Project Management (BUS 407)

HANDOUT # 1

UNIT 1: INTRODUCTION TO PROJECT

MANAGEMENT

CLO # 1: Define the role of project management in an organization and

identify the phases of the project life cycle

Source: https://lms.ectmoodle.ae/
 Learning Objectives

 Defining project management

 The importance of project management
 Give three reasons for studying PM.
 Direct Project Goals: Performance, Cost, Time

1–2
 What is a Project?

A temporary and one-time endeavor

undertaken to create a unique product
or service, which brings a beneficial
change or an added value

1–3
 Project: Definition
• Project :“A project is a series of activities directed to
accomplish a desired objective.”

• Projects: Unique, one-time operations designed to

accomplish specific set of objectives in a limited
time frame.

Plan your work first…..then work your Plan

1–4
 Examples of Projects
– constructing houses, factories, shopping
malls, athletic stadiums or arenas
– developing military weapons systems,
aircrafts, new ships
– launching satellite systems
– constructing oil pipelines
– developing and implementing new computer
systems
– planning concert, football games, or
basketball tournaments
– introducing new products into market

1–5
 Characteristics of a project
 A unique, one-time operational activity or
effort
 Requires the completion of a large number

of interrelated activities
 Established to achieve specific objective

 Resources, such as time and/or money, are

limited
 Typically has its own management structure

 Needs leadership
1–6
 WHY PROJECT MANAGEMENT?

• Today’s complex environments require

ongoing implementations
• Project management is a method and
mindset…a disciplined approach to
managing chaos
• Project management provides a
framework for working amidst persistent
change

1–7
 Defining Project
Management
• The application of knowledge, skills,
tools and techniques to project activities
to meet project requirements

• Organizing and managing resources so

the project is completed within defined
scope, quality, time and cost constraints
1–8
 The Importance of Project
Management
• Factors leading to the increased use of
project management:

– Compression of the product life cycle

– Knowledge explosion
– Triple bottom line (planet, people, profit)
– Corporate downsizing
– Increased customer focus
– Small projects represent big problems

1–9
 Direct Project Goals:
Performance, Cost, Time

1–10
Figure 1-1
 Project Management
• What are the Key Metrics
– Time
– Cost
– Performance objectives
• What are the Key Success Factors?
– Top-down commitment
– Having a capable project manager
– Having time to plan
– Careful tracking and control
– Good communications
1–11
 Project Management
• What are the tools?
– Work breakdown structure
– Network diagram
– Gantt charts
– Risk management

1–12
 Project Life Cycle

FIGURE 1.2
1–13
 Project Management (BUS 407)
HANDOUT # 2

Unit 2: Project Selection & Definition

CLO #2: Describe the characteristics, scope and priorities of a project and relate to
organizational strategy.

Source: https://lms.ectmoodle.ae/
 Learning Objectives

• Applying selection model to a project.

• Aligning project with organizational strategy.
• Learn how to define a project scope and define its
priorities

2–2
 introduction

Strategy is implemented through projects. Every

project should have a clear link to the
organization’s strategy

Hence, we need to select projects among the

given ones
Project selection: A major step in aligning
project with organizational strategy
• Definition:
Strategic management can be defined as the
process of deciding and implementing what an
organization wants to be and how it is going to
get there.
Project selection: A major step in aligning
project with organizational strategy
• Organization strategy:
- Must decide which potential projects they will
pursue (sometimes among many competing
projects)
- Requires every project to be clearly linked to strategy
- Available capital is the major constraint
- Profitability is often the major criteria
- Must evaluate approaches when there is more
than one project that can accomplish a particular
business goal
 Project Selection Model
• Project evaluation factors

-Production factors
-Marketing factors
-Financial factors
-Personnel factors
-Administrative and Miscellaneous factors
 Project Selection Model
• Project evaluation models

 Non numeric models

 numeric models:
1. Profit/profitability
2. Scoring
 Project Selection Model
• The weighting scoring model: definition
A weighted scoring model is a tool that provides
a systematic process for selecting projects
based on many factors/criteria.

The weights reflect the relative importance of

each individual factor (in the organization
strategy)
 Project Selection Model
• The weighting scoring model:
Steps in identifying a weighted scoring model:
1. Identify criteria important to the project selection
process.
2. Assign weights (percentages) to each criterion so they
add up to 100 percent.
3. Assign scores to each criterion for each project.
4. Multiply the scores by the weights to get the total
weighted scores.
The higher the weighted score, the better.
 Project Selection Model
• Advantages of the scoring model:

 They allow multiple criteria to be used for evaluation

 Weighted models recognize that some criteria are
more important than others
 Structurally simple and relatively easy to understand
 They are a direct reflection of management policy
 Easily altered to accommodate change in management
policy or priorities
 Project Selection Stages
• Stage 1: Strategic Considerations Phase
– Considering both external and internal business environments
– Matching with business strategies

• Stage 2: Project Evaluation Phase

– Economic returns
– Risk analysis
– … Other criteria

• Stage 3: Project/Portfolio Selection Phase

– Project selection Model (Scoring model)
 Project Management Process

1. Project planning

2. Project scheduling

3. Project control

4. Project team
- made up of individuals from various areas and
departments within a company
 Project Management Process

5. Matrix organization
– a team structure with members from functional
areas, depending on skills required
6. Project Manager
– most important member of project team
7. Scope statement
– a document that provides an understanding,
justification, and expected result of a project
8. Statement of work
– written description of objectives of a project
 Project Management Process

9. Organizational Breakdown Structure

– a chart that shows which organizational units are
responsible for work items

10.Responsibility Assignment Matrix

– shows who is responsible for work in a project
 Project Management (BUS 407)

HANDOUT # 3

UNIT 3: Developing the Project Plan

&
Estimating Time

CLO # 3: Construct a network diagram and Estimate the time required for each
activity.

Source: https://lms.ectmoodle.ae/
 Learning Objectives

• Explain the key issues associated with project

management.
• Describe how to apply the Critical Path Method
(CPM).
• Explain how to make time/cost tradeoff
decisions in projects.

1–2
Understand the following terms:

* Network * Activities critical path

* Event *critical activities
* Critical Path

1–3
 Network Diagrams
• Network diagrams are the preferred
technique for showing activity sequencing.

• A network diagram is a schematic display

of the logical relationships among, or
sequencing of, project activities.

• Two main formats are the arrow and

precedence diagramming methods.
4
 Network Diagrams
Activity-on-Arrow (AOA) networks
– also called Arrow Diagramming Method (ADM)
– Uses an arrow to depict an activity
– simpler for projects with many dependencies
– emphasizes events; milestones can be easily flagged
– sometimes requires dummy activities
Activity-on-Node (AON) networks
– also called Precedence Diagramming Method (PDM)
– Uses a node to depict an activity
– easier to draw for simple projects
– emphasizes activities
– no dummy activities
 Constructing a Project Network
• Terminology
– Event: a point in time when an activity is started
or completed. It does not consume time.
– Activity: an element of the project that requires
time.
– Merge Activity: an activity that has two or more
preceding activities on which it depends.
– Parallel (Concurrent) Activities: Activities that can
occur independently and, if desired,
not at the same time.
6–6
 Constructing a Project Network
• Terminology
– Path: any route along the network from start to finish
– Critical path: the longest path through the activity
network that allows for the completion of all project-
related activities; the shortest expected time in which
the entire project can be completed. Delays on the
critical path will delay the completion of the entire
project.
2 C
D
5
B 6
A
3 4

(Assumes that minimum of A + B > minimum of C in

6–7 length of times to complete activities.)
 Situations in network diagram AON

2–8
 Situations in network diagram AOA
B
A
A must finish before either B or C can start

C
A
C both A and B must finish before C can start
B

A
C both A and B must finish before either of C or D can
start
B
D

A
B
A must finish before B can start
Dummy both A and C must finish before D can start

C
2–9 D
 A Comparison of AON and AOA Network
Conventions

Activity on Activity Activity on

Node (AON) Meaning Arrow (AOA)
A comes before
(a) A B C B, which comes
before C A B C
A A
A and B must both
(b) C be completed
before C can start C
B B
B
B and C cannot
(c) A begin until A is B
completed A
C C
 A Comparison of AON and AOA Network
Conventions

Activity on Activity Activity on

Node (AON) Meaning Arrow (AOA)

C and D cannot
A C begin until A A C
(d) and B have
both been
B D completed B D

C cannot begin
until both A and B
A C are completed; D A C
(e) cannot begin until Dummy activity
B is completed. A
B D dummy activity is
introduced in AOA B D
 A Comparison of AON and AOA Network
Conventions

Activity on Activity Activity on

Node (AON) Meaning Arrow (AOA)

B and C cannot
begin until A is
completed. D
A B D cannot begin A B D
until both B and
(f) C are completed. Dummy C
C A dummy activity
activity is again
introduced in
AOA.
AOA Project Network for House
B 3
Lay Dummy
foundation
2 0 Build Finish G
A C house D work
1 2 4 6 7
Design house Order and 3 1
and obtain receive Select E F Select
financing materials paint carpet
1 1 5
3 1

AON Project Network for House

Lay foundations Build house
B D
Finish work
2 3
G
Start A 1
3
Design house F
C
and obtain 1 E 1
financing 1 Select carpet
2–13
Order and receive
darla/smbs/vitSelect paint 13
materials
 Constructing a Project Network:
Table 3-1 A Sample Set of Project Activities and
Precedence's Activities
Activity Predecessor
a --
b --
c a
d b
e b
f c, d
g e

2–14
 Constructing a Project Network:
Figure 3-1 Stage 1 of a Sample AON Network

2–15
 Constructing a Project Network:
Figure 3-2 Stage 2 of a Sample AON Network

2–16
 Constructing a Project Network: Figure 3-3 A
Completed Sample AON Network

2–17
 Critical Path Method (CPM)
Critical Path – path with the longest total duration
This is the shortest time in which the project can
be completed.
Critical Activity – an activity on the critical path

*If a critical activity is delayed, the entire

project will be
delayed. Close attention must be given to
critical activities
to prevent project delay. There may be
more than one
 Critical Path Method (CPM)

Practical approach to finding critical path:

1. identify all possible paths from start to finish
2. sum up durations for each path
3. largest total indicates critical path

(This approach is inefficient, but is instructive)

 Project Network:
Example of Computing Project duration with
CPM
Activity Pred. Dur. Activity Pred. Dur.
a -- 4 g c,d 1
b -- 3 h e 4
c a 3 i f 5
d a 2 j e,g 6
e b 6 k h,i 1
f b 4

- Draw AON network and use the CPM to find the project
duration?
 c=3
Duration of
critical path
: 15

a=4 g=1

j=6
d=2

Start Finish
e=6
h=4

b=3 k=1

f=4 i=5

The critical Path is : b,e,j