in time when you expect to undertake them. The bar spans may overlap, as, for example, you may conduct research and choose software during the same time span. As the project progresses, secondary bars, arrowheads, or darkened bars may be added to indicate completed tasks, or the portions of tasks that have been completed. A vertical line is used to represent the report date.

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Gantt charts give a clear illustration of project status, but one problem with them is that they don't indicate task dependencies - you cannot tell how one task falling behind schedule affects other tasks. The PERT chart, another popular project management charting method, is designed to do this. Automated Gantt charts store more information about tasks, such as the individuals assigned to specific tasks, and notes about the procedures. They also offer the benefit of being easy to change, which is helpful. Charts may be adjusted frequently to reflect the actual status of project tasks as, almost inevitably, they diverge from the original plan.

Sample Gantt Chart

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Work Breakdown Structure (WBS)

WBS is a hierarchical listing of the subcomponents of a project. The WBS is an essential tool in the project planning process The WBS is a logical

hierarchy that organizes and breaks down the work that needs to be accomplished on a project. WBS can be defined as:

“A deliverable-oriented grouping of project elements that organizes and defines the total scope of the project work.”

Work not in the WBS is not in scope of the project. Each descending level represents an increasingly

detailed description of the project elements. Often used to develop or confirm a common

understanding of project scope.

Importance of WBS
It defines and breaks down the work on a project into manageable chunks, often called work packages. It tells us what activities or tasks have to be done in order to complete the project. It serves as the foundation for the development of schedules, budgets, and resource requirements.

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It serves as a useful tool for identification of activities and assignment of responsibilities.

WBS Role
It is the basis for
 Estimating  Budgeting  Pricing  Controlling Costs  Assigning Responsibility  Scheduling  Allocating Resources  Reporting, Monitoring, and Controlling

Basic guidelines for WBS
Work described in a higher level must be the sum of all the work in the next lower level. Definitions of work should be usable as communications tools so results can be compared with expectations for the work when the project is implemented. Work that will be performed by different people should be clearly differentiated. WBS should define measurable deliverables for each work component of the project. WBS should be flexible enough to allow for changes. The most common Work Breakdown Structure is the six-level indented structure shown in the figure below.
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Level Managerial Levels 1 2 3 4 5 6

Description

Total Program Project Task
Subtask Work Package Level of Effort

Technical Levels

Benefits of WBS

Estimates

Risk and Contingency Plans
Schedule

WBS
Risk Control

Project Control Activity List
Communication Control

Change Control

Project Plan

Progress Reports

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References:

www.mindstool.com
PMBOK Guide

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