Introduction

Project Management
 WHAT IS A PROJECT?
Definition

• A project is a unique venture with a beginning and end

, conducted by people to meet established goals within
parameters of cost, schedule and quality
Major Characteristics of a Project
– Fixed objective: Has an established objective or a fixed set
of objectives .
– Project starts when the objectives are finalized
– Project comes to an end as soon as the objectives are
attained.
– Tenure: Has a defined life span with a beginning and an
end.
– Team work: Requires across-the-organizational
participation.
– Unique: Involves doing something never been done before.
– Made to Order: Projects follow “ pull” rather than push.
Has specific time, cost, and performance requirements
 Major Characteristics of a Project
– Single entity- Responsibilities of a single
person/entity, many participants.
– Multi skilled staff- wide range of skills including
technical skills, human skills, financial skills,
negotiation skills.
– Subcontracting- A civil contractor may subcontract
electrical work or excavation work on a regular basis.
– Risk and uncertainty- Projects are risky as the
activities involved are non retrievable.
 What is Operational Process/ Routine
work
• An ongoing work effort is generally a repetitive
process because it follows companies existing
procedures. The ongoing execution of activities that
produce the same result or product repetitively is
what operations is all about.
• Production operations, accounting operations,
manufacturing a product are all operational activities
• Operations are permanent initiatives which produce
repetitive results, with resources assigned to do the
same set of tasks and produce a standard output.
DIFFERENCES BETWEEN OPERATIONS AND
PROJECT MANAGEMENT
Operations management Projects

Repetition Process are ongoing and Projects are temporary

repetitive and unique (Non-
repetitive)
Objectives Objectives-Profits Objective- Scope,
generated, cost reduced, performance, time, cost
quality of product and
services
Duration On-going(continuous in One shot - limited life,
nature) ceases with attainment of
the objective
People People are homogenous People are More
heterogeneous
DIFFERENCES BETWEEN OPERATIONS AND
PROJECT MANAGEMENT
Operations Projects
management

System Well established Systems must be

systems in place to created to
integrate efforts integrate efforts
Risk Greater certainty Greater
of uncertainty of
performance, cost, performance, cost,
schedule schedule

Organizational Part of line Outside of line

Structure organization organization
COMPARISON OF ROUTINE WORK
WITH PROJECTS
Routine, Repetitive Work
Taking class notes
Daily entering sales receipts into the
accounting ledger
Responding to a supply-chain
request
Practicing scales on the piano
Routine manufacture of an Apple
iPod
Attaching tags on a manufactured
product
Projects
Writing a term paper
Setting up a sales kiosk for a
professional accounting meeting
Developing a supply-chain information
system
Writing a new piano piece
Designing an iPod that is
approximately 2 X 4 inches, interfaces
with PC, and
stores 10,000 songs
Wire-tag projects for GE and
Wal-Mart
PROJECT LIFE CYCLE
 PROJECT LIFE CYCLE

• An overall 85 % effort and 40 % time of the overall

project is consumed during the implementation
phase.
• The planning phase consumes 9% efforts and 30 %
of the time.
• The rest two phases consumes less efforts and time.
 Concept Phase

• The basic processes of the project initiation phase are

• Product/Project document: This is a statement describing the
characteristics of the project.
• Project feasibility document: This constraints and alternative
solutions to the constraints to be developed.
• Project concept document: This document will answer the
following questions.
• What is to be done?
• How will it be done?
• Why is it to be done?
 Concept Phase

• Project charter: Project charter formally communicates

the initiation of the project. It consists of project scope ,
project authority and KSF(Key Success factors).
• Frequent interactions with customers and stakeholders
• Preparing project feasibility documents, project concept
statements and project charter.
 Planning Phase
• The basic processes of the project planning phase are
• Defining the scope: Define the scope of the project and
its limitations.
• Preparing the work breakdown structure: Divide the
whole project into smaller activities.
• Role Assignment: Assign jobs to individuals or group of
individuals as predefined activities.
• Project Scheduling: Determine optimum schedule of the
project and display the same on a Gantt Chart.
• Fund allocation: Allocation of funds for individual
activities.
 Planning Phase

• Subsidiary processes

• Risk Management planning

• Procurement planning
 Implementation/Execution Phase

• Following activities happen in this phase.

• The team members the tasks allocated in the earlier phase
under the supervision of the project manager and report to him.
• The project manager is responsible for performance
measurement , which includes finding variation with respect to
cost, schedule and scope.
• Project manager- Status reports to all key stakeholders-
deviations-why-actions for deviations
• Project key stakeholders are responsible for the review of
variances
 Termination/Closing phase

• Train the customer

• Transfer documents

• Release resources

• Evaluation

• Lessons learned
 What is Project Management ?

• Project management is “the application of

knowledge, skills, tools and techniques to project
activities to meet project requirements”- PMI, A
Guide to the Project Management Body of
Knowledge (PMBOK® Guide).
 Objectives of Project Management

• Scope: The boundary of a project is called scope of

the project.
• The expectations from the project manager and the
team.
• Shortage of skills, funds or time may lead to reduced
scope of the project.
 Scope-Example
• Construction Project
• A project allotted to a civil contractor always have a well
defined scope

• Excavation

• Concreting

• Brickwork

• Plastering of all walls.

 Objectives of Project Management
• Performance: A project is always expected to have a
well defined performance.
• Unable to adhere to the desired performance often leads
to an unsuccessful project.
• Example : River valley project
• Performance standard defined as to hold:
• 10 million meter cube of water
• And to produce 500 MW of electricity
 Objectives of Project Management
• Time: There is always a fixed tenure of the project and
always an end to the project.
• A successful project is the one which is completed within
the time limits perceived during the planning.
• Example : An IT solution provider is asked to develop a
Systems Applications and Products in Data Processing
in 3 months.
 Objectives of Project Management

• Cost: It is dependent on all the above objectives.

• Mathematically can be represented as

• Cost =f(P, T,S)

 Example-Project Management Objectives
• To lay broad gauge rails (double) from Roha to
Mangalore( 760 km) with the required gradients at places
without much disturbing the life styles and environment
to be completed till 1995 with a cost of Rs 22.45 billions.
It should have a life of 75 years.
Scope : Laying the dual rails for 760 km
Performance: Should minimally disturb the lifestyle and
environment, with durability of 75 years.
Time : 1995
Cost : Rs 22.45 billions
PROJECT TRIANGLE
 History of Project Management
• Project Management timeline
• 1910- Henri Gantt introduced the Gantt chart for tracking the
project.
• 1950- NASA developed PERT and DuPont developed CPM
• 1962- NASA introduced Work Breakdown Structure
• 1967- International Project Management Association(IPMA)
founded.
• 1969- Project Management Institute(PMI formed).
• 1983- Harvard Project Manager , planning software was launched.
• 1984- First version of Microsoft Project was released by a
company working for Microsoft corporation.
• 1990- The first windows version of Microsoft Project was released.
• 2013- Latest version till date for Microsoft Project has been
launched.
 THE CHALLENGE OF PROJECT
MANAGEMENT
• The Project Manager
– Manages temporary, non-repetitive activities and
frequently acts independently of the formal
organization.
• Marshals resources for the project.
• Is linked directly to the customer interface.
• Provides direction, coordination, and integration
to the project team.
• Is responsible for performance and success of the project.
– Must induce the right people at the right time to
address the right issues and make the right decisions.
1–26
 Tools and Techniques of Project Management
• The various tools and techniques of project management
are as follows:

• Bar/Gantt Chart

• Line-of-Balance

• Linear Programming

• Network Analysis
 Bar/Gantt Chart

• The Gantt chart was developed by Henry L. Gantt in

1910.
• Purpose is to provide an immediate comparison
between planned work and actual progress of work
Building a House
 Three Main Relationships-Gantt Charts
• Finish to Start (FS) – FS tasks can't start before a
previous (and related) task is finished. However, they
can start later.

P
S
Examples :
1) Land(P) must be purchased before road, building(S)
can start.
2) Supper(S) starts when the cooking is complete (P).
3) Concrete(S) pouring starts after the forms are built(P).
 Three Main Relationships-Gantt Charts
• Start to Start (SS) – SS tasks can't start until a
preceding task starts. However, they can start later.

S
Examples:
1) As soon as you put the batter in the oven (P) you can
start making the icing (S).
2) Mixing of chemicals(S) cannot start until air quality testing
starts(P).
3) You can’t start up the machine(S) until the pollution
testing starts(P).
 Three Main Relationships-Gantt Charts
• Finish to Finish (FF) – FF tasks can't end before a
preceding task ends. However, they can end later.

Examples :
1)Electrical work cannot finish until dry walling is
complete.”
2)“Design work cannot finish until environmental studies
are complete”
3) Paint Interior of the house and setup furniture.
• The following table shows the tasks, dependencies, and
estimated times a project manager might input to a basic
GANTT chart for a software development project.
Project Start Date : 2nd February 2021

Task Task Predecessor Time(Days)

Identifier Description Tasks(s)
1 Establish - 2
project
2 Establish 1 3
customer
requirements
3 Produce 2 4
software
specification
documents
 GANTT Chart-Examples
Project Start Date : 2nd February 2021

Task Task Predecessor Time(Days)

Identifier Description Tasks(s)
4 Write test 3
plans 1
5 Write code 3 2
6 Developer 5 2
testing
7 System testing 4,6 4
8 Write 3 3
customer
documentation
 Line of Balance

• Line of balance (LOB) is a management control process

used in construction where the project contains blocks of
repetitive work activities, such as roads, pipelines, tunnels,
railways and high-rise buildings.
• LOB collects, measures and presents information relating to
time, cost and completion, and presents it against a specific
plan.
 Line of Balance

• The LOB technique was created by the Goodyear

Company in the early 1940s, before being adopted and
developed by the U.S. Navy in the early-1950s.
• It was subsequently developed for industrial
manufacturing and production control, as well as the basic
concepts behind planning and scheduling in
the construction industry.
 Line of Balance(LOB)

• An LOB diagram shows the repetitive project work as a

single line on a graph.
• It differs from a bar chart which shows a particular
activity’s duration, by showing the rate at which the work
has to be undertaken to stay on schedule, as well as the
relationship of one trade or process to the subsequent trade
or process.
 Line of Balance(LOB) graph
The Project timeline is represented along the x-axis of the LOB
diagram. The work areas that define the project are represented
along the y-axis.
 Line of Balance(LOB) graph

▪ In the figure below, it can be seen that Activity A lasts a 10

weeks. The productivity of A, spread across each of the work
areas, is 2 weeks per floor.
 Line of Balance(LOB) graph

▪ If Activity B has a productivity rate of 1 week per floor, then it

can begin work at the end of the second week.
▪ As Activity B continues, at the end of the week 4 work can begin on the
second floor; at the end of week 6 work can begin on the third floor, and so
on. The horizontal red dashed lines represent the breaks in Activity B work,
where the workforce is waiting for Activity A to clear the way for them to
continue. In this example, starting Activity B as soon as possible will result
in a lost productivity of 4 weeks.
• The diagram below shows that by delaying the start of Activity
B for 4 weeks, the workforce can continue uninterrupted, and
hence are more productive. This enables a better understanding
of how workforces follow one another through activities.
 Linear Programming

• Linear programming is a specialized technique for

linear work
• It has widely used in the construction of large canals
and drainages .
• It is a simple two dimensional graphical technique.
 Constructing a Network

• Two conventions exist in constructing a

network.
• Representing the Activity on Arc (AOA)
• Representing the Activity on Node (AON)
 The AOA network

a b c e g
1 2 3 4 6 8

d
h

f
5 7
 The AON network

Start a b c f Stop

d e
 Classification of Projects
• Projects can be classified on the basis of

• Duration

• Quantum of Investment

• Ownership

• Risk Involved
 Classification of Projects
Duration

• Long-term Projects (Projects have a life of more than 10

years).

• Mid-term Projects( Projects have a life of 5 to 10 years).

• Short-term Projects( Last only for less than 5 years).

 Classification of Projects
Investment
• It is based on how much initial investment is needed to
start the project.
• In Indian Context
• Investment outlay > Rs 200 million is a High Investment
Project.
• 30 million< Investment outlay< 200 million is considered
as a Medium Investment Project.
• Investment outlay < 30 million is considered Low
Investment Project.
 Classification of Projects
Risk

• Greenfield project

• Brownfield project

• Divestment project

• Modernization /replacement project

 Classification of Projects
• Greenfield project : In a Greenfield investment the parent
company opens a subsidiary in another country.
• Instead of buying an existing facility in that country , the
company begins a new venture by constructing new
facilities in that country.
• Construction might include more than just a production
facility.
• Such projects are fresh and are exposed to very high risk.
 Classification of Projects
• Brownfield project : An existing company purchases or
leases an existing facility to begin production. It is of three
types.

• Expansion Project

• Vertical Integration Project

• Diversification Project
 Classification of Projects
• Expansion project : There is an increase in the capacity of
existing plant.

• There is no change or very nominal change in the product.

• Example: A Biscuit company is increasing its capacity

from 20 MT/ month to 35 MT/month.
 Classification of Projects
• Vertical Integration: The degree to which a firm owns its
upstream suppliers and downstream customers is called
vertical integration.

• It is of two types

• Forward Integration

• Backward Integration
 Classification of Projects
• Forward Integration Project: Downstream expansion is
called forward integration.
• The product of the existing product becomes raw material
for the proposed project, i.e. a steel industry moves for
manufacturing steel pipes.
• Backward Integration Project: Upstream expansion is
called backward integration.
• The raw material needed for the existing industry is
proposed to be manufactured by a new project, i.e. a steel
pipe industry plans to manufacture its raw material, steel
itself.
 Classification of Projects
• Diversification Project: Financial Synergy may be
obtained by combining two firms:
• One with better financial resources but poor technical
capabilities and another firm with strong technical
capabilities but poor financial resources.
• Concentric diversification Project
• Conglomerate diversification Project