Project Management22

PROJECT MANAGEMENT
Sub Code 400
Developed by
Prof. Ratnakar Mate
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe 2. Dr. B.P. Sabale 3. Prof. Dr. Vijay Khole 4. Prof. Anuradha Deshmukh
Group Director Chancellor, D.Y. Patil University, Former Vice-Chancellor Former Director
Welingkar Institute of Navi Mumbai (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant
Prof. Kanu Doshi Prof. B.N. Chatterjee

Dean – Finance Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Dean – Management Development Programs Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ
Prof. B.N. Chatterjee Prof. Vineel Bhurke

Dean – Marketing Faculty – Rural Management
Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai
Prof. Dr. Swapna Pradhan Course Editor

Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai
Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai
Mr. Ajay Prabhu Ms. Kirti Sampat

Faculty – International Business Assistant Manager – PGDM (HB)
Corporate Consultant Welingkar Institute of Management, Mumbai
Mr. A.S. Pillai Mr. Kishor Tamhankar

Faculty – Services Excellence Manager (Diploma Division)
Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai
COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

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NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.
1st Edition, June 2014 2nd Edition, September 2021

CONTENTS
Contents
Chapter No. Chapter Name Page No.
Part - I
1 Introduction 5-8
2 Business-Project Relation and Project Culture 9-19
3 Basic Concept of Project and Various Types of Projects 20-31
4 Methods of Generating Business Ideas 32-46
5 Transformation of the Business Ideas into Projects 47-61
Part - II
6 Introduction to Project Management and Phases of 63-100

the Projects
7 Project Initiation Phase 101-148
8 Project Data/Requirement Analysis and Final Project 149-190

Definition
9 Budget, Investment and Approvals 191-212
Part - III
10 Project Planning and Scheduling 214-261
11 Project Execution 262-295
Part - IV
12 Project Monitoring and Control 297-350
13 Closing/Handing Over the Project 351-396
3
PART - I
Part - I
4
INTRODUCTION
Chapter 1
Introduction
Dear Friends,
In the modern era and global environment, Management Science is the

KEY to the SUCCESS in every field, every sector. Amongst the various
techniques of the Management Science, PROJCET MANAGEMENT is very
important tool to remain competitive on every front such as quality, cost
and delivery. These three are the heart and arteries of business.
During our journey of Distant Learning Program for PROJECT

MANAGEMENT, we will very systematically understand, learn, review and
asses our learning about the various aspects of PROJECT MANAGEMENT in
the subsequent chapters.
For ease of understanding, learning and to maintain the sequential flow of

information, the program book is divided into four parts.
The Part I will enable us to understand the basic aspects such as:
• Business-Project Relation
• Project Culture
• Generating Business Ideas
• Concept of Project
• Types of Project
• Transformation of Business Ideas into Project and build the basic
foundation of Project Management to enter smoothly in the wonderland
of Project Management.
The Part II will introduce us to the various phases of the projects as

follows:
(i) Initiation Phase
(ii)Analysis Phase
(iii)Budgeting, Investments and Approval Phase
5
INTRODUCTION
(iv)Planning Phase
(v)Execution Phase
(vi)Control and Monitoring Phase
And then so-called brainwork phases of the projects, i.e.,
(i) Initiation Phase
(ii)Analysis Phase
(iii)Budgeting, Investments and Approval Phase will be deliberated in

detail.
The Part III is focused on the so-called action phases as follows:
(iv)Planning Phase
(v)Execution Phase where lot actions are happening on the field and the
project activities start showing physical movement. Each minute details
of these phases will be deliberated in detail.
The Part IV will focus on the control, monitoring and closing part of the
projects as follows:
(vi)Control and Monitoring Phase
• Handover and closing the projects and management of these will be

discussed in details.
In this, we will also throw some light on:
• Learning and implementation of improved process for future as

concluding portion of the Project Management program.
The contents as explained above are divided into four parts and further
subdivided into 13 chapters. Part one comprises of 5 chapters and Part
two, three and four comprises of 4, 2 and 2 chapters respectively.
6
INTRODUCTION
Each chapter is deliberated in detail with reference to the Objectives

mentioned at the beginning of each Chapter. There are some Activities/
Exercises provided in every chapter. These will be helpful for self-study
and better understanding of the subject. It is expected to work on these
activities/exercises timely at the end of each chapter. The exercises are
focused on understanding the high points of each chapter.
Summary in the form bullet points is available at the end of every chapter.
Objective type self-assessment exercise with multiple options available at

the end of every chapter. These will not take more than half an hour if the
chapter is read patiently to understand the contents.
7
INTRODUCTION
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
8
BUSINESS-PROJECT RELATION AND PROJECT CULTURE
Chapter 2
Business-Project Relation And Project
Culture
Objectives
Objective of this chapter is to elaborate the frequently used term ‘business’

and explain in brief the various aspects of business, the business project
relation and the requirement of project management culture. This shall
build the foundation of PROJECT MANAGEMENT MODULE which will be
deliberated in the subsequent chapters.
Structure:
2.1 What is Business?

2.2 Definitions of Business
2.3 Salient Features of Business
2.4 Business-Project Relations
2.5 Organizational and Project Culture
2.6 Summary
2.7 Activities to Implement Learning and Enhance Understanding
2.8 Exercise
9
2.1 What is Business?
We all are human beings and we have some basic needs and unlimited
dreams. These unlimited dreams demands and generates the wants. In
order to meet the basic needs and satisfy the wants (in order to fulfill the
dreams), we all are continuously engaged in some activity. In every walk of
life, directly OR indirectly, we come across the word “Business” OR
“Businessman”. In the modern world, “Business” is the integral part of
every human being.
Business is an economic activity which is related with continuous

and regular production and distribution of goods and services for
satisfying human needs and wants.
2.1.2 All of us need food, clothing and shelter as our basic needs. We also
have many other household requirements to be satisfied in our daily lives;
in addition to the wants to fulfill the unlimited dreams. We meet all these
requirements from the shopkeeper/retailer or supermarkets/malls. The
retailer/shopkeeper supermarkets/malls get these from the wholesalers/
distributors. The wholesalers/distributors get these from the
manufacturers. There are also some service providers to execute the home
delivery.
10
The shopkeeper/retailer, wholesaler/distributor, manufacturer and the

service providers in the above example are involved in the economic
activity to satisfy human needs, i.e., business and hence are called
businessman.
2.2 Definitions of Business
2.2.1 The term business is defined by the management experts in various

ways. Few of them are as follows:
Robert Stephenson defines business as, “The regular production or

purchase and sale of goods undertaken with an objective of earning profit
and acquiring wealth through the satisfaction of human wants.”
According to L.R. Dicksee, “Business refers to a form of activity conducted

with an objective of earning profits for the benefit of those on whose behalf
the activity is conducted.”
Lewis Henry defines business as, “Human activity directed towards

producing or acquiring wealth through buying and selling of goods.”
Thus, in a wider comprehensive scope, business deals with

production and distribution of goods and services with an objective
of earning profits by satisfying human needs/wants under the
uncertain market conditions.
2.3 Salient features of Business
Following are the major inherent features of any business.
2.3.1 Exchange of Goods and/or Services
All business activities are directly or indirectly concerned with the exchange
of goods or services for money’s worth.
2.3.2 Deals in Numerous Transactions
Whereas exchange of goods and services is a regular feature; a

businessman has to deal with number of transactions.
11
2.3.3 Profit is the Main Objective
The prime objective of any business is earning a profit which is considered

as reward for the services of a businessman.
2.3.4 Business Skills for Economic Success
To be a good businessman and run the business with economic success,

one needs to have good business qualities and skills. A businessman needs
experience and skill to run a business.
2.3.5 Risks and Uncertainties
Business is subject to risks and uncertainties. Some risks, such as risks of

loss due to fire and theft can be insured. There are also uncertainties, such
as loss due to change in demand or fall in price cannot be insured and
must be borne by the businessman.
2.3.6 Buyer and Seller
Every business transaction has minimum two parties that is a buyer and a
seller. Business is nothing but a contract or an agreement between buyer
and seller.
2.3.7 Connected with Production
Business activity may be connected with production of goods or services.

In this case, it is called as industrial activity. The industry may be primary
or secondary.
2.3.8 Marketing and Distribution of Goods
Business activity may be concerned with marketing or distribution of goods

in which case it is called as commercial activity.
2.3.9 Deals in Goods and Services
In business, there has to be dealings in goods and services.
Goods may be divided into following two categories:
12
(i) Consumer goods: Goods which are used by final consumer for
consumption are called consumer goods, e.g., T.V., soaps, etc.
(ii)Manufacturer’s or Capital goods: Goods used by manufacturer for

further production are called manufacturer’s or capital goods, e.g.,
machinery, equipments, etc. Services are intangible but can be
exchanged for value like providing transport, warehousing and
insurance services, etc.
2.3.10 To Satisfy Human Wants
The businessman also desires to satisfy human wants through conduct of

business. By producing and supplying various commodities, businessmen
try to promote consumer’s satisfaction.
2.3.11 Social Obligations
Modern business is service-oriented. Modern businessmen are conscious of

their social responsibility. Today’s business is service-oriented as well as
profit-oriented. Under the corporate social responsibility, almost every
businessman is giving his own contributions.
2.4 Business-Project Relations
After deliberating the concept of business, its definitions and the inherent
features of a business, we will discuss in detail the link between business
and project. At every stage of a business, it is very essential for the
success of the business to manage the activities very efficiently and
effectively.
2.4.1 The establishment of a business is achieved by treating each activity

as a project and a mechanism is established to develop the standard
practices and monitor and improve the same on a regular basis. This
practice is applicable to all aspects of the business including finance,
marketing, operations and so on. Thus, the business project relations and
roles are complimentary and unseperatable for the success of the business.
2.4.2 Business operation team is responsible for overseeing, directing and

controlling business administration and operations. Operations ensures
support to the day-to-day activities to achieve the strategic and tactical
13
goals of the business. Examples of the operations include production/

manufacturing operations, accounting operations, software support and
maintenance of all these. Whereas projects teams are ensuring that the
mechanisms for all above is established and they demonstrate the
continual improvement trend.
2.4.3 Though temporary in nature and the project teams will help achieve
the organizational goals and ensure that the same are aligned with the
organization’s strategy. This is done by improving the operations, products
or systems by creating business initiatives that are developed and
implemented through projects.
2.5 Organizational and Project Culture
Considering the above elaboration and the business-project relation, it is

evident that for success of the business and organization, a project and
Project Management culture is a mandatory requirement for an
organization aspiring for achievement of the organizational goals.
2.5.1 Culture of organization are values and behaviors that contribute

to the unique social and psychological environment of an organization.
Organizational culture includes an organization's expectations, experiences,

philosophy, and values that hold it together, and is expressed in its self-
image, inner workings, interactions with the outside world, and future
expectations. It is based on shared attitudes, beliefs, customs, and written
and unwritten rules that have been developed over time and are
considered valid.
2.5.2 Also called corporate culture, it is shown in:
1. The ways the organization conducts its business, treats its employees,
customers, and the wider community;
2. The extent to which freedom is allowed in decision-making, developing

new ideas, and personal expression;
3. How power and information flow through its hierarchy; and
4. How committed employees are towards collective objectives.
14
2.5.3 It affects the organization’s productivity and performance, and

provides guidelines on customer care and service, product quality and
safety, attendance and punctuality, and concern for the environment. It
also extends to production-methods, marketing and advertising practices,
and to new product creation.
2.5.4 Organizational culture is unique for every organization and one of

the hardest things to change. The well built organizational culture will
definitely have the inbuilt project attitude and project management culture.
15
2.6 Summary
• Business is an economic activity, which is related with continuous and

regular production and distribution of goods and services for satisfying
human needs and wants.
• In a wider comprehensive scope, business deals with production and

distribution of goods and services with an objective of earning profits by
satisfying human needs/wants under the uncertain market conditions.
• The prime objective of any business is earning a profit.
• At every stage of a business, it is very essential for the success of the

business to manage the activities very efficiently and effectively.
• The business-project relations and roles are complimentary and

unseperatable for the success of the business.
• Project and Project Management culture is a mandatory requirement for

an organization aspiring for achievement of the organizational goals.
• Culture of organization are values and behaviors that contribute to the

unique social and psychological environment of an organization.
• Organizational culture is unique for every organization and one of the

hardest things to change.
• The well built organizational culture will definitely have the inbuilt project
attitude and project management culture.
16
2.7 Activities to implement learning and enhance

understanding
Please consider your own organization/institution as a business unit and

prepare the report with reference to following aspects:
a. Objectives/policies of the organization.
b. Goals/targets of the organization.
c. Values/mission of the organization.
d. Future business plans.
e. Projects conducted during the year and status of the same.
f. Impact of the projects on business objectives/targets.
g. Cultural programs and involvements of the employees in the same.
h. HR policy of the organization.
17
2.8 Multiple Choice Questions
1. We all are human beings & we have some basic needs & limited dreams.
a) True
b) False
2. Business is an economic activity, which is related with continuous &

regular production & distribution of ________ for satisfying human
needs & wants.
a) goods & services
b) channels
c) food
d) None of them
3. _________ defines business as, “Human activity directed towards

producing or acquiring wealth through buying & selling of goods.”
a) L R Dicksee
b) Robert Stephenson
c) Lewis Henry
d) Robert Henry
4. __________ team is responsible for overseeing, directing & controlling

business administration & operations.
a) Production
b) Business operation
c) Accounts
d) Front Desk
5. Organizational culture is unique for every organization and one of the

hardest things to change. True or False
a) True
b) False
Correct Answer:- (1) – b, (2) - a, (3) - c, (4) - b, (5) – a
18
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
19
BASIC CONCEPT OF PROJECT AND VARIOUS TYPES OF PROJECTS
Chapter 3
Basic Concept Of Project And Various Types
Of Projects
Objectives
This chapter is written with an objective to understand very distinctly the

basic concept of project, various aspects of projects, difference between
projects and business operating methodology and the classification of
various projects on the basis of their purpose, objective, size, duration,
finance requirements etc.
Structure:
3.1 What is Project?

3.2 Classification and Types of Projects
3.3 Classification on the Basis of Project Ownership
3.4 Classification on the Basis of Project Duration
3.5 Classification on the Basis of Project Sector
3.6 Classification on the Basis of Project Outcome
3.7 Summary
3.9 Exercise
20
3.1 What is project?
A project is a one-time (temporary) endeavor undertaken to create a

unique product, service, or result (e.g., an improvement in existing
method, product or service). The temporary nature of projects very
distinctly indicates that a project has a definite start and end. Temporary
doesn’t necessarily refer to the duration of the project.
3.1.1 Outcome of the Project
The outcome of the project is not temporary (e.g., new/improved version

of a car or new social network sites like Facebook or an online service for
car maintenance). Rather most projects are undertaken to create a lasting
outcome (e.g., dam and irrigation projects, Golden Quadrilateral project for
road network etc.). There are projects delivering results to last for
centuries (e.g., any national monument, the historical forts monuments
built in past etc.).
Every project shall create a unique product, service or result. These

outputs may or may not be tangible. There may be repetitive elements
present in the project deliverables and activities but the fundamental
concept “output of any project will always be unique in nature” remains
unchanged. For example, the residential/commercial/office building are
built with the same basic material content with same construction methods
and practices. In spite of this, each one of these buildings are unique in
nature with reference to its location, design, circumstances/situations
under which the project is executed and the contributors and stakeholders.
3.1.2 Uncertainties and Deviations in the Output
The routine or ongoing activities are generally of repetitive processes which

are executed as per the organization’s existing procedures/SOPs. In
contrast to this, because of the unique nature of the projects, there may be
some uncertainties during execution of the projects leading to deviations to
the products, services and results delivered at various stages of the
projects. Most of them can be corrected at the cost of project duration and
cost whereas few may be irreversible. This aspect of projects will be dealt
in detail in the subsequent chapters.
21
3.1.3 Project Planning and Organization
Because of the uniqueness of the project, there may be new/first-time

activities for the members of the project team. This necessitates more
detailed, meticulous planning and monitoring as compared to the routine
work.
Since the project execution involves many complex activities, the project
team needs support from various functions and from all levels of the
organization. In order to have efficient and effective execution of the
projects, the project team must be comprising of representation of cross-
functional team members at all levels in the organization. While organizing
a project team, the factors such as targeted output of the project, duration
of the project, cost of the project and impact of the project are also needed
to be taken into consideration.
3.1.4 Project Cycle Time
The duration of the project will be defined at the beginning of the project
and will depend on the complexity, final outcome of the project, need of
the early completion of the project and the finance requirement of the
project.
A project once started will reach to an end when:
1. The projects objectives/targets are met with.
2. The project is terminated considering that its objectives will not be met
or cannot be met.
3. The need of the project no longer exists.
A project can create:
• A product which may be a component of another item (e.g., fuel injection

system of an engine), an improved version of an item (e.g., improved
version of a car) or final item/product itself (e.g., a missile launching
vehicle).
22
• A service or a capability to perform service (e.g., material requirement

planning service or a software for material requirement planning).
• An improvement in the existing product or a service (e.g., six sigma

project undertaken to reduce defects in the existing product/service)
• A result such as an outcome or document (e.g., a research project that

develops a medical research paper/knowledge document that can be
used to treat patients or a new approach for diagnosis).
3.2 Classification and types of projects
Classification of projects is done in various ways with a specific basis and

further the same are classified into various types. Each one of these will
have different requirements to manage the same efficiently and effectively
and achieve the unique planned/targeted output.
3.3 Classification on the basis of project ownership
3.3.1 Government and Non-government Projects
Globally, the first specification/basis used for project classification is

whether it is government or non-government project. The Government
projects are generally of very large size. The projects either of:
1. Union/Central/Federal government.
2. State government.
3. Local bodies like Municipal Corporation, Nagarpalika or District

administrative body such as Zilla Parishad
Most of the government projects are of the public interest and in the
sectors like infrastructure, industrial development, irrigation, water supply,
transport, defense, oil and gas, aviation etc. These are either fully or
partially sponsored by the government. Prime objective of all these
projects is to generate infrastructure for the people of the country and
create an atmosphere conducive for social, agriculture, financial and
industrial development of the country. The government may execute these
projects:
23
a. With its own resources and finance or
b. It may get it executed from private sector agencies/industrial houses/

corporates.
c. It may get it executed with private finance and agencies/industrial

houses/corporates on principles like BOT (build/own/transfer) or any
other type of agreement with the financing agencies.
Earning or maximizing the profits is not an objective of the government for

these projects. But all the other agencies involved will look at all these
projects as business opportunities will try to earn and maximize their profit
margins.
Few of the examples of the government projects are listed below:
i. Bhakra Nangal Dam, Koyana Dam

ii. Pune-Mumbai Expressway
iii. Indira Gandhi International Airport
iv. Konkan Railway/Jammu-Udhampur Railway
v. New long-range missiles built for Defence
vi. Oil exploration projects/Gas gathering station in Assam
vii.New Golden Quadrilateral road network between 4 metro cities
viii.Ganga/Jamuna river cleaning project
ix. Bharatpur Bird Sanctuary
x. Jaitapur atomic power project
xi. Indraprastha Stadium, Delhi
3.4 Classification on the basis of project duration
3.4.1 It is a general conception that the projects are of longer duration,

with a large team working for it and of high investments. This not true. The
project, as mentioned earlier, is a one-time (temporary) endeavor
undertaken to create a unique product, service, or result (e.g., an
improvement in existing method, product or service). The duration of such
an endeavor can range anywhere between a week to years.
24
The projects on the basis of duration are generally classified as under:
a. Short-term Projects.
b. Medium-term Projects.
c. Long-term Projects.
3.4.2 Short-term Projects
The short-term projects as the name suggests are of short duration which
ranges between a week even to 6 months. The team size may be as small
as an individual. These projects are generally of the nature such as small
improvement of product/service, generating a standard operating
procedure, generating a database etc.
3.4.3 Medium-term Projects
These are the projects where the duration ranges between 6 months to 24
months. The team size will vary depending on the complexity, nature and
site of the project. The examples of such projects are construction of a
building, development of a new product etc.
3.4.4 Long-term Projects
These are the projects where the duration ranges between 24 months to
60 months. The team size will vary depending on the complexity, nature
and site of the project. There may be multiple teams working on the
projects at multiple locations simultaneously. These projects are generally
of the nature such as construction of dams, airports, oil/gas exploration
facility, railway lines with related facilities, expansion of existing business
with and without addition of products and services etc.
Considering the long-term duration, the risks like delays in execution,

expenses overrun, abandoning due to unviability are more prominent in
long-term duration projects and hence, the same calls for detailed micro
planning, very close monitoring and control.
As a good project management practice, the project duration should not

exceed 60 months. If the project duration is exceeding over 60 months,
the projects are divided into phases and are taken up sequentially or
25
simultaneously. If multiple phases are to be taken up simultaneously, it is

preferred to have different project management teams with co-ordination.
3.5 Classification on the basis of project sector
One more way of classifying/identifying the projects is by the sector to

which the project belongs. Few of the examples are listed below.
Infrastructure Oil and Gas
Aviation Agriculture
Forest Pollution Control
IT Projects Defense
Metal Production Automobile
Shipbuilding Pharmaceuticals
3.6 Classification on the basis of project outcome
The last but most important way of classifying the project is the unique
outcome of the project. Most common of them are listed below.
a. Conducting a market survey to generate new business ideas: For

example, a survey conducted by TATAs for small car market India.
b. Facility Development making it operational: For example, a

manufacturing plant constructed by TATAs for NANO car.
c. Product/Service Development: For example, NANO car developed by

TATAs for specific Indian customer segment.
d. Product/Service Improvement: For example, improved version of ALTO

K10 developed by Maruti Udyog Limited.
e. Process/Software Development: For example, New Local Body Tax

collection process and software adopted by Municipal Corporations,
Banking software adopted by almost all banks.
26
3.7 Summary
• A project is a one-time (temporary) endeavor undertaken to create a

unique product, service or result (e.g., an improvement in existing
method, product or service).
• The outcome of the project is not temporary (e.g., new/improved version

of a car or new social network sites like Facebook or an online service for
car maintenance).
• Because of the unique nature of the projects, there may be some

uncertainties during execution of the projects leading to deviations to the
products, services and results delivered at various stages of the projects.
• The duration of the project will be defined at the beginning of the project
and will depend on the complexity, final outcome of the project, need of
the early completion of the project and the finance requirement of the
project.
• Classification of projects is done in various ways with a specific basis and

further the same are classified into various types. Each one of these will
have different requirements to manage the same efficiently and
effectively and achieve the unique planned/targeted output.
• Most of the government projects are of the public interest.
• The government projects are either fully or partially sponsored by the

government.
• Prime objective of all the government and projects is to generate

infrastructure for the people of the country.
• Earning or maximizing the profits is not an objective of the government

for projects.
• Considering the long-term duration, the risks like delays in execution,

expenses overrun, abandoning due to unviability are more prominent in
long-term duration projects and hence such projects calls for detailed
micro planning, very close monitoring and control.
27
• As a good project management practice, the project duration should not

exceed 60 months.
• If the project duration is exceeding over 60 months, the projects are

divided into phases and are taken up sequentially or simultaneously.
28

understanding
1. Referring the project definition, make a list of three projects each with
outcome as _________.
a. Product
b. Service
c. Improvement in existing product
d. Improvement in the service
e. New process
f. New software
2. Classify above projects into _________.
a. Government long-term projects

b. Sector-wise projects
c. Short-term projects
d. Government-financed projects
e. Government BOT projects
3. Justify how the project output/result is unique for each of the project.
29
1. A project is not a one-time endeavor undertaken to create a unique

product, service, or result. True or False
a) True
b) False
2. Once a project has started it can reach to an end when ________

a) The projects objectives/targets are met with.
b) The project is terminated considering that its objectives will not
be met or cannot be met.
c) The need of the project no longer exists.
d) All of them.
3. What can a project create?

a) A product which may be a component of another item
b) A service or a capability to perform service
c) An improvement in the existing product or a service
d) All of them
4. If the project duration is exceeding over _____ months, the projects are
divided into phases and are taken up sequentially or simultaneously.
a) 60
b) 30
c) 25
d) 40
5. _______ are the projects where the duration ranges between 6 months
to 24 months.
a) Short-term Projects
b) Long-term Projects
c) Medium-term Projects
d) Fixed-Term Projects
Correct Answer:- (1) – b, (2) - d, (3) - d, (4) - a, (5) - c
30
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
31
METHODS OF GENERATING BUSINESS IDEAS
Chapter 4
Methods Of Generating Business Ideas
Objectives
As mentioned in Chapter 2,
“Business is an economic activity, which is related with continuous

and regular production and distribution of goods and services for
satisfying human needs and wants.” and
“The establishment of a business is achieved by treating each

activity as a project and a mechanism is established to develop the
standard practices, monitor and improve the same on a regular
basis.”
The human culture varies from country to country, state to state, religion
to religion, class to class, ethnic group to ethnic group and society to
society. Also evolution of human culture is a continuous process. Because
of the continuous evolution, the human needs and wants are continuously
undergoing the change. The speed of this change in recent decades has
increased due to the globalization and development of the information and
technology.
These rapidly changing human needs are giving birth to new business
opportunities every day. All businessman and business establishments are
therefore competing to sense these business opportunities and are
engaged in generating new ideas to set and achieve the business targets.
Considering the description above and in order to manage the projects

efficiently and effectively, it is very important to gain a knowledge about
the “METHODS OF GENERATING BUSINESS IDEAS”.
32
Structure:
4.1 What is an Idea?
4.2 Business Idea
4.3 Creative Environment and Methods for Generating Business Ideas
4.4 Methods of Generating Business Ideas
4.5 Summary
4.7 Exercise
33
4.1 What is an IDEA?
The most commonly accepted definition of idea is “An idea is a thought

or collection of thought that generates in mind.”
This generation is generally with intention, but unintentional idea

generation is not ruled out. Important aspect to note is that one must
ensure the mind is kept open and unlocked for the ideas to flow.
4.2 Business IDEA
A business idea is an idea generated which can be transformed into a

viable concept and used for commercial purposes. It typically centers on a
commodity or service that can be sold for money.
34
4.3 Creative Environment and Methods for generating

Business Ideas
There are several methods for generating ideas. These ideas then need to
be developed and tested to convert into a business idea. Business ideas, if
introduced at the right time, when demand for such service or a product
introduced by the idea is expected to surge, can lead to a very profitable
business. Business ideas are always available around; however, it is the
application applied on these ideas, and timing makes all the difference in
failure or success.
4.3.1 Creative Environment for Idea Generation
A creative and conducive environment is first and foremost requirement for

effective and efficient idea generation. Following are few important tips to
ensure such environment.
4.3.1.1 Start with Family
For a business establishment, the term family has a wider reference and
refers to all the stakeholders especially employees at all levels since they
are consistently in touch with the business activities, processes and
customers. Tapping family for great business ideas is an obvious first step
doesn’t call for any additional expenditure. To keep the family always
charged for delivering the ideas, it is necessary that all the employees are
qualified, rightly placed, trained and aware of the organization’s business
policies and values.
4.3.1.2 Also Involve the Extended Family
Do not limit yourself and solely depend on your own family ideas–especially
when your creative juices run dry. This is reason enough to listen to ideas
others may have. Here, others are obviously your expanded family. The
expanded family refers to the suppliers, business associates, professional
service providers, technical advisors, legal advisors and even the business
competitors. With the expanded family, chances are there that a couple of
them have some incredible brilliant business ideas.
35
The important aspect is to keep your antenna up at all times so you can
retrieve good ideas when you stumble across them and you may make
more money recognizing someone else’s idea than creating one yourself.
4.3.1.3 Look at All the Things that Bug You
It may not sound profound, but this is very fertile ground for great
business ideas. Here are few examples which generated great business
ideas in this area out of a bug.
Mr. Kemmons Wilson was quite upset in the 1950s when a motel owner
wanted to charge him an additional price for each of his five children. He
was so ticked off, he launched Memphis, Tennessee-based Holiday Inn,
today one of the world’s largest hotel chains.
If King C. Gillette hadn’t been fed up with the tedious process of

sharpening his straight-edge razor, he wouldn't have founded the massive
disposable razor industry. When he took his idea for a portable razor with a
blade that could be used several times to a research university for
assistance, engineers questioned his sanity. Gillette followed his instincts
and the rest is history.
4.3.1.4 Tap Your Expertise and Interests
Thousands of clever people have taken up hobbies and turned them into a
successful business. Tim and Nina Zagat, who launched the Zagat Surveys,
a publishing empire that sells restaurant guides for many major US and
European cities, are great examples. In the early 1970s, the Zagats were
high-priced corporate attorneys whose passion was dining out. For fun,
they created a newsletter in which they asked their friends to rank popular
restaurants in several categories. Each year, the newsletter encompassed
more restaurants. Eventually it became such an expensive and time-
consuming undertaking that the couple began charging money for it to
allay their expenses. That was the meager beginning of the famed Zagat
Survey, which is sold in bookstores worldwide. “When you’re doing
something you love, it’s never considered work,” says Ries a marketing
guru from USA and author of the book ‘Positioning: The Battle for Your
Mind’.
36
4.3.1.5 Keep Your Senses Alert on Travel
Traveling opens your eyes to a plethora of potential business ideas, e.g.,

Leopoldo Fernandez Pujals’ (A businessman from Spain) discovery of
Domino’s Pizza on a trip to the United States from his native Spain. Pujals
was so impressed with the fast-food preparation and operation, he went
back to Spain and launched his own version, called TelePizza, in 1986. His
company now registers $260 million in sales, and employs 13,000 people
in eight countries.
4.3.1.6 Keep Your Eyes Open
When you see something that piques your interest, ask yourself, What is it
about this situation that’s special? Then narrow your focus so you home in
on the idea. The process of zeroing in on the idea often gives birth to
important niche markets. Here is a success story of one of the Indian
enterprise which narrowed to the start-up idea and excelled
making best use of the Internet.
Gone are the days when start-ups would take years to get visibility and
prosper. Today, a start-up can easily reach out to hundreds of thousands
people and flourish without having to spend a huge sum–but only if it
knows how to make the best use of the Web and various free services
available online.
Bengaluru-based Chumbak, which is widely known for producing quirky

products–from fridge magnets to eccentric boxer shorts – is one such
example.
Founded in March 2010, the start-up has progressed and expanded

multifold in the last three years, and their founders credit the web and
Google Adwords for where they are today. “The Web is a start-up’s best
friend,” says Vivek, Co-founder, Chumbak, adding, “AdWords is pretty cool
as it helps us reach out to consumers we physically can't go to and say
come in and buy.”
37
The company’s success story spreads across the borders, and

consequently, it was contacted by a California-based company Enso, which
was working with Google to create a case study video on how companies
worldwide used Google services and made the Web work for them. They
were looking for businesses that had a compelling business, web and
human story.
Three companies worldwide got selected and Chumbak was one of those
three. “We got shortlisted and had a couple of rounds of interviews with
them on Google Hangouts and over a course of a week, they had spent
many hours getting to know us and what we did at Chumbak. A week later,
we got an e-mail saying that we had been selected and we would be one of
the three companies worldwide that would be a part of the Google case
study,” said Chumbak in a blog post.
The founders of Chumbak conceived the idea of this offbeat start-up and
they used the web to create a niche market and fly high.
4.3.1.7 Examine Old Mousetraps –– Then Build a Better One
“If a product doesn’t meet your own high standards, create a better one,”
advises British business trend watcher Perry Lowe. “That’s what put Ben
and Jerry’s on the map.” Ice-cream fanatics Ben Cohen and Jerry
38
Greenfield felt popular ice-creams weren’t rich and tasty enough for their
cultivated palates (ability to taste and distinguish between flavors), so they
created their own super-premium line of ice-cream, which is a best-seller
nationwide. Just think: If these ice-cream gurus weren’t such picky eaters,
there would be no Cherry Garcia, Chubby Hubby or Phish Food (the famous
ice-cream flavors) to enjoy. Ben and Jerry will appear soon on Indian map
also.
4.3.1.8 Take it to the Streets
There's no better place to lock into up-and-coming trends than city streets,
Lowe contends. Street culture spawned punk, hip-hop, grunge and a
number of other fads that rapidly evolved into multimillion-dollar
businesses in United States.
“Great ideas can often be found by just browsing happening inner-city

neighborhoods in virtually any big city in the world,” says Lowe.
4.3.1.9 Continue Dreaming
Many people ignore their dreams, and some don’t remember them at all.
But sometimes it pays to listen to those inner messages, no matter how
strange or less intelligent they are. “You never know, you might just find
the germ of a great idea,” says Lowe. The tough part is crawling out of bed
in the dead of night to jot down those great ideas before they’re forgotten.
4.3.1.10 Check out the Net
In the world, where IT Explosions are taking place every moment, web
surfing as a fun way to log on to potential business ideas. Virtually every
search engine has a ‘What’s New’ or ‘What’s Hot’ section, where it lists new
trends, news tidbits and hot new websites.
Keeping a consistent check on various sites can lead to the trigger of an

idea or concept which is never thought of.
39
4.4 Method of Generating Business Ideas
Having understood the basic concept of idea, a business idea and wide
variety of sources/aspects of ideas available in the previous sections,
coming up with an idea to serve as the basis for a new business idea still
can be the area of concern. Hence, the need to clearly understand the
several methods of generating business ideas and make use of the correct
one or a combination of them is inevitable.
These methods are best suitable for an organization that need expansion in
products or services and be rest assured about the future business.
Prominent of them are elaborated for better understanding.
4.4.1 Focus Groups
A focus group is defined as a group of individuals providing information in a

structured format. A moderator leads the group of about 8 to 14
participants through an open, in-depth discussion rather than simply
asking questions to solicit participants’ responses.
For a new product or services area, the moderator focuses the discussion
of the group in either a directive or non-directive manner.
The group is stimulated by comments from other group members in

creatively conceptualizing and developing a new product or service to fill a
market need.
The focus group is an excellent approach for initially screening ideas and
concepts. Existing company can use this method to expand a section or
department to be able to achieve greater productivity in its services.
4.4.2 Brainstorming
The brainstorming method allows a group of individual to be stimulated to

greater creativity by interacting with each other and participating in
organized group experience.
Most of the ideas generated from the group have no basis for further
development, yet there are times that a good idea emerges. This has a
40
greater frequency of occurrence when the brainstorming effort focuses on a

specific product or market area.
For this approach to be successful, there are certain basic rules which must
be followed. These rules are as follows:
1. There should be no negative comment or criticism.
2. Each participant must be provided with an opportunity to suggest his/

her idea till all such ideas are exhausted.
3. Quantity of ideas should be encouraged, the wider the idea, the better
and combinations and improvements of ideas are encouraged.
4. All such ideas generated must be recorded.
Many engineering, manufacturing giants, modern commercial banks

successfully used brainstorming techniques to develop a series of product/
improve the products and services for their clients or customers.
4.4.3 Problem Inventory Analysis
Problem inventory analysis is a method for obtaining new ideas and

solutions by focusing on existing problems. In this approach, the customers
or consumers are provided with a list of problems in a general product
category.
Thereafter, they are asked to identify and discuss product in each category
that have a particular problem. Other way to add to the problem inventory
list is to monitor and record the customer complaints on a regular basis.
The feedback from the service and marketing personnel can be another
source of problem inventory. This method is effective when an improved
service/product is desired. This approach also will be useful to identify the
product gaps, the niche in the market.
This approach also helps to improve the customer satisfaction index which
is vital factor for repeat business opportunity and establish the brand
equity value.
41
When known product or services are related to suggested problems, a new

product idea emerges. Result from product inventory analysis must be
carefully evaluated as they may actually reflect a new business
opportunity.
For maximal result, it is advisable that problem inventory analysis should

be used primarily to identify new product ideas from existing product
before further evaluation.
4.4.4 Market Research
Market research is a very vast and complex subject. The same can’t be
discussed here in few lines. Market research is a very powerful method to
identify the new avenues of business for expansion/starting a new
business. This approach will be helpful to identify business which will
maximize the utilization of available expertise, infrastructure and the
finances.
Very systematically and scientifically conducted Market Research survey

may take a longer time and involve some initial expenses.
4.4.5 Future Planning
Long-term future planning and constant monitoring of the same to align

them with the customer/market requirements is a very strong approach to
generate business ideas and implement the same. Close monitoring of the
customer’s changing needs, identifying and jumping on the ideas,
development of these ideas within shortest possible time and launching
them at the right time are prominent factors for the future planning to be
efficient and effective.
There are business establishments existing for decades and some of them
are there for centuries and also have developed a global network. Few of
them are PHILIPS, LINCOLN, JOHNSON and JOHNSON, TATAs, BAJAJ AUTO,
MARUTI UDYOG. This is possible only with effective and efficient future
planning.
42
4.5 Summary
• “An idea is a thought or collection of thought that generates in mind.”
• A business idea is an idea generated which can be transformed into a

viable concept and used for commercial purposes. It typically centers
on a commodity or service that can be sold for money.
• A creative and conducive environment is first and foremost requirement

for effective and efficient idea generation. Following are few important
tips to ensure such environment.
(i) Start with family

(ii) Involve the extended family
(iii) Look at all the things that bug
(iv) Tap your expertise and interest
(v) Keep your eyes open
(vi) Keep your senses alert on travel
(vii) Examine old mouse traps – then build better one
(viii)Take it to the streets
(ix) Continue dreaming
• Understand the several methods of generating business ideas and make

use of the correct one or a combination of them is inevitable.
• The prominent methods of generating business ideas are:
(i) Focuss Groups

(ii) Brainstorming
(iii) Problem Inventory Analysis
(iv) Market Research
(v) Future Planning
43

understanding
1. List down the five thoughts coming to your mind every day for a week.
Check how many of them are business ideas.
2. Follow the rules and conduct a Brainstorming session with group of 4 to

7 on the subject “How the delays in the examinations can be controlled
and reduced to zero?”
3. Prepare a report with respect to:
a. Idea generated by each participant

b. Total idea generated
c. Group the similar/closer ideas to generate final list of ideas
d. Check and list the number of ideas which can be business ideas.
4. Prepare a future plan report for yourself for next 25 years and elaborate
on how you have taken into consideration:
a. Your skills and expertise

b. Your changing needs
c. The external factors affecting the plans
d. Finance requirements for executing these plans.
44
4.7 MULTIPLE CHOICE QUESTIONS
1. A business idea is an idea generated which can be transformed into a

viable concept & used for commercial purposes.
a) True
b) False
2. Business ideas, if introduced at the right time, when _______ for such
service or a product introduced by the idea is expected to surge, can
lead to a very profitable business.
a) requirement
b) demand
c) need
d) importance
3. The expanded family refers to the _______

a) suppliers,
b) business associates,
c) professional service providers,
d) All of them
4. If ________ hadn't been fed up with the tedious process of sharpening

his straight-edge razor, he wouldn't have founded the massive
disposable razor industry.
a) Mr. Kemmons
b) Nina Zagat
c) King C. Gillette
d) Tim Zagat
5. The brainstorming method allows one individual to be stimulated to

greater creativity by interacting with each other and participating in
organized group experience.
a) True
b) False
Correct Answer:- (1) – a, (2) - b, (3) - d, (4) - c, (5) - b
45
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
46
TRANSFORMATION OF THE BUSINESS IDEAS INTO PROJECTS
Chapter 5
Transformation Of The Business Ideas Into
Projects
Objectives
In the last three chapters, we have discussed and learned about the terms
human needs/wants, business, projects, ideas and business idea. We have
also learned various methods of generating business ideas. This is the first
step towards our journey to PROJECT MANAGEMENT.
Till this time, we have enlighten ourselves to develop the ability to come up
with a business idea which can be transformed into a viable business. But
in order to put these ideas into business, these ideas must be supported by
feasibility and a business plan. Once this is achieved, the same can be
easily transformed to Project. Our endeavor in this chapter is to get
ourselves acquainted to this process of “Transforming of Business
Ideas into Projects”.
Structure:
5.1 Feasibility of the Business Idea
5.2 Also consider these to implement a feasible idea
5.3 Molding Business Idea into Project
5.4 Summary
47
5.1 Feasibility of the Business Idea
In order to decide whether the business idea is feasible, it is essential to

consider following aspects:
5.1.1 Definite Section of Users
The importance of an idea is often overrated at the expense of developing

output that can be sold in enough quantities to the users. There must be at
least some users who really need the output of the idea on an urgent basis
and not just people who could see themselves using it one day. The today’s
most used social website “Facebook” is initially developed with a very small
section of internet users as target users. But future of the idea has proven
to be brightest.
5.1.2 Uniqueness
A unique idea will always have a competitive edge for marketing of the
same. It doesn’t mean that one should not launch an idea which is not
unique in its nature. But for such an idea, uniqueness can be cultivated by
adding unique features, exclusive, quality and by adopting unique sales,
marketing and service techniques.
5.1.3 Investment to Output Ratio
To implement an idea, must meet the prime requirement of any business

one, i.e., commercial viability. It is always advised to conduct a systematic
financial study considering the short-and long-term benefits.
5.1.4 Expected Returns
The expected returns in terms business volume the profits for short term &
long term are extremely important to decide the feasibility of a business
idea. The acceptance /rating /rejection will depend on the business policies
of an establishment, prevailing market scenario. The criteria becomes more
prominent if there are more no of business ideas available. Project team
prepares data of Capex – Investments required for assets ( Bldg &
Machines ) , additional labour , logistics , project total expenses , expected
volume of new / changed product with additional margin expected etc.
48
Finance team calculates IRR. Based on that management decides about

acceptance of project.
5.1.5 Time Duration to Implement the Idea
The time duration must be assessed to implement the idea in order to

launch the output at an appropriate time. Creativity and innovations are
the keys to keep this time under control. If the appropriate time is missed,
there is risk of missing the bus and one may have to face the “Closed
market window”.
5.1.6 Life Cycle of an Idea
An idea whose time has come and has the quantities/qualities of being
attractive, durable and timely. An opportunity is anchored in a product or
service which adds value for its buyer or user. The window of opportunity
must remain open long enough for the entrepreneur to be able to exploit
the advantages afforded by it. Also possibility diversion/use in future of
investment done needs to be considered for business ideas with shorter
life.
5.1.7 Threats/Risks to the Idea
There are factors which are beyond control of a business establishment like
the changing needs of the user, government statutory rules and
regulations, competitor’s plans etc. All the possible threats/risks must be
assessed well before declaring the business idea to be feasible. The key to
do this is entrepreneurial alertness, desire and drive to make it work.
The time taken to conduct the feasibility study is of utmost important in

today’s environment; in which (speed and sense of urgency) are the
buzzwords for a successful business organization apart from the chances of
missing the bus. Once the scientific/ systematic feasibility study is
conducted, a report should essentially be generated and distributed to all
concerned parties/individuals. This is necessary to boost the self-
confidence of all concerned while implementing the business idea without
any room for doubts and knowledge about the possible risks/threats. A
sample feasibility checklist and feasibility report is provided for better
understanding under Annexure 5.1 and Annexure 5.2.
49
As a general guideline, any idea for which the feasibility rating is above
90% can be implemented with minimal risk. The rating between 80% to
90% will have average risk factor and needs attention while implementing.
Any rating between 70% to 80% will be a high risk business idea and the
call to implement will be based on risk calculation. It is advised not to
implement any idea for business rating less than 70%. As mentioned in the
beginning, these are general guidelines. The establishments/organizations
may have and adopt their own policies for making the decisions.
5.1.8 Also consider these to implement a feasible idea
The window begins to close as the market becomes more structured and
the competition becomes stiffer. Types of opportunities available include
new products and services, new means of production, new distribution
routes, and improved service and relationship building.
• Confidence is an important ingredient of success in the majority of

ventures including business. Lack of confidence results in procrastination
and inertia which are detrimental to entrepreneurship. The timing of
implementation of business ideas is very crucial for their success and
those who lack self-confidence are likely to be passed by the “windows of
opportunity” during periods of self-doubt.
• Creativity and innovation is what helps successful entrepreneurs to beat

the competition. While business training has influence to pursue business
ideas. The specific environment has been viewed as one of the set of
influences which selectively permit some ventures to survive while
available resources help to specify the carrying capacity of a given area
where you want to operate the project.
• An idea does not automatically translate into an opportunity. Finding a

good idea is the first step in the process of converting an entrepreneur’s
creativity into an opportunity.
• Ideas are just ideas. An idea is the seed of a successful product or

service. Without proper care and maintenance, it will not bloom. Ideas
require solid research of the target market, a good strategy and a sound
business plan, without which, ideas cannot go much further.
50
5.2 Molding business idea into project
With the approach elaborated above ones, it is concluded that the business
idea is feasible. The next obvious step is to prepare a business plan in the
light of project definition and philosophy which we have assimilated in last
few chapters.
The prime project requirements as stated earlier are:
1. A project is a one-time (temporary) endeavor.
2. A project is undertaken to create a unique product, service, or result

(e.g., an improvement in existing method, product or service).
3. A project has a definite start and end.
4. A project needs an organized team to execute.
5. A project needs finance allocations.
6. A project has uncertainties and deviations are likely.
It is essential that all above requirements are taken into consideration

while writing a Business Plan. Each requirement in relation to the business
idea implementation is explained briefly in following paragraphs.
5.2.1 One-time Endeavour
For implementation of each business idea, a business plan is needed

which will be executed as a project. This is what is referred to as one-time
endeavor. There may be similar business plan for each idea with the
activities, scope same or similar in nature. But it is essential to execute the
business plan exclusively for each business idea. The expense requirement
also may vary but is needed once for implementation of a business idea.
5.2.2 Unique Output
Any business idea will deliver an output which will be unique in nature. The
output may be a product, service, facility, infrastructure, equipment, a
system, resource or a combination of some of them, may be all of them. A
51
business is expected to specify/outline the output and its uniqueness in

clear terms without any ambiguity. The clearly defined output will avoid the
difficulties while executing the project plan prepared to execute the
business idea.
5.2.3 Definite Start and End
As elaborated earlier, the defined start and end is the prime requirement
for implementing any business idea transformed into project. The defined
start and end are integral part of every business plan. These will be the
basis for the project plan and the activities thereof like crash plans,
corrective actions and correction plans. The time span will decide the
resource requirement and control the expense budget. Here, one must be
very clear about the start and end that this start and end are for
implementation of business ideas though project philosophy and not the
start and end for the routine manufacturing/operations activities.
The monitoring and measurement of gains of the implemented business

idea will start only after the successful implementation of the business
idea.
5.2.4 Organized Team to Execute
The successful implementation of business idea is the output of a organized

team effort. While preparing the business plan, the team organization must
be considered and addressed. The team size and complexion should be
built to integrate the required expertise, experience and skills. This is very
essential for the idea to sail smoothly.
5.2.5 Finance Allocations
For the execution of any activity, Vitamin M is the important element and
the business idea execution project is not an exception for the universally
accepted principle. Only important aspect of the finance for projects is that
the delays are not acceptable at any stage and hence utmost importance
and priority must be attached. In order to ensure this, the business must
identify and clearly define the primary and alternative sources of finances.
The finance allocation must be sufficient to complete the activities. Roles
and responsibilities of finance allocation, disbursements, additional
contingencies etc. must be very clearly defined.
52
5.2.6 Uncertainties and Deviations
As stated earlier, uncertainties and deviations are inherent features of the

business idea execution project. Hence, the cognizance of the same will
form the integral part of the business plan. Precisely conducted feasibility
study will be of assistance to identify the possible elements of uncertainties
and deviations. Business plan must have mention of these for the
knowledge and awareness of all concerned and the course actions to
counter them. This will avoid the last minute surprises and any stalemate
situations.
5.2.7 Final Close-out Actions/Handover
This will be the last but not the least portion of the Business Plan. It is
expected here to clearly define the methodology, the further action plans,
reports to be generated as close- out actions and declaration with closing
sign off.
The precise, accurate, specific and structured business plan with above
considerations is the medium to transform the feasible business idea into
project which subsequently shall travel through the various stages of
PROJECT MANAGEMENT. The project journey, aspects, skills and many
more features of the same will be deliberated in subsequent chapters.
The typical Business Plan will include the details with reference to the
business aspects discussed above in addition to the executive summary,
company details including strategies and policies, administrative guidelines,
the details of analysis done (e.g., break-even analysis, SWOT analysis etc.)
and operating methodology. The complete details should be covered
approximately within 25 to 30 pages.
53
5.3 Summary
• In order to put the ideas into business, these ideas must be supported by
feasibility and a business plan.
• In order to decide whether the business idea is feasible, it is essential to

consider the following aspects:
i. Definite section of users.

ii. Uniqueness.
iii. Investment to output ratio.
iv. Expected returns.
v. Time duration to implement the idea.
vi. Life cycle of an idea.
vii.Threats/risks to the idea.
• The time taken to conduct the feasibility study is of utmost important in

today’s environment; in which speed and sense of urgency are the
buzzwords for a successful business organization apart from the chances
of missing the bus.
• Once it is concluded that the business idea is feasible, the next obvious
step is to prepare a business plan in the light of project definition.
• The precise, accurate, specific and structured Business Plan with

considerations such as one-time endeavor, unique output, definite start
and end, organized team to execute, finance allocations, uncertainties
and deviations and final close-out actions/handover is the medium to
transform the feasible business idea into project which subsequently shall
travel through the various stages of PROJECT MANAGEMENT.
54

understanding
1. Conduct the feasibility study for the ideas listed as an output of learning
activity of previous chapter (Refer 4.7.2).
2. Prepare Feasibility study summary report for ideas listed above.
3. Decide which of these ideas are feasible as per the general guidelines
and prepare a Business Plan for any two of them.
55
1. Today’s most used social website ________ was initially developed with
a; very small section of internet users; as target users.
a) Whatsapp
b) Facebook
c) Google
a) Twitter
2. The expected returns in terms business volume the profits for short
term & long term are extremely important to decide the feasibility of a
business idea.
a) True
b) False
3. The window of opportunity must not remain open long enough for the
entrepreneur to be able to exploit the advantages afforded by it.
a) True
b) False
4. The time taken to conduct the feasibility study is of utmost important in

today’s environment; in which ______& are the buzzwords for a
successful business organization
a) speed
b) growth
c) sense of urgency
d) both a & c
e) both a & b
5. The team size and complexion should be built to integrate the

required______
a) expertise
b) experience
c) skills
d) All of them
Correct Answer:- (1) - b, (2) - a, (3) - b, (4) - d, (5) - d
56
ANNEXURE 5.1
Feasibility Check List
SR. NO. MAJOR CHECKPOINT SPECIFIC INSTRUCTIONS/

CONSDERATIONS
1.0 User section
Short-term users Volumes, possibility of retention and

duration.
Long-term users Volumes, possibility of retention and

duration.
2.0 Uniqueness
Product/Service Availability if not new.
Features Compare with others available if not new. If

new, promotion requirements.
Cos/Utility
3.0 Investment
requirements
Capital Possibility of available. If not short-term,

long-term or phase-wise, liabilities
Resource generated.
Recurring/running
expenses
4.0 Expected returns
Geographical Area If the area is untapped, the distribution

network requirements.
Rise in turnover Ratio w.r.t. to current business turnover and

organization’s vision and mission.
Effect on profit % Organization’s business policy.
5.0 Implementation
period
Phase Single Phase, Multiphase.
Duration Beginning of promotion campaign,

launching, secrecy requirements.
57
Starting Date
End Date
6.0 Life cycle
Period ROI, utility of capital goods for diversion,

possibility of developing similar business
idea.
Returns over the Whether the returns will remain same,

period reduce or rise.
7.0 Threats/risks
Strengths Technical, available know-how, experience

of human resource, financial stability,
Weaknesses marketing network.
Opportunities Untapped market, competition etc.
Threats All of the above
8.0 Any other factors

with respect to
organizational
policies
58
ANNEXURE 5.2
Feasibility Report Summary
SR. NO. CHECKPOINT RATING ACTUAL

RATING SCORE
1.0 User section
Short-term users
Long-term users
2.0 Uniqueness
Product/Service
Features
Cost/Utility
3.0 Investment requirements
Capital
Resource
Recurring/running expenses
4.0 Expected returns
Geographical area
Rise in turnover
Effect on profit %
5.0 Implementation period
Phase
Duration
Starting Date
End Date
6.0 Life cycle
Period
Returns over the period
59
7.0 Threats/risks
Strengths
Weaknesses
Opportunities
Threats
8.0 Any other factors with respect

to organizational policies
TOTAL 100%
60
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture
61
PART - II
PART - II
62
INTRODUCTION TO PROJECT MANAGEMENT AND PHASES OF THE PROJECTS
Chapter 6
Introduction To Project Management And
Phases Of The Projects
Objectives
Now, we have completed one more stage of our journey towards project
management. Our business plan is ready and this stage onwards we will
start managing the project in real sense. While doing this, we will first
understand the concept of project management, get ourselves acquainted
with various styles of project operation and then the various stakeholders
of the project and their roles.
This will provide us an idea about the things which we are supposed to
manage. In order to manage all these effectively, we will then study the
various control factors which we need to manage and control throughout
the project cycle.
As mentioned earlier, speed and sense of urgency are the keywords in the
world of Project Management which are all the time referring to the delays.
Hence, in order to take care of these, we will also glance through common
reasons of delay evolved over the period by the history of Project
Management.
All the above will build the basic foundation of Project Management on
which we construct the PROJECT in phases. We will also define these
phases and the phase-wise learning for management of the project will
continue
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Structure:
6.1 Concept of Project Management
6.2 Project Stakeholders and their Roles
6.3 Control Factors for Managing the Project
6.4 Common Reasons for the Delays in Project
6.5 Methods of Project Operation
6.6 Phases of Projects and its Management
6.7 Role, Responsibilities and Skills of Project Manager
6.8 Summary
64
6.1 Concept of Project Management
Basically, project management is nothing but application of knowledge,

skills, tools and techniques to project activities in order to meet the project
requirements. Application of these to all the logical and integrated project
activities (processes) throughout all the phases will accomplish a very well-
managed successful project and achieve the project output as planned.
To elaborate further the major functions, but are not limited to, for
managing a project typically includes:
a. Identifying the requirements.
b. Addressing the various needs, concerns and expectations of the

stakeholders.
c. Setting up a communication network and maintain the same to ensure

effective, active and collaborative communication between the
stakeholders.
d. Manage and direct all the stakeholders towards meeting the project
requirements and create the project deliverables.
e. Balancing the competing project constraints (control factors).
The specific nature, attributes and environment of the project may

influence the list of constraints which needs focus of the Project
Management Team.
Due to potential for change, the change/revision aspect of a project must

be respected and provided with due attention throughout the life cycle of
the project. The same will be elaborated further at appropriate stage. This
consideration will help the project management team to come up with
accurate estimates and take necessary corrective actions at appropriate
time for better management of the project.
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6.1.1 Project Constraints
Balancing the project constraints is a very critical function of the project

management and needs to be handled very skillfully. As mentioned above,
the list of project constraints will vary from project to project. In general,
this will include, but will not be limited to:
• Scope
• Quality
• Schedule
• Budget
• Resources and
• Risks
The relationship amongst these constraints is of utmost important since a

change in one will always simulate an impact on the other. For example, if
the project schedule is crashed, it is unavoidable to provide additional
resources to complete the project without any change in the scope and
quality. In turn, the addition of resources will definitely trigger a revision
in the budget.
Whereas if the revision of budget is not possible, the project scope and/or
quality may be revised to deliver the end results of the project within the
crashed time frame. This will definitely lead to an impact on the project
stakeholders and the revised deliverables may create additional risks.
This will be a situation which needs very skillful handling as mentioned

above. The project team must be in a position to assess the situation,
balance the demands and requirements of stakeholders and take a final
call. The proactive communication of the final decision to all the
stakeholders will ensure accomplishment of a successful project.
6.2 Project Stakeholders and Their Roles
It is very essential to know and establish the list of all stakeholders for
effective and efficient Project Management. A stakeholder is an individual,
group or an organization who may impact or get impacted by the activity
or outcome of the project. The stakeholders may or may not be directly
involved in the project activities but can have interests that will get
affected by the performance of the project. Vice versa, the stakeholders
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also may exert pressure on the project management team to achieve a set
of results needed to satisfy strategic business objectives or other needs.
Good project governance skill is a must in such situations to align the

business strategies and objectives with the project management in order to
consistently manage the projects and maximize value of project outcomes
in line with the business strategy. Such a governance will provide a
framework within which the project management team can take decisions
to satisfy both the stakeholders needs/expectations and organizational
strategic business objectives. This framework also will be useful to address
the issues which are not in line with the business strategies and improve
upon the same. The sample list of stakeholders with their interaction
matrix is available at Annexure 6.1.
6.3 Control Factors for Managing the Project
The consistent project management within the project constraints,

stakeholders and governance framework is not an easy task though the
project team members are alert and on their toes. It is observed that many
surprises, issue, delays are cropping up with uncertainties during the
project management. The major reasons for them to appear are not
related with project management but the poorly identified/defined control
factors. The identification, establishment and application of control factor is
of prime importance to keep the projects on track all the time and
accomplish final results as planned.
Evolved over the years, the most important control factors which are
applicable to all types of projects are:
• Time
• Money/Budget
• Quality
• The Team Operating on the Project
• Information
These five factors are the soul of the project and must be treated and
followed very religiously by each of the stakeholders for success of the
project. All of these must be the integral part of each and every project
documents like plan, progress monitoring, reporting and so on.
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6.3.1 Time
Time control appears on the top of the control factor list since, if not
controlled, it is impacting almost all constraints of the projects. The time
control is incorporated in all the project activities in the form of amount of
time estimated for each activity, the deadlines for the same. Controlling the
time will ensure that each activity is completed on time.
Time consideration for all project documentation/plans will indicate and

control:
• Which activity should take place in which phase.

• Estimated time for each activity.
• Sequence of the activities.
• Human resource and material allocation for each activity.
• Actual time taken by each activity and the addition/reduction of expenses
thereof.
• The shortest, longest and critical deadlines
Time consideration is equally important for progress monitoring and will

monitor and indicate:
• Progress.
• Deadlines.
• Adjustments of schedules required.
With reference to project reporting, time control will ensure
• Generating reports on the actual time.

• Analysis of actual time and provide clues/explanation for excess/less time
consumption.
Thus, to emphasize once again, there is no other option for exercising the
Time Control. Many organizations/project executors doesn’t attach the due
importance to the time control. The obvious reasons provided for
overruling the control are:
• There is no time estimates available.

• Activities of multiple projects are combined.
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• The process of exercising the time control itself is too complicated and
time- consuming.
• The control delays the activities in line.
• Whatever time it takes, the project is to be completed.
All the above can’t be justified since the efficient and effective project
management will not only complete the project but will always put in all
efforts to complete the projects with expected output, on scheduled time
and within the budgeted cost.
Even if this is not achieved with time control in place, the gaps, overruns,
delays are known and can be corrected to the maximum extent possible
and the learning can be incorporated as system improvements on a
continual basis to avoid the repetitions in future project management.
Obviously, the valid reasons can’t be neglected and must be resolved to

keep the control system in operation and also ensure that it is not delaying
the project activities in line.
The detailed time estimation and work breakdown system will be

deliberated at appropriate stage of the project management study.
6.3.2 Money/Budget
Many of the project stakeholders are of the opinion that the cost/budget/
money control is the responsibility of the marketing, procurement,
accounts and labor handling only. This is totally wrong. Arranging finance
and monitoring the cash may be a function of a group. But each
stakeholder of the project is equally responsible for the budget control.
For example, if there is some ambiguity in the contract/product

specification, the marketing will be responsible for extra cost incurred,
whereas if the design and engineering is designing the product/service with
additional features, the cost may go up. Similarly, if the customer is
demanding something beyond the agreed specifications, the same will
definitely lead to additional cost. Similarly, the extra time required to
incorporate also will lead to additional cost and extended schedules.
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The Money/Budget control in project documentation/plans will provide the:
• Internal/external human resource cost.

• Estimated man-hours.
• Budgets for specific tasks (professional fees, imports etc.)
• Budgets for raw materials, tools, consumables etc.
The money/budget control while monitoring the progress of the project will
ensure:
• Cash flow monitoring.

• Negotiations with suppliers/subcontractors.
• Monitoring of actual cost versus estimated costs.
• Adjustment of budgets, if any.
• Negotiate with customer/clients for above referred budget adjustments.
The money/budget control in project reporting will reflect with:
• Compiled periodic financial reports and statements.

• Analysis of these reports indicating the financial health of the project.
• Gravity of further control needed.
• Directions of project team to expedite specific actions. (For example, if
import from a specific country is required and the exchange rate is on a
rising trend, the same can be highlighted to expedite those particular
imports and keep the cost under control.)
6.3.3 Quality
The term Quality normally refers to the product or service. Quality, referred
in the context of project, refers to the output quality of each phase/stage/
activity. This may be a product or service. For example, the output of
project planning will be a detailed plan, whereas output of design and
engineering activity will be an engineering drawing or document. The
output of the financial monitoring will be a finance report whereas the
output of manufacturing will be a product.
Some of these products/services may be directly affecting the Overall

Project Quality. Some of them are the mandatory requirements. There are
outputs which are essential outputs to supplement the project
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management and may not directly affect the project output but the quality
of these have an impact on overall project management.
Since all these are one-time, the quality requirements must be in line with
stakeholders requirements, well-defined, precise, agreed upon, recorded
and informed to all stakeholders most important being the end customer; if
the product/service is made for sale to a particular customer.
Quality in the project plans/documentation will ensure:
• The comprehensive scope of each activity.

• Details of each output.
• The basis/quality standards requirements.
• The quality requirement specifications, test methods and the acceptable
levels/norms.
Project progress monitoring will ensure quality requirements by:
• Conducting quality checks/tests on the outputs, review the same and

decide final action.
• Address the quality issues and resolve them for final approval.
• Release the output for next phase/stage/activity.
The reporting of projects will include quality aspects and ensure that:
• The planned/desired quality is attained before the output is released for

next phase/ stage/activity.
• The complaints/conflicts are addressed and resolved or raised to higher

levels for resolution.
The authorities for quality check, review and approval are different for
different output and are not necessarily Quality Control personnel. For
example, the project plan may be reviewed and approved by the project
manager whereas the engineering plan and documents may be checked,
reviewed and approved by Engineering Manager and so on. Thus, in a
nutshell, each stakeholder is responsible for Quality Control of the project
and not only the QC Manager.
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One more important aspect must be always considered that the quality will
be gauged against the specifications and requirements only. In the efforts
of making good output, it is many times seen that the best quality is
insisted which finally adds on the cost and execution time of the project. To
avoid such situations to the maximum extent possible, the quality
requirements should be explicit.
6.3.4 Organization of the Project Team
This particular aspect if referred as control may surprise many and make
them raise their eyebrows. But this is very important control for effective
project management. The organization of project team essentially refers to
the number, capability (qualification, experience and skills) along with
assignment of tasks, activities, responsibilities and authorities.
Project plans/documents with reference to organization of project team will

ensure and indicate:
• The composition of team with details of team members
• The authorities assigned
• The tasks and responsibilities assigned
• Details of Integration with other project/operation interfaces and

availability of on-call members.
Project team organized as indicated above (for progress monitoring and

execution) will:
• Direct the all stakeholders operating on the project
• Monitor and provide necessary trainings for required skills and
• Mediate between the interfaces and stakeholders.
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6.3.5 Information
“Decisions on the basis of facts/data” is one of the important management

principles. And in order to have the facts/data, information control is an
essential requirement. Information control is expected to address the
information management issues such as:
• What information will be controlled/maintained?

• Who will maintain the information?
• At what stages/points, the information will be maintained?
• What is the objective of maintaining the information?
• How the information will be maintained?
The tools used for the information management is very important element
to decide the effectiveness of information control. In today’s era of rapid IT
tool development very effective tools like e-mail, e-mail notification, issue
tracker, project website & no of softwares like MS Sharepoint, etc to
integrate these tools are available. But the project team members must be
trained to use these tools & use them effectively.
The project plans and documentation must include:
• The details about information to be recorded, distributed and archived.
• The details of information, information receiver and the form of

information.
• The details of the tools to be used.
• Project data backup plan to ensure important information is protected in

case of computer hardware failure.
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During progress monitoring, information control will ensure that:
• Periodic consultations are held.
• Right information is reaching to the right person. This is very important,

during large projects like setting up Turn key manufacturing / processing
plant, Wind / solar parks, Formats of information sharing should be
determined at the start of project defining – What will be shared with
customer / Contractors and other stakeholders. Any premature or excess
/ short information shared can affect project progress / budget.
• It is to be ensured that information sharing is in line with agreed

contractual terms with customer / contractors.
• The commitments/agreements are met with.
Information control will ensure the availability of information to prepare the

Project Reports. The formats of information and title of these formats may
vary from organization to organization but the contents essentially will
remain same with reference to the nature of project and outputs of the
project. Some of the sample Information control formats for:
• Issue List.
• Action and decision list.
• Risk log and
• Meeting Report
are provided at Annexure 6.2
6.4 Common reasons for the delays in Project
The project management organizations’ gurus over the years after going
through the real-life scenario has arrived at the common reasons for the
delays in the project execution.
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• Overoptimistic schedules
• Working on too many projects at the same time
• “One solution fits to all” syndrome
• Expansion of project scope
• Research-oriented projects
• Poor design
• Neglecting Quality Control
• Lack of experience
• Organizational strategies
6.4.1 Overoptimistic Schedules
These are often the results of organizational strategies to get into the
projects without paying much attention to the delivery schedules and firm
belief that the schedules can be compressed. Also the customer
requirements and the market competitions are leading to overoptimistic
schedules. In such situations, it is frequently observed that only the
projects get delayed but the same also impacts the cost of the project and
may disturb the schedule of other projects.
While operating with such schedules intentionally, the stringent project

controls are necessary to keep the damages under control and out-of-box
thinking to do the things differently along with sequencing of activities can
be the key to the success.
6.4.2 Working on Too Many Projects at the Same Time
The capacity to handle the projects simultaneously, depends on the

resources, timely availability of the resources, skills set of the human
resource and most important the nature of the projects being handled.
While handling multiple projects simultaneously, the conflict management,

resource allocation and priority setting will play important roles and these
must be informed and well understood by all stakeholders at all interfaces.
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6.4.3 “One Solution Fits to All” Syndrome
As mentioned above, the same or one solution approach may yield good
results for projects of similar nature but if the projects are of different
nature, then this approach will prove to be a syndrome and disastrous.
Hence, choice of project management and the solutions must be done
cautiously.
6.4.4 Expansion of Project Scope
This is observed as very common cause of delays. The analysis indicates

this happens many times because of the inputs and interpretation of the
inputs not being explicit at initial stages of the project. Most of the
stakeholders prefer to remain silent on this issue initially and finally lands
into conflict situation, delay in project execution etc.
To avoid such situations, the scope either must be explicitly defined or

provisions in the schedule must be made to take care of the implicit scope
and the stage at which the same will become explicit must have been
defined.
6.4.5 Research-oriented Projects
Such projects or part projects will be governed by the project risk and
uncertainty management and these elements must be known and
incorporated in the project schedules before the same are identified as
delays.
6.4.6 Poor Design
This cause straightway points at the capability of the designers, inputs

provided to them and the output expected. To avoid these situations, the
review and approval process must be very stringent and all the concerned
stakeholders must be consulted before releasing the design outputs to next
stage.
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6.4.7 Neglecting Quality Control
This will definitely attribute to shear negligence and violation on the part of
human resource. This might have happened knowingly or unknowingly. The
good quality culture inculcated in the organization and the value respect for
quality will definitely arrest such issues. The authority delegated at all
levels to arrest bad quality will definitely put a FULLSTOP somewhere and
avoid the hassles afterwards.
6.4.8 Lack of Experience
Lack of experience in any area of operation can be a cause for the delay.
But if accepted with honesty, it can be managed to keep the project on
schedule by harnessing the strength/experience available within or by
hiring expert professional service at the correct time.
6.4.9 Organizational Strategies
The delays on account of organizational strategies only can be avoided by

adopting some flexibility and preparedness of the organizations to review
the same. There can be exceptions to the rules in the organizational overall
impact. But at the same time, the exceptions should not become rules.
Hence, the authorities for these aspects must be used very judiciously.
All these are mentioned here with an intention that these shall not appear
in the readers’ list of project management delay analysis and there may be
few more reasons available for analysis.
6.5 Methods of Project Operation
The choice for project operation methodology mainly depends on the:
• Ownership of the project (government, non-government, public sectors

etc.)
• Duration of the project
• Sector of the project (aviation, steel, pharmaceutical, automobile etc.)
• Outcome of the project
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• Objective of the project (For example, for enhancing the manufacturing

capacity, for developing a new product for customer,for building
infrastructure for public transport/industrial development etc.)
These aspects of the projects will decide the levels of risks and
uncertainties involved in the project execution, implementation and
management. Most of government projects are of longer duration, high
investment and of public welfare/infrastructure nature. Whereas the steel,
aviation, oil and gas sector projects may be for building the new facilities.
The projects in an automobile/engineering industry may be for
development of new model of vehicle or for improvement in the existing
vehicle.
With the above description, it is clear that the same methodology of project
operation can’t be applied for all the projects. The basic two methods of
project operation are:
• Cyclical and
• Waterfall methods.
6.5.1 Cyclical Method (Adaptive Method)
Cyclical method is generally followed in software development projects. In

this method, the uncertainty and risk levels for the output are
comparatively higher since the number of scenario and variables are high.
In this method, the output is achieved after performing number of cycles

with the improvements/revisions incorporated for every cycle. The output
of every cycle is tested for the given set of conditions and implemented
only after the desired output is achieved. Few more cycles may be required
even after implementation.
Cyclical method can incorporate new requirements; may be a customer

requirement or revealed as outcome of uncertainty; and go back to revise
the output to the extent of planned number of cycles. Refer Annexure
6.3 for better understanding.
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6.5.2 Waterfall Method (Unadaptive or Irreversible Method)
As against the cyclical method, the waterfall method is progressing in one

direction and the project is executed in a phased manner. The output of
each phase is forwarded to next phase. As the name indicates, it is not
possible to go reverse against water falling.
The revisions/changes required due to any reasons can be incorporated by

repeating the whole process. Doing so will call for very high cost impact
and also the project duration can increase to a larger extent.
The small improvement projects can straightaway follow the waterfall

methods since most of the activities are known and the risk and
uncertainties are close to zero.
In practice, most of the projects are executed by following a combination

of cyclical and waterfall methods. The areas prone to risk and uncertainties
are executed by following cyclical methods whereas the areas with least
risk and uncertainties can be executed with waterfall method. Thus,
combining the advantages of both the methods, the project can be
accomplished on a least risk level and on scheduled time. Refer Annexure
6.5.3 Operation in a Part by Part Manner
Most of the government/public sector projects are of bigger scope. In such

cases, it is not possible to execute the project in one go. Hence, the project
is divided into smaller projects and may be executed parallel or in a
sequence considering the investment required, their dependence on each
other and the usage of the output of each part.
While executing the projects in such a manner, the sequence of

requirement, integration of the different project teams and close
monitoring, of the overall project is very important to achieve the planned/
targeted outputs.
For example, while executing express road project between two

destinations, it is not necessary to construct the road from one destination
to the other. One can identify/estimate the rush areas, risks for land
acquisitions, income from the sectors and decide to build either parallel or
79
one after another in various sectors, put them into operations and finally
connect all of them together.
The Union government’s well-known dream “Golden Quadrilateral” project

connecting the four metro cities of India – Delhi, Mumbai, Chennai and
Kolkata is a classic example of part by part execution of the project.
Similarly, while erecting a steel plant or pharmaceutical unit, the units can
be divided into manufacturing capacities or as per the process
requirements and then erected, installed, tested and put into operation as
per schedule.
6.6 Phases of Projects and its management
Whatever method of operation is followed, each project has to undergo

definite phases. Over the years, these phases have undergone many
evolutions and the most common phase/sequence accepted, followed by
most of the organizations and applicable to any type of project is
considered and elaborated here onwards for our project management
study.
Sequentially, the phases involved are:
• Project Initiation/Definition Phase

• Project Analysis Phase
• Budget, Investment and Financial Approval Phase
• Project Planning Phase
• Project Execution Phase
• Project Control and Monitoring Phase
• Project Closing and Handover Phase
Project management is an essential requirement of each and every stage

phase activities though the nature of management, controls differ with
each other. Integration of one phase/activity with other phases/activities is
also very important and critical. Management of these integrations will
ensure smooth sailing of the project from one phase to the other phase
and the reversals or cyclic iterations will be kept under control.
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6.6.1 Project Initiation/Definition Phase
Project initiation/definition is something like preparing draft of a recipe or

designing an arm within a security system. For doing this successfully, it is
very important to consider all the scenarios/inputs/situations which may be
encountered and will have an impact on the project output at each phase.
Some of these are obvious which will be surely taken care. But the
experience and skills of the team/organization will have real test to
anticipate the surprise elements.
6.6.2 Project Analysis Phase
The output generated by project initiation phase will have to be analyzed

using scientific methods for its coverage of the spectrum, activities,
duration and impacts from all angles including the commercial aspects. As
an output of the analysis, it may generate possible flag of caution, hold
points, uncertainties/grey areas and most important the commercial
implications.
There may be some implications which may compel to trigger the actions
to take care of the final objective and successful accomplishment of the
project.
6.6.3 Budget, Investment and Financial Approval Phase
The analysis of the project initiation action will almost freeze the
framework and definition of the project. To remain within the defined
framework for quality, cost and delivery, it is necessary to identify/define
the budgets or investments.
Approval and release of such approved financial documents to all the

stakeholders will be a final output. Integration of these final outputs at all
the interfaces is the most important action since missing of any interface
will have direct impact on financial planning and also may lead to a
situation with no action in certain areas.
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6.6.4 Project Planning Phase
Beginning of project planning phase is a key integration point since the

Project Planning and Budgeting can run parallel and need not be
sequential. The final decision will depend on the organizational strategy.
Project planning is the key to the successful accomplishment of the project

and hence must be done very methodically. Integration of the plans of all
stakeholders is a critical element and must be addressed to avoid any
conflicts at advance stage of the project.
6.6.5 Project Execution Phase
The success of the execution phase lies in the project planning phase.
Integration of actions within the stakeholders decisions and conflict
management are the key factors to keep the project on track. These will be
elaborated in detail in the subsequent chapters.
Uncertainties, surprises, last moment changes/revisions and grey areas are

the factors hindering the pace of execution phase. In addition to these, the
organizational business strategies also sometimes can become the
hindrance.
6.6.6 Project Control and Monitoring Phase
The control and monitoring mechanism defined/adopted for a particular

project will directly decide the fate of the project. Hence, deciding the basic
control and monitoring mechanism and management of the same is of
utmost important.
The objective of the control and monitoring mechanism is to support the

successful accomplishment of the projects and should not be considered as
mere hold points. Each stakeholder must faithfully respect the control and
monitoring mechanism and at the same time, any ambiguity should be
highlighted immediately to the project manager. This will ensure that the
same will not be an excuse/hindrance at a later stage.
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6.6.7 Project Closing and Handover Phase
Project closing/handover though is the last phase of project management is

not of least importance but is the most important phase since the same
shall finally certify whether the project is successfully accomplished.
This is also important for the commercial aspects, performance, lessons

learnt and improvements and records of the project in the future.
6.7 Role, Responsibilities and skills of Project Manager
Let us peep in the meeting room and listen to the conversation going
between the project manager and the project team members.
“Is every one there?” Manager asked to his team in meeting.
Answer “Yes” came in asynchronously from all different voices.
“Is everything fine? Anyone facing any issues in their project objectives?”
This is manager’s voice.
One member raised the voice and told “I have one issue regarding the
database design”.
And it goes on for an hour.
These four lines would be the starting sentences of a typical project team
meeting.
Now let us listen to the same conversation for an organized and managed
project team.
“The attendance sheet is signed by everybody indicates that all are present
for the meeting” said the Project Manager.
Answer “Yes” came in synchronously from all in one voices.
“As per the agenda and the reports received except the database design
issue everything else is fine. Mr. Romesh has sent the details of the issue
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to Mr. Jayant. Mr. Jayant is working to resolve the same and issue the
resolution communication by 6.00 pm today. Is that correct Mr. Jayant?”
This is manager’s voice.
“Yes that is correct” said Mr. Jayant.
Mr. Sanjay raised the voice and told “I have one issue regarding the
welding procedure and design in-charge is not responding.”
“This is an important issue though it is not raised earlier. But let us not
take time of all. Myself, Mr. Sanjay and Design In-charge will discuss this
immediately after this meeting and the technical note will be issued to all
concerned. Thanks to all of you” said the Project Manager.
And the meeting is concluded with decisions and schedule of next meeting.
The two conversations cited above are self-explanatory and clearly

indicates difference between the attitude, approach, decision-making skills,
conflict management skill etc. of the two project managers and the effect
of the same on the project management. By this time, it is established that
certain skills are required by the project manager to carry out his role and
responsibility towards the project.
The term project manager used here and used henceforth doesn’t refer
to the designation of a person in the organization. The person by
designation may not be a manager or may with a designation higher than
the manager in the organizational structure. It must be understood clearly
that this term is used with project reference only. The project manager is
expected to interact with all the stakeholders in a capacity of project
manager for the project and not as a senior or junior as per the
organizational structure.
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6.7.1 Role of the Project Manager
In brief and precise words, the project manager is one who identifies and
ensures the application of knowledge, skills, tools and techniques to
describe, organize, oversee and control the various project processes.
To play his role effectively, it is not expected that the project leader should
have all the knowledge (the knowledge about the project management is
an essential requirement), skills but as mentioned above he must be clear
about his role to identify and apply within the stakeholders or hire and use
them.
6.7.2 Responsibilities of the Project Manager
The project manager’s overall responsibility includes but is not limited to

the successful initiation, planning, execution, monitoring, control and
closure of a project with accomplishment of targeted outputs, as per the
schedules and within the allocated budgets.
To shoulder these responsibilities successfully, the project manager can’t

be a mere manager or leader or monitor; but has to be good proportionate
mixture of all the three as per the need of the situation.
6.7.3 Skills Required by the Project Manager
The moment the role and responsibilities of a project manager are clearly
understood it is not difficult to identify the skills required to perform the
role and shoulder the responsibilities. Some of them must have been
noticed in the initial conversation. The majority of these skills are covered
by:
• Leadership
• Team building/delegation
• Motivation
• Communication
• Influencing decision-making
• Political and cultural awareness
• Negotiations
• Trust building
• Coaching
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The success of the project manager lies in communication, information,

analysis, comprehension and timely decision with the effective utilization of
available resources. An exclusive attention of the project manager is
essential to the areas like risk and uncertainty.
The “Leader” is defined as a person who has followers. The project

manager first of all is required to establish his leadership with this
definition. In order to do this, he may have to demonstrate it first. Another
important tip is that the leader must take all the decisions professionally
and not emotionally.
Many times, it is seen that an inexperienced, enthusiastic and impatient

project manager tries to do things himself in order to maintain the
momentum. This may sound good momentarily; but may reflect into
inefficiency and non-cooperation by the other teammates. Sometimes, this
also results into “wait and watch attitude”.
Hence, this is going to be very tricky situation provided the project

manager doesn’t pull himself out at the right moment and let every
stakeholder play his role.
In short, delegation and experience of the project manager play very

important role in the project management. As a good practice, the project
manager should have an experience of 3 to 4 years in the project
management field before taking up any independent project assignment.
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6.8 Summary
• Project management is nothing but application of knowledge, skills,

tools and techniques to project activities in order to meet the project
requirements.
• Balancing the project constraints is a very critical function of the project

management and needs to be handled very skillfully. The list of project
constraints will vary from project to project. In general, this will include,
but will not be limited to:
➡ Scope
➡ Quality
➡ Schedule
➡ Budget
➡ Resources and Risks.
• It is very essential to know and establish the list of all stakeholders for
effective and efficient Project Management.
• A stakeholder is an individual, group or an organization who may impact

or get impacted by the activity or outcome of the project.
• The stakeholders may or may not be directly involved in the project

activities but can have interests that will get affected by the performance
of the project.
• The stakeholders also may exert pressure on the project management

team to achieve a set of results needed to satisfy strategic business
objectives or other needs.
• The identification, establishment and application of control factor is of

prime importance to keep the projects on track all the time and
accomplish final results as planned.
• The most important control factors which are applicable to all types of
projects are:
87
➡ Time
➡ Money/Budget
➡ Quality
➡ The Team Operating on the Project
➡ Information.
• The project management organizations’ gurus over the years after going
through the real-life scenario indicates following common reasons for the
delays in the project execution
➡ Overoptimistic schedules
➡ Working on too many projects at the same time
➡ “One solution fits to all” syndrome
➡ Expansion of project scope
➡ Research-oriented projects
➡ Poor design
➡ Neglecting Quality Control
➡ Lack of experience
➡ Organizational strategies.
• The choice for project operation methodology mainly depends on the:
➡ Ownership of the project

➡ Duration of the project
➡ Sector of the project
➡ Outcome of the project
➡ The project type
• The same methodology of project operation can’t be applied for all the
projects. The basic two methods of project operation are:
➡ Cyclical and
➡ Waterfall methods.
• Whatever method of operation is followed, each project has to undergo

definite phases. Over the years, these phases have undergone many
evolutions and the most common phase sequence accepted is:
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➡ Project Initiation/Definition Phase
➡ Project Analysis Phase
➡ Budget, Investment and Financial Approval Phase
➡ Project Planning Phase
➡ Project Execution Phase
➡ Project Control and Monitoring Phase
➡ Project Closing and Handover Phase
• The project manager is one who identifies and ensures the application of
knowledge, skills, tools and techniques to describe, organize, oversee
and control the various project processes.
• The project manager's overall responsibility includes but is not limited to

the successful initiation, planning, execution, monitoring, control and
closure of a project with accomplishment of targeted outputs, as per the
schedules and within the allocated budgets
• The majority of the skills essential for the project manager covered by:
➡ Leadership
➡ Team building/delegation
➡ Motivation
➡ Communication
➡ Influencing decision-making
➡ Political and cultural awareness
➡ Negotiations
➡ Trust building
➡ Conflict management and
➡ Coaching.
• The success of the project manager lies in communication, information,

analysis, comprehension and timely decision with the effective utilization
of available resources.
• An exclusive attention of the project manager is essential to the areas

like risk and uncertainty.
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understanding
1. Select any project executed earlier in your organization.
2. Prepare the report with reference to the following points:
a. Project constraints: List the project constraints and its interfacing

impact on each other.
b. Project stakeholders: List all the stakeholders classify them as:
(i) internal/external,
(ii) silent stakeholders,
(iii) stakeholders who can create pressure on project execution.
3. Prepare a matrix of stakeholders as per the Annexure.
4. Define the role/responsibilities of the project manager.
5. List down the phases with which the project was executed.
6. Record your observations about the skills exhibited by the project

manager, output of the project – planned vs. actual.
7. Record your observations about the delays and reasons for the same.
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1. _____ is nothing but application of knowledge, skills, tools & techniques

to project activities in order to meet the project requirements.
a) project management
b) program management
c) principles of management
a) office management
2. A _________ is an individual, group or an organization who may impact

a) partnership
b) stakeholder
c) business
d) department
3. Which are the most important control factors which are applicable to all
types of projects?
a) Time
b) Money
c) Quality & The team operating on the project
d) All of the above
4. Time consideration is equally important for progress monitoring & will

monitor & indicate which of the following?
a) Progress
b) Deadlines
c) Adjustments of schedules required
d) All of them
5. What does quality in the project plan’s documentation ensure?

a) The basis / quantity standards requirements.
b) text methods
c) comprehensive scope of each activity.
d) Details of each input
Correct Answer:- (1) - a, (2) - b, (3) - d, (4) - d, (5) - c
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ANNEXURE 6.1
List of Stakeholders with their Interaction Matrix
Stakeholder 1 2 3 4 5 6 7
Project Manager – 1 **** **** **** **** * * ****
Design Manager – 2 **** **** *** *** * * ****
Purchase I/C – 3 **** **** ****
Manufacturing I/C – 4 **** **** ****
Despatch I/C – 5 * ****
Transporter – 6 * **** ****
End Customer – 7 **** ** * * ****
Note: The interactions indicated here are to explain the concept only. The
same may vary in practice.
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ANNEXURE 6.2
Sample Issue List
Project Title: Date:

Document Owner: Phase: Initiation/Analysis etc.
Sr. Type Issue Raised Date Priority Decision Status
No. Description by Name
1 RFC 1
DS
Type Priority Decision Status
RFC – Requset for 1 – High/Immediate A – Accepted OK – Resolved

Change action
DS – Deviation 2 – Medium/Plan for R – Rejected OPEN –

from Specification action Resolution in
progress.Awaiting
resolution
Q – Query/ 3 – Low/No action P – Parked till Open- Awaiting

clarification date resolution &
Critical.
C – Concern
R – Risk
Document No.: Revision:
We can also add a column of G / Y / R indicator or give colour shade in

status column, Green indicates issue resolved / under control, Yellow
indicates work in progress needs regular attention and Red indicates,
issues need urgent attention else it can affect Project schedule/ budget /
safety , hence critical.
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Sample Action and Decision List

Action List
Sr. No. Topic Action by Completion Completed Status

Name Date Planned on
1 1
Decision List
Sr. No. Description of Impact on Date of Decision

Decision Implementation
Circulated to:
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Annexe 6.2
Sample Risk Log

Sr. Issue Description Raised Raised Priority Proposed Status

No. by on Measure
1 Enter brief description 1
Priority Status
1 – High/Immediate action OK – Resolved
2 – Medium/Plan for action OPEN – Awaiting resolution
3 – Low/No action
Circulated to:
Note: Sample is provided for better understanding only. The contents may
vary to suit the project.
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Annexe 6.2
Sample Meeting Report
Attended by:
1. Agenda
(i)
(ii)
(iii)
2. Status of Previous Report
3. Action List/Decision List
Brief description on the update of the list.
4. Issue log
Brief description on the update of the log.
5. Risk log
Brief description on the update of the log.
6. Any other specific information/intimation
Attachments:
Circulated to:
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ANNEXURE 6.3
Methods of Project Operations (Cyclical)
Start of project
Cycle 1
No. of Interations
Test
Not OK
OK
Cycle2
No. of Interations
Test
Not OK
OK
End of Project 1
Note: There are multiple activities in each cycle. There may be number of tests
in each cycle.
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Annexure 6.3
Methods of Project Operation (Waterfall)
Start of Project
Phase 1
Phase 2
Phase 3
Phase 4
End of Project
Note: There are multiple activities in each Phase. There may be more
number of phases. The figure indicating combination is provided for better
understanding.
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ANNEXURE 6.4
Methods of Project Operations (Composite)
Start of Projects
Phase 1 Phase 2 Phase 3
Cycle 1 Cycle 2 Cycle 1
Test Test Test

Not Ok Not Ok Not Ok
Ok Ok Ok
Phase 4 Cycle 2
Phase 5 Ok Not Ok
Test
End of Project
Note: There are multiple activities in each Phase. There may be more no
phases.The figure indicating combination is provided for better
understanding.
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
100
PROJECT INITIATION PHASE
Chapter 7
Project Initiation Phase
Objectives
Project initiation and definition being the beginning phase of the project it
mainly focusses on building the sound foundation for the project to take
off. The number of stakeholders involved during this phase can be the
highest since it deals mainly with getting the inputs considering total
aspects of the projects to prepare the final definition of a project.
Considering the time span, this may be the shortest phase but
management of this phase is very important since the output of this phase
shall be the basis for all subsequent phases/activities. Any flaws/
inadequacies left during this phase will have detrimental effects on the
progress, accomplishment of the project objectives and may lead to delays
in executing the project and overshooting of budgets.
Role of the project manager and marketing/sales (or internal project

customers) is very crucial because the inputs provided by them shall be the
basis for initial communication. Hence, any ambiguity/clarifications
required/assumptions made must be resolved before the final definition is
issued to next phase. Any issues not resolved/ not possible to resolve at
this stage must be recorded to identify the risk and uncertain areas.
During the learning of subsequent chapter we will focus our attention on:
(i) Finalizing the list of stakeholders, interfaces and the nature of their
interaction with each other.
(ii) Preparing and communicating the proposed macro level project

charter to these stakeholders.
(iii) Getting Inputs/requirements close to reality.
(iv) Organizing, acquiring, communicating and developing the project

teams
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Structure:
7.1 Preparing Macro Level Project Plan (Project Charter)
7.2 Contents of the Macro Plan (Project Charter)
7.3 Finalizing the List of Stakeholders
7.4 Communicating the Proposed Macro Plan (Project Charter) for Inputs/
Requirements
7.5 Getting Inputs/Requirements from the Stakeholders
7.6 Organizing for the Project Teams
7.7 Summary
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7.1 Preparing Macro level Project Plan (Project Charter)
First and foremost requirement for any project process initiation is the
appointment of project manager. The appointed project manager will
then ensure his acquaintance and thorough understanding about the
project output, schedule and cost/budget. The Project Manager shall have
all the authentic input documents in his custody.
Preparing a macro level project plan is the primary responsibility of the

project manager, internal project customer/marketing sales personnel and
business in-charge of the organization.
Design, planning, procurement, manufacturing (project executors) shall be

the key input providers. While preparing the macro level plan, the following
inputs must be explicitly understood and considered by the team.
a. Project scope.
b. Project output requirements.
c. Project quality requirement/acceptance criteria.
d. Stages and sequence of the outputs.
e. Approvals hold points for these outputs.
f. Capability for executing the project with available resources.
g. Requirement of hired resources and professional services.
h. Details about the end-user/end customer.
i. Overall budget.
j. Project-specific organizational strategy.
k. Method of financial allocations.
For preparing macro level plan and to ensure its coverage, it is advised to
have a checklist. The checklist of generic form is preferred so that it can be
used for all the projects and will have a wider coverage. This will reduce
the chances of miss outs. One such sample checklist is provided at
Annexure 7.1 for better understanding.
7.1.1 Project Scope
Project scope must be mentioned in explicit term, for both physical

material and documentation requirements, including design,
manufacturing, supply, installation and erection/commissioning
requirements.
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7.1.2 Project Output Requirements
Apart from the scope of supply, this will specify the utilities needed
(especially on site), erection equipment needed, licenses to follow
regulations, engineering services required etc. These are important to
estimate and include from the initiation phase to avoid any disputes and
hold ups at a later stage.
7.1.3 Project Quality Requirement/Acceptance Criteria
It may not be possible to decide and freeze these aspects at beginning but
the inspection stage, document, standard, specific requirements must be
known at the beginning. Requirement of quality documents for final release
of documents and commercial requirements must be frozen and included in
the plan for further actions.
7.1.4 Stages and Sequence of the Outputs
The project may be (subproject) a part of bigger project and interfaced at

particular stage and required at a particular time. These requirements and
consequences of delay on both, main and subproject, must be taken into
consideration during initiation and definition phase.
The organizational business strategies and project contract terms must be

aligned to each other in such cases.
7.1.5 Approvals Hold Points for These Outputs
The outputs mentioned above in spite of meeting the quality requirements

may call for third-party inspection clearances or clearance by an authorized
personnel from end-user/end customer. All such hold points and the time
required to complete must be taken as an essential input. If it is not
possible to finalize these aspects during initiation phase, the documents
and stages to address these aspects must be identified and mentioned
during initiation phase.
7.1.6 Capability for Executing the Project with Available Resources
The capability aspect is very important, in order to make maximum

utilization of the resources available with the project executor. The input
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also will be of use to decide the engagement and allocation of resources.

The project cost also can be kept under control with this input.
7.1.7 Requirement of Hired Resources and Professional Services
If available, these inputs will be useful to include them in project definition.

Plan the contract stages, asses alternative and combine requirements of
different projects to get better deals. If not available, the same shall be
included at appropriate stages for necessary actions.
7.1.8 Details about the End-user/End Customer
It is always good to have explicit requirements of the customer/end-user.

There are some requirements which are not even specified by the customer
but are inherent requirements of the product/service. The project executor
is expected to consider all these requirements.
In order to anticipate this, the project manager must know the details of
the targeted customer/customer segment/the owner of project/end-user of
the project output.
If permitted by the standard operating procedure this information also can

be used to build the rapport with the customers for better understanding of
their requirements.
7.1.9 Overall Budget
Overall budget of the project is very important to decide the break-up of

budget allocations and establish controls on the same from initiation phase.
Hence, clarity for the budget input is must from initiation phase. Also the
results of analysis can be used to bridge the gap if any between the budget
estimated and budget allocated.
7.1.10 Project-specific Organizational Strategy
There may be deviations/contradictions in the project contract and

standard organizational business strategies. It is mandatory to resolve
these deviations/contradictions during initiation phase.
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Also there may be some decisions taken while accepting the project to
meet business strategies by the project executor. For example, though the
customer’s delivery requirement is 8 months, it might have decided to
deliver the same in 4 months considering the workload pattern. In such
case, project-specific strategy may be to convince the customer to accept
earlier delivery or make an arrangement to keep the project output in
stock.
7.1.11 Method of Financial Allocations
Finance is the most scarce resource for all the organizations and hence the
methodology to generate the finances and use them effectively and
judiciously to accomplish the final project output must be known to the
project manager and all concerned stakeholders from initial stages of the
project.
There are various methods available for finance control. The experts should
establish and adopt the most suitable one for the specific project, e.g.,
there may be strategy to finance the project with the collection of same
project or there may be strategy to finance the projects on priority basis
from the total available collection.
7.2 Contents of the Macro plan (Project Charter)
Like any other plan project, macro plan also shall be complete, actionable
and must clearly identify the integration/interfacing points and the
interfaces. To ensure this, one can make use of well-known 5 W’s and one
H for all the activities on a macro level. In order to check the coverage for
all activities, the sequential WBS shall be used as basis with the boundaries
from initiation to closing and handover of the project.
In response to the macro plan, the stakeholders are expected to do

evaluation of their own project management aspect and provide
the input requirements for next phase, i.e., project analysis and final
project definition. Individual stakeholders are expected to perform the
detailed WBS, activity scheduling, sequencing with time estimates and
resource allocation during planning phase. In order to do this effectively,
the macro level plan shall spell out in explicit terms the scope, boundaries
and responsibilities for a stakeholder. Any overlapping must be identified
and communicated.
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Generally, it is presumed that the 5W and 1H philosophy is best suited for

analysis and problem solving but application of the same philosophy in
anticipation for planning shall leave very marginal scope for the problems.
The following table which explains glossary of these 5W and 1H and its
relation with project philosophy will bring more clarity for the use of this
concept.
Sr. No. W/H Concept Question Link with Project Philosophy
1 W1 What Scope/Output
2 W2 Why Quality/Deliverables
3 W3 Who Responsibility/Team
4 W4 When Stage/Phase/Time/Schedule
5 W5 Where Location
6 H How Method/Procedure/Budget
7.3 Finalizing the list of stakeholders
Finalizing the list of stakeholders is very tricky and crucial task for project
management throughout the project life cycle, i.e., from initiation to close-
out since stakeholders contribution towards the project shall be a deciding
factor of the project success or failure. Hence, the list of stakeholders must
be very exhaustive with critical evaluation of their interaction and
interfaces.
Such a list of stakeholders with their interaction and interface matrix will
be very useful for building very accurate WBS, correct flow and sequence
activities, the dependence and overlapping of activities and the flow of
information required to ensure effective monitoring and control of the
project.
On a broader scale, the stakeholders are grouped into four categories as

follows:
• Organization’s Business Group

• Organization’s Operations Group
• Project Team (Functional Group)
• External Stakeholders
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7.3.1 Organization’s Business Group
This group of stakeholders are the ones responsible for the organization
business in line with the organizational business strategies. This will
generally include the CEO, marketing head, sales head and the customer
order processing unit head (in case the project is executed against
customer order). Their inputs are most important for formulating the
project charter.
The heads may nominate their representatives for a particular project.

Involvement of this group is higher during project initiation and final
stages. In between, they need to be kept informed about progress of the
project. The project manager will have close communication and
interaction with the group.
7.3.2 Organization’s Operations Group
Since the operations group is engaged in routine business activities of the

organization and are not responsible for project execution activities, their
role is of supporting nature. The project execution team will have to
establish very close communication and interaction with the operations
group.
This is essential and crucial for many activities since the resources may be
common and their effective planning and utilization is needed. Project
manager will be a link between operations and project team for effective
management. This will ensure progress of the activities for both operations
and project team.
It is ideal to have common single point stakeholder for the project

operation but is decided as per organization’s business strategies.
7.3.3 Project Team Members (Functional Group)
Project team members from different functional group are the key
stakeholders for all projects. These members are involved in the project
activities round the clock and are ensuring the required pace and progress
of the project.
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These functional groups will include planning, design, procurement,

manufacturing, inspection, packing, preservation and delivery, installation
and commissioning. In addition to the functional groups, the support
service groups such as IT, maintenance, housekeeping, accounts, finance,
legal etc. also should appear in the stakeholders’ list.
The frequency of communication and interaction within the functional

groups is the highest whereas the frequency of service groups is limited.
The dependence/impact of other activities is highest within this group.
Hence, the interfacing and integration of their activities is of utmost
importance.
Only the functional heads may appear in the stakeholders’ list but the
information and communication must reach to each member of this group
to avoid delay in action because of non-availability of information and/or
communication.
7.3.4 External Stakeholders
As indicated by the heading, these are stakeholders which are not

employees/members of the project executing organization. These mainly
include the customers, suppliers, contractors, bankers, engineering service
providers and other service providers.
The interaction of these stakeholders is limited and generally with the

project manager, functional heads and organizational stakeholders. It is
necessary to identify them, decide the interaction frequency, integration
points and mode of communication with them.
Sharing of information with this group of stakeholders must be kept to

limited extent as per organizational strategies. Refer sample Stakeholders’
List for better understanding Annexure 7.2.
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7.4 Communicating the proposed macro plan (Project

Charter) for inputs/requirements
As soon as the inputs as referred in 7.1 are available and the stakeholders’
list as elaborated at 7.3 is prepared by the team of project manager,
stakeholders from business and operations group and the functional heads.
The macro level project plan shall be prepared with the methodology
explained at 7.2.
While preparing this plan, one must be clear about the objectives of the
plan. In order to ensure this, an expert advice may be taken before release
of the project charter or there may be a panel of facilitators appointed. The
objectives of preparing and communicating the macro level plan primarily
includes:
• Communicating all the stakeholders that this particular project is initiated

under the leadership of Mr. XYZ (Project Manager).
• Communicating the scope of the project.
• Communicating the targeted unique output of the project.
• Communicating the overall schedule and timeline of the project.
• Communicating the team organization and all stakeholders.
• Communicating project approval requirements.
• Communicating the assumptions and constraints, if any.
• Communicating responsibilities and overall methodology of operation.
• Communicating the organizational strategies and contract details in case

of project against customer order. It is important to inform project team
about clauses in customer contract which can affect profitability and
budget of project. A few are – LD ( Late delivery penalty ), Force
majeure , etc. It helps team to decide on deploying additional resources
at an extra cost.
• Communicating the macro level budget for the project.
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• Getting inputs for all the aspects of project for analysis and micro level
planning.
The project initiation communication through a project launch meeting

is always a preferred and effective proposition. The project manager shall
conduct the meeting and explain contents of the communication to the
stakeholders on broader scale including expectations and inputs required
from them for further execution. Clarification of any queries shall be done
on the spot. Certain plan of actions also can be decided. This also will help
to build the rapport and ensure team homogeneity.
Use of software for records and acknowledgement, responses and feedback

is inevitable. The use of software and soft communication mediums like e-
mails shall also ensure quick, instantaneous transmissions of
communication, information, acknowledgement, responses and feedback
irrespective of the physical distance. Use of video conferencing is also
made extensively to beat the hindrance of distance.
Standard software like MS PROJECTS is very commonly used for the

purpose. Many organizations are nowadays using specially developed
software for tracking of the projects from start to end and store the data at
a common soft location accessible to all the stakeholders. Use of the
technology also saves time, money and helps to keep the project budgets
under control. As any other technology, this method also has certain
limitations as availability of internet access at remote project locations.
In order for better understanding, please refer the sample macro level plan
communication at Annexure 7.3.
7.5 Getting inputs/requirements from the stakeholders
The effective macro level plan (Refer 7.2) and its communication to the
stakeholders will ensure the clarity about the project and will be received
positively by the stakeholders. Next step is to get the necessary inputs for
preparing the final definition of the project.
Involvement of all stakeholders and functional leaders from this phase is

necessary to build the bond and ensure commitment of the stakeholders to
the project. The inputs also shall provide sufficient inputs for the analysis
111
for various project management aspects and will be beneficial to ensure

correct management plans in place.
These inputs necessarily shall cover the following Project Management

aspects but shall not be limited to:
• Project interfacing and integration management

• Project scope management
• Project time and schedule management
• Project cost management
• Project quality management
• Human resource of the project management
• Project information and communication management
• Project risk management
• Project procurement management
• Project stakeholder management.
7.5.1 Tools and Techniques to Collect the Input Requirements
Various proven/scientific tools and techniques are used to collect the

requirements for final project definition. These cover a wide spectrum of
tools and techniques ranging from simple interviews to complex tools like
data analysis and network analysis using software. Such requirements
generated for various aspects of project management are subsequently
used for further analysis.
7.5.1.1 Collecting Requirements for Project Interfacing and Integration

Management
Most of the requirements for overall project interfacing and integration

management are taken into consideration while preparing the project
charter.
The project charter along with the requirement of other project

management aspects, organizational environmental factors and
organizational process assets are considered as collected inputs for this
project management aspect.
The requirement of other project management aspects are discussed and

elaborated in the subsequent clauses.
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The organizational environmental factors that can influence the project

management includes:
• Government/industry standards
• Safety requirements/risks involved in operation
• Existing infrastructure
• Existing information system
• Management practices
• Personnel administration (e.g., recruitment/hiring guidelines,
performance review and development guidelines)
Information about these can be easily collected from the existing

organizational policies and administrative guidelines.
The organizational process assets that can influence the project

management includes:
• Standard guidelines, work instructions, proposal evaluation and

performance measurement criteria
• Existing change control procedure
• Historical project data
• Recent project documents
• Historical learning data and lessons
• Engineering software and versions.
Information about these also can be easily collected from the existing
engineering and quality system documents and records.
These inputs are used in subsequent phase for analysis and generating the
overall project management plan. The overall project management plan
coordinates all subsidiary plans and integrates them into a comprehensive
project management plan. This plan will be central document defining the
basis of all project work.
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7.5.1.2 Collecting Requirements for Project Scope Management
The project scope management refers to defining the scope, developing,

monitoring and controlling it over the entire project phases.
For example, let us take a project of building an airport. For building an

airport the project scope may start from survey of land and travel through
acquisition of land, construction of airstrips, construction of buildings,
construction of other facilities and so on up to a facility ready for flights to
take off. In such cases, expertise is required to break the scope in
manageable units and defining the unit-wise scope and developing,
monitoring and controlling it over the entire project phases.
To do this and identify the requirements, tools and techniques like:
• WBS
• Statutory and legal norms
• Engineering expertise
• Organizational historical data
• Government regulations
• Market condition knowledge
• Project schedule and timelines etc. will be used.
The requirement generated will include but will not be restricted to:
• Project scope management plan with manageable scope units

• Report on market conditions
• Organizational culture requirement
• Infrastructure requirement to meet the scope
• Policies and procedures required
• List of discrepancies/issues for scope
• List of assumptions made
• Sequence and stages identified.
Most of the requirements generated will be on broader scale. Any

additional information, data, documents, clarifications shall be arranged
from the concerned parties. If necessary, a meeting shall be arranged with
all concerned parties to resolve the pending issues. Such additional data
with the requirements shall be further analyzed during the analysis phase
and the output shall be used for final project definition and during planning
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for incorporating micro level quality controls and monitor the same
throughout the project execution phases.
7.5.1.3 Collecting Requirements for Project Time and Schedule

Management
The project time/duration and schedule management refers to establishing

the policies, procedures, and documentation for planning developing,
managing, executing and controlling the project schedule. This task will be
relatively easy for an organization which is in project business for longer
years and who have handled variety of projects.
This is because the historical data, expertise, set policies, procedures and
documentation will be readily available. The requirements may be
generated by comparing the available set of:
• Policies
• Procedures
• Documents against the required:
➡ Policies
➡ Procedures
➡ Documents
This task shall be completed on the basis of:
• Project charter
• Contract/product documents
• Market conditions
• Scope baseline
• Resource and skills availability
• Software availability
• Current organizational authorization matrix
• Project closure guidelines
• Change control procedure
• Risk control procedure
• Monitoring and reporting system
• Historical data
• Data of similar project in recent past
• Involvement of other agencies
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There may be other information and documents tools mentioned other than
above. The gap/ variance analysis will lead to the needs/requirements as
listed below but will not be limited to:
• Schedule management plan
• Revisions required in the available policies, procedures and documents
• Revisions required in the change control procedures and risk control

procedure
• Major risk factors including market and social
• Advance actions required to reduce the dependence on the agencies

involved
• Recommendation for the methodology to be followed
• Recommendations for interfacing and integration of critical activities/

stages.
The requirements generated will be of the medium level. Any additional

information, data, documents and, clarifications shall be arranged from the
concerned parties. If necessary a meeting shall be arranged with all
concerned parties to resolve the pending issues. Such additional data with
the requirements shall be further analyzed during the analysis phase and
the output shall be used for final project definition and during planning for
incorporating micro level time and schedule controls and monitor the same
throughout the project execution phases.
7.5.1.4 Collecting Requirements for Project Cost Management
The cost estimation done for the project is the primary basis for cost
management. But only this information is not sufficient for cost
management. There are many other aspects of cost management. The
objective of this activity is to identify these aspects and provide the
information about basic requirements of these aspects. In order to do this
initially, the:
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• Project charter
• Cost estimation data
• Scope baseline
• Schedule baseline
• Organizational policies
• Market condition for the products contained in the project
• Currency exchange rates
• Alternatives proposed
• Current tax pattern
• Available price lists
• Available vendor data
• Cost control procedure
• Government rules and regulations
• Any project-specific subsidies (for example, waiver of excise duty for
public sector projects, waiver of octroi duty for a municipal corporation
project)
etc. are considered and the project-specific recommendations,

requirements and needs for the cost management are provided. These will
include but will not be limited to:
• Cost management plan

• Recommendations about alternatives available
• Report on market conditions and trend
• Report possibility of tax restructuring
• Report on currency exchange status and trend
• Recommendations on utilizing existing stocks
• Recommendations on combined bulk purchasing
• Documentation requirements for availing subsidies
• Recommendations on budget schedule and fund requirements.
The requirements generated will be on broader level. Any additional

information, data, documents and clarifications shall be arranged from the
concerned parties. If necessary, a meeting shall be arranged with all
incorporating micro level cost controls and monitor the same throughout
the project execution phases.
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7.5.1.5 Collecting Requirements for Project Quality Management
Project Quality management is a very important aspect since unlike routine

operations project output is unique in nature and is not of repetitive type.
Each and every lapse on quality will necessarily lead to addition of cost,
hold ups in schedule and delays in deliveries.
Project quality management addresses the quality of the project and its
deliverables. Quality measures and techniques are specific to the type of
deliverables. For example, the measures and techniques for a software
development project may not apply to a construction project whereas the
measures of a construction project may not apply to the engineering
project. But there may be a project wherein all these deliverables are
involved. For such a project, there may be need of subsidiary Quality
management plan.
Project-specific quality policy, objectives and responsibilities are the

inherent attributes of the Quality management plan and this applies to all
aspects of project management. In current market scenario, each and
every organization does have their own quality management systems. But
a project-specific quality management system based on the ISO quality
standards and incorporated with the project plan is a key to success.
The QMS shall plan quality management, perform quality assurance and
control the quality. This approach will ensure the right grade quality at
each stage and activity. Quality as defined by the ISO 9000 is “the degree
to which a set of inherent characteristics fulfill requirements”. The project
manager and project quality must be capable to understand and interpret
the project quality requirements in the context of this definition. These
must be negotiated with customer for the agreement and acceptance. This
will help to keep the quality cost under control and avoid customer
dissatisfaction.
It must be noted here that:
• The quality level that fails to meet quality requirements is always a

problem.
• The low grade of quality that meets the requirement will not be a
problem.
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• Precision is a measure of exactness. (For example, if an instrument A can

measure the values with an increment of 0.1 unit and an instrument B
can measure with an increment of 0.01 unit, then the measurements
taken with instrument B be more precise.)
• Accuracy is an assessment of correctness. (For example, a diameter of

bar is 10.576 mm. An instrument C indicates the 3 readings as 10.580,
10.579 and 10.581 whereas an instrument D indicates the 3 readings as
10.575, 10.576, and 10.577. From these results, we can conclude that
both instruments have same precision level but instrument D is more
accurate.)
• Hence, appropriate levels of accuracy and precision must be defined in

the Quality Management Plan.
• Overinspection will definitely lead to increase in cost of quality.
The above description shall form the basis for the project quality
management team to work out the project quality management
requirements. In addition to above description, the following also shall be
considered:
• Project charter
• Scope baseline
• Applicable quality standards, safety standards and pollution control

standards
• Organization’s quality management system including quality assurance,

control procedures
• Historical quality data for similar projects
• Available quality control facilities
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• Technical requirements of the deliverables
• Health, safety and environmental requirements
• Quality measurement record and data requirements as per the project

agreement
• Current document and change control procedure.
With due considerations to above-mentioned basis and other documents,

the project quality management requirements will be worked out. These
shall include but will not be limited to:
• Quality management plan
• Recommendations on utilizing existing QC facilities
• Recommendations on new QC facility requirements
• Recommendations on personal protective equipment
• Recommendations on revisions required in the current quality

management system
• Major quality hold points and stages
• Risk factors with reference to management
• Budget for quality management
• Technical details and quality standards required, if any
• Report on any ambiguous quality requirements and clarifications needed

for the same.

concerned parties. If necessary a meeting shall be arranged with all
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incorporating micro level quality controls and monitor the same throughout
7.5.1.6 Collecting Requirements for Project Human Resource

Management
Human resource is the important element which inherent part of every

function/aspect of the project. Human resource management is a process
which refers to the organizing, managing and leading the project team.
Project team comprises of people with assigned responsibilities and roles
for each and every task/activity throughout all phases of the project.
The skill set requirement engagement (part time/full time) of these people
may be different from function to function. Involvement of these people in
project decision-making is beneficial to the project and strengthen their
commitment to the project.
During initiation phase, the functional leaders shall work out the
requirement on the basis of:
• Project charter
• Project scope
• Project schedule
• Human resource policies of the organization/government rules and

regulations
• Nature and type of project
• Location of the project
• Existing human resource available and their engagement
• Personnel administration policies
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• Lessons learnt during execution of earlier projects
• Historical data of similar project
• Risk factors and areas
• Skill set requirement
On the basis of above information provided with project initiation,

communication requirements will be worked out and will include but will
not be limited to:
• Revisions required, if any, organizational human resource policies and

personnel administration policies.
• Skill set-wise human resource requirement on a macro scale
• Utilization of existing human resource and additional requirement
• Geographical locations for sourcing human resource
• Communication requirements within the project team
• On-site requirements such as accommodation, logistics, communication

etc.
• Requirement of supporting human resource for office, communication,

project monitoring etc.
• Part-time/on-contract human resource requirements
• Project-specific training requirements
• Categorization of human resource such as core, executive/leadership and

operational team
• Any other information required to resolve any ambiguity from customer/

other stakeholders.
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concerned parties by the project manager. If necessary, a meeting shall be
arranged with all concerned parties to resolve the pending issues. Such
additional data with the requirements shall be further analyzed during the
analysis phase and the output shall be used for final project definition and
during planning for incorporating micro level human resource requirements
and monitor the same throughout the project execution phases.
7.5.1.7 Collecting Requirements for Project Information and

Communication Management
It is seen many times that the project managers are busy in sending
communication to project team members and other stakeholders. The
stakeholders may be internal or external. Effective communication is
needed to build a bridge between the stakeholders with different cultural/
organizational backgrounds; with different levels of expertise; with
different perspective and interests since all of them impact or influence the
project outcome.
The project information and communication management refers to:
• Develop an approach (SOP)/plan for project communication based on

stakeholder’s information needs and organizational policies.
• Initiate actions to create, collect, distribute, store, retrieve, and

ultimately dispose the project information.
• Monitor and control the communication as per plan throughout the

project cycle and ensure the stakeholder’s information needs are met.
Considering the:
• Macro level plan (Project Charter)

• Project scope
• Risk factors and areas
• The stakeholders’ list,
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all the stakeholders shall provide the requirements such as:
• Who all need the information

• What information is needed
• When will the information be needed
• Where the information should be stored
• What format the information should be stored in
• How the information shall be retrieved
• Any specific need such as time lag/language consideration.

the output shall be used for final project definition along with project
information and communication plan and used during planning for
incorporating micro level activities for communication and information
controls and monitor the same throughout the project execution phases.
7.5.1.8 Collecting Requirements for Project Risk Management
Project risk management is a very crucial but equally uncertain aspect.

Identifying the correct risk factors, risk areas is a very important task and
will be totally dependent on skills and experience of the project
management team.
Some of the important considerations, factors and aspects which may

impact the requirements for risk management are:
• Project scope
• Government rules/regulations/policies
• Currency status and trends
• Cultural changes
• Political environment
• Change in the customer policies
• Natural calamities
• Competition
• Non-availability of resources
• Benchmarking
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• Historical data
• Research type activities with uncertainty of results
With these considerations, requirements as under shall be generated but

will not be limited to these only:
• List of identified risk

• Possible impact of the identified risks
• Possible alternatives in case of risks
• Possible changes in the government policies and the impact of the same
• Changes required in the risk control methods and policies
• Recommendations on timeline for actions on risks identified
• List of ambiguities which may lead to risk and clarifications needed.
The requirements generated will be on broader level and of anticipatory

and speculative type. Any additional information, data, documents,
clarifications shall be arranged from the concerned parties. If necessary, a
meeting shall be arranged with all concerned parties to resolve the pending
issues. Such additional data with the requirements shall be further
analyzed during the analysis phase using various tools/techniques and the
output shall be used for final project definition along with risk management
plan. These outputs also will be used during planning for incorporating
micro level risk management controls and monitor the same throughout
7.5.1.9 Collecting Requirements for Project Procurement Management

Project procurement management refers to:
• Establishing procurement management policy which shall specify the

approach for identifying the potential suppliers and documenting the
project procurement decisions.
• Interaction with suppliers, selection of supplier and establishing a

contract.
• Executing the contract, monitoring the performance and incorporating

the revisions required.
• Completing and closing each procurement contract.
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These aspects of project procurement management not only interact with

each other but are also interacting with other processes/aspects of project
management. In order to this procurement functions effectively, has
certain requirements, needs certain and information which worked out on
the basis of initial project initiation communication. Most important of the
basis are:
• Project charter
• Project scope
• Project schedule and baseline
• Organizational procurement policies
• Cost estimation data
• Market condition for the products, material contained in the project
• Currency exchange rates
• Alternatives proposed
• Current tax pattern
• Available price lists
• Available vendor data
• Project requirements about direct deliveries, if any.
Considering the above and any other available data, the primary
requirements for procurement management are worked out which will
include but will not be limited to:
• Procurement management plan
• Changes/revisions required in the procurement policies
• The list of longer lead components material
• Technical data requirements for the suppliers
• Fund requirements schedule
• Information about the delivery time required
• List of approved vendors (project-specific)
• Mode of deliveries in case the material to be delivered directly to

customer’s/project owner’s premises
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• Macro level procurement plan
• List of any ambiguity
• List of information/data required to resolve these ambiguities
• List of risk factors and risk areas which will impact the project
procurement
• List of probable vendors, suppliers and subcontractors.

information, data, documents, clarifications shall be arranged from the
concerned parties to resolve the pending issues.
Such additional data with the requirements shall be further analyzed during
the analysis phase using various tools/techniques and the output shall be
used for final project definition along with risk management plan. These
outputs also will be used during planning for incorporating micro level risk
management controls and monitor the same throughout the project
execution phases.
7.5.1.10 Collecting Requirements for Project Stakeholder Management
The project stakeholder management plan is an integral component of

project management plan and shall address:
• Method of project operation selected
• Procedure for execution and closing project activities to achieve the

project objectives
• Policy for human resource allocation and assigning the roles and
responsibilities
• Method for monitoring and controlling the changes
• Information sharing and communication between the stakeholders
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There may be some overlapping of this management aspect with overall

project management and human resource management. Project manager’s
role is very important for the stakeholder’s management. The project
manager shall along with the stakeholders work out the requirement
minimum as listed below:
• Desired and current engagement of key stakeholders (Refer Annexure

7.4 for better understanding)
• Interrelationship and potential overlap between stakeholders
• Communication and information requirements of the stakeholders as

discussed earlier
• Expected response time to the communication
• Method for updating the stakeholder management plan
• Impact on the project in case of change in stakeholder
• Method of handing over the charge to new stakeholder

information, data, documents and clarifications shall be arranged. If
necessary, a meeting shall be arranged with all concerned parties to
resolve the pending issues. Such additional data with the requirements
shall be further analyzed during the analysis phase using various tools/
techniques and the output shall be used for final project definition along
with risk management plan. These outputs also will be used during
planning for incorporating micro level stakeholder management controls
and monitor the same throughout the project execution phases.
7.6 Organizing for the project teams
The project initiation phase shall be closed after receiving the requirements
from all the stakeholders and for all the project management aspects
explained under the clauses 7.1 to 7.5.
It must have been noticed that till this time the most of the work is done
by the project manager, internal project customer/marketing sales
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personnel, business in-charge of the organization and the functional heads

from functions such as design, planning, procurement, manufacturing, HR,
installation and commissioning.
This is the stage where the first interfacing point of the project occurs. This
point onwards all the stakeholders of the project shall get connected with
the project activities and the basic requirement for this is to organize the
project teams with roles and responsibilities.
The role of the project manager, HR head and functional heads is very
important for this. The project manager will have to ensure that all team
members follow ethical and professional behavior. The important
considerations for designating the project team shall be:
• Qualification, experience and skills required to perform the role

• Current engagement of the person
• Acceptance by functional head, other team members and stakeholders
• Integrity of the person with the organization, and the project
• Internal conflicts, cultural issues
• Geographical locations of the project and the team member
• Availability within the organization/need to appoint or hire.
With above considerations, the teams shall be organized and acquired for
the various project management aspects and execution functions by
conducting meetings, negotiations (in case of new appointments/hiring)
and/or multi-criteria decision analysis. For multi-criteria decision analysis,
the major criteria shall include availability, cost, experience and
competency.
7.6.1 Communicating the Project Team Organization
Since team organization is a starting point for project activities for an

individual, communication of the same is of utmost importance. The
objective of this communication is to ensure that each activity has an
unambiguous owner and all team members have a clear understanding of
their roles and responsibilities along with the roles and responsibilities of
the internal supplier and customer.
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Various formats can be used for the purpose. For example, a hierarchical
format may be used for to communicate high level roles, whereas a text
based format is better suited to document detail roles and responsibilities.
The hierarchical formats shall indicate the resource breakdown structure
(RBS) also in addition to the work breakdown structures (WBS) also in
order to ensure that all activities and resources that are not directly
connected with project deliverables are included and the roles and
responsibilities are assigned.
The responsibility assignment matrix (RAM) is a format that shows

resources assigned to a particular activity at a glance. For better
understanding, refer the samples at Annexure 7.4 A, B, and C.
Primarily, it is the project manager’s responsibility to ensure that

such a communication is released, reached to all team members
and is understood by them. Best method to do this is to conduct a
meeting for this purpose only and monitor.
7.6.2 Developing the Project Team
For effective and efficient project management, it is an inevitable

requirement that the project team is developed to accomplish the project
outputs within budgeted cost and scheduled time. The project team
development refers to:
• Improving knowledge and skill levels of the team members to increase

their abilities to complete project deliverables at lower costs, reduced
schedule and improved quality.
• Building trust and feeling of ownership among the team members to

boost the morale of the team, avoid conflict and improve teamwork.
• Creating dynamic, cohesive and collaborative team culture to:
➡ Improve individual and team performance
➡ Allow cross training and mentoring between team members to share

knowledge and expertise.
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Development of the project team is a continuous energizing and learning

process and shall remain on till the closure of the individual role/closure of
the project. Primarily, the project manager and functional leaders are
responsible to keep this process on.
Various tools and techniques are used to ensure the development of

project team that include but are not limited to:
• Enhancement of interpersonal skills
• Training
• Team building activities
• Setting ground rules
• Colocation (Colocation; also referred to as “tight matrix”; is an act of

placing many or all of the most active project team members at the same
physical location in order to enhance their ability to perform as a team.
This can be temporary at crucial stages/ times of the project)
• Recognition and rewards
• Personnel assessment
Since the team development is a continuous process, the project manager

and functional leaders must be open to the discussions and listen to the
team member’s feedback during the development exercises.
With these actions of organizing, acquiring, communicating and partially

developing the project teams, we are now ready to take on the next phase
of the project, i.e., project analysis and final definition.
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7.7 SUMMARY
• First and foremost requirement for any project process initiation is the
appointment of project manager.
• The project manager shall have all the authentic input documents in his
custody.
• Preparing a macro level project plan is the primary responsibility of the

project manager.
• While preparing the macro level plan, the following inputs must be
explicitly understood and considered by the team:
➡ Project scope
➡ Project output requirements
➡ Project quality requirement/acceptance criteria
➡ Stages and sequence of the outputs
➡ Approvals hold points for these outputs
➡ Capability for executing the project with available resources
➡ Requirement of hired resources and professional services
➡ Details about the end-user/end customer
➡ Overall budget
➡ Project-specific organizational strategy
➡ Method of financial allocations.
• Like any other plan, project macro plan also shall be complete, actionable
and must clearly identify the integration/interfacing points and the
interfaces.
• In response to the macro plan, the stakeholders are expected to do

evaluation of their own project management aspect and provide the input
requirements for next phase, i.e., project analysis and final project
definition.
• Finalizing the list of stakeholders is very tricky and crucial task for
project management throughout the project life cycle, i.e., from initiation
to close-out since stakeholder’s contribution towards the project shall be
a deciding factor of the project success or failure. Hence, the list of
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stakeholder must be very exhaustive with critical evaluation of their

interaction and interfaces.
• On a broader scale to the stakeholders are grouped into four categories

as follows:
➡ Organization’s Business Group

➡ Organization’s Operations Group
➡ Project Team (Functional Group)
➡ External Stakeholders
• The objectives of preparing and communicating the macro level plan

primarily includes:
➡ Communicating all the stakeholders that this particular project is

initiated under the leadership of Mr. XYZ (Project Manager)
➡ Communicating the scope of the project
➡ Communicating the targeted unique output of the project
➡ Communicating the overall schedule and timeline of the project
➡ Communicating the team organization and all stakeholders
➡ Communicating project approval requirements
➡ Communicating the assumptions and constraints, if any
➡ Communicating responsibilities and overall methodology of operation
➡ Communicating the organizational strategies and contract details in

case of project against customer order
➡ Communicating the macro level budget for the project
➡ Getting inputs for all the aspects of projects for analysis and micro
level planning.
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• The project initiation communication through a project launch meeting is

always a preferred and effective proposition. The project manager shall
conduct the meeting and explain contents of the communication to the
stakeholders on broader scale including expectations and inputs required
from them for further execution.
• The inputs for the analysis for various project management aspects will
be beneficial to ensure correct management plans and execution of
projects through all phases in place. These inputs necessarily shall cover
the following major Project Management aspects:
➡ Project interfacing and integration management

➡ Project scope management
➡ Project time and schedule management
➡ Project cost management
➡ Project quality management
➡ Human resource of the project management
➡ Project information and communication management
➡ Project risk management
➡ Project procurement management
➡ Project stakeholder management.
• The project initiation phase shall be closed after receiving the

requirements from all the stakeholders and for all the project
management aspects.
• This point onwards all the stakeholders of the project shall get connected
with the project activities and the basic requirement for this is to
organize the project teams with roles and responsibilities. The role of
project manager, HR head and functional heads is very important.
• The important considerations for designating the project team shall be:
➡ Qualification, experience and skills required to perform the role.
➡ Current engagement of the person
➡ Acceptance by functional head, other team members and

stakeholders
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➡ Integrity of the person with the organization, and the project
➡ Internal conflict/cultural issues
➡ Geographical locations of the project and the team member
➡ Availability within the organization/need to appoint or hire.
• The objective of the project team organization communication is to

ensure that each activity has an unambiguous owner and all team
members have a clear understanding of their roles and responsibilities
along with the roles and responsibilities of the internal supplier and
customer.
• Development of the project team is a continuous energizing and learning

process and shall remain on till the closure of the individual role/closure
of the project. Primarily, the project manager and functional leaders are
responsible to keep this process on.
• Various tools and techniques are used to ensure the development of

project team that include:
➡ Enhancement of interpersonal skills

➡ Trainings
➡ Team building activities
➡ Setting ground rules
➡ Colocation
➡ Recognition and rewards
➡ Personnel assessment
• Since the team development is a continuous process, the project

manager and functional leaders must be open to the discussions and
listen to the team member’s feedback during the development exercises.
135

understanding
1. 7.8.1 Refer to the sample project communication at Annexure 7.3 and

prepare:
a. List of stakeholders for the construction project.
b. List down the requirements for Human Resource Management and

Project Communication Management.
c. What could be risk factors/areas other than those mentioned in the

organizational strategies?
d. Prepare the overall project team in format indicated at Annexure

7.5A.
2. Prepare a project communication for the design, development and

launch of new application for social networking site.
3. Prepare a project team development plan for above application.
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1. _____ is nothing but application of knowledge, skills, tools & techniques

to project activities in order to meet the project requirements.
a) project management
b) program management
c) principles of management
a) office management
2. A _________ is an individual, group or an organization who may impact

a) partnership
b) stakeholder
c) business
d) department
3. Which are the most important control factors which are applicable to all
types of projects?
a) Time
b) Money
c) Quality & The team operating on the project
d) All of the above
4. Time consideration is equally important for progress monitoring & will

monitor & indicate which of the following?
a) Progress
b) Deadlines
c) Adjustments of schedules required
d) All of them
5. What does quality in the project plan’s documentation ensure?

a) The basis / quantity standards requirements.
b) text methods
c) comprehensive scope of each activity.
d) Details of each input
Correct Answer:- (1) - a, (2) - b, (3) - d, (4) - d, (5) - c
137
ANNEXURE 7.1
Sample Checklist for Project Definition

Document Owner: Phase: Initiation and Definition
Release: Updated on:
Sr. Input Description Availability Impacted Action to

No. Y/N Phase be taken
for project
definition
1 Project scope
2 Project output requirements
3 Project quality requirement /

acceptance criteria
4 Stages and sequence of the

outputs
5 Approvals hold points for these

outputs
6 Capability for executing the

project with available resources
7 Requirement of hired resources

and professional services
8 Details about the end-user/ end

customer
9 Overall budget
10 Project-specific organizational
strategy
11 Methods of finance allocations
Phases: 1. Initiation , 2. Analysis, 3. Planning, 4. Execution, 5 Control

and Monitoring, 6. Closing
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ANNEXURE 7.2
Sample List of Stakeholders and their Interaction

Stake Cod OBG OB OBG OO OOG OOG PFG PFG PFG PFG PFG PFG ESG ESG ESG
holder e 1 G2 3 G1 2 3 1 2 3 4 5 6 1 2 3
Organi OBG
zation
al
Busine
ss
Group
Projec OBG *** * * * **

t 1
Manag
er
In- OBG *** * * * **

charg 2
e
Busine
ss
In- OBG *** * * * **

charg 3
e
Financ
e
Organi OOG
zation
al
Opera
tion
Group
In- 00G *
charg 1
e
Opera
tions
In- OOG *** **

charg 2
e HR
In- OOG ***

charg 3
e IT
Projec PFG
t
Team
Memb
er
(Funct
ional
Group
)
Leade PFG *** *

r- 1
Planni
ng
139
Leade PFG *** *

r- 2
Engin
eering
Leade PFG *** *

r- 3
Procur
ement
Leade PFG *** *

r- 4
Contra
cts
Leade PFG *** *

r- 5
Logisti
cs
Leade PFG *** *

r- 6
Billing
Extern ESG
al
Stake
holder
Group
Custo ESG ***

mer 1
Suppli ESG ***

ers 2
Subco ESG ***

ntract 3
ors
No marking : no interaction
*** : Strong interaction
** : Medium Interaction
* : Low Interaction.
140
ANNEXURE 7.3
Sample Macro Level Plan Communication
Date: 15th January 2004

Dear Friends,
All of us are very well aware that our organization is ready to close the
current financial year on a very enthusiastic note with a business growth of
23% over last year. We have very ambitious targets for the year ahead.
I am glad to formally announce the initiation of project for “Construction of
250 residential flats at Khanapur”. This is very prestigious project for our
organization since this would the first project of this size and it is planned
for a record time completion. This project will provide a very strong boost
to our organizations business to achieve a growth of 30% over current
year.
I am very excited to take over this project as Project Manager and am

confident achieve the same as schedule with the solid rock support from all
of you.
The detailed Project Charter and all the relevant information is attached
with. The formal “Project launch meeting” is arranged on 21st January,
2004. During this meeting, I will explain the project in detail. I request all
of you to review the complete documents in detail and bring all your
doubts/clarifications needed. All these shall be resolved during meeting and
we will try to eliminate all ambiguities and start the project on a positive
note.
Thanks and regards,

Mr. Kiran Chandra Sharma
Attachments:
➡ Project charter (A)

➡ Responsibilities and overall methodology of operation (B)
➡ Expected inputs for all the aspects of projects for analysis and micro level
planning (C)
141
ANNEXURE 7.3 A, B, C
(A)PROJECT CHARTER
Sr. Title Description Planned/Target Specific

No. Reference
/ Remarks
1 Project Construction and sell of 250

Title residential flats
2 Site S. No. 135 Khanapur

Location Village, Tal : Haevli District:
Pune
3 Scope of Plan, construct and sell of

the flats Site development
Project including amenities Hand
over and closing of the site
4 Schedule Beginning of Phase 1 15th Feb. 2004

of the Handover and closing of site 15th Aug 2006
project
5 Budget For complete project till ` 18.35 crores

handover and closing of site
6 Project Project Manager Mr. K. C. Sharma

Team Operations Manager Mr. Manoj Date
Manager – HR Mr. S. H.
Manager – Finance Deshpande
Manager – Marketing/sales Mr. Ajay Bhosale
Mr. Paul Saxena
7 Advisors/ Legal Advisor Adv. A.M. Singh

Cons-
Technical Consultant Y.S. Sane and Co.
ultants
Financial Consultant BAZ Consultants
B) ORGANIZATIONAL STRATEGIES
This is very ambitious and prestigious project for the organization. This is
expected to add about ` 37.5 crores to the turnover with a profit of 17.5%.
It is assumed that with prevailing market conditions, the 90% units will be
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booked within 4 months after launching, i.e., the bookings are opened and
balance 10% will be sold before closing of the phase. The organizational
policies for the particular project shall be as elaborated below:
1. Customer Segment: The organization is targeting the low income

group customer segment for the project that can’t afford the high cost
accommodation within the municipal corporation limits.
2. Scope of the Project: The detailed scope and specifications of the
individual units and amenities will be worked out considering the
interest of above customer segment. The bear minimum specifications
will be considered as standard to facilitate selling.
3. Utilization of Infrastructure: The available equipment and human
resources on site closer to the proposed site are to be utilized. In case
of any additional resources, the proposal shall be submitted to the CEO
with necessary justifications and backup.
4. Method of Project Execution: The project will be executed in phases
with a minimum overlap period. The phase sequence and size will be
decided by the technical committee.
5. Financial Allocations: The organization has already invested in the
land for the project. ` 3 crores are allocated for initial expenses. Rest all
expenses are to be managed from the booking amounts. 30% of the
booking amounts shall be deposited to head office as corporate
contribution.
6. Technical Approvals: All construction plans shall be approved by the
district collectors. Internal approval shall be obtained for construction of
every stage as identified by the architect.
7. Risk Factors: The non-availability of construction labor at site, non-
availability of steel, sand and cement on time and the delay for plan
approval are anticipated as risk factors and areas. The risk management
plans are to be prepared and executed to counter these factors. An
additional budget of 1.5% as contingency for these may be sanctioned.
For any additional information/clarifications/data, please consult the Chief

Officer (Business Strategies).
C) Please refer the attachments for the input requirements
143
ANNEXURE 7.4
Desired and Current Engagement of Key Stakeholders
Stakeholder Unaware Resistant Neutral Supportive Leading
Stakeholder 1 C D
Stakeholder 2 C D
Stakeholder 3 C D
Stakeholder 4 C, D
Stakeholder 5 C D
Stakeholder 6 C, D
Unaware : Unaware of project and potential impacts

Resistant : Aware of project and potential impacts and resistant to
change
Neutral : Aware of project yet neither supportive nor resistant
Supportive : Aware of project and potential impacts and supportive to

change
Leading : Aware of project and potential impacts and actively
engaged in ensuring the project is a success
C : Current engagement
D : Desired engagement
Explanation
1. There is no gap in current and desired engagement of stakeholders 4

and 6. In other words, they are engaged to the desired level.
2. There is gap in current and desired engagements of stakeholders 1, 2, 3

and 5.
3. The gap is highest in case of stakeholder 1, and lowest in case of

stakeholder 2.
144
ANNEXURE 7.5(A)
Sample Hierarchical Format of Project Team Organization

145
ANNEXURE 7.5 (B)
Sample Responsibility Assign Matrix (RAM)

Activity/ Person Arvinda Benson Charles Dinesh Emmaneul
Create project R A C I I
charter
Communicate R A I I I
project plan
Collect requirements R I C I I
for project plan
Submit change R R, A I, A R, A R, A
requests for project
plan
Implement the R A C I I
change request and
communicate
revised project plan
R : Responsible
A : Accountable
C : Consult
I : Inform
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ANNEXURE 7.5 (C)
Sample Text-oriented Role and Responsibility Format

Position
Role
Skill requirements
Responsibility
Authority
Assessor
Document No. Revision
147
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
148
PROJECT DATA/REQUIREMENT ANALYSIS AND FINAL PROJECT DEFINITION
Chapter 8
Project Data/Requirement Analysis And
Final Project Definition
Objectives
Till this time we have initiated the project by appointing a project manager.
The project manager in consultation with his team has prepared the project
charter and communicated to the stakeholders; that are listed for the
particular project. The functional leaders as stakeholders have provided
their requirements considering the various project management aspects
such as Planning, Quality, Human resource and so on. The project teams
are already organized, acquired, developed and are ready competent and
capable to take on the next stage assignment and manage the same.
To move ahead from the initiation stage we need to consolidate the input
requirements received from the stakeholders, validate for the
completeness, fulfill the shortcomings if any and then take up the analysis
of the same to arrive at micro level inputs required for the next phase, i.e.,
cost estimation, budgeting, financial approvals and beginning of
investments required. Simultaneously we can start detail planning of the
project for execution.
Our objective in this chapter shall be to learn, assimilate and use the
scientific approach to carry out the task mentioned above for the effective
project management and ensure that finally the project success is
accomplished
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Structure:
Structure:
8.1 Verification of the Inputs/Requirements Received from Stakeholders
for Completeness
8.2 Consolidation of Requirements Received
8.3 Analysis and Evaluation of Inputs Received from Stakeholders
8.4 Tools and Techniques for Analysis and Evaluation
8.5 Risk Analysis
8.6 Outputs of the Project Analysis
8.7 Revising the Macro Level Project Plan
8.8 Final Definition of Project and Close-out
8.9 Summary
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8.1 Verification of the inputs/requirements received from

stakeholders for completeness
As mentioned earlier, there may be clarifications required to resolve the

ambiguities, some additional information/data required to arrive at explicit
definition of the project. These clarification, information/data etc. may be
from internal stakeholders or external stakeholder (most probably the
customer at this stage). Such clarifications, information/data must be
completed before moving ahead for the consolidation in order to avoid
duplication of similar actions.
The most popularly followed method to ensure completion of this within

the project executing organization is:
a. To circulate the list of clarification, information data needed to all

concerned and get the same.
b. To organize face-to-face discussions for any unresolved issues with the

internal stakeholders.
c. To record any unresolved issues and decide the time-bound plan

of action for the same. The impact of these unresolved issues
towards project scope, cost and delivery must assessed,
controlled and monitored.
In case of similar clarification, information/data requirement from

customer/external stakeholders:
a. A list of clarification, information/data is sent to the customer along with

a request for a face-to-face meeting.
b. A meeting with agenda shall be scheduled. Participants will be project

manager, key stakeholder seeking the information and customer
representatives. Such a meeting is very commonly known as “Project
kick-off meeting”.
c. Any unresolved issues shall be recorded and plan of action shall be

decided.
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d. Impact of the unresolved issues on the project scope, cost and

schedule, if any shall be explicitly recorded and signed off by all
the participants.
The project kick-off meeting agenda shall include following important

aspects; but will not be limited to:
a. Details of Information/communication exchange authorities.

b. Documentation requirement/exchange procedure.
c. Approval requirements, procedure and duration.
d. Scope and delivery requirements.
e. Quality control procedure and authorities.
The project kick-off meeting will be useful for building a formal

communication link and help to expedite the communication between the
customer-end and the project executing organization. In case the output of
project is for internal use (for example, project output is a new product/
service developed by an organization for sale), the project kick-off meeting
will be held with the internal customer/product or service development
team/sales and marketing/a team generating product or service
requirement.
With the meetings/interviews/discussions as mentioned above, the stage of

collecting requirement shall be closed.
8.2 Consolidation of requirements received
With closing of the stage as mentioned above, now the project team is
ready with all the requirements. But as elaborated in the previous chapter,
the inputs/requirements shall be provided by the stakeholders considering
all the aspects of project management. The same may not be in sequence/
order of the project management and there will be stakeholders; those are
involved in the project management for more than one aspect of project
management. Also there may be requirement which is common for more
than one stakeholder (for example, human resource, finance, software
etc.)
Hence, these inputs/requirements need segregation, sorting and

consolidation to facilitate further action simultaneously. Obviously, the first
152
criteria for such segregation will be the project management aspect that
are listed below and were also considered for collecting the requirement:
• Project interfacing and integration management

• Project scope management
Under each of these project management aspects, these requirements are

further classified under:
• Project management system related requirements.

• Design, engineering and estimation related requirements.
• Resource related requirements.
• Information and communication requirements.
• Logistics and other similar requirements.
The various management aspects are already discussed at length in the

previous chapter. The further classification is explained below in brief.
8.2.1 Project Management System Related Requirements
The project management system related requirement covers mainly the

plans and processes that will define the organizational strategies,
procedures, documents, roles, responsibilities and authorities. For
example, quality management aspect, the requirements for defining quality
management plan, quality control process, quality control documents etc.
will appear under this category.
8.2.2 Design, Engineering and Estimation Related Requirements
The requirements under this category will mainly cover the requirements
for executing the design, engineering and estimation part of the project
and generating the design, engineering documents and estimation data.
153
For example, design standards specified by the customer, design software,

document identification and unique numbering system, documentation
exchange and approval schedules, professional services, standard data for
estimation purpose etc.
8.2.3 Resource Related Requirements
Resource requirements shall cover the physical resources required in

various areas/aspects of project management for accomplishment of
projects successfully to deliver the desired outputs, on schedule and within
the budget. There can be many examples to explain. human resource,
basic infrastructure for execution (like space equipment of required
capacity for machining, material handling, computers, printers, telephones
etc.), manufacturing equipment, materials as per specification, at required
time and in required quantities etc. are the few of these examples.
8.2.4 Information and Communication Requirements
Information and communication requirements shall cover the type, time of

information required. Communication requirements shall cover the contact
details, the medium of communication, number of copies of
communication, form of communication (soft/hard), advance duration for
communication, expected response duration for the communication etc.
8.2.5 Logistics and Other Similar Requirements
Logistics requirements covers mainly the requirement related to

transportation, accommodation for the human resource at site or meeting
venue etc. In case of material, these will cover transportation, loading/
unloading, receipt at site, storage, packing/preservation etc. If not
addressed and documented properly, these may create issues for
firefighting and may also put breaks on the project progress.
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8.3 Analysis and Evaluation of inputs received from

stakeholders
It is necessary to analyze, evaluate the complete and consolidated

requirements before these are approved/incorporated in the official project
document that will be generated and used in the subsequent phases of the
project management/execution. The basis for analysis and evaluation shall
include following considerations but will not be limited to:
• Is it mandatory as per the project contract/internal project specification?
• Is it adding any value?
• Will it call for any change in the organizational strategy?
• Is it possible to meet the requirement within available norms and

resources?
• If no, what are the alternatives available?
• What is the impact on project scope, quality, cost and schedule for
meeting or not meeting the requirement?
• What is the basis of estimations done for the requirement? Is it the only
basis possible?
• Are these estimations correct and close to reality?
• Do these activities need any control? If yes, to what extent?
• Is this requirement call for any capital investments?
• If yes, what are advantages and disadvantages of the capital investments

on short-and long-term basis?
• What is going to be impact on the organization business for meeting or

not meeting the requirement?
155
The results/outcome of the analysis and evaluation of requirements on the

basis of above considerations shall be helpful to take decision to:
• Accept and incorporate the requirement as it is.

• Accept and incorporate the requirement partially.
• Reject the requirement with justification.
• Incorporate the revision in the organizational policies.
• Approval/disapproval of capital investments with justification and
alternatives.
The analysis and evaluation will also be helpful to:
• Work out and estimate the breakdown budget
• Work out and estimate the human resource requirements breakdown

budget
• Identify the controls needed
• Identify the control stages
• Identify the stages at which the requirement can be met
• Provide overall clarity to the project manager and key stakeholders
8.4 Tools and techniques for analysis and evaluation
The analysis and evaluation shall be faster and effective with the use of
tools and techniques evolved over the years and developed by the project
management gurus. There are many of them under various headings.
Important ones to suffice for the purpose of project management
requirement analysis are listed here:
• Expert judgment
• Facilitation technique
• Meeting
• Project management information system
• Analytical techniques
• Group creativity technique
• Focus groups
156
• Facilitated workshops
• Questionnaire and surveys
• Group decision-making techniques
• Document analysis
• Observations
• Prototypes
• Benchmarking
• Alternative analysis
• SWOT analysis
8.4.1 Expert Judgment
Expert judgments are often used to evaluate and analyze the aspects that
doesn’t have the physical data to analyze. For example, in a scope
definition over and above the specifications or stated requirements, there
are some intended needs of the project output. If these are not fulfilled/not
considered, the project scope may not be complete in all respects. Such
judgments are sought from group or individuals having specialized
knowledge or training. Such experts include but are not limited to:
• Senior management
• Other unit heads within the organization
• Consultants
• Stakeholders including customers or project sponsor .
• Professional and technical associates
• Industry groups and
• Subject matter experts
8.4.2 Facilitation Technique
Facilitation technique has broad application for analysis and evaluation of

the requirements of various project management aspects/processes in
order to define the project charter.
Facilitators are the trained and/or experienced experts for project

management. Facilitators help the teams and individuals to accomplish the
specific task. While doing this, the facilitators use appropriate techniques.
Brainstorming, conflict resolution, problem solving are some of the key
techniques.
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8.4.3 Meeting
Meetings conducted with clearly defined limited agenda, purpose, objective

and time frame are very effective tool to analyze and evaluate the inputs
from the stakeholders. The project manager shall be the organizer of such
meetings and shall be attended by selected team members (those are
impacted and are experienced for the subject under discussion). The cross-
functional composition of team is a preferred choice. Purpose of the
meeting shall be very precisely specified such as:
• Information exchange,
• Brainstorming,
• Option evaluation,
• Decision-making etc.
The team may have to develop some templates/formats, collect and

analyze the supporting data, consider alternatives to evaluate the
requirement before arriving at decisions/recommendations. The teams
must consider all aspects of the project such as scope, schedule and cost;
and not only the technical aspects.
Meetings are most effective when all participants are face-to-face in the
same location. Virtual meetings can be held using audio and/or video
conferencing equipment, but demands additional preparation and
organization to achieve the same effectiveness of a face-to-face meeting.
Outcome of the meetings shall be recorded and incorporated/used in the

subsequent phase of project management.
8.4.4 Project Management Information System
Project management information system is an inherent part of any project

executing organization’s environment. The project management
information is a very powerful tool for the evaluation since it provides
access to tools such as scheduling, work authorization system,
configuration management system, project database, project records, an
information collection and distribution system, or interfaces to other online
automated systems.
158
All these tools are very useful for analysis and generate and monitor some
key performance indicators.
8.4.5 Analytical Techniques
Requirements of almost every project management aspect need some or

the other time to consider alternatives, fast track or crash activities, take
decisions about the impact on the project scope, cost, schedule and
output. Use of analytical tools is very effective in such cases.
Organizational policies and procedures may influence the techniques used.

Very common tools used include but are not limited to leads and lags,
alternative analysis and performance review etc. The techniques used also
will vary as per the management aspect under consideration. For example,
while considering the cost management aspect techniques such as payback
period, ROI (return on investment), internal rate of returns and discounted
cash flow will have to be used.
Analytical techniques are also used effectively to assess the potential

outcomes with possible variations of project, environmental variables and
relationship of these other variables such as risk, market conditions,
currency exchange variations etc. The analytical techniques applied in such
cases are:
• Regression analysis
• Grouping methods
• Causal analysis. (A quality management approach to software
development using feedback of defect data for achieving quality
improvements in development processes.)
• Root cause analysis

• Forecasting methods (e.g., time series, scenario building, simulation etc.)
• Failure mode and effect analysis.
• Reserve analysis
• Trend analysis
• Earned value management and
• Variance analysis
159
The use of analytical techniques covers very wide spectrum and demands
wide range and volume of data. This will be from the organizational
historical data, stakeholder requirements, design and based on certain
assumptions. Hence, using analytical techniques, one should fall into
statistical trap but focus on the trends, take the direction indications and
decide the action plan.
8.4.6 Group Creativity Technique
Group creativity techniques are used for organizing and make use several
group activities to identify alternatives, review of the alternatives from
different angles, impacts of the alternatives and arrive at the best possible
solution. Few of them are explained, in brief, below.
8.4.6.1 Brainstorming
Brainstorming is a very widely used technique to generate multiple

alternatives without any bias or prejudice. Since brainstorming doesn’t
include any voting or prioritization, it is often used with other group
creativity technique that do so. For e.g. – PFMEA ( Process Failure Mode
Effect Analysis ) , DFMEA – ( Design Failure Mode Effect Analysis )
8.4.6.2 Nominal Group Technique
This technique is the enhanced version of brainstorming that allows voting

process to rank the ideas preferentially. Most useful ones of these are
further taken for another cycle of brainstorming and prioritization.
8.4.6.3 Idea/Mind Mapping
Idea mapping is a technique used to consolidate the outcome of

brainstorming into a single map to reflect the commonality and differences
in understanding and generate new ideas/alternatives. The ideas/
alternatives generated with this technique are expected to be more
realistic, close to reality and innovative ones.
8.4.6.4 Affinity Diagrams
This technique allows large number of ideas/alternatives to be classified

into groups for review and analysis.
160
8.4.6.5 Multi-criteria Decision Analysis
This is a technique that uses a decision matrix and provides systematic

analytical approach for establishing criteria like risk levels, uncertainty and
evaluation. This data is further utilized, evaluate, prioritize and rank the
many ideas/alternatives.
8.4.7 Focus Groups
Focus group technique is used to bring together the stakeholders and

subject matter experts to understand about their expectations and
attitudes about the project under execution. A trained moderator/expert
guides the group through an interactive discussion, designed to be more
conversational than a one-to-one interview.
8.4.8 Facilitated Workshops
Facilitated workshops are focused sessions participated by key stakeholders

to evaluate the project requirements. Such workshops primarily helps for
quickly defining the cross- functional requirements and reconcile the
stakeholder differences.
Because of the interactive group nature, such well facilitated workshops

can build trust, foster relationships and improve communication amongst
the participants, which leads to increased stakeholder consensus.
Examples of such workshops are Joint Application Design (JAD) sessions

used in software development project. Another example is Quality Function
Deployment (QFD) sessions used in manufacturing industries.
8.4.9 Questionnaire and Surveys
Questionnaire and survey are best suited to get information, opinion trend
from a large number of respondents spread over a wide geographic area
and statistical analysis of such data is appropriate for analysis and
evaluation.
Questionnaire shall be written sets of questions designed to receive quick

response. The sample size and geographical dispersion of the respondents
are the key factors for the effective results of the survey. To decide the
161
locations of the distribution centers for a consumer product or to decide

route and station locations for a metro project are the examples for better
understanding.
8.4.10 Group Decision-making Techniques
The group decision-making is an assessment process having multiple

alternatives with an expected outcome in the future actions. These
techniques can be used to generate, classify and prioritize the project
requirements in the project management aspects such as scope, risk,
schedule, resource etc.
There are various methods to reaching a group decision such as:
• Unanimity: A decision that is reached whereby everyone agrees on a

single course of action
• Majority: A decision that is reached with a support from more than 50%
of the members for a single course of action out of the two nominated.
• Plurality: A decision that is reached whereby the largest block in a

group decides, even if majority is not reached. This method is generally
used in case the number of options nominated is more than two.
• Dictatorship: In this method, one individual makes the decision for the
group.
Once decided, the decisions taken has to be respected by all the

stakeholders without any apprehensions.
8.4.11 Document Analysis
Document analysis is used to elicit requirements by analyzing existing

documentation and identifying information relevant to the requirements.
There are wide range documents that may be analyzed to help elicit
relevant requirements. Examples of documents that may be analyzed
include but are not limited to:
• Business plans
• Marketing literature
162
• Agreements
• Request for proposal
• Current process flows
• Logical data models
• Business rules and guidelines
• Application software documentation
• Business processes/Interface documentation
• Similar use cases from historical data
• Other requirements documentation
• Problem/issue logs
• Policies
• Procedures
• Regulatory documents such as law, codes, ordinances etc.
• Environmental and pollution standards
• Design and engineering standards/specifications.
8.4.12 Observations
Observations provide a direct way of observing individuals in their work

environment and how they perform their jobs or tasks and carry out the
processes. The observation technique is particularly suitable for detailed
processes when the user of the product (project output) may face difficulty
(or have faced difficulty in past) and are reluctant to articulate their
requirement.
Observation is also referred to as “job shadowing”. It is usually done

externally by an observer by observing a business expert performing a job.
It also can be done by “participant observer” who actually performs a
process or procedure to experience how it is done to uncover the hidden
requirements.
8.4.13 Prototypes
Prototyping is a method that provides a working model of the expected

product for the experiment and analysis of requirements rather than
limiting the discussions to abstract representation of their requirements.
Prototypes support the concept of progressive elaboration in iterative
cycles of mock-up creation, user experimentation, feedback generation and
revision. After performing enough feedback cycles, the requirements
163
obtained are sufficient complete and accurate to the next phases such as
planning, design and execution.
Storyboarding is another form of prototyping technique that shows

sequence or navigates through series of images/illustrations. This form
prototyping is used on a variety of projects in a variety of industries, such
as film, advertising, instructional design, and on agile and other software
development projects.
8.4.14 Benchmarking
The proposed/suggested processes and operations are compared with the

one in use for similar product/organizations in order to identify best
practices, improve on them and generate a basis for performance
measurement.
The benchmarking may be in comparison with internal or external product/

organization.
8.4.15 Alternative Analysis
Many activities have alternative methods of accomplishment and hence

various different levels of resource capability or skills, different size and
type of machines, different tools etc. The make-rent-buy decisions also will
vary for each of them. Analysis of these alternatives will be useful to decide
the best choice and estimate time and cost for the same. This analysis also
can be used to make the contingency plans and risk management plans.
8.4.16 SWOT Analysis
This is very popular technique for project management and is used to

examine and analyze the strengths, weaknesses, opportunities and threats
perspectives of the each aspects of project management to assess the
severity of the weaknesses and threats. This assessment results shall be
used to decide the corrective actions and incorporate the same at all stages
of project management.
The assessment of strength and opportunities area shall be used to

enhance the project management and have better control to accomplish
the project deliverables in terms of project output, schedule and cost.
164
The tools and techniques elaborated above must be used selectively for the
analysis of requirements received for each of the project management
aspects mentioned under 8.2. All of them are not suitable for each of them.
Refer Annexure 8.1 for guidelines to use the appropriate tools/
techniques.
8.5 Risk Analysis
Risk management is a very important project management aspect and

shall have very serious consequences if not handled with proactive attitude
since beginning of the project. Risk identification and risk management
plans are the basic requirements. But this will not be sufficient if not
supported by the qualitative and quantitative analysis and then backed
with risk control mechanism.
The risk analysis is focused around the:
• Risk appetite: Anticipated degree of uncertainty.
• Risk tolerance: The degree, amount or volume of risk that an

organization can withstand.
• Risk threshold: The level of uncertainty or the level of impact that the
organization can tolerate.
The cumulative consideration of all the above shall decide the risk attitude
of an organization towards a project. This risk attitude will decide and
select the different risk responses to keep the project under control.
Another aspect which must be taken into consideration during risk analysis
is that the risks can be either positive or negative which are commonly
referred to as opportunities or threats. Positive risks that offer
opportunities within the limits of risk tolerances can be pursued in order to
generate enhanced value. For example, adopting an aggressive resource
optimization technique is a risk taken in anticipation of a reward for using
fewer resources. Considering the importance of the risk factor, the
qualitative and quantitative analysis is specially elaborated in detail for
better understanding in the subsequent paragraphs.
165
8.5.1 Qualitative Risk Analysis
Qualitative risk analysis is a rapid and cost-effective means of establishing

the priorities for planning the responses to the risk. Key advantage of
qualitative risk analysis is to reduce the level of uncertainty and focus on
high priority risks. Unbiased risk approach of the participants is the key to
the effective analysis. Established definitions of the level of probability and
impact in the risk management plan will help to reduce the bias influence.
The time criticality of risk related actions/requirements also may magnify
the importance of a risk. An evaluation of the quality of information
available will help to control the magnification of risk importance.
8.5.1.1 Inputs for Risk Analysis
For the effective and efficient qualitative risk analysis, it is mandatory to

have and consider the following inputs:
• Risk management plan: The ideal risk management shall address the
roles and responsibilities for conducting risk management, budgets,
scheduling of risk management, risk categories, definitions of probability
and impact, the probability and impact matrix, the probability and
stakeholders’ risk tolerances. In case such as plan is not available, it may
be developed while performing the risk analysis.
• Scope baseline: Projects of a common/recurring type have more well

understood risks. But for the projects using state-of-the-art/first-of-its-
kind technology, and highly complex projects tend to have more
uncertainty leading to more risks. Clearly defined scope baseline is
essential for effective evaluation and analysis of the identified risks.
• Risk register: Risk register is the compilation of the list of identified

risks with root cause of risk, possible impact/effect of each risk and the
potential response to the risks. (This information may be used from the
experience of earlier projects and expertise of the stakeholders).
• Industry studies of similar projects by experts can provide insight and

context for the risk assessment.
• Information on prior similar projects under execution or completed.
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8.5.1.2 Tools and Techniques for Qualitative Risk Analysis
The tools and techniques used in general for analysis of the various project
management aspects are elaborated at 8.4 above, few of them will be
useful for the risk analysis also. In addition these there are some more
tools and techniques specifically suitable for the qualitative risk analysis.
The same are explained hereunder for the clarity and understanding.
8.5.1.2.1 Risk Data Quality Assessment
Risk data quality assessment will evaluate the usefulness of the data for
risk management by examining the degree to which the risk is understood
and quality, accuracy, reliability, and integrity of the risk data available.
The output of qualitative risk analysis with poor quality risk data shall be
either of little use or no use. It may be necessary to gather better data in
case the data is not acceptable, though it may lead to more time and
resources than originally planned.
8.5.1.2.2 Risk Categorisation
Criteria such as source of risk, root causes of the risk, the impacted project
area, or other project-specific criteria (e.g., project phase, geographic
project areas, customer sector of the product, etc.) are used for risk
categorization.
This categorization of the risks can be used to judge/identify the effects of

risks on the project areas and the project areas most affected by the
probable risks. This technique also shall help to determine work packages,
activities, project phases or even roles that can lead to the development
effective risk responses.
8.5.1.2.3 Risk Urgency Assessment
The risk requiring immediate/early responses are termed as “urgent to

address”. The response urgency is a cumulative function of probability of
occurrence, symptoms, warning signs, risk rating and time taken by the
risk to affect project. The risk urgency assessment may be combined with
the risk rating derived from the probability and impact matrix in order to
assign the final risk severity rating.
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8.5.1.2.4 Probability and Impact Matrix
Table 8.1: Probability and Impact Matrix
Refer the Table 8.1 above. This probability-impact matrix is constructed to

evaluate importance of each risk and decide on the rating of each risk
considering its impact on the project objectives. The figure above
indicates:
• The low rating risk with gray color where the risk rating values are
0.003 to 0.05.
• The moderate rating risks are identified with white color where the risk
rating values are 0.060 to 0.14.
• The high rating risks are identified with black color and the risk rating
values are 0.16 to 0.72.
The classification and the threshold values used here are indicative only
and will vary from organization to organization depending on the risk
attitude and risk rating rules established by the organization.
Each risk will be rated with reference to its probability of occurrence and its
impact on the project objectives to arrive at the risk rating. The risk ratings
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are then further used to decide the categorization and prioritization of the
risks. This data will be useful to take decision to make use of expensive
analysis tools such as quantitative analysis and decide risk response action
plans.
8.5.1.2.5 Risk Probability and Impact Assessment
The risk probability assessment refers to the likelihood of occurrence of

each risk whereas the impact assessment analyzes the potential impact of
the each risk occurrence on the project objectives such as schedule, cost,
quality or performance. The impact assessment shall include both positive
and negative effects to decide on the threats and opportunities.
Since this is qualitative analysis technique, the experience and expertise of

the participants involved is very important. In order to make it more
effective; knowledgeable experts external to the project may be included
along with the project team members. The analysis is normally done in
interviews/meeting with the select group of project team members and
experts. Guidelines/definitions of the risk management plan are used to
decide the ratings for probability and impact.
Probability of each risk and its impact on each project objective is assessed
and the explanatory details such as assumption and justification for levels
assigned are also recorded. The output of the probability and risk
assessment will be helpful to update the risk register and categorization of
on the basis of urgency. The risks with low probability and low impact may
be included in the “watch list” for monitoring throughout the project cycle.
8.5.1.3 Output of Qualitative Risk Analysis
Updated risk register with details such as assessment results of the

probability and impact for each risk, risk rating, score and ranking; risk
categorization, watch list for low probability risks and list of risks requiring
further analysis. The assumptions data also needs updating considering the
availability of new information from the qualitative analysis.
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8.5.2 Quantitative Risk Analysis
The quantitative risk analysis is performed on the high priority risks

identified by the qualitative risk analysis. The project manager shall seek
expert judgment on the selection of risks that needs to be considered for
quantitative risk analysis. Quantitative risk analysis numerically analyzes
the effect of the priority risk on the overall project objectives. The key
advantage of this analysis is the quantitative information generated that
can be used to support the decision-making in order to reduce the project
uncertainty levels.
The quantitative risk analysis shall be repeated as needed and part of

control process. This iteration will indicate the trends and ensure that
overall project risk is satisfactorily decreased.
8.5.2.1 Inputs for Quantitative Risk Analysis
For the effective and efficient quantitative risk analysis, it is mandatory to

have and consider following inputs:
• Risk management plan: The ideal risk management shall address the
roles and responsibilities for conducting risk management, budgets,
scheduling of risk management, risk categories, definitions of probability
and impact, the probability and impact matrix, the probability and
stakeholders’ risk tolerances.
• Cost management plan: To provide the guidelines on establishing and

managing risk reserves.
• Schedule management plan: To provide the guidelines on establishing

and managing risk reserves.
• Risk register: Risk register updated with information as indicated in
8.5.1.3 above. Industry studies of similar projects by experts can provide
insight and context for the risk assessment.
• Information on prior similar projects under execution or completed.
• Risk databases that may be available from industry or proprietary

sources.
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8.5.2.2 Tools and Techniques for Quantitative Risk Analysis
The tools and techniques used in general for analysis of the various project
management aspects are elaborated at 8.4 above, few of them will be
useful for the quantitative risk analysis also. In addition to these, there are
some more tools and techniques specifically suitable for the quantitative
risk analysis. The same are explained hereunder for the clarity and
understanding.
8.5.2.2.1 Data Gathering and Representation Techniques
To quantify the data of probability and impact of risks on project

objectives, the experience and historical data is drawn in by utilizing the
Interview technique. The data needed will depend upon the type of
statistical probability distribution that are used. For example, data can
be collected on the three points such as optimistic (low), pessimistic (high)
and most likely scenario for some commonly used distribution, (For
example, beta distribution, triangular distribution). Refer Annexure 8.2.
Continuous probability distributions, which are used extensively in

modeling and simulation, represent the uncertainty in values such as
duration of schedule activities and cost of project components. Discrete
distribution can be used to represent uncertain events such as the
outcome of a test or a possible scenario in a decision tree. Uniform
distribution can be used if there is no obvious value that is more likely
than any other between specified high and low bounds, such as in the early
concept stage of design.
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8.5.2.2.2 Modeling Techniques
Commonly used techniques use both event-oriented and project-oriented

analysis approach that includes Sensitivity analysis, Expected monetary
value analysis and Modeling and simulation.
Sensitivity Analysis: Sensitivity analysis helps to identify the risk which

has the most potential impact on the project. It also helps to understand
the correlation between the variations in the project objectives against the
variations in different uncertainties. In order to analyze these variations’
effect on one project element, uncertainty is examined with all other
uncertain elements are kept on hold at their base values. One typical
display of sensitivity analysis is tornado diagram. Refer Fig. 8.1 Example
of Tornado diagram below.
From the figure, it can be concluded that:
• The Risk 1 has the highest impact.
• Each risk has the negative as well as the positive impact.
• The Risk 6 has the lowest impact.
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Fig. 8.1: Example of Tornado Diagram
Expected Monetary Value Analysis: Expected monetary value analysis

(EMV) is a statistical concept that will consider the alternatives and
calculate the average outcome under the uncertain scenarios which may or
may not happen in future. The expected value is calculated with reference
to the probability of occurrence of the particular scenario. This technique is
commonly used to build a decision tree analysis which can be used to make
the decisions to reduce or keep the risk under control. One such decision
tree diagram is provided at Annexure 8.3 for better understanding.
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Modeling and Simulation: The modeling and simulation technique builds

a project model that translates the specified uncertainties into their
potential impact on the project objectives. Simulation is done using Monte
Carlo technique. The model is computed for number of iterations with the
random input values from the available probability distribution of the
uncertainties. For example, cost risk analysis model will be simulated with
cost estimate data whereas schedule risk analysis will make use of
schedule network diagram and duration estimates.
The output from a simulated model will generate cumulative distribution

charts that can be used to draw conclusions such as the probability of
achieving specific cost target, probability of achieving a specific task in
scheduled duration etc.
8.5.2.3 Outputs of Quantitative Risk Analysis
Quantitative risk analysis provides very useful and valuable information

that must be incorporated in the project documents. For example, the risk
register updates will have to consider and address:
• Probabilistic analysis of the project

• Probabilities of achieving cost and time objective
• Prioritized list of quantified risks
• Trends in quantitative risk analysis results
8.6 Outputs of the project analysis
The analysis of project requirements for the project management aspects

as listed below:

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Will provide us the verified, complete, revised quantifiable, clear and

actionable project requirements as listed below:
• Project management system related requirements.

• Design, engineering and estimation related requirements.
• Resource related requirements.
• Information and communication requirements.
• Logistics and other similar requirements.
• Risk analysis data.
The project analysis output will also include but will not be limited to the
following:
• Input data for budget and estimation

• Input data for project planning
• Revised overall project management plan
• Revised management plan for each of the project management aspect
• Revised standard organizational business and operating procedures
• Revised stakeholder register
• Revised risk register
• Clearly defined scope baseline.
These outputs will be used as inputs to the next phases of project

management. The macro level project plan also shall be revised in line with
analysis outputs.
8.7 Revising the macro level project plan
The macro level plan shall be revised and communicated to all the
stakeholders on the basis of the outputs of project analysis. The
communication must include the following mandatory documents
• Revised project charter.
• The overall project management plan that co-ordinates all subsidiary

plans and integrates them into a comprehensive project management
plan. This plan will be central document defining the basis of all project
work.
• Stakeholders’ list with their interaction matrix.
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• Project team organization with clearly defined roles and responsibilities.
• The complete details of the requirements accepted as final and

justification analysis data of the same.
• Details of communication interfaces including name, phone numbers,

mail id etc.
• Complete project specifications.
• Project-specific organizational strategies.
• Budget and financial approval policies.
• Project management plans and procedures for each of the project

management aspects.
• Risk register and analysis data.
• Plan of action for subsequent phases.
It is always preferred to have this on a common server of the information/

communication system with access control for easy access and use as and
when required.
While revising the project charter, the following aspects must be considered
to prevent any loopholes/gaps/ambiguity:
• Project scope.
• Project output requirements.
• Project quality requirement/acceptance criteria.
• Stages and sequence of the outputs.
• Approvals hold points for these outputs.
• Capability for executing the project with proposed resources.
• Requirement of hired resources and professional services.
• Details about the end-user/end customer.
• Overall budget available and its allocation with reserves/contingency.
• Project-specific organizational strategy.
• Method of financial allocations.
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8.8 Final Definition of project and close-out
With the revised communication as mentioned above, it is concluded that

the final definition phase of project is accomplished. Formal record of
close-out shall be done in a meeting of all stakeholders in sign-off
document and clear understanding of the final project definition.
The project manager’s role is very vital for the close-out since this may be
milestone defined and beginning of the next milestone phase. In many
project contracts, the close-outs are linked with the commercial
transactions. Communication of the close-out to all impacted stakeholders
is the primary responsibility of the project manager.
Any delay in the close-out on the basis of contract agreement must be

recorded with reasons for the delay and justification and informed to the
concerned to avoid any conflicts at a later stage.
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8.9 Summary
• We shall have to consolidate the input requirements received from the

stakeholders, validate for the completeness, fulfill the shortcomings if
any and then take up the analysis of the same to arrive at micro level
inputs required for the next phase, i.e., cost estimation, budgeting,
financial approvals and beginning of investments required.
• There may be clarifications required to resolve the ambiguities, some

additional information/data required to arrive at explicit definition of the
project. These clarification, information/data etc. may be from internal
stakeholders or external stakeholder (most probably the customer at this
stage). Such clarifications, information/data must be completed before
moving ahead for the consolidation in order to avoid duplication of similar
actions.
• The project kick-off meeting will be useful for building a formal

communication link and help to expedite the communication between the
customer-end and the project executing organization. In case the output
of project is for internal use (for example, project output is a new
product/service developed by an organization for sale), the project kick-
off meeting will be held with the internal customer/product or service
development team/sales and marketing/a team generating product or
service requirement.
• The inputs/requirements need segregation, sorting and consolidation to

facilitate further action simultaneously. The first criteria for such
segregation will be the project management aspect listed below:
➡ Project interfacing and integration management

➡ Project scope management
➡ Project time and schedule management
➡ Project cost management
➡ Project quality management
➡ Human resource of the project management
➡ Project information and communication management
➡ Project risk management
➡ Project procurement management
➡ Project stakeholder management.
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• The requirements are further classified under:
➡ Project management system related requirements.

➡ Design, engineering and estimation related requirements.
➡ Resource related requirements.
➡ Information and communication requirements.
➡ Logistics and other similar requirements.
• It is necessary to analyze, evaluate the complete and consolidated

requirements before these are approved and incorporated in the official
project document.
• The results/outcome of the analysis and evaluation of requirements on

the basis of above considerations shall be helpful to take decision to:
➡ Accept and incorporate the requirement as it is.

➡ Accept and incorporate the requirement partially.
➡ Reject the requirement with justification.
➡ Incorporate the revision in the organizational policies.
➡ Approval/disapproval of capital investments with justification and
alternatives.
The analysis and evaluation will also be helpful to:
➡ Work out and estimate the breakdown budget

➡ Work out and estimate the human resource requirements breakdown
budget
➡ Identify the controls needed
➡ Identify the control stages
➡ Identify the stages at which the requirement can be met.
• The analysis and evaluation shall be faster and effective with the use of
tools and techniques evolved over the years and developed by the
project management gurus. There are many of them under various
headings. Important ones to suffice for the purpose of project
management requirement analysis are listed here:
➡ Expert judgment
➡ Facilitation technique
➡ Meeting
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➡ Project management information system
➡ Analytical techniques
➡ Group creativity technique
➡ Focus groups
➡ Facilitated workshops
➡ Questioner and surveys
➡ Group decision-making techniques
➡ Document analysis
➡ Observations
➡ Prototypes
➡ Benchmarking
➡ Alternative analysis
➡ SWOT analysis
• Risk management is a very important project management aspect and

shall have very serious consequences if not supported by the qualitative
and quantitative analysis and then backed with risk control mechanism.
The risk analysis is focused around the:
➡ Risk appetite: anticipated degree of uncertainty.
➡ Risk tolerance: the degree, amount or volume of risk that an

organization can withstand.
➡ Risk threshold: the level of uncertainty or the level of impact that

the organization can tolerate.
The cumulative consideration of all the above shall decide the risk attitude
of an organization towards a project.
• Qualitative risk analysis is a rapid and cost-effective means of

establishing the priorities for planning the responses to the risk. Key
advantage of qualitative risk analysis is to reduce the level of uncertainty
and focus on high priority risks. Unbiased risk approach of the
participants is the key to the effective analysis.
• The quantitative risk analysis is performed on the high priority risks

identified by the qualitative risk analysis. Quantitative risk analysis
numerically analyzes the effect of the priority risk on the overall project
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objectives. The key advantage of this analysis is the quantitative

information generated that can be used to support the decision- making
in order to reduce the project uncertainty levels.
• The risk register updates after analysis will have to consider and
address:
➡ Probabilistic analysis of the project.

➡ Probabilities of achieving cost and time objective
➡ Prioritized list of quantified risks
➡ Trends in quantitative risk analysis results
• The project manager’s role is very vital for the close-out since this may
be milestone defined and beginning of the next milestone phase. In
many project contracts the close-outs are linked with the commercial
transactions. Communication of the close- out to all impacted
stakeholders is the primary responsibility of the project manager.
• Any delay in the close-out on the basis of contract agreement must be

recorded with reasons for the delay and justification and informed to the
concerned to avoid any conflicts at a later stage.
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understanding
1. Refer to the tools and techniques elaborated at 8.4 above and guidelines
provided under Annexure 8.1 analyze the:
a. List of stakeholders for the construction project.
b. Analyze the requirements for Human Resource Management and

Project Communication Management.
c. Analyze the risk factor/areas other than those mentioned in the

organizational strategies.
d. Analyze the overall project team requirements.
2. Prepare a revised:
➡ Project communication management plan
➡ Project human resource management plan for the design,

development and launch of new application for social networking site.
➡ Project procurement management plan for the construction project.
3. Prepare the revised final project definition and communication for the
construction project.
182
1. The ___________ will be useful for building a formal communication

link & help to expedite the communication between the customer-end &
the project executing organization.
a) Project plan
b) project kick off meeting
a) project document
b) project team
2. Record any unresolved issues & decide the time-bound plan of action for
the same. The impact of these unresolved issues towards project scope,
cost & delivery must be _________.
a) assessed
b) controlled
c) monitored
d) All of them
3. Impact of the unresolved issues on the project scope, cost & schedule;
if any shall be explicitly recorded & signed off by all the participants.
a) True
b) False
4. Resource requirements shall cover the physical resources required in

various areas/ aspects of project management for accomplishment of
projects successfully to deliver the desired outputs, on schedule &
within the ______.
a) stipulated time
b) given range
c) budget
d) none of them
5. ______ requirements covers mainly the requirement related to

transportation, accommodation for the human resource at site or
meeting venue etc.
a) Production
b) Order
c) Product
d) Logistics
183
Correct Answer:- (1) - b, (2) - d, (3) - a, (4) - c, (5) - d
184
ANNEXURE 8.1
Guidelines for Use of ANALYSIS and EVALUATION Tools and

Techniques
Sr. Tools Project Management Aspect

No. and
Techni Interf Scope Time Cost Qualit Huma Infor Risk Procu Stake
acing y n matio reme holde
ques and Mana and Mana n Mana nt r
geme geme Mana Resou geme
Integr nt Sched nt geme rce and nt Mana Mana
ation ule nt geme geme
Mana Comm nt nt
Mana Mana geme unicat
geme geme nt ion
nt nt
Mana
geme
nt
1 Expert √ √ √ √ √ √ √ √ √ √
Judgme
nt
2 Facilitati √ √ √ √ √ √
on
Techniqu
es
3 Meeting √ √ √ √ √ √ √ √ √ √
4 Project √ √ √ √ √ √ √ √ √ √
Manage
ment
Informat
ion
System
5 Analytic √ √ √ √ √
al
Techniqu
es
6 Group √ √ √ √ √ √ √ √ √ √
Creativit
y
Techniqu
es
7 Focus √ √ √ √ √ √ √ √ √ √
Groups
185
8 Facilitate √ √ √ √ √ √ √
d
Worksho
ps
9 Question √ √ √ √ √ √ √ √ √ √
naire
and
Surveys
10 Group √ √ √ √ √ √
Decision
making
Techniqu
e
11 Docume √ √ √ √ √ √ √ √ √ √
nt
Analysis
12 Observat √ √ √ √ √ √ √ √ √ √
ions
13 Prototypi √ √
ng
14 Benchm √ √
arking
15 Alternati √ √
ve
Analysis
16 SWOT √ √ √ √ √ √ √ √ √ √
Analysis
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ANNEXURE 8.2
Range of Three Point Project Cost Estimate Data
WBS Element Low – To Most Likely – Tm High – Tp
Design 4 6 10
Plan 2.5 3.5 5
Engineer 2 3 6
Build 16 20 35
Test 11 15 23
Paint 1.5 3 5
Pack and Despatch 0.6 1.8 2.4
Total Project 37.6 52.3 86.4
The three point estimates are collected from the relevant stakeholders for each
WBS element for triangular, beta or other distributions. In this example, Cost
risk simulation can be done to check the probability of completing the project at
or below most likely value of ` 52.3 million.
Combined cost (Tc) = (To + Tm + Tp)/3 – for Triangular Distribution
Combined cost (Tc) = (To + 4Tm + Tp)/6 – for Beta Distribution
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ANNEXURE 8.3A
Example of Decision Tree Diagram
Note: The decision tree shows how to make a decision between alternate
capital strategies (represented as ‘Decision node’) when the environment
contains uncertain elements (represented as ‘Chance node’).
188
ANNEXURE 8.3B
Cost-Risk Simulation Result
The Cost-Risk Analysis is done assuming the range of data indicated in the
Annexure 8.2 clearly indicates that:
• The probability of completing the project within most likely cost estimate
is only 12%
• Whereas the probability of completing the project with 10% contingency

is 56% and
• With a contingency of 20%, the probability will rise to 80%.
189
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
190
BUDGET, INVESTMENT AND APPROVALS
Chapter 9
Budget, Investment And Approvals
Objectives
In continuation with the previous chapter, once the project requirements

and other analysis is completed; the scope baseline gets established. This
is the basic foundation of the project on which we are going to construct
our projects and shall be passing through various phases such as planning,
execution, control, monitoring and so on.
For any organization in the world the business, profits, customer retention
and expansion are the keys of survival. For achieving targets of all these
aspects successfully, a common factor is playing a very important role that
is money. Money is never an abundant resource in any organization and
same is the case for projects. Hence, budgeting and control of the same is
vital assignment for successful accomplishment of a project.
The project schedule (time) is the most important variable linked with the
cost. Any increase, addition of time shall have direct impact as escalation
of cost. In order to control the time factor, it is necessary to ensure that
there are no stoppages, hold points on account of any type of approvals.
In this chapter, we will study the approach/methods for budgeting,

investment proposals, approvals (including the financial and statutory/
regulatory approvals) with an objective establish and incorporate the
budgets/approvals and the operation of the same in the project documents
and ensure that the same are controlled as per project management plan.
Structure:
9.1 Budgeting
9.2 Inputs for Budgeting
9.3 Cost Budgeting Approach
9.4 Outputs of Budgeting
9.5 Investments
9.6 Approvals
9.7 Summary
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9.1 Budgeting
Budgeting is a process of aggregating the estimated cost of individual

activities or work packages to establish the cost baseline. The premium
advantage of budgeting is that it determines the cost baseline against
which project performance can be monitored and the cost is kept under
control.
9.2 Inputs for Budgeting
The inputs required for effective budgeting includes but are not limited to:
• Cost management plan

• Scope baseline
• Activity cost estimates/standard rate guide
• Basis of estimates
• Project schedule/resource calender
• Risk register
• Project agreements
• Organizational budgeting policies/strategies
The project budget includes all the authorized funds allocated to execute
the project. The cost baseline is the approved version of the time phased
project budget, but excludes management reserves.
9.2.1 Cost Management Plan
The cost management plan describes how the project costs will be
managed and controlled.
9.2.2 Scope Baseline
The scope baseline is a combination of limitations by contract for the

utilization/ expenditure of the allocated funds, Work Breakdown Structures
(WBS) and WBS Dictionary that provides related detailed statements of
work identification of the deliverables and a description of the work in each
WBS component required to produce each deliverable.
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9.2.3 Activity Cost Estimates/Standard Rate Guide
Cost estimates for each activity within a work package are aggregated to
obtain a cost estimate for each work package.
9.2.4 Basis of Estimates
The basis for estimates will contain the supporting details for cost
estimates such as basic assumptions that deals with the inclusion or
exclusion of indirect or other costs in the project budget.
9.2.5 Project Schedule/Resource Calendar
The project schedule/Resource calendar shall specify relation of time with

activities, milestones, work packages etc. These details such as planned
start and finish dates, execution period, assignments of resources and
impacts of delay can be used to aggregate costs to the calendar periods in
which the costs are planned to incurred.
9.2.6 Risk Register
The review of updated risk register is essential to consider and aggregate

the risk responses cost.
9.2.7 Project Agreements
Applicable agreement/contract information and costs relating to products,

services, or results that have been or will be taken into consideration while
determining the budget.
9.2.8 Organizational Budgeting Policies/Strategies
These will include:
• Existing formal and informal cost budgeting related policies, procedures

and guidelines
• Cost budgeting tools/software/program and
• Reporting methods
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9.3 Cost budgeting approach
There are various approaches in use and are used individually or in

combination depending on the suitability to organizational culture and
business policies. Few of them are elaborated for better understanding.
9.3.1 Cost Aggregation
This is the simplest approach that aggregates the cost estimates by work
packages in line with the WBS. The work package estimates are then
added to the higher level component and so on for the entire project. The
control levels are specified for monitoring.
9.3.2 Reserve Analysis
The reserve analysis approach considers the reserves for the “known
unknowns” and “unknown unknowns” which can be put in simple
terms as anticipated possible risks and unanticipated risks and the cost for
them. The “known unknown reserve” is called as “Contingency reserve”.
The same accounts for cost uncertainty. For example, rework for project
deliverables could be anticipated. Here, the project deliverable is known
but the amount of rework is unknown.
The contingency reserve may be a percentage of the estimated cost, a

fixed number or may be an outcome of analysis such as quantitative risk
analysis. Contingency reserves are part of the cost baseline and the overall
project funding requirements. As more precise information about the
project is available, the contingency reserve may be used, reduced or
eliminated completely.
The reserve for “unknown unknowns” is called as “Management reserve”

and is not included in the cost baseline but withheld for management
control purposes. These are reserved for unforeseen work that appears in
the scope of the project. The management reserve is not a part of the cost
baseline but is part of the overall project budget and funding requirements.
When an amount of management reserve is used to fund unforeseen work,
the same is added to the cost baseline with an approved change.
The reserve analysis approach establishes both contingency and

management reserves and are identified in the budgeting documents and
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are informed to the restricted concerned group of stakeholders. Any

unused reserves will directly enhance the profit levels.
9.2.3 Historical Relationship
Historical relationship budgeting approach can be used for the analogous

projects similar to the executed in past. This involves the use of project
characteristics to develop the mathematical model to predict the project
costs. Such model uses multiple separate adjustment factors, each of
which has numerous considerations within it.
The cost and accuracy of analogous parametric models are likely to be

reliable only if:
• Historical information used to develop the model is accurate.
• Parameters used in the model are quantifiable.
• Models are scalable, such that they work for large projects, small
projects, and phases of a project.
One good example for the application of historical relationship is the

construction project in which the simplest possible method of costing is the
cost per square foot,
9.3.4 Funding Limit Reconciliation
Funding limit reconciliation approach will fix up/establish a limit on the

expenditure of project funds. The aggregate of planned expenses are
compared with the fixed limit. The variance between the funding limit and
planned expenses will sometimes necessitate the rescheduling of activities/
work packages to level the expenditure.
This can be accomplished by imposing various constraints such as time,

material rate and reduction in resources by using efficient alternatives.
195
9.4 Outputs of Budgeting
The budgeting process completed with the inputs and approaches as

elaborated above shall yield the outputs as follows:
• Cost Baseline
• Project Funding/Investment Requirements
• Project Documents Updates
These outputs are elaborated for better understanding in the subsequent

paragraphs.
9.4.1 Cost Baseline
The cost baseline is the approved version of the time-phased project

budget excluding any management reserves. The cost baseline can be
changed only through formal change control procedures. The cost baseline
is also used as a basis for comparison to actual results. The cost baseline
for the entire project is developed by the summation of the approved
budgets for the various schedule activities/work packages.
Refer to Figure 9.1 below which indicates the various components of the
project budget and cost baseline. For better understanding, refer the
Sample Budget Sheet provided at Annexure 9.1.
196
Fig. 9.1: Project Budget Components
Notes:
1. Contingencies can be expressed as % of total activity cost budget.

2. Control account numbers/heads shall be as per organizations’ SOP.
9.4.2 Project Funding/Investment Requirements
Total and periodic funding requirements (monthly, quarterly) are derived

from the cost baseline. The fund values derived are often incremental
amounts which are not continuous. The fund requirements also may not be
evenly distributed over the period and shall appear in steps. The fund
requirement data can be used for financial planning, approvals and to
identify the sources of the funding.
197
9.4.3 Project Documents Updates
After completion of budgeting task, some of the project documents may

need updating. The prominent of them are:
• Risk register
• Activity cost estimates
9.5 Investments
Investments are expenses that are incurred to execute the project but are
not part of the project deliverables. For example, cement mixing plant
installed for a construction project, machinery purchased for the
manufacturing of car and the computers and software purchased for
development of software program.
All projects while executing needs different types of investments. These

investments will vary in nature and type depending on the type of project,
duration of execution, existing infrastructure and facilities and the other
projects under execution with their status. The investments can be
categorized as:
• Project Specific: Required for the project only
• General: Required for the projects and can be used in future.
The project-specific investments components include facilities built/erected

(including those built at site), equipment, transport arrangements,
temporary offices, guest houses, human resource used etc.
The general investments components include general manufacturing

facilities (such as fabrication, painting, heat treatment etc.), the buildings,
human resource, material handling facilities etc.
The investment costs are apportioned over the project output in case of a
repetitive product. In case, it is of one-time use, the cost of the complete
component or the hiring cost may be included in the project budget and
fund requirements.
198
9.5.1 Investment Proposals
Investment proposals for all such requirements must be made well in

advance to fulfill the requirement as per the schedule requirement. The
roles and responsibilities of the project manager, indenter, approver and
purchaser must be clearly identified and defined in the appropriate project
documents. The most common method followed by the organization’s is to
address them in the organizations’ standard operating procedures.
The proposal’s contents must include the following essentially but will not
be limited to:
1. Complete technical information of the requirement such as:
• Size
• Capacity
• Peripheral requirements
• Power and utility requirements
• Software requirement
• Environmental
• Statutory and regulatory requirements,
• Floor requirement
• Human resource qualification
• Details of alternatives available
• Installation and commissioning requirements
• Stages of completion and utilization.
2. Delivery requirements
3. Location for delivery
4. Contact and responsible authorities for receiving the proposed

investment
5. Purpose of the investment required
6. Justification for the investment proposal with comparison
7. Impact of the non-availability delay in providing the proposed

investment
199
8. Budget allocation and variations, if any with the reasons and

justification
9. Type of investment project-specific/general.
The typical investment proposals for concrete mixing plant are provided at
Annexure 9.2 for better understanding.
9.6 Approvals
The project team while executing the project and passing through various
phases needs number of approvals. These are not necessarily financial
approvals. Also all these approvals are not necessarily from internal
authorities. These approvals if not ensured as scheduled (or in advance)
may generate hold points and delays in project schedule.
Considering the importance of the approvals, the same are elaborated

specifically though the same are covered at several stages of the project
management.
The first level classifications are:
• Internal approvals
• External approvals
9.6.1 Internal Approvals
In view of the project management plan, well-defined organizational

policies and standard operating procedures, internal approvals are
comparatively easier to identify, incorporate, schedule, execute and
control.
The internal approvals include but are not limited to:
• Corporate approvals
• Budget approvals
• Investment approvals
• Fund requirement approvals
• Financial expenses approvals
• Engineering approvals
200
• Procurement approvals
• Quality approvals
• Delivery approvals
• Invoicing approvals
• Human resource approvals
• Subcontracting approvals
• Approval for professional and other services
• Change approvals
9.6.2 External Approvals
External approvals vary from project to project and are not fully known.
These may be the approvals from customers, Inspection agencies, State
government departments, Union government agencies etc.
Since these are varying from project to project, it is essential to identify,

incorporate, schedule, execute and control these approvals with
appropriate project documents. Execution and control of these
approvals is not an easy task since the project executor has no
control over the agencies involved. In order to keep the approval
process under control in spite of the delays, it is always advised to keep
sufficient buffer/safety margin with reference time element.
The project agreement/contract, project specifications and applicable

statutory and regulatory norms are the basis for consolidating the
approvals required. These must be addressed in the overall project
management plan.
The external approvals include but are not limited to:
• Approvals from financial Institutions
• Engineering approvals from customer/customer appointed agency
• Quality approvals from customer’s inspection/customer appointed agency
• Tax exemption approvals in case of public sector customers/contract

terms
• Approvals of building layouts and manufacturing facilities
201
• Approvals for power and other utility requirement
• Approvals for storage of flammable gases
• Approvals for pollution control
• Approvals for fir safety
• Approvals for material storage
• Approvals of equipment installed at site as per statutory and regulatory

norms (e.g., explosives and mining)
• Emission approvals
• Work permits
• Safety approvals
• Contract labor approvals
9.6.3 Impact of Approvals
Some of these approvals are required to be taken during manufacturing,

construction, installation and commissioning and are required to be
provided before final handing over of the project. Some of them are hold
points also for next activity/phase.
In case of the agencies providing chargeable approval services like

inspection agencies, the maximum time allocated for the approval shall be
part of the contract.
In case of customer appointed agencies also, the maximum approval time

shall be the part of the contract. Any delays must be recorded and
intimated to customer from time to time with impact on delivery and
quality of the deliverables.
It is seen on many occasions that bulk of the project expenses have been
incurred, majority of the activities/work packages are completed but the
overall completion/closing of the project is pending for some or the other
202
approval. The situation not only delays the project but also lead to
additional expenses issues such as:
• Warranty extension of the equipment installed
• Maintenance of the equipment installed
• Extended stay of the site engineers
• Non-receipt of payments
• Financial (cash flow) crunch
• Non-movement of manufacturing equipment, generators, transport/

material handling equipment/facilities from one site to another site
• Expenses on security for the extended period
• Delays in starting of other projects
• Delays in testing , installation and commissioning of the work packages

supplied
• In case of private partnership projects, the ROI investment will get

delayed.
In case the additional expenses are recoverable as per the contract terms,
record of all such expenses and intimation to customers from time to time
is mandatory. Project manager’s role is very vital for the purpose of such
records and expenses.
203
9.7 Summary
• Money is never an abundant resource in any organization and same is

the case for projects. Hence, budgeting and control of the same is vital
assignment for successful accomplishment of a project.
• Budgeting is a process of aggregating the estimated cost of individual

activities or work packages to establish the cost baseline. The premium
advantage of budgeting is that it determines the cost baseline against
which project performance can be monitored and the cost is kept under
control.
• The inputs required for effective budgeting includes but are not limited
to:
➡ Cost management plan

➡ Scope baseline
➡ Activity cost estimates/standard rate guide
➡ Basis of estimates
➡ Project schedule
➡ Risk register
➡ Project agreements
➡ Resource calendars
• The reserve analysis approach establishes both contingency and

management reserves and are identified in the budgeting documents and
are informed to the restricted concerned group of stakeholders. Any
unused reserves will directly enhance the profit levels.
• The cost baseline is the approved version of the time-phased project

budget excluding any management reserves. The cost baseline can be
changed only through formal change control procedures.
• After completion of budgeting task, some of the project documents may

need updating. The prominent of them are:
➡ Risk register
➡ Activity cost estimates and
➡ Project schedule
204
• Investments are expenses that are incurred to execute the project but
are not part of the project deliverables.
• All projects while executing needs different types of investments. These

investments will vary in nature and type depending on the type of
project, duration of execution, existing infrastructure and facilities and
the other projects under execution with their status. The investments can
be categorized as:
➡ Project-specific: Required for the project only
➡ General: Required for the projects and can be used in future.
• Investment proposals for all such requirements must be made well in

advance to fulfill the requirement as per the schedule requirement. The
roles and responsibilities of the indenter, approver and purchaser must
be clearly identified and defined in the appropriate project documents.
• The project team while executing the project and passing through
various phases needs number of approvals. These are not necessarily
financial approvals. Also all these approvals are not necessarily from
internal authorities. These approvals if not ensured as scheduled (or in
advance) may generate hold points and delays in project schedule.
The first level classifications are:
➡ Internal approvals
➡ External approvals
• In view of the project management plan, well-defined organizational

policies and standard operating procedures, internal approvals are
comparatively easier to identify, incorporate, schedule, execute and
control.
• External approvals vary from project to project and are not fully known.
These may be the approvals from customers, inspection agencies, State
government departments, Union government agencies etc.
• Execution and control of the external approvals is not an easy task since
the project executor has no control over the agencies involved.
205
• In case of customer appointed agencies also, the maximum approval

time shall be the part of the contract. Any delays must be recorded and
intimated to customer from time to time with impact on delivery and
quality of the deliverables.
206

understanding
1. Consider any work package for a construction project and an

engineering project and:
a. Prepare a cost budget for each of them.

b. List down the known unknowns for both of the above.
c. Elaborate the unknown unknowns and the consideration for the
management reserves for the above.
2. Prepare an Investment proposal for a crane required to enhance the

production capacity.
3. Elaborate and list down all the internal and external approvals required
for a construction project site.
207
1. For any organization in the world the business, profits, customer

retention and expansion are the keys of survival
a) True
b) False
2. The project schedule is the most important variable linked with the
________.
a) Target
b) Project
c) Cost
d) Profit
3. The premium ___________ of budgeting is that it determines the cost

baseline against which project performance can be monitored and the
cost is kept under control.
a) Disadvantage
b) Advantage
c) Requirement
d) level
4. The “known unknown reserve” is called as ___________.

a) Management reserve
b) Qualitative Reserve
c) Quantitative Reserve
d) Contingency reserve
5. The _____ is the approved version of the time-phased project budget

excluding any management reserves.
a) Project Funding
b) Cost Baseline
c) Project Documents Updates
d) All of them
Correct Answer:- (1) – a, (2) - c, (3) - b, (4) - d, (5) - b
208
ANNEXURE 9.1
Sample Budget Sheet
Cost Cost Cost

estimates estimates estimates
`L `L `L
Project Managem 1.5

Budget ent
Reserve
Cost 30.46 Control Contingen 0.3

Baseline Accounts cy
Reserve
MFG 001 Work 30.16 Activity 0.88

Package contingen
cy
Reserve
Fabricatio Activity
n of Rack
structure Material 23.4
for water procurem
filtration ent
Unit 1
Material 0.33
testing
Material 0.75
cutting
Fabriation 3.4
Internal 0.25
inspection
Customer 0.35
approval
Surface 0.27
finishing
and
painting
Packing 0.53
31.96 31.96 30.46 30.16
Notes:
1. Activity contingency is 3% of the cost aggregates.
2. Work package contingency is 1% of the cost aggregates.
209
ANNEXURE 9.2
Typical Investment Proposal For Concrete Mixing Plant at Site
INVESTMENT PROPOSAL
1. Proposal No. and Date:

2. Name of the Indenter:
3. Account Control:
4. Brief Details of Proposal:
Part I: Proposal Details
Sr. No. Details Particulars/Specifications
1 Technical Details
Size As per manufacturer standard
Capacity 2.5 tons/hour
Peripheral requirements Cement storage and handling

trolleys, working platforms
Power and utility requirements 3 Phase, 415V, Water 1000 Lits/

Hour
Software requirements Nil
Environmental requirements Nil
Statutory and regulatory Safety shoes and PPE

requirements
Floor requirements 7000 sq. ft.
Human resource qualification SSC, Semi-skilled
Details of alternatives available Godrej, Renuka and Maxwell
Installation and commissioning Foundation plan and load details

requirements
Stages of completion and utilization Single stage
2 Delivery requirements 24 weeks, before start of WP 3
210
3 Location for delivery Village Bhangarwadi, Tal.: Maval,

Dist.: Pune
4 Contact and responsible authorities Assistant Engineer, Surya group,

for receiving the proposed Phase I
investment
5 Purpose of the investment required To ensure completion of WP 3 as

per schedule
6 Justification for the investment Separate sheet is attached

proposal with comparison
7 Impact of the non-availability, Separate sheet is attached

delay in providing the proposed
investment
8 Budget allocation and variations, if 35 lakhs, No variation

any with the reasons and
justification
9 Type of investment project specific/ Project-specific, can be shifted to

general. other site partially
Part II: Approval Recommendation (within 4 working days)
1 Recommendation of Project Remarks, signature and date

Manager
2 Recommendation by Investment Remarks, signature and date

Committee
3 Recommendation by Finance In- Remarks, signature and date

charge
Part III: Approval (within 6 working days)
By Corporate General Manager Remarks, signature and date
Account Head
Budget (Cost baseline)
Fund requirement allocation
PART IV Plan of Actions
211
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
212
PART III
PART III
213
PROJECT PLANNING AND SCHEDULING
Chapter 10
Project Planning And Scheduling
Objectives
Planning is the most important step in project management. Planning is

also referred to as the process of predicting the future of the project. But
the correct statement would be “Planning is not the process of
predicting what will be future of the project? But it is the process
of predicting how the future of project should look like?” Planning is
preparing a sequence of action steps to achieve some specific goal.
Effectively executed planning process can reduce much of the necessary

time and effort of achieving the goal. A plan is like a road map or more
precisely a geometrical Positioning System in today’s technologically
advanced world. While following a plan, like a GPS, one can always see:
• His current location/status w.r.t. the specific goal

• How far he has progressed towards his project goal?
• How far he is from his destination? and
• What are the steps/actions to reach the destination?
The above brief description about the planning process underlines the
importance of the project planning in project management. Project
planning is the guide and basis for all the stakeholders to align and
integrate their actions to accomplish the final project outputs. Any flaws,
loopholes, discrepancies, ambiguities etc. may lead to chaotic,
uncontrollable planning.
In this chapter, we will be discussing a scientific approach for project

planning and scheduling with an objective to provide accurate basis and
guide to all stakeholders in the form of precise Project Plan and
Schedule.
214
Structure:
10.1 Project Planning Team

10.2 Project Management and Project Planning Processes
10.3 Project Management Plan
10.4 Project Planning Process
10.5 Develop Project Schedule
10.6 Communication Planning
10.7 Planning for Risk Response
10.8 Planning for Procurement
10.9 Summary
10.11 Exercise
215
10.1 Project Planning Team
Detailed guidelines and consideration on the process of organizing projects

teams are provided in Chapter 7 (Refer 7.6). The project planning team
shall be reviewed and reorganized, if necessary with reference to the
above-mentioned detail requirements. There may be different functional
teams executing the planning function for restricted areas with pre-defined
boundaries of their function acceptable to the both successor and
predecessor stakeholder.
The project planning team must mandatorily work as cohesive team

irrespective of their functional responsibilities; since the integration and
interfacing of the various plans prepared for the functional requirements at
functional levels to the overall project plan is an important task and will be
deciding factor for the project management and success.
The role of project manager and project planning in-charge is very crucial.
Both of them are jointly expected to resolve all the differences, conflicts of
interest within the project planning team and ensure that the project plan
and schedule will be released with agreement of all stakeholders. Any
unresolved issues and disagreements shall be recorded with the plan of
action and resolved at the appropriate time as recorded. This will help to
create a ownership about the project plan and onus will be voluntarily
accepted by the stakeholders.
10.2 Project Management and project planning processes
Before we enter into the project planning process, it is essential to know

the overall project management process and the interactions of the other
processes within project management with each other. These processes are
referred in earlier chapters at various points. The main important processes
can be listed as:
• Project initiation
• Project planning
• Project execution
• Project monitoring and control
• Project closing.
216
There are other subprocesses/project management areas which are also

referred at various places in earlier chapters. For example, these may be
Human resource selection, Procurement, Manufacturing, Documentation,
Finance approvals, Quality control and approvals, Engineering/Design
approvals, risk response management etc.
Fig. 10.1: Interactions of Project Management Processes
217
Notes for the Figure 10.1 above:
1. The project executor itself can be the Project Initiator or sponsor.
2. Suppliers are referred to as sellers.
3. The darker dotted lines indicate the interactions between internal

process groups/ stakeholders whereas the continuous lines indicate the
interactions with external stakeholders.
Refer Fig 10.1 above which indicates the overall project management
process, the processes with this process and their interactions with each
other via the internal and external stakeholders. It can be seen that most
of the internal stakeholders are directly interacting with the planning
process team and also the external stakeholders are indirectly interacting
with the planning process. From the description, it is once again made
evident that the role of planning process is very crucial for each of the
stakeholder.
This is the reason for selecting a very strong, experienced and competent
project team for project planning. The project planning team members
must be fully aware of all the processes and their interaction within the
restricted area for which he/she is responsible. But at the same time, each
project planning team member must be well aware of the overall project
and project management process.
The project planning team is expected to provide due considerations to the

quality, cost and delivery of the projects along with communication, human
resource, risks, procurements and stakeholders’ engagement. The complex
nature of project may call for repeated feedback loops and additional
analysis. In short, the project planning team’s role doesn’t end at the
development of project plan but continues till closing of the project.
In order ensure the precise, on-time communication and establish the

feedback loops for necessary corrective actions and revision of project plan
and the project planning team must establish a rapport and cordial
business relations with all the stakeholders.
218
10.3 Project Management Plan
Overall project management plan is the central document that describes

how the project will be executed, monitored and controlled. It integrates
and consolidates all of the subsidiary plans and baselines from the planning
process. The project management plan is now ready as an output of the
project analysis. Once the project management plan is baselined, it may
only be changed/revised with a change request and change approval and
control process.
While project management plan is the central primary document used to

manage the project, other project documents are also used. These are not
part of the project management plan but are generated from subsidiary
plans of project management plans while implementing the project
planning process. Table 10.1 provided at Annexure 10.1 is representative
list of the project management plan components and project documents.
10.4 Project Planning Process
For most of the project planning assignments “Project Plan” is prepared

with an intention of getting it approved the same is found to and
unworkable during tracking (tracking: Viewing and updating of the actual
progress of tasks so that you can see progress across time, evaluate
slippage of tasks, compare scheduled or baseline data to actual data, and
check the completion percentage of tasks and your project) progress. But
with the right start, it can be ensured that the plan created at the
beginning of your project is an effective management tool throughout the
project.
The use of the five-step planning process outlined here to make sure that
the planning process shall not go down the wrong path any time. This
process assumes that you have already defined the project start date (start
date: The date when a task is scheduled to begin. This date is based on the
duration, calendars, and constraints of predecessor and successor tasks. A
task’s start date is also based on its own calendars and constraints),
applied the appropriate base calendar (base calendar: A calendar that can
be used as a project and task calendar that specifies default working and
non-working time for a set of resources. Differs from a resource calendar,
which specifies working and non-working time for an individual resource),
219
and set up the default task type (task type: A characterization of a task
based on which aspect of the task is fixed and which aspects are variable.
There are three task types: Fixed Units, Fixed Work, and Fixed Duration.
The default task type in Project is Fixed Units) and other settings. Then
follow the following five steps:
• Create a task/activity list and work breakdown structure (WBS)
• Estimate task/activity durations
• Estimate the resources required for the task/activity
• Create and establish dependencies between tasks/activities and its

implications
• Assign resources.
The use of Gantt Chart while following all these steps shall make the
planning process very effective. This was done and demonstrated very
effectively by Henry Gantt initially and become very popular as Gantt chart.
Building a Gantt chart manually is a tedious and cumbersome task and
may leave a chance for some mistakes. As on date, many softwares are
available to build the Gantt chart. One of them is MS Projects and is
available with most of MS Office packages. Building a project plan in the
form of Gantt chart has many advantages such as.
• It makes the quicker revisions possible with considerations of the

impacts.
• It is very useful for tracking and communicating progress of the project.
• It can also be used to raise alarm signals well in advance.
Intention here is only to promote the use of software to make the project
management easier and comfortable irrespective of the software used for
achieving the purpose. The software used only will be helpful to the extent
of executing the instructions with pre-programmed menus. But the final
structure and accuracy of the project plan shall be dependent on the 5
steps mentioned above which are the basis of any project plan.
220
10.4.1 Create a Task/Activity List and Work Breakdown Structure

(WBS)
Activities
Defining activities is the process of identifying and documenting the

specific actions to be performed to produce a project deliverables.
Objective of this process is to break down the work packages into activities
that provide the basis for estimating, scheduling, executing, monitoring
and controlling the project work. The decomposition technique is very
effectively for identifying and generating the activity list.
Rolling wave plan is another technique used for the purpose. Rolling wave
planning is an iterative planning technique in which the work to be
accomplished in the near term is planned in detail whereas the work to be
accomplished in future is planned at higher level. This plan keeps on rolling
as more and more information is made available and specific details are
agreed upon.
Activity list, activity attributes and project milestones are the distinct
outputs of the process of defining activities. Durations, associated
resources and cost are the activity attributes whereas an important
significant point or an event in a project is a milestone.
Sequencing activities is a process that defines the logical sequence of

work, on the basis of documented relationship of the project activities, to
obtain the highest efficiency irrespective of the constraints.
The process of creating WBS shall subdivide the project deliverables and
project work into smaller more manageable components called as tasks/
activities. The key objective of the process is to provide a structured vision
of the output that is to be delivered.
Work Breakdown Structures (WBS)
The WBS is a hierarchical decomposition of the total scope of work to be

carried out by the project team to accomplish the project objectives and
generate the required deliverables. The WBS shall organize and represent
the total scope of the project and work specified for the current approved
project on the basis of project definition.
221
The lowest level components of WBS shall contain the planned work that is
called as work package. The work package can be used to group the
activities for which work is scheduled, estimated, monitored and controlled.
It must be noted here that the work referred in the context of WBS
indicates the product/deliverable as a result of the activity and not the
activity itself. In short, the result is in measurable terms.
The inputs that are needed to be considered for creating WBS include:
• Scope management plan
• Project scope statement
• Requirements finalized after the project analysis
• Customer-specified guidelines/standards. For example, ISO/IEC

Standards for products, environment, safety etc.
• Organizational policies, procedures, templates etc.
• Organizational historical data with learning from previous projects.
10.4.1.1 Approach for Creating WBS
Different approaches are followed by different organizations to create a

WBS structure to suit the organizational strategy and culture. The most
common of them are:
• Top-down approach
• Organization-specific guidelines
• Use of WBS templates.
The bottom-up approach is used for integration of the work packages.
The WBS structure can be represented in different ways. Typical of these

structures are:
• Product and project deliverables at bottom level, the project life cycle/
execution phases at next upper level and so on. (Refer Figure 10.3)
222
• Final project deliverable at top level, major project deliverables at next

lower level and so on. (Refer Figure 10.4)
• WBS with the subcontracted subcomponents. The subcontractor will

develop the WBS for subcontracted work and is integrated with the main
project WBS.
Visual System Management

Project (1.0)
1.1 Needs 1.2 Standards 1.3 System 1.4 Project

Assessment Development Engineering Management
1.1.1 Current 1.1.2 Requirement 1.1.3 Alternatives 1.1.4 System

System Audit Finalisation Development Requirement Development
1.1.1.1 Component 1.1.2.1 Gap 1.1.3.1 Alternatives

Identification Assessment Identification
1.1.1.2 Component 1.1.2.2 1.1.3.2 Analysis of

Analysis Requirement Alternatives
Change
Identification
Fig. 10.2: Sample WBS Decomposed Down through Work Packages
223
MRP Software
Project Project Detail Integration

Construction
Management Requirement Design & Testing
Phase
Phase Phase Phase Phase
Software Software Software Software Software
Meetings Reports Reports Reports Reports
Training Training Training Training Training

Program Program Program Program Program
Materials Materials Materials Materials Materials
Fig. 10.3: WBS Representation Organized by Phases
224
Car Series
Project Road Support Test &

Training Data Facilities
Management Vehicle Equipment Evaluation
Factory Office Mock-

Systems Equipment Technical
level Building Ups
Engg. Mgmt Training Orders
Maint. Operati
Facilities Dealer
Engg. Data -on
PM level Facility
Training Test
Supporting
Activities
Depot
Services Proto.
Mgmt.Data level
Training Test
Final.
Test
Communication Steering Accident

Chassis Engin
& control control control
System System System
Fig. 10.4: Sample WBS with Measure Deliverables
10.4.1.2 Techniques for Creating WBS
Decomposition is the most common technique used for creating WBS.

The decomposition of higher level WBS requires subdividing into the work
for each of the deliverables/subcomponents into its most manageable and
verifiable products. The verification indicates here to the feasibility of
estimating the cost and duration for that task/activity. The decomposition
to the lowest level must be ensured for inclusion of all activities/tasks that
are necessary for the completion of the higher level deliverables. This
check and chain shall continue for all levels.
225
The number of decomposition levels shall be decided by the complexity of

the deliverables at each level. As the decomposition levels are increased to
more and more details, the ability to plan, manage and control is
enhanced. But at the same time, excessive decomposition shall lead to
non-value-adding management efforts, inefficient use of resources,
decreased efficiency in performing work and difficulty in data aggregates.
Considering these two factors contradicting each other, the optimum level
of decomposition must be decided to suit the project under execution. The
decomposition of the project work into work packages generally involves
the following activities in brief:
• Identifying and analyzing the deliverables and related work.
• Structuring and organizing the WBS
• Decomposing the upper WBS levels into lower level detailed components
• Developing and assigning identification codes to the WBS components

and
• Verifying that the degree of decomposition of the deliverables is

appropriate.
In case of long duration project, it may not be possible to decompose the

deliverable/ subcomponent that will be accomplished in the later phases of
projects. In such cases, the project planning team usually waits until the
deliverables are clearly defined and agreed upon. This is referred as to
rolling wave plan.
It is necessary to reiterate here once again that the WBS represent all the
product and project work, including the project management work. The
total of the work from lowest level should be rolled up to cover 100% work
and nothing extra is performed to accomplish the project.
Expert judgments often used to analyze the available information needed

for decomposition and create an effective WBS. Such judgments are
applied to the technical details of the project scope and are used to
reconcile the difference in opinion. The expert judgment may come in the
form of predefined WBS templates.
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10.4.1.3 Finalizing the WBS
Finalizing the WBS is an assignment that deals with the considerations

such as the deletion of non-value-adding efforts, reduction in activity
duration due to excessive detailing which are elaborated above. Another
important aspect which must be taken into consideration is the
interdependency of the work packages and the constraints created. As far
as possible, the number of constraints shall be reduced to minimum.
The Project manager in collaboration with the project team shall

determine the final decomposition of the project scope into the
discrete work packages that will be used to effectively manage the
project work.
10.4.1.4 WBS Outputs
The project scope baseline is the component of the overall project

management plan and output of WBS creation. It includes approved
version of the:
• Project scope statement: Project scope as referred to earlier includes

project scope, major deliverables, assumptions and constraints.
• WBS: As elaborated WBS is a hierarchical decomposition of the total

scope of work to be carried out by the project team to accomplish the
project objectives and create the required deliverables.
• WBS dictionary: The WBS dictionary is a document that provides

detailed deliverable, activity and scheduling information about each
component of WBS. The WBS Dictionary is a document that supports the
WBS. Following major information components are available in the WBS
but are not limited by these.
➡ Code of account identifier

➡ Description of work
➡ Assumptions and constraints
➡ Responsible organization
➡ Schedule milestones
➡ Associated schedule activities
➡ Resources required
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➡ Cost estimates
➡ Quality requirements
➡ Acceptance criteria
➡ Technical references and
➡ Agreement information
The revised requirements documentation is another output of WBS

creation. The might be updated to include the approved changes as an
implication of WBS creation.
10.4.2 Estimate the Resources Required for the Task/Activity
The resource estimation refers to the process of estimating the type and
quantities of resources such as material, human, equipment, suppliers,
consultants, service providers, sub-contractors etc. to perform each
activity. The resources identified in turn used for most accurate cost and
duration estimates.
The resource estimation is closely associated and co-ordinated with cost
estimation since the local approval code, local statutory and regulatory
requirements, tax structure etc. may vary from place to place. Similarly,
the manufacturing and assembly technique, processes, environmental
norms will vary from product to product. The project team may not familiar
with all of them. In such cases, additional cost may be required to acquire
the requisite knowledge/information by appointing/hiring consultants,
providing training to the project team members etc. For example, for a
construction project, the project team may not be familiar with the local
building approval codes.
The inputs required for the resource estimation will be similar to those
used for the cost estimation with few changes. These inputs will include:

• Activity list
• Activity attributes
• Resource calendars
• Risk register
• Activity cost estimates
• Resource location
• Organizational policies and procedures
• Historical information of similar work on previous projects.
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The techniques as listed below are used for resource estimation. These are
similar to those used for cost estimation and will be useful for activity
duration estimation also.
• Alternative analysis: The alternatives possible of resources are

analyzed to use the most suitable
• Use of standard data: Organizations has the standard data/norms for

cost of resources that is used.
• Bottom-up estimation: This method decomposes the activities to the

bottom level, the resources for each activity are estimated and then
added to estimate the aggregate cumulative resource estimation. The
activities may or may not be dependent.
• Project management software: Many softwares has the capability to

plan and organize and manage resource pools and develop resource
estimates. Depending on the version/sophistication level of the software,
resource breakdown structures, resource availability, resource rates,
resource calendars can be defined for optimizing the resource utilization.
10.4.2.1 Activity Resource Estimation Outputs
The activity resource estimation include:
• Activity resource requirements: These requirements are in turn used to

estimate the aggregate requirements of each work packages for each
work period. The amount of detail description of the resource
requirements will depend on the application area. The documentation of
resource requirement may include the basis of estimation, assumptions
made, availability and quantity.
• Resource breakdown structures: The resource breakdown structure is a

hierarchical representation of resource by category and type. Examples
of resource category include labor, material, equipment and supplies
whereas the examples of resource type will include the skill level, grade
level etc. The RBS is useful for organizing and reporting project schedule
data with information about resource utilization.
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• Updated project documents: The project documents which may need

updating include activity list, activity attributes and resource calendars.
10.4.3 Estimate Task/Activity Durations
Activity duration estimation is the process that deals with the process of
estimating the work periods needed to complete individual activities with
estimated resources. The prime objective of this process is to provide the
amount of time required for completion of each activity, which is a major
input for developing the process schedule.
While estimating the activity duration information on scope of work of the

activity, required resource type, estimated resource quantities and
resource calendars are used. The inputs for estimating the activity duration
are generated by individuals/group on the project team that is most
familiar with the nature of work in the specific activity. The duration
estimates are progressively elaborated on the basis of availability and
quality of input data. For example, the duration estimates can be improved
as more detailed and precise data about the project engineering and
design work is made available. All data and assumptions that support
duration estimating are documented for each activity duration estimate.
The inputs used for estimating activity durations are same as the one
mentioned at 10.4 above. In addition to these; the outputs of activity
resource estimation as mentioned in 10.4.2.1 above also will be
considered as inputs to activity duration estimation.
10.4.3.1 Tools and Techniques for Estimating Activity Duration
The tools and techniques used for duration estimation are similar to the
one used for cost estimation. These include:
• Analogous estimation
• Parametric estimation
• Three point estimation
• Estimation with reserve analysis
• Estimation with group decision-making techniques
All above techniques are elaborated in detail in the Chapter 9 in the

context of cost estimation. Similar explanation, methodology is applicable
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for activity duration estimates also. The advantages/disadvantage such as

the one listed below shall remain to the same extent for estimation of
activity duration also.
• Less cost of estimation of analogous estimation accuracy of.
• Good reliability of analogous estimation for the projects similar in nature.
• Dependence of parametric estimation on the number of variables used

and the quality of previous data for accuracy.
10.4.3.2 Outputs of Activity Duration Estimation
The activity duration estimation process generates the outputs as follows:
a. Activity duration estimates: These are the quantitative assessments

of the likely number of time periods that are required to complete an
activity. Activity duration estimates may include some indication of the
range of possible results. For example
• 3 weeks + –3 days indicates that the activity will take minimum 15 and
maximum 21 working days considering 6 days working/week.
• 10% probability of exceeding three weeks indicates that there is high

probability (90%) of completing the work within three weeks.
b. Project documents updates: The project document that may need

updating includes but will not be limited to:
• Activity attributes and
• Assumption made in developing the activity duration estimates, such as

skill levels, availability as well as the basis of estimates.
10.4.4 Sequence and Set the Relationship Dependencies between

Tasks/Activities
Sequencing activities is the process of arranging them in a logical sequence

of work to achieve maximum efficiency with the pre-assigned resources.
Start of each activity/ milestone must be connected to the finish of at least
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one predecessor activity, milestone. Finish of each activity, milestone must

be connected to the start of at least one successor activity/milestone. This
requirement is not applicable to the first and last activity/milestone. The
inputs considered for the sequencing shall be as follows:

• Activity list
• Milestone list
• Government/industry standards
• PMIS
• Organizational policies and procedures
• Scheduling methodology, tools and templates
• Historical information of similar work on previous projects.
10.4.4.1 Tools and Techniques for Sequencing
The tools and techniques used for sequencing are easy to understand and
are logical. Almost all scheduling software available as on date has these
techniques as inherent feature. The most common of them are:
• Precedence diagramming
• Dependency determination and
• Lead and lag
10.4.4.1.1 Precedence Diagramming
Precedence diagramming method (PDM) technique is used for constructing

the schedule model. Here, the activities are represented by nodes and are
graphically linked by one or more logical relationships to indicate the
sequence in which the activities are to be performed.
PDM includes four types of dependencies/logical relationships. Successor

activity is a dependent activity that logically comes after the predecessor
activity in a schedule. Each activity; except the first and last; behaves as
predecessor and successor as the schedule is progressing. The four types
of logical relationships are explained below and illustrated in Figure 10.5.
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• Finish to Start (FS): A logical relationship in which a successor activity

cannot start until a predecessor activity is finished. Example: Second
innings of cricket match cannot start until first inning is finished.
• Finish to Finish (FF): A logical relationship in which a successor activity

cannot finish until a predecessor activity is finished. Example: Checking
of examination papers cannot finish unless the examination is finished.
• Start to Start (SS): A logical relationship in which a successor activity

cannot start until a predecessor activity is started. Example: Concrete
leveling activity cannot start until concrete pouring is started.
• Start to Finish (SF): A logical relationship in which a successor activity

cannot finish until a predecessor activity is started. Example: The first
security guard cannot finish his duty until the second security guard’s
shift is started.
Finish to Start (FS)

ACTIVITY A ACTIVITY B
ACTIVITY A
ACTIVITY A
Finish to Finish (FF)

Start to Start (SS)
ACTIVITY B
ACTIVITY B
Start to Finish (SF)
ACTIVITY A ACTIVITY B
Fig. 10.5: Relation Types for Precedence Diagramming
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10.4.4.1.2 Dependency Determination
Dependencies are characterized by the four attributes that are mandatory,

discretionary, internal and external. These attributes form the combination
such as:
• Mandatory external dependencies

• Mandatory internal dependencies
• Discretionary external dependencies
• Discretionary internal dependencies
The dependencies are explained below in detail for better understanding:
• Mandatory dependencies: These are the dependencies that are legally

and contractually mandatory or inherent in the nature of work.
Mandatory dependencies often involve physical limitations. For example,
a chimney erection cannot be started until the foundation has been built.
Technical dependencies may not be mandatory. The project team shall
decide the mandatory dependencies during the process of sequencing.
Mandatory dependencies should not be confused with assigning schedule
constraints.
• Discretionary dependencies: Discretionary dependencies are based on

knowledge of best practices within a particular application area or some
unusual aspect of a project where a specific sequence is desired, in spite
of other acceptable sequences. Discretionary dependencies should be
fully documented since they can create arbitrary total float values and
can limit the scheduling options. The documented data can be reviewed
and considered for modification/removal of dependency in case of fast
track project. The project team shall decide the discretionary
dependencies during the process of sequencing.
• External dependencies: These dependencies are generally beyond the

control of the project team. For example, the third requires a testing
equipment that is delivered late by an external source, or the hearing for
cutting the trees at site is delayed by government agency. The project
team shall decide the external dependencies during the process of
sequencing.
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• Internal dependencies: Internal dependencies are decided by

precedence relationship between project activities as explained in PDM
and are generally inside the project teams control. For example, if the
team cannot proceed for next step of fabrication until the RT is
completed, this becomes an internal mandatory dependency. The project
team shall decide the internal dependency during the process of
sequencing.
10.4.4.1.3 Leads and Lags
Lead and lag are very important features of the activities since these
decide the overall possible reduction of a project cycle. Lead and lag always
are considered as the advancement or delay of predecessor activity with
respect to successor activity.
For example, as illustrated in Figure 10.6 below, the activity of excess

material removal from site can be started 2 weeks before finish of the
activity of completing the punch list for the onsite engineering project. This
is indicated as FS in the graphical representation. Similarly, the activity of
conducting a unit test can start only with a delay of 15 days from starting
the teaching of syllabus. This is indicated as SS in the graphical
representation.
Fig. 10.6: Examples of Lead and Lag
The project management team shall determine the dependencies that may
require lead/ lag to accurately define logical relationship. All lead/lag data
along with the assumptions should be documented.
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10.4.4.2 Outputs of Sequencing
Project schedule network diagram is an important output of the sequencing

process. These diagrams are the graphical representation of the activities
which will be used in turn for developing the schedule. The project
management software available has a built-in facility to generate the
network diagrams. A summary narrative to explain the basic approach of
sequencing will be helpful to understand the network diagram generated. A
sample project schedule network diagram is provided at Figure 10.7 for
better understanding.
Fig. 10.7: Sample Project Schedule Network Diagram
The following project documents may need updating in consequence to

sequencing:
• Activity list
• Activity attribute
• Milestone list
• Risk register
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10.4.5 Assignment Duration and Resources
Assigning the duration and resources is process of compiling and assigning

all the attributes of an activity. As mentioned, duration and resources are
the important attributes that decide the quality, cost, time taken by the
project outputs. After estimation and sequencing, 100% data for
assignment is available.
All project management software demand the assignment before

development of the project schedule can start. Any inaccurate, incorrect
assignment can have large impact on a complex project with multiple
activities and work packages. This in turn may lead to integration and
interfacing issues. Hence, it must be strongly advocated that assignment
accuracy is the key to generate accurate Project Schedule.
10.5 Develop Project Schedule
Development of the project schedule is the process that analyzes the data
assigned such as activity duration, resources, dependencies, and schedule
constraints and generates the project schedule model with planned dates
for completing project activities.
10.5.1 Inputs for Developing the Project Schedule
The development of project schedule needs following inputs:
• Schedule Management Plan

• Activity List
• Activity Attributes
➡ Milestone list
➡ Project schedule network diagrams
➡ Activity resource requirements
➡ Resource calendars
➡ Activity duration estimates
➡ Project scope statement
➡ Risk register
➡ Project team assignment details
➡ RBS resource breakdown structures
➡ Organizational policies and procedures
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➡ PMIS and communication channels
➡ Scheduling methodology, tools and templates
➡ Historical information of similar work on previous projects.
Since we have discussed all these inputs and referred earlier, we will not be
elaborating the same once again.
10.5.2 Tools and Techniques for Developing Project Schedule
The Project Development is a two phase process. During the first phase,
the project schedule model is generated by using the inputs mentioned
above. This may not match with the overall project management plan and
project objectives. The second phase analyzes the schedule model by using
various techniques such as CPM, CCM, resource optimization etc. Modeling
techniques are used to simulate and analyze the “what if” scenarios.
Leads/lags with advance scheduling tools are used for refinement and
compression of schedules.
10.5.2.1 Schedule Network Analysis
As mentioned above, Schedule Network Analysis is a technique that

generates the project schedule model. With the use of various techniques
mentioned above, the early and late start and finish dates for the
activities/work packages of the uncompleted portion of the project are
calculated. The analysis may reveal some points of convergence or
divergence of the network paths. This information is used for schedule
compression and other analysis further.
10.5.2.2 Critical Path Method
Critical path method is a method used to estimate the minimum project

duration assess the amount of scheduling flexibility on the logical network
paths within the schedule model. This technique calculates the early start,
early finish, late start and late finish dates for all activities without
consideration to the resource limitations by performing a forward and
backward pass analysis through schedule network. The sequence with
longest path in the logical schedule network shall be the critical path
since it determines the shortest possible project duration.
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For better understanding, see the simple example at Figure 10.8. In this
example, the longest path includes activities A, C and D. Hence, the
sequence of A-C-D is the critical path.
On any network path, the schedule flexibility is measured by the amount of

time that a schedule activity can be delayed or extended from its early
start date without delaying the project finish date or violating a schedule
constraint and is termed as “total float”.
A CPM critical path is normally characterized by zero total float on

the critical path.
Any activity on the critical path is called as a critical path activity. Critical
paths as derived from the PDM may have positive, negative or zero float.
Schedule networks may have multiple near-critical paths. Many software
packages av ailable allow the project team define/adjust the activity
attributes such as duration, logical relationships (in case of discretionary),
lead/lag and other schedule constraints to generate a Critical Path with
zero or positive total float.
After calculating the total float for a network path, the free float for an
activity on the critical path can be determined. The free float is the amount
of time by which a schedule activity can be delayed without delaying the
early start date of any successor activity or violation of a schedule
constraint. As illustrated in the Figure 10.8, the free float for Activity B is
5 days.
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Fig. 10.8: Critical Path Method Example
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10.5.2.3 Critical Chain Method
The CCM (Critical chain method) technique considers the effects of

resource allocation, resource optimization, resource leveling and activity
duration uncertainty on the critical path defined by CPM and allows the
project team to place buffers on project schedule path to account for
limited resources and project uncertainties. The resource-constrained
critical path is known as the critical chain.
Duration buffers added by CCM are non-work schedule activities to manage

uncertainty. One buffer placed at end of the critical chain as
illustrated in Figure 10.9 is called as the project buffer and protects
failures on target finish date along the critical chain.
Additional buffers, known as feeding buffers are placed at each point

where a chain of dependent activities (that are not on the critical chain)
feeds into the critical chain. Feeding buffers, thus, protects the failure on
critical chain along the feeding chains.
Once the buffer schedule activities are determined, the planned activities
are scheduled to their latest possible planned start and finish dates. The
CCM focuses on managing the remaining buffer durations against the
remaining durations of chains of activities; whereas the CPM manages
the total float of network path.
Fig. 10.9: Illustration of Critical Chain
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10.5.2.4 Resource Optimization
Resource optimization techniques are used to adjust the schedule model to

cater to the demand and supply of resources. The resource optimization
techniques include but are not limited to:
• Resource leveling
• Resource smoothing
Resource Leveling: In resource leveling technique, the start and finish

dates are adjusted on the basis of resource constraints with an object of
balancing the resource demand against availability. Resource leveling will
be very useful where the resources are shared, are available only at certain
times, in limited quantities or overallocated. Resource leveling often can
change the critical path, usually to increase.
As illustrated in Figure 10.10, the welding equipment is available for 8
hours/day but was allocated for 16 hours on day 1 before resource
leveling. In order to level the same, the allocation is revised to 8 hours for
days 1, 2 and 3.
Resource Smoothing: Resource smoothing technique adjusts the

activities of a schedule model in such a way that the resource requirement
doesn’t exceed certain predefined limits. The Critical Path remains
unchanged in case of resource smoothing; but the activities may get
delayed within their free and total float. Thus, project completion date may
not be delayed by resource smoothing but it may not be able to optimize
all resources.
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Fig. 10.10: Illustration of Resource Leveling
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10.5.2.5 Modeling Technique
Modeling techniques include but are not limited to What-if Scenario

Analysis and Simulation.
What-if Scenario Analysis: This is the process of evaluating the

scenarios in order to predict their effect, positively or negatively, on project
objectives. A schedule network analysis is performed using the schedule to
compute different scenarios such as delaying a major component delivery,
extending specific engineering duration or introduction of external factors
such as strike or a change in the licensing process. Outcome of the what-if
scenario analysis can be used to assess the feasibility of the project
schedule under adverse conditions, for preparing contingency and response
plans to overcome or mitigate the impact of unexpected situations.
Simulation: Simulation calculates the multiple project durations against

different sets of activity assumptions by using probability distributions. The
most common simulation technique is Monte Carlo analysis which is
explained earlier in Chapter 9.
10.5.2.6 Scheduling Tools, Lead/Lags and Schedule Compression
An automated scheduling tool contain the schedule model and expedite the
scheduling process. A scheduling tool can be used in conjunction with other
project management software application as well as manual methods.
Lead/lag of activities also can be used for this objective of expediting.
Schedule Compression techniques are used to shorten the schedule

duration without reducing the project scope, in order to meet schedule
constraints, imposed dates or other schedule objectives. This is achieved
with techniques such as Crashing and Fast tracking.
In case of crashing, the schedule duration is shorten with least incremental

cost. These include overtime approval, providing additional resources,
additional/bonus payments for early delivery. Crashing works only on
activities on critical path whereas additional resources will reduce the
activity duration. Crashing may not be a viable alternative always but may
result in increased risk and/or cost.
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In case of fast tracking, the activities are performed in parallel for a

particular portion of the project against the normal concept of performing
in sequence. Fast tracking may result in rework and increased risk. Fast
tracking is viable only if the overlapping of activities and parallel
performing of activities is possible.
10.5.3 Outputs Project Schedule Development
After following the detailed planning process detailed above, it will deliver
following outputs:
• Schedule data
• Project calendars
• Project management plan updates
• Project document updates
10.5.3.1 Schedule Baseline
A schedule baseline is the version of a schedule model that is agreed and

accepted by all stakeholders. During monitoring and controlling the
schedule baseline, start and finish dates are compared with the actual
dates to assess the variances, if any.
10.5.3.2 Project Schedule
The project schedule is an output of a schedule model that presents linked

activities with planned start and finish dates as minimum along with
durations, milestones and resources. The project schedule may be
presented in summary format as Master Schedule or in detail form.
Although a project schedule can be presented in tabular format, the
popular way is to present in graphical formats such as bar charts,
milestone charts or project schedule network diagrams (explained earlier in
this chapter).
The bar charts are often Gantt charts and many forms of Gantt charts,
defined for the purpose of use, are available. Few of them are:
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• Multiple Milestone Gantt Chart

• Daily Gantt Chart
• Baseline Gantt Chart
• Timeline Gantt Chart
• Stoplight Gantt Chart
• Earned Value
• Gantt Chart with Dependencies
• Earned Value Dashboard
Some typical examples of these are provided at Annexure 10.2.
10.5.3.3 Schedule Data
Schedule data is collection of information for describing and controlling the

schedule. The data information includes schedule milestones, activities,
activity attributes and documentation of assumptions and constraints.
Additional information such as resource requirements by time period;
alternative schedules of best case, worst case resource leveled/unleveled
etc.; inputs for scheduling contingency reserves, cash flow projections also
can be made available from schedule data.
10.5.3.4 Project Calendars
Project Calendar shall provide the information about the working days and
shifts available for schedule activities. There may be more than one
calendar for the use by different work packages. The calendars may be
updated with a defined frequency.
10.5.3.5 Project Management Plan Updates
The schedule baseline and schedule management plan that are the
elements of overall project plan will impact and demand the updating of
the overall project management plan.
10.5.3.6 Project Document Updates
The project documents that may call for update as an impact of project
schedule development process shall include but will not be limited to:
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• Activity resource requirements

• Calendars
• Risk register
10.6 Communication planning
Communication is defined as transfer of information between the

stakeholders. Communication planning shall address the choice of
communication technology/medium, communication model, methods of
communication, response to communication and frequency of
communication.
The choice of communication technology will depend on the factors such as

urgency of communication, availability of technology, ease of use,
sensitivity and confidentiality of the information and most importantly the
project environment. Considering these factors, the communication
technology shall be selected to suit the particular project.
Communication model may be a direct one-to-one communication system

or communication through fixed contact points at various levels or may be
combination of both. The communication model must be defined and
known to all stakeholders.
The communication methods may be:
• Interactive Communication: Multidirectional exchange of information

between two or more parties. Example: meetings, phone calls,
messaging, video conferencing etc.
• Push Communication: This will ensure that the information is

distributed but doesn’t ensure that it has reached to the stakeholder and
understood by them. Example: letters, memos, reports, voice mails, e-
mails etc.
• Pull Communication: The stakeholders are expected to access the

communication content at their own discretion. Example: PMIS data,
lessons learnt database etc.
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The choice of communication methods must be discussed and agreed upon

by the stakeholders. Documented communication plan must be made
available to all stakeholders.
10.7 Planning for risk response
As discussed in detail in Chapter 8, the risks are analyzed to decide

response plan. Several risk response strategies are available. Specific
actions are required to implement these strategies including primary and
backup strategies. A fallback plan is necessary in case the planned strategy
turns out to be ineffective.
Avoid, Transfer, Mitigate and Accept are the four strategies typically used to
deal with the risks. Out of these, avoid, transfer and mitigate will have
negative impacts on the project objective whereas the fourth accept can be
used to convert the risk into opportunity, i.e., positive risk.
In case of avoiding strategy, the project team acts to eliminate the risk and
protect the project from impact. This may involve actions such as
extending the schedule, reduction in scope, acquiring expertize and
clarifying the requirements.
In case of transfer strategy, the risk is transferred to the third party such
as the supplier, insurance with warranty, guarantees etc. Here, the risk is
transferred but not the cost of the risk.
In case of mitigation, the project team will focus on actions to reduce the
probability of occurrence of that risk. Where it is not possible to reduce the
probability, a mitigation response may address the risk impact by targeting
links that determine the severity. Example: a protection circuit may be
added to avoid failure of a original component.
In case a risk is accepted, it can be exploited to convert to opportunity if it

occurs. If it is not possible and then it is dealt by the project team and
reviewed to manage the impact with contingency reserves.
The strategies decided to deal with the risks must be documented and
appear on the appropriate project documents such as quality management
plan, procurement management plan etc.
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10.8 Planning for procurement
In addition to the procurement schedule, organizational policies and

procedures for procurement, it is necessary to consider the:
• Technical requirements,
• Customer preferred vendor lists,
• Material certifications required,
• Impact of access buying on the project cost,
• Possible consolidation of requirements considering other projects/
business of the organization.
In order to cater to these requirements and effective and efficient

procurement, the techniques such as fixed price contracts, cost
reimbursable contracts, time and material contract, make or buy decision,
source selection criteria etc. shall be used and incorporated in the
appropriate project documents.
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10.9 Summary
• “Planning is not the process of predicting what will be future of the

project? But it is the process of predicting how the future of project
should look like?”
• In order to ensure the precise, on-time communication and establish the

feedback loops for necessary corrective actions and revision of project
plan, the project planning team must establish a rapport and cordial
business relations with all the stakeholders.
• For most of the project planning assignments, “Project plan” is prepared

with an intention of getting it approved and the same is found to
unworkable during tracking (tracking: Viewing and updating of the actual
progress of tasks so that you can see progress across time, evaluate
slippage of tasks, compare scheduled or baseline data to actual data, and
check the completion percentage of tasks and your project) progress.
But with the right start, it can be ensured that the plan created at the
beginning of your project is an effective management tool throughout the
project.
• The use of the five-step planning process shall ensure that the planning
process shall not go down the wrong path any time. Follow the following
five steps:
➡ Create a task/activity list and work breakdown structure (WBS)

➡ Estimate task/activity durations
➡ Estimate the resources required for the task/activity
➡ Establish dependencies between tasks/activities and its implications
➡ Assign resources.
• Defining activities is the process of identifying and documenting the

specific actions to be performed to produce a project deliverable.
Objective of this process is to break down the work packages into
activities that provide the basis for estimating, scheduling, executing,
monitoring and controlling the project work.
• The WBS is a hierarchical decomposition of the total scope of work to be

carried out by the project team to accomplish the project objectives and
generate the required deliverables. The WBS shall organize and represent
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the total scope of the project and work specified for the current approved
project on the basis of project definition.
• Decomposition is the most common technique used for creating WBS.

The decomposition of higher level WBS requires subdividing into the work
for each of the deliverables/subcomponents into its most manageable
and verifiable products. The verification indicates here to the feasibility of
estimating the cost and duration for that task/activity. The decomposition
to the lowest level must be ensured for inclusion of all activities/tasks
that are necessary for the completion of the higher level deliverables.
• The Project manager in collaboration with the project team shall

determine the final decomposition of the project scope into the discrete
work packages that will be used to effectively manage the project work
• The resource estimation refers to the process of estimating the type and
quantities of resources such as material, human, equipment, suppliers,
consultants, service providers, sub-contractors etc. to perform each
activity.
• Sequencing activities is the process of arranging them in a logical

sequence of work to achieve maximum efficiency with the pre-assigned
resources. Start of each activity/milestone must be connected to the
finish of at least one predecessor activity/milestone. Finish of each
activity, milestone must be connected to the start of at least one
successor activity/milestone. This requirement is not applicable to the
first and last activity/milestone.
• PDM includes four types of dependencies/logical relationships. Successor

activity is a dependent activity that logically comes after the predecessor
activity in a schedule. Each activity, except the first and last, behaves as
predecessor and successor as the schedule is progressing. Dependencies
are characterized by the four attributes that are mandatory,
discretionary, internal and external. These attributes form the
combination such as:
➡ Mandatory external dependencies

➡ Mandatory internal dependencies
➡ Discretionary external dependencies
➡ Discretionary internal dependencies
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• Lead and lag are very important features of the activities since these
decide the overall possible reduction of a project cycle. Lead and lag
always are considered as the advancement or delay of predecessor
activity with respect to successor activity.
• The sequence with longest path in the logical schedule network shall be
the critical path since it determines the shortest possible project
duration.
• A CPM critical path is normally characterized by zero total float on the

critical path.
• The CCM (Critical chain method) technique considers the effects of

resource allocation, resource optimization, resource leveling and activity
duration uncertainty on the critical path defined by CPM and allows the
project team to place buffers on project schedule path to account for
limited resources and project uncertainties.
• Resource optimization techniques are used to adjust the schedule model

to cater to the demand and supply of resources.
• In resource leveling technique, the start and finish dates are adjusted on
the basis of resource constraints with an object of balancing the resource
demand against availability.
• Resource smoothing technique adjusts the activities of a schedule model

in such a way that the resource requirement doesn’t exceed certain
predefined limits.
• Schedule compression techniques are used to shorten the schedule

duration without reducing the project scope, in order to meet schedule
constraints, imposed dates or other schedule objectives. This is achieved
and techniques such as Crashing and Fast tracking.
• The project schedule is an output of a schedule model that presents

linked activities with planned start and finish dates as minimum along
with durations, milestones and resources. The project schedule may be
presented in summary format as Master Schedule or in detail form.
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• Schedule data is collection of information for describing and controlling

the schedule. The data information includes schedule milestones,
activities, activity attributes and documentation of assumptions and
constraints.
• Communication planning shall address the choice of communication

technology/ medium, communication model, methods of communication,
response to communication and frequency of communication.
• The risks are analyzed to decide response plan. Several risk response
strategies are available. Specific actions are required to implement these
strategies including primary and backup strategies. A fallback plan is
necessary in case the planned strategy turns out to be ineffective. Avoid,
Transfer, Mitigate are Accept are the four strategies typically used to deal
with the risks.
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understanding
1. List down all the activities of the construction project/any other project
of your organization referred in the earlier chapters.
2. Prepare minimum 5 number of WBS for above project.
3. Work out the duration estimates and resource estimates for above 5
WBS.
4. Prepare typical precedence diagrams for activities listed to indicate the

typical 4 dependencies.
5. Identify and list 2 numbers of mandatory external dependency and

discretionary internal dependency.
6. Develop the project schedule:
a. In the form of Gantt chart with dates

b. Indicate the milestones for this project
c. Identify the critical path for any one of the work package with total
float.
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1. The project planning team’s role doesn’t end at the development of

project plan but continues till closing of the project.
a) True
b) False
2. The use of the ______ planning process outlined here to make sure that
the planning process shall not go down the wrong path any time.
a) three-step
b) two-step
c) five-step
d) four-step
3. Objective of this process is to break down the work packages into

activities that provide the basis for estimating, scheduling, executing,
monitoring and controlling the project work.
a) Estimate task/activity durations
b) Create and establish dependencies between tasks/activities and
its implications
c) Create a task/activity list and work breakdown structure (WBS)
d) Assign resources.
4. Activity resource Estimations includes _________.

a) Activity resource requirements
b) Resource breakdown structures
c) Updated project documents
d) All of them
5. Analogous estimation, Parametric estimation, Three point estimation are

the tools and techniques for ________.
a) Estimating Activity Duration
b) Estimate Task
c) Resource Estimation Outputs
d) Estimate the Resources Required
Correct Answer:- (1) – a, (2) - c, (3) - c, (4) - d, (5) - a
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ANNEXURE 10.1
Table 10.1: List of Project Management Plan Subsidiaries and

Project Documents
Project Management Plan Project Documents
Stakeholder management Activity attributes Project staff assignments

plan
Scope management plan Activity cost estimates Project statement of

work
Schedule management plan Activity duration Quality checklists
estimates
Schedule baseline Activity list Quality control

measurements
Risk management plan Activity resource Quality metrics

requirements
Requirements management Agreements Requirements

plan documentation
Quality management plan Basis of estimates Requirements traceability

matrix
Scope baseline Change log Resource breakdown

structure
• WBS
• WBS dictionary
Procurement management Change requests Resource calendars

plan Risk register
Process improvement plan Forecasts
• Cost Forecasts
• Schedule Forecast
Human resource Issue log Schedule data

management plan
Cost management plan Milestone list Seller (Supplier)

proposals
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Cost baseline Procurement Source selection criteria

documents
Configuration management Procurement Stakeholder register

plan statement of work
Communication Project calendars Team performance

management plan assessments
Change management plan Project charter Work performance data

Project funding Work performance
requirements information Work
Project schedule performance reports
Project schedule
network diagrams
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ANNEXURE 10.2
Sample Gantt Charts
Multiple Milestone Gantt Chart: Indicates the milestones with diamonds

and dates
Baseline Gantt Chart: Indicating progress against the base schedule
258
Gantt chart with dependencies: The dependencies are indicated by thin

lines linking the end of one task to the start of another
259
Earned Value Gantt Chart: Indicates the time cost performance of a

project
260
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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PROJECT EXECUTION
Chapter 11
Project Execution
Objectives
Till this time, we have learned and used various project management tools
and techniques to the do so-called software or paperwork phase of the
project management. The Human resource sector involved for this exercise
is limited, experienced and qualified to place the management plans,
schedules and methods for the same in place. Now, it is the time to test
“how effective and efficient is the exercise completed till this time” The
obvious reason is that from this point onwards it is only execution of
activities mentioned in the plans as per schedule and the documented
project management procedures/methods.
Project management in the phase of execution is very crucial since the

number of stakeholders involved will rise sharply. The human resource that
will be utilized for various functions in the execution of project such as
manufacturing, procurement, quality control, assembly, erection,
commissioning etc. will be from wide spectrum of experience and
qualification. Also other interfaces of the organizations such as operations,
marketing, business affairs, finance etc. will get associated very closely
with the project management team.
Organization business values and culture are the prime important factors
that will have an impact on the project execution phase. Our objective in
this chapter is to discuss and assimilate the technique to ensure
that in spite of the factors mentioned above the project
management in its execution doesn’t allow it to derail from the
planned track and detract from the target objectives. It is not
necessary to assume that all the factors mentioned above will have an
adverse impact on the project management. Some of them may have
positive impacts also
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Structure:
11.1 Business Values and Organizational Culture

11.2 Organizational Environment Factors
11.3 Relationship between Project and Operations Management
11.4 Role and Responsibilities of Project Manager
11.5 Direct and Manage the Project Work
11.6 Managing the Human Resource
11.7 Managing the Communications
11.8 Managing Procurement – Initiating, Conducting and Closing
11.9 Managing the Quality Assurance Requirements
11.10 Responding to Risks
11.11 Managing Stakeholder’s Engagement
11.12 Summary
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11.1 Business Values and Organizational Culture
Business value is a unique concept for each organization. It is entire value

of the business including the tangible and intangible element. Monetary
assets, fixtures, stockholders equity and utility are the examples of
tangible elements whereas goodwill, brand recognition, public benefit and
trademarks are the examples of intangible element of the business value.
Business value is an output of effective management of the ongoing

business operations. Thus, the organizations with good business
value will have an ability to employ reliable established processes
to meet the project objectives and earn additional business value.
The government agencies, social organizations, educational institutions are
not business-driven and are not profit-making establishments but are
focusing on acquiring business value for their activities.
Organizational culture and style phenomenon is explained in detail at 2.5,

Chapter 2. But the repetition of the same to some extent in context of
project execution will not be incorrect. In brief, the organization is a
systematic, organized group of entities (persons and/or departments) to
accomplish a purpose; one of which may be to undertake the projects.
Cultural norms are developed by the organizations over years of operation.
These cultural norms may affect the execution of projects in either

direction since the norms include established approaches (to initiate and
plan projects), means (considered acceptable) for getting the work done
and recognized authorities (who make or influence the decisions but are
not responsible for the project accomplishment). Organizational culture is
the phenomenon developed over a period of time by the common
experiences of the members. The culture then becomes unique by practice
and common usage over a period time. Common experiences include, but
are not limited to:
• Shared visions, mission, values, beliefs and expectation.

• Regulations, policies, methods and procedures
• Motivation and reward systems
• Risk tolerance.
• View of leadership, hierarchy and authority relationships
• Code of conduct, work ethics and work hours
• Operating environments.
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All of these are referred during our journey of project management

till this time and occur at some or the other place/time during
execution and may conflict with the organizational culture. The
project manager’s role is very important in such incidences in order
to resolve to the logical end or escalate the issues raised by the
stakeholders. In some of the incidences, there may be changes
required in the organization’s policies/procedures. The project
manager is expected to follow and expedite the change approval
and management procedure.
11.2 Organizational Environment Factors
The organizational environment factors refer to the conditions which are

not under the control of project team, but can influence, constrain or direct
the project. Most of them have taken into consideration during the project
planning process.
The prominent of these factors incudes but are not limited to:
• Organizational Structures: Can affect the availability of resources and

influence the execution of projects. The structures vary from functional to
project wise with variety of matrix structures (Refer Annexure 11.1).
The position of the project manager and reporting in the overall
organizational structure is crucial for taking and implementing decisions
as per project requirement. Project wise strong matrix organization with
Project Manager’s reporting to the CEO is always preferred.
• Geographic distribution of facilities and resources.
• Infrastructure.
• Revisions in government/industry standards.
• Existing human resources: There may be little choice/no choice for

selection with reference to skill, disciplines, and knowledge.
• Personnel administration: Standard staffing and retention, employee

performance review procedures, reward and overtime policy and time
tracking may prove to be out of place for the project application.
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• Organizational work authorization system.
• Organization’s established communication channels.
• Commercial databases: For example, standard cost estimation data,

risk database, standard outsourcing rate data etc.
• Processes and procedures: Some of the important procedures are

Change Control, Financial Control, Issue and Defect Management and
Risk control.
• Corporate knowledge base: Shall provide the historical information

and lessons learned along with related technical and other information
about the projects executed earlier.
These factors may enhance or constrain the project management

options and may have positive or negative influence on the project
outcome which becomes prominent and evident during the project
execution phase.
Hence, the project team is required to deal with these factors very
skillfully with swift responses and effective corrections/corrective
actions with approvals and information to the project manager; in
case of constraints and negative influences. The enhancement and
positive influences shall be recorded, incorporated in the learning
data and used for improvement in future.
11.3 Relationship between Project and Operations

Management
Both projects and operations are inherent parts of any business

organization that can’t be separated from the organization. Each of one of
them has its own function and essential slot for survival of the
organization. With this concept as focal point if both project and operations
management are aligned to the organizational business strategies, the
issues like conflicts of interest, priorities either will not exist or if exists can
be resolved to support strategic goals of the organization.
Operations management is responsible for overseeing, directing and

controlling business operations to support day-to-day business operations
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of repetitive nature. For example, production, manufacturing, accounting,

maintenance operations etc.
Projects being one-time endeavor with unique output and accompanied

with uncertainties require project management skill sets against the
business process management and operations management activities and
skill set required for management of operations; the projects and
operations management intersect at various points during the project life
cycles. These intersections are more prominent during execution phase of
the project. The intersection points differ with the nature and type of the
project.
In case the project is product/process improvement or new product

development within the organization, the project management
intersect with operations at:
• Each closeout phase.

• The point of utilization of existing resources.
• Testing/upgrading of the new/improved product/process.
• Approval of the new/improved product/process.
• Implementation of the new/improved product/process.
Finance, human, production resource requirements/approvals

doesn’t generally qualify to be crossing points since the project
output will support and add business value to the organization.
In case the project is planned to deliver the output (product/service)

to an external agency/customer, the project management’s crossing
point with operations point will be more in number with increased gravity
of conflicts with reference to clashing of interests and priorities even
though the project is planned to generate and add revenues to the
strategic business targets.
For such projects, the prominent crossing points include but will not be
limited to:
• Business goals and targets
• Organizational strategies, policies and procedures.
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• Resource utilization and leveling (facilities, equipment).
• Financial requirements and approvals.
• Infrastructure.
• Utilization of common facilities such as supporting functions. (e.g., IT,

Maintenance, administration, accounts, finance etc.)
• Selection and assigning human resource from existing pool.
For such a scenario, it is very essential to maintain the harmony

between operations and project management. This can be achieved
provided the beginning is made from the top management and
demonstrated to the middle and lower level management of both
streams. The decisions shall be taken judiciously with the
consideration mentioned above that each of one of them has its
own function and essential slot for survival of the organization and
both project and operations management are aligned to the
organizational business strategies to accomplish the project and
business objectives successfully.
11.4 Role and Responsibilities of Project Manager
The role and responsibilities of project manager and stakeholder are

elaborated at length in the Chapter 6. But brief repetition of the same will
not be unwarranted since the actions for the project execution becomes
more prominent in this phase and the dependency of activities is also more
which needs speed and sense of urgency in the decision-making as
mentioned earlier.
The project manager has a prominent role to play in this phase being a
focal point of communication. By the time the execution phase of project
begins, the project manager must consolidate further his leadership that is
already established. He must take all the decisions professionally and not
emotionally.
He shall start demonstrating his skills for team building/delegation and

motivate the team with effective communication of the decisions. Feedback
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loops must be put in place to receive the change request approval note
with a proper justification and take decisions without any delays.
The success of the project manager lies in communication, information,

analysis, comprehension and timely decision with the effective utilization of
available resources. An exclusive attention of the project manager is
11.5 Direct and Manage the Project Work
Directing and managing the project work refers to leading and performing
the work defined in the project documents, providing feedback for the
changes needed and implementing the approved changes to achieve the
project objectives. Work performed in all functional areas is covered for
overall project management.
Basis for performing work includes the project documents such as but are
not limited to:
• Scope management plan.
• Schedule management plan.
• Cost management plan.
• Approved change requests: These are the request initiated by the

stakeholders and then reviewed and approved by the change control
authority. The change request may be a corrective action, a preventive
action or a defect repair. The change requests can impact any area of the
project and may call for revision of the policies, project management
plan, procedures, costs, budgets or even the schedules.
• Infrastructure
• Organization environmental factors as elaborated at 11.2 above.
• Organization culture as elaborated at 11.1 above including policies and

procedures.
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While leading and performing the activities of project, the stakeholders

including project manager shall come across the specific activities as listed
below (in addition to accomplishing the project objectives and create
project deliverables).
• Train and manage the team members assigned to the project.
• Obtain, manage and use resources including materials, tools, equipment

and facilities.
• Implement the planned methods and standards.
• Establish the communication channels between the stakeholders.
• Issue change requests and implement approved changes.
• Generate work performance data such as cost, schedule, technical/

quality/status progress reports for forecasting.
• Manage risk and implement risk response activities.
• Manage vendors and suppliers.
• Collect and document lessons learned.
The project manager along with the project management plan is expected
to manage the various technical and organizational interfaces within the
project. The project manager should also manage the unplanned activities
and decide the appropriate course of action.
Deliverables are produced as outputs from execution phase of project as

planned and scheduled in the project management plan. The work
performance data collected needs to be communicated for appropriate
actions. Work performance data includes information about the completion
status of deliverables and other relevant details about project performance.
This data will also be used as an input to the Monitoring and Controlling
process group.
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While directing and managing the project work, the project team may use:
• Expert judgments,
• Meetings and
• PMIS
as effective means to accomplish the project objectives and deliverables.
It is primary responsibility of the project manager to ensure availability of

expertise needed; mainly for the technical and management activities. The
expertize may be utilized from:
• Other units within organization

• Consultants/subject matter experts
• Stakeholders and
• Professional and technical associates from renowned research institutes.
Meetings are very effective means to discuss the pertinent topics. Each
participant of the meeting should have a defined role. The attendees shall
be appropriate stakeholders involved or affected by the topics addressed
along with project manager and concerned project team members.
Meeting arranged with well-defined agenda, purpose, objective, time and

conducted with all participants face-to-face will be most effective meetings.
Virtual meetings may be arranged with full preparation using and video
conferencing tools. Minutes of each meeting should be stored as part of the
PMIS and circulated to all the concerned stakeholders.
Updating all the relevant project documents is an essential requirement of

the process of directing and managing the project work. The directing and
managing the project process shall generate the outputs as listed below
but will not be limited to:
• Unique and verifiable product as project deliverable.

• Work performance data
• Change requests
• Updated project management plan with its revised elements
• Updated project documents such as project logs, risk register,
stakeholder register etc.
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11.6 Managing the Human Resource
Human resource management is one of the critical tasks during project

execution. Objective of the management is to resolve issues, revise
communications, address conflicts to motivate the team and improve the
team interaction for accomplishing the project objectives. The key
considerations for managing the human resource shall be:
• Roles and responsibilities identified as per the human resource

management plan
• HR policies and procedures of the organisation
• Team performance assessment reports
• Issue log
• Work performance reports
• Employee motivation efforts.
Various logical means are used to effective human resource management.

Prominent of these are elaborated for better understanding.
11.6.1 Observation and Conversation
Observation and conversation on a routine basis are very useful to keep in

touch of project work and attitude of the project team members. The
project team can monitor the progress towards the deliverables and
interpersonal issues with observation and conversation.
11.6.2 Project Performance Appraisals
Project performance appraisals will be useful for the clarification of roles

and responsibilities, constructive feedback to and from the team members,
identification of unknown/unresolved issues, identify training needs and
plan for the same and establishing/ revising the specific targets for the
future time span.
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The need and frequency of formal project performance will be decided by

the duration, complexity of the project, organizational policy, labor
workforce requirement and the amount and quality of regular
communication.
11.6.3 Conflict Management
As explained earlier, conflict is an inevitable phenomenon in a project

environment. Conflicts shall be addressed immediately and usually in
private using a direct collaborative approach. In case of disruptive conflicts,
formal procedures including disciplinary actions may be used.
Scarce resource, scheduling priorities and personal working styles are the
major reasons of conflict. Well-defined team ground rules, group norms,
and solid management practices such as communication planning and clear
role definition will reduce the number of conflicts to minimal.
The conflict that is resolved with a win-win situation results in higher

productivity and positive working relationships. The difference of opinion of
the conflict can be utilized as an opportunity for increasing the creativity
and better decision-making. If these differences become a negative factor,
the project team members are responsible initially to resolve the same as
first step. If it is escalated, the project manager should provide help and
facilitation for resolution.
Conflict management is a crucial key element for appraising project

manager’s success. Different project managers may adopt different
methods to handle the conflict management but the key factors for
determining the resolution methods remain unchanged. The same are
listed below for better understanding.
• Relative importance and intensity

• Time available to resolve
• Stand taken by the individuals involved
• Motivation available to resolve the conflict on a short-term and long-term
basis.
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The general techniques used for resolving the conflicts are:
• Withdraw/Avoid: Withdrawing from actual conflict situation by

postponing the issue for better preparation or allow to be resolved by
others.
• Smooth/Accommodate: Emphasizing areas of agreement rather than

area of difference; conceding one’s position to the needs of others to
maintain harmony and relationship.
• Compromise/Reconcile: Searching for solutions that bring some

degree of satisfaction to all parties in order to temporarily or partially
resolve the conflict.
• Force/Direct: Pushing one’s viewpoint at the expense of others;

offering only win-lose solutions, usually enforce through the power
position to resolve an emergency.
• Collaborative/Problem Solve: Incorporating multiple viewpoints and

insights from differing perspectives; requires a co-operative attitude and
open dialogue that typically leads to consensus and commitment.
The above-mentioned techniques are not specified in any order of

preference. The choice is the prerogative of the user to suit its
requirement.
11.6.4 Interpersonal Skills
As mentioned earlier, interpersonal skills is one of the mandatory

requirement for the project manager since he is required to use
combination of technical, personal and conceptual skills to analyze the
solutions/suggestions/change requests and appropriately interact with
team members. Effective use of interpersonal skills allows the project
manager to capitalize on the strengths of all team members.
Leadership, influencing, effective decision-making are the typical examples

of interpersonal skills.
• The project manager’s leadership can inspire the project team to achieve
high performance levels.
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• The ability of project manager to timely influence the team members will
help him to overcome the critical situations. He can achieve this by active
and effective listening, considering the various perspectives, gathering
relevant and critical information and then convincing the stakeholders
with clearly articulated points and positions to reach an agreement
without breach of mutual trust.
• Effective decision-making will not only achieve and maintain the time
schedule but also will provide an edge for managing the risks in spite of
adverse environmental factors.
11.7 Managing the Communications
Managing communications is not merely managing the transfer of data

from place to place and individual to individual but it involves the aspects
from creating, collecting, storing, retrieving and the final disposition of
project information as per the communication management plan with an
objective to ensure efficient and effective flow of communication between
the project stakeholders.
The management of communication is of vital importance in the project

execution phase since it has to go beyond distribution of relevant
information and ensure that the information being distributed is accurate
and precise, and is well received and understood by the receiver. The
communication management also shall provide opportunities for the
stakeholders to generate requests for required information, clarifications
and discussion.
Techniques and considerations for effective communication management

include but are not limited to the following:
• Sender-receiver model: Should include feedback loops to provide

opportunities for interactions/participation and remove barriers to
communication.
• Choice of media: Will be decided by the situation demand as to whether

it should be in writing or verbal, with a formal memo versus a formal
report, face-to-face or by e-mail.
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• Writing style: Should ensure appropriate use of active versus passive

voice, sentence structure and word choice.
• Meeting management: As explained in detail at 11.5.
• Presentation: The presenter should be aware of the impact of body

language and design of visual aids.
• Facilitation: Should be used to build consensus and overcome

obstacles.
• Listening: Active listening with an intention of acknowledging, clarifying

and confirming understanding shall remove the barriers that adversely
affect the comprehension.
The communication management plan, work performance reports,

organizational culture, PMIS, organizational policies, guidelines, procedures
and templates will form the platform/ foundation for the communication.
The communication technology, communication model and communication

method (elaborated under section 10.6) selected as per the
communication management plan shall be tested for its suitability for
communication in the execution phase. All the stakeholders must be aware
and trained for the use of planned communication system for achieving
effective and efficient communication.
Any potential barriers, challenges for the effective and efficient flow of
communication shall be identified and corrected immediately.
Performance reporting is the key function of communication and it includes

collecting and distributing information including status reports, progress
measurement and forecasts. Performance reports should reach to each
level of stakeholders as per his requirements.
The role of each stakeholder is very important for the effective and
efficient communication since each one of them is generating,
sending, receiving, utilizing and responding to the project
information. The project managers has an additional role to
facilitate and identify any barriers, changes required and get the
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approval for revisions and corrective actions along with

implementation of the same.
11.8 Managing Procurement – Initiating, Conducting and

Closing
Procurement is a process which involves number of internal as well as

external stakeholders and hence managing and ensuring the co-ordination
between all of them is a challenging task to the authorized procurement
officer.
The procurement process normally starts with an indent raised for

procurement and then follows the path of enquiry, vendor/supplier
proposals, negotiation, selection of vendor/ supplier, contract award,
delivery period, receipt of the material/service and ends with successful
closing of the contract.
Quality, cost and delivery are the key requirements of procurement and
inherently built in the organizational policies, guidelines and procedures.
Consolidation of requirements and standard rate contracts will avoid the
repetitive activities such as enquiries, vendor response and negotiations.
Technical specification of the indented material/service is the key element
for managing procurement and hence, the same must very clear, precise,
unambiguous and aligned to the technical requirements of project
deliverables both in quality description and quantities.
Procurement management plan, procurement documents (RFQ), project

documents; organizational procurement policies, guidelines and procedures
and vendor/supplier proposals are the inputs for procurement. On the basis
of these inputs, the Procurement Statement of Work shall be
generated. This document is a critical component of procurement process
and can be revised until it is finally agreed by all concerned stakeholders.
The statement of work shall include following as minimum:
• Specifications
• Quantity
• Quality levels (Acceptance Criteria)
• Performance data
• Delivery period/validity of contract
• Delivery or work location
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• Packing and transportation requirements

• Other project-specific requirements
It is always that the statement of work is endorsed for agreement by

signature of all concerned stakeholders.
Periodic review of procurements in presence of all concerned stakeholders

and in context with the project status will always beneficial to avoid
conflicts, align the procurement status with future revised target/plans or
revise the other plans to align with procurement without affecting the final
project status. Such reviews also will provide inputs for financial plans and
fund requirements. Minutes of such reviews shall be recorded and
circulated to all concerned and form the part of the work performance
data.
The terms and conditions for closing/termination must be specifically

mentioned and appearing in the contract documents (for example,
purchase order). No procurement will be closed until it is received at the
place of delivery/work and accepted by the quality control for quality and
performance criteria.
The closing of procurement for commercial aspects should be done as a

separate exercise to avoid any litigation at later stage and this will be the
primary responsibility of the authorized procurement officer. The delays, if
any, shall be recorded and intimated to all concerned and form the part of
the work performance data.
Early termination of contract is a special case of procurement closure which

shall be exercised as per the terms and conditions mentioned in the
contract. The terminations may result with:
Mutual agreement by both parties

From default of one party
For convenience of the buyer if provided for in the contract.
The corrective actions/change requests arising out of such terminations

shall be planned/incorporated in the project documents and implemented
as per schedule. The actions may be treated as risk response. This is the
primary responsibility of the authorized procurement officer and project
manager.
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Project manager’s pro-active role is very essential to ensure co-

ordination between all the stakeholders for managing the
procurement actions.
11.9 Managing the Quality Assurance Requirements
Quality assurance and quality control activities are complimentary to each

other. Quality assurance deals with means and measures used to build the
confidence that the quality control procedures with these means and
measures will deliver the planned quality measurements and performance
parameters. Appropriate quality assurance efforts will also result into
reduction into quality control checks and in turn the waiting time and hold
ups in the quality control activities. Simple example of quality assurance in
the use of drilling jigs to ensure repetitive accuracy or use of gauges with
statistical control charts or use of a standard module for developing a
software module.
In case of repetitive mass production operations, the quality assurance

requirements are well-defined and merged into the routine manufacturing
activities with certain periodic validation checks on the quality assurance
means and measures used. Quality assurance is often included as the part
of the process development and qualification which is done before finalizing
the production method. The same will be incorporated and used in the
routine manufacturing methods until there is a revision in the quality
measurement and performance parameters.
Unlike this in case of projects, such requirements are not known in

advance; though some of them can be anticipated; because of the one-
time endeavor and unique output nature of the projects. These
requirements become evident as the execution phase progresses. Hence,
needs to be considered and incorporated to build the confidence that the
final output or an unfinished output (work-in-progress) will be completed in
a manner that meets the specified quality requirements. Thus, in case of
projects, the quality assurance becomes the part of manufacturing
process and is joint responsibility of the engineering,
manufacturing and quality stakeholders. Engineering function is
included here to specify the quality requirements and use of
standards as specified by the customer and organizational
procedures.
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For example, let us consider the project for manufacturing of a boiler in

which shell welding and tube welding activities are involved with leak proof
requirement. In such a case, it is essential to develop a welding procedure
for the weld joints and qualify the same before it is used. Also it may call
for a fixture to facilitate the repetitive circular tube joints considering the
higher numbers. The qualified welding procedure as per specified standards
and the circular welding fixture are the quality assurance means provided
in this case to ensure the leak proof weld joints as the final output
requirement.
The quality assurance process also provides an umbrella for continuous

process improvement which is an iterative means for improving the quality
of all processes. Continuous process improvement reduces waste and
eliminates non-value-adding activities. This in turn allows the processes to
operate at higher level of efficiency and effectiveness.
Quality management plan, process improvement plan, quality

measurement parameters with acceptance norms, results of quality control
measurement and the relevant project documents are basis for executing
quality assurance process.
Various analytical and Statistical tools such as the one listed below are
used to determine the quality assurance means and measures in case of
complex and larger projects.
• Affinity diagrams: Used to generate ideas that can be linked to form

organized pattern of thought about a problem.
• Process decision program charts (PDCPC): Used to understand the

steps required to achieve the target and identify the steps that can derail
the achievement of target.
• Interrelationship digraphs: A process of creative problem solving in

moderately complex scenario (with 50 logical intertwined relationships).
• Tree diagrams: Similar to WBS that provide parent-child relationship.
• Prioritization matrices: Used to prioritize the alternatives available for

the identified key issues.
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• Activity network diagrams: Used with scheduling methodologies such

as PERT, CPM etc.
• Matrix diagrams: Used to perform data analysis within the

organizational structure created in matrix to indicate the strength of
relationship between factors, causes and objectives.
Quality audits and process analysis are the common techniques used to
identify, implement and check effectiveness of quality assurance means
and measures for all projects irrespective complexity and size.
Quality Audits
A quality audit is a structured, independent process to determine whether

the project activities comply with organizational and project policies,
processes, and procedures. The objective of quality audit normally include:
• Identifying all good and best practices being implemented.
• Identifying all non-conformity, gaps and shortcomings.
• Share good practices introduced or implemented in similar projects in the

other organization/unit.
• Proactively offer assistance in a positive manner to improve

implementation of processes to increase the productivity as team effort.
• Highlight contributions of each audit in the lessons learned data of the

organization.
The subsequent efforts to correct any deficiencies must result in reduced

cost of quality and an increase in customer acceptance of the project
output. Quality audits may be scheduled or random and shall be conducted
by qualified internal/external auditors.
Quality audits can confirm the implementation approved change requests

including updates, corrective actions, defect repairs and preventive actions.
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Process Analysis
The process analysis method will examine the problems experienced,

constraints experienced and non-value-adding activities identified during
process operation in order to discover the root cause and develop the
preventive actions.
The change requests generated for quality assurance requirements

must be expedited for approval, scheduling and implementation by
the project manager. The revision updating of relevant project
document shall be ensured with planning of the training needs
generated.
11.10 Responding to Risks
Response to the risks is a direct function of the risk management plan and
stakeholders’ alertness during project execution. Responding to the risks
that are identified in the risk register is comparatively easier as compared
to the unidentified new risks, since the information such as risk owner,
agreed risk responses (for the identified risks) is available in the risk
register. Only requirement is the alertness of the risk owner to respond as
planned.
Responding to the unidentified risks is the key issue. For dealing with such
issues, continuous tracking of work during execution is the primary
requirement. This will help to track and identify the new or changing risks.
This also can feed inputs to the periodic risk assessment.
On identifying the new/changing or potential risk, the risk owner shall

immediately send a risk identification report to the project manager
mentioning the details of risk, anticipated effect of the risk, correction
needed to handle the risk appropriately. Project manager in turn should
discuss this report with the project team and concerned stakeholders and
determine the response. The response can be of immediate firefighting and
long-term corrective/preventive action.
Periodic risk performance report from the risk owners to the project
manager and all concerned stakeholders containing the details of risk
occurrence, risk response, probable potential risks in future etc. will be
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useful to assess the efficiency and effectiveness of the risk management

plan.
In case the situation demands the risk owner shall be authorized to

respond with appropriate actions under intimation to the project manager.
Risk management becomes more easier with the more number of risks
handled but frequent discussions about risk will more likely tend the
stakeholders to identify the risks and opportunities.
11.11 Managing Stakeholder’s Engagement
Ensuring and managing the stakeholder’s engagement with the project

throughout the project cycle is the primary responsibility of the project
manager. The impact/need of this is more prominently felt during the
execution phase of the project. For executing the process of managing
stakeholders efficiently and effectively, the project manager shall
communicate and work with the stakeholders to meet their needs/
expectations and address issues as they occur and foster the appropriate
stakeholder engagement in the project activities.
The project manager will have advantage of increasing support and

minimizing the resistance and thereby increasing the probability of
accomplishing the project objectives and deliverables.
While managing the stakeholder engagement, the project manager must

get involved himself into:
• Engaging stakeholders at appropriate project stages to obtain or confirm

their continued commitment to the success of the project.
• Managing stakeholder expectations through negotiation and

communication, ensuring project goals are achieved;
• Addressing potential concerns that not yet become issues and

anticipating future problems that may be raised by stakeholders. Such
concerns need to be identified and discussed as soon as possible to
assess associated project risks; and
• Clarifying and resolving issues that have been identified.
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Managing stakeholder engagement helps to increase the probability of

project success by ensuring that stakeholders clearly understand the
project goals, objectives, benefits, and risks. This enables them to be
active supporters of the project and to help guide activities and project
decisions. By anticipating the end-users of the reactions to the project,
proactive actions can be taken to win support or minimize negative impact.
The ability of stakeholders to influence the project is typically highest

during the initial stages and reduces progressively as the project
progresses. As mentioned earlier, the project manager responsible for
engaging the stakeholders in a project may seek help from the end-user/
end customer of the project. Active management of stakeholder
involvement reduces the risk of project failure to meet its goals and
objectives.
Stakeholder management plan, communication management plan,

document revision record, communication requirements and organizational
procedures such as issue management, change control shall form the basis
for stakeholder’s engagement management process.
Appropriate communication methods, interpersonal skills and management

skills are the essential means for effective and efficient implementation and
management of stakeholder engagement process.
Few examples of the interpersonal skills are:
• Building trust
• Resolving conflicts
• Active listening and
• Overcoming resistance to change
Few examples of the management skills can be:
• Facilitate consensus toward project objectives

• Influence people/end-user to support the project
• Negotiate agreements to satisfy the project needs and
• Revise organizational behavior to accept the project outcomes.
The stakeholder management process may generate number of change

requests as an output of this process; which must be reviewed and
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approved if acceptable. The approved change requests must be scheduled

and implemented as per organizational procedure and project management
plan. Implementation of these change requests may call for updating of
some of the project documents. The same shall be done and recorded on
priority.
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11.12 Summary
• Project management in the phase of execution is very crucial since the

number of stakeholders involved will rise sharply. The human resource
that will be utilized for various functions in the execution of project such
as manufacturing, procurement, quality control, assembly, erection,
commissioning etc. will be from wide spectrum of experience and
qualification. Also other interfaces of the organizations such as
operations, marketing, business affairs, finance etc. will get associated
very closely with the project management team.
• Thus, the organizations with good business value will have an ability to
employ reliable established processes to meet the project objectives and
earn additional business value.
• The various organizational cultural norms and project requirements occur

at some or the other place/time during execution and may conflict with
the organizational culture. The project manager’s role is very important
in such incidences in order to resolve to the logical end or escalate the
issues raised by the stakeholders. In some of the incidences, there may
be changes required in the organization’s policies/procedures. The
project manager is expected to follow and expedite the change approval
and management procedure.
• The environmental factors may enhance or constrain the project

management options and may have positive or negative influence on the
project outcome which becomes prominent and evident during the
project execution phase.
• The project team is required to deal with these Environmental factors

very skillfully with swift responses and effective corrections/corrective
actions with approvals and information to the project manager; in case of
constraints and negative influences. The enhancement and positive
influences shall be recorded, incorporated in the learning data and used
for improvement in future.
• Operations management is responsible for overseeing, directing and

controlling business operations to support day-to day business operations
of repetitive nature.
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• The projects and operations management intersect at various points

during the project life cycles.
• For scenario of operations and project intersecting, it is very essential to

maintain the harmony between operations and project management. This
can be achieved provided the beginning is made from the top
management and demonstrated to the middle and lower level
management of both streams. The decisions shall be taken judiciously
with the consideration mentioned above that each one of them has its
own function and essential slot for survival of the organization and both
project and operations management are aligned to the organizational
business strategies to accomplish the project and business objectives
successfully.
• The success of the project manager lies in communication, information,

analysis, comprehension and timely decision with the effective utilization
of available resources. An exclusive attention of the project manager is
• Observation and conversation on a routine basis are very useful to keep

in touch of project work and attitude of the project team members.
• Project performance appraisals will be useful for the clarification of roles

and responsibilities, constructive feedback to and from the team
members, identification of unknown/unresolved issues, identify training
needs and plan for the same and establishing/revising the specific
targets for the future time span.
• Conflict is an inevitable phenomenon in a project environment. Conflicts

shall be addressed immediately and usually in private using a direct
collaborative approach.
• Interpersonal skills is one of the mandatory requirement for the project

manager since he is required to use combination of technical, personal
and conceptual skills to analyze the solutions/suggestions/change
requests and appropriately interact with team members.
• Managing communications is not merely managing the transfer of data

from place to place and individual to individual but it involves the aspects
from creating, collecting, storing, retrieving and the final disposition of
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project information as per the communication management plan with an

objective to ensure efficient and effective flow of communication between
the project stakeholders.
• The role of each stakeholder is very important for the effective and
efficient communication since each one of them is generating, sending,
receiving, utilizing and responding to the project information. The project
managers has an additional role to facilitate and identify any barriers,
changes required and get the approval for revisions and corrective
actions along with implementation of the same.
• Project manager’s pro-active role is very essential to ensure co-

ordination between all the stakeholders for managing the procurement
actions.
• In case of projects, the quality assurance becomes the part of

manufacturing process and is joint responsibility of the engineering,
manufacturing and quality stakeholders. Engineering function is included
here to specify the quality requirements and use of standards as
specified by the customer and organizational procedures.
• The change requests generated for quality assurance requirements must

be expedited for approval, scheduling and implementation by the project
manager. The revision updating of relevant project document shall be
ensured with planning of the training needs generated.
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11.13 Activities TO Implement Learning and Enhance

Understanding
1. Considering execution of a building construction project.
a. list down organizational environmental factors and prepare note on

its effect on the:
b. Human resource management
c. Procurement management and
d. Stakeholder’s engagement
2. For the construction project, identify minimum five numbers of possible

risk and prepare a note on standard risk response.
3. Simulate a possible situation of conflict for above construction project

between
a. The electrical contractor and civil construction manager

b. The customer and site supervisor
and elaborate your approach to resolve the same on short-term and

long-term basis.
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1. The organizations with good business value will have an ability to

employ reliable established processes to meet the project objectives and
earn additional business value.
a) True
b) False
2. _________ can affect the availability of resources and influence the

execution of projects
a) Infrastructure.
b) Geographic distribution of facilities and resources.
c) Organizational Structures
d) Existing human resources
3. Standard cost estimation data, risk database, standard outsourcing rate

data etc. are examples of ________
a) Commercial database
b) Organizational database
c) Personal database
d) Corporate knowledge base
4. _______ and _______ the project work refers to leading and

performing the work defined in the project documents, providing
feedback for the changes needed and implementing the approved
changes to achieve the project objectives.
a) directing
b) managing
c) planning
d) both a & b
e) both a & c
5. While directing and managing the project work, the project team may
use ________
a) Expert judgments
b) Meetings
c) PMIS
d) All of them
Correct Answer:- (1) – a, (2) - c, (3) - a, (4) - d, (5) - d
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ANNEXURE 11.1
Sample Various Organizational Structures
Weak Matrix Organization
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Functional Organization
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Balance Matrix Organization
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Projectized Organization
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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PART IV
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PROJECT MONITORING AND CONTROL
Chapter 12
Project Monitoring And Control
Objectives
Project control and monitoring is the topmost priority aspect of the project
management throughout project life cycle. The obvious reason is that this
is the aspect which will determine the final fate of the project and can tell
us corrective measures required to ensure successful accomplishment of
the project.
Our objective in this chapter is to focus our attention on all control

elements including those elaborated at 6.3 and discuss in detail the
monitoring, control and implementation of the corrective/preventive
actions for the same to ensure efficient and effective project management.
Structure:
12.1 Necessity of Monitoring and Controlling Project Work
12.2 Integrated Change Control
12.3 Control of Project Scope
12.4 Controlling Project Schedule
12.5 Communications Control
12.6 Controlling the Risks
12.7 Cost Control
12.8 Quality Control
12.9 Procurement Control
12.10 Summary
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12.1 Necessity of Monitoring and Controlling Project work
As mentioned on several occasions in earlier chapters, the project is one-

time endeavor with unique output. Uncertainties and dependencies of the
activities are inherent features of every project. These unique nature and
inherent feature emphasizes the need for tracking, reviewing and reporting
the progress of each activity to meet the performance objectives defined.
This will provide the necessary detailed information to the stakeholders to
understand the current status of the project, the actions taken and budget,
schedule and scope forecasts. This precisely is the process of monitoring
and control of the project and is applicable to all the project management
aspects/elements as mentioned above.
Monitoring is an activity of project management; that is required to be

performed throughout the project cycle. Monitoring includes collecting,
measuring and distributing performance information. The measurement
and trends are then analyzed to identify the need of process improvement.
Continuous monitoring will indicate the project health from various
perspective and identify the areas that may demand special attention.
Control includes deciding on corrective/preventive actions and/or

replanning the follow-up actions in order to ensure that the action taken
are effective to resolve the performance issue addressed.
12.1.1 Span of Control and Monitoring Process for Project Work
Monitoring and control process for a project as mentioned above is

applicable to all aspects/elements of the project management and is mainly
concerned with following for each of them.
• Comparing the actual project performance against the planned.
• Analysis of the project performance to identify and decide the corrective

and/or preventive actions needed and initiate these actions.
• Analysis, tracking and monitoring of identified project risks and ensure

triggering of response as per the project management plan.
• Identifying new risks trigger actions to decide the response to the new
identified risks.
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• Reporting the status of the risks.
• Maintaining an accurate timely information base with respect to output of

the project and associated documentation till completion of the project.
• Providing information to support status reporting, progress measurement

and forecasting.
• Providing forecasts/information to update current cost and schedule

status.
• Monitoring implementation of approved changes as and when they occur.
• Providing appropriate information to the project manager to generate

overall project progress and status report.
12.1.2 Basis for Control and Monitoring the Project Work
The overall project management plan, its subsidiary plans for each
management aspects such as scope, cost, schedule etc., schedule and cost
forecasts, validated changes, work performance information, the
organizational applicable environment factors and process assets such as
policies, procedures, historical data etc. shall form basis for exercising the
control and monitoring process. All these factors have been referred and
discussed in our journey of project management till this time.
12.1.3 Techniques to Exercise Control and Monitoring Process for

Project Work
Various techniques, methods and tools are used to monitor and control the
project. The control element/project management aspect under monitoring
and control must be taken into consideration for selection of the
techniques/methods/tools. Following are used for monitoring and control of
the project work:
• Expert judgment
• Analytical techniques
• PMIS
• Meetings
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All above are referred, discussed and elaborated in earlier chapters. The
same may be referred again to refresh the memory and information.
12.1.4 Outputs Generated
While monitoring and controlling, the outputs generated are obvious and
includes:
• Change Requests: The change requests may call for expansion,

reduction or adjustment to the project scope, project deliverables, quality
requirements and schedule or cost baselines. Change request also may
necessitate the collection and documentation of new requirements.
Change requests must go through the integrated change control process.
• Work Performance Reports: Work performance reports are intended

to create awareness and generate decisions/actions. Examples include
status report, information notes, recommendations, memos etc.
• Project Management plan updates: Including all subsidiary plans.
• Project document update: Major of them are schedule and cost

forecasts, work performance reports and issue log.
12.2 Integrated Change Control
Integrated change control is the process that ensures all changes are made
with its consideration and impact for the overall project. The integrated
change control process includes:
• Review of all change requests
• Approving/rejecting the changes
• Identifying changes/impacts on project deliverables, organizational

processes, project documents and overall project management plan
• Communicating the change request review decision.
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The integrated change control approach shall benefit to ensure

documented changes within the project are considered in an
integrated fashion and the project risks are reduced and kept
under control.
Integrated change control is necessary to be implemented from inception

of the project and through entire project cycle. Implementation of the
integrated change control process is the primary responsibility of the
project manager. The procedure for implementation and the level of
control to be applied shall be the organizational choice. The project
management plan, project scope statement, and other deliverables are
maintained by updated by carefully managing the changes. Only approved
changes are incorporated.
The organizational procedure may allow to initiate the changes verbally but
the same should be documented and follow the change control procedure
and entered into the configuration management system. Each change
request must be supported with the information on estimated time and
cost impacts. Authority for the acceptance/rejection of the change control
shall be explicitly identified and stated in the procedure with a time span.
In case a change control is complex and needs multidisciplinary expertize,
it may reviewed and approved/rejected by the change control board.
Further actions such as recording, communication, document revision,
implementation of the changes may be done by the same CCB or by the
regular change control authority.
The approved changes may call for revised cost estimates, activity
sequence, schedule dates, resource requirements and analysis of risk
response alternatives. Customer approval may be essential for certain
changes and this should a part of the responsibility of the change control
authority or CCB.
Keeping track of the changes is very crucial for the project management
and hence the configuration management is focused on the specification of
both deliverables and baselines. The configuration management model that
is opted should be able to support the Configuration Status Accounting
and; Configuration verification and Audit.
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12.2.1 Inputs (Base Information) for the Integrated Change

Control
The project management plan, work performance reports, and change

requests form the set of primary inputs for integrated change control
process. The organizational environmental factors and process assets also
may impact the change control process.
The main elements of the project management plan that are needed for
change control:
• Scope management plan which elaborates the procedure for scope

changes
• Scope baseline which provides the product definition
• Change management plan which provides direction for managing the

change control process and documents the change control authority and
CCB.
The change requests are the output of all monitoring and control processes
and of the project executing processes. These may be request for defect
repairs, corrective action or preventive action. Corrective and preventive
actions normally do not affect the project baseline but may affect the
performance.
The major organizational process assets that can influence the change
control process include:
• Change control procedure

• Procedure for approving and issuing change authorization
• Project documents (e.g., scope, cost and schedule baselines, project
calendars etc.)
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12.2.2 Techniques Used for Integrated Change Control
Expert judgments, meetings and change control software program/tools

are very widely used techniques for the change control process.
In addition to expertise of the project management team, the expertise

may be utilized from pool of stakeholders, consultants, professional and
technical associates, subject matter experts etc. These experts may be
members of the CCB for a specific case.
The change control meetings shall be conducted with well-defined agenda,

the role of each participant and final objective. There may be participants
other than the individual change control authorities and CCB members. In
case the change request is kept “on hold”, impact of such decision must be
documented with plan of action for further actions and next review date.
The software program/tools are used to manage the change requests and
resulting decisions. The well organized, configured program will help to
cover the impact of any change on the entire project and also save the
time for communication and document revisions.
12.2.3 Outputs of Integrated Change Control
Approved change requests, change logs (revision records), updated project

management plan and revised project documents are the outputs
generated by integrated change control. Approved change requests will be
implemented while directing and managing the project work. Change logs
are essential for the configuration management and control. Updated
project documents are means and mediums to communicate the changes.
12.3 Control of project scope
Project scope control refers to the process of monitoring and managing

changes to the scope baseline with an objective of maintaining same within
the project management plan. The monitoring and management of scope is
implemented through integrated change control process. While doing this,
there may or may not be changes to the documented scope statement.
In case of changes, the same must be incorporated through the change

control process and must be documented in all the project documents
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including project management plan. The uncontrolled expansion to product

or project scope without adjustments to time, cost and resources is
referred to as a scope creep.
12.3.1 Inputs for Scope Control
Following are the necessary inputs for efficient and effective scope control.
• Project management plan: Scope management plan, change

management plan, configuration management plan and scope baseline
are the important elements that are useful for controlling the scope.
Actual results are compared with scope baseline to decide the action
needed.
• Requirements documentation: Documented, unambi guous

(measurable and with acceptance criteria), traceable, complete and
consistent requirements accepted by the stakeholders make it easier to
identify any deviations against the agreed scope for the project or
product.
• Requirements traceability matrix: Requirement traceability matrix is

template that links requirements from their origin to the project scope/
deliverables. It provides a means to track and monitor the requirements
throughout the project life cycle. The traceability matrix also will be
helpful to detect the impact of any change or deviation from the scope
baseline on the project objectives.
• Work performance data: Shall provide the statistics such as number of

change requests received/accepted and the number of deliverables
completed, revised/delayed etc.
• Organizational process assets: Shall include the scope related

policies, procedures and guidelines along with the monitoring and
reporting methods and templates.
12.3.2 Techniques Used for Scope Control
Variance analysis is the very widely technique to identify the cause and
determine the degree of difference between the baseline and actual
performance. Project performance measurements are used to assess the
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magnitude of variation from the original scope baseline. Important aspect

of project scope control include determining the cause and degree of
variance relative to the scope baseline and deciding whether corrective
and/or preventive actions are required.
12.3.3 Outputs of Scope Control
Following are the prominent outputs of the scope control process:
Work Performance Information
Work performance information includes information on the current status

of the project against the scope baseline, the type/categories of changes
received, the scope variances and its causes, impact of the variances on
the schedule/cost and forecast about the future of the project. This
information will be useful for making the scope decisions and raise the
necessary change requests.
Change Requests
Analysis of the scope performance may result into a change request to the
scope baseline or the project management plan. The change requests may
include corrective actions, defect repairs or project scope enhancement
requests. These change requests has to follow the integrated change
control route elaborated at 12.2 above.
Project Management Plan Updates
Prominent among these updates are the scope baseline and other
baselines.
Project Document Updates
Prominent among these updates are the requirement documentation and

requirement traceability matrix.
Organizational Process Updates
Organizational process assets that maybe updated include but are not
limited to:
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• Causes of variances
• Corrective actions and the justification for the same
• Other types of lessons learned from the scope control.
12.4 Controlling project schedule
Schedule control refers to the process of monitoring the status of the

project activities in order to update the progress and manage the changes
to the schedule baseline for achieving the plan. Schedule control will help
to identify the deviations from the plan and take necessary corrective and/
or preventive actions in order to minimize the risks.
Schedule model can be updated against the actual performance and the
schedule baseline can be revised and approved. This must be done through
the integrated change control process only.
Schedule control as the subsidiary of integrated change control

process is mainly concerned with:
• Determining the current status of the project
• Influencing the factors which are causing schedule changes
• Deciding whether the project schedule has changed and
• Managing the actual changes as they occur.
In case of intelligent and swift schedule control approach, the major

activities and scope of schedule control will be:
• Comparing the total amount of work delivered and accepted against the
estimates of work completed for the time elapsed to decide the current
status of project schedule.
• Conducting periodic reviews (to record lessons learned) for correcting

processes and improving, if necessary.
• Reprioritizing the remaining work plan (with specific reference to

backlog).
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• Deciding the rate of production for validated and accepted deliverables

against the scheduled rate.
• Deciding whether the project schedule is changed and the degree of

change.
• Managing the changes as and when they occur.
12.4.1 Inputs for (Basis of) Schedule Control
Project management plan, project schedule, work performance data,

project calendars, schedule data and organizational process assets are the
obvious inputs/basis for the schedule control.
The project management plan will provide the schedule management plan
that describes the method for managing and controlling the schedule and
the schedule baseline.
The project schedule must be of recent version to indicate updates,

completed activities, and activities started.
The work performance data must be updated till the date on which
schedule control reviews are conducted.
All the project calendars (if more than one are made) should be available
to facilitate better schedule forecasts.
The prime organizational process assets used for schedule control includes
but are not limited to:
• Existing formal and informal schedule control related policies, procedures

and guidelines,
• Schedule control tools/software
• Monitoring and reporting methods to be used for schedule control.
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12.4.2 Techniques Used for Schedule Control
Various techniques are available for controlling the project schedule.

Depending on nature, complexity and budget of the project, the most
suitable tools/techniques shall be identified and used. Most commonly used
and prominent of these techniques are elaborated in the following
paragraphs.
12.4.2.1 Performance Reviews

Performance review is the most common technique and is applicable for
the entire range of projects. Performance reviews measure, compare, and
analyze the schedule performance for the parameters such as actual start
and finish dates, per cent completion and duration of balance work-in-
progress. Periodic performance reviews are preferred. The frequency and
span between the reviews will be decided by the nature, complexity, and
stage of the project. Various methods that are used to interpret the results
of performance review and use them for schedule control are explained in
following paragraphs.
Trend Analysis: Trend analysis will assess the project performance

against the time to indicate whether performance is improving or
deteriorating. Graphical representations are better for easy understanding
and rescheduling the future performance goals and other actions as
applicable.
Critical Path Method: CPM technique of scheduling is explained in detail

at 10.5.2.2. Comparing progress along the CPM will help to identify the
variance. The variance along the CPM will have a direct impact on the
project end date and also identify the schedule risk.
Critical Chain Method: CCM technique of scheduling is explained in detail

at 10.5.2.3 Comparing the amount of buffer balance against the buffer
required to protect the delivery date will decide the schedule status. The
difference in the buffer will decide whether the corrective action is needed.
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Earned Value Management: Schedule performance measurements such

as schedule variance (SV) and schedule performance index (SPI) are used
to assess the magnitude of variation to the original schedule baseline
(Refer Table 12.1 and Figure 12.1). The total float and early finish
variances are also essential parameters to evaluate project schedule
performance.
EVM will be helpful to manage the important aspects of schedule control

such as identifying the cause and degree of variance as compared to the
schedule baseline, estimating the implications of these variances for future
work to completion and deciding whether corrective/preventive actions are
necessary. (For example a major delay on the activity not on critical path
will have minor impact on the overall project schedule whereas a minor
delay on the activity on the critical path will have major impact on the
overall project schedule.
• Milestone / Gateway Reviews –
The project activities can be divided in important Milestone & Gateways for
reviews. For eg – For a new vehicle development , Gateways can be –
Design Review, Design confirmation, Prototype , Sign off , Launch
readiness etc and each gateway will have separate reviews for Inputs
available , progress and final out put ready.
For a turnkey project like establishing wind park , gateways can be – Land
procurement, Readiness of Wind Generator parts ( Tower, Turbine , etc ),
Foundation readiness, sub assy at site, erection , charging etc.Each
Gateway review involves different level team within organisation.
12.4.2.2 Project Management Software
Number of project management software that are available for tracking the
planned dates versus actual dates and report variance against the schedule
baseline are used to forecast the effects of changes to the project schedule
model.
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12.4.2.3 Resource Optimization
Resource optimization techniques are used for rescheduling of the activities

and facilitate to improve the resource utilization in order to align the
current status of schedule with the plan.
12.4.2.4 Modeling Technique
Modeling techniques are used to simulate and review various scenarios

(guided by risk monitoring) against the current one in order to align the
schedule model with the project management plan and approved baseline.
12.4.2.5 Leads and Lags
Leads and lags are adjusted during the network analysis of the actual
status in order to align the lagging activities with the plan.
12.4.2.6 Schedule Compression
Schedule compression techniques are used to identify the project activities

that are lagging behind and align them with the plan either by fast tracking
or crashing schedule for the balance work.
12.4.2.7 Scheduling Tools
Schedule data is updated and compiled into the schedule model to reflect
actual progress of the project and balance work to be completed. The
scheduling tools and the supporting schedule data are in conjunction with
manual methods/project management software to do schedule network
analysis to generate an updated project schedule.
12.4.3 Outputs of Schedule Control
Work performance information includes the calculated SV and SPI that are
documented and communicated to all concerned stakeholders.
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Change Requests
Analysis of the schedule performance measurements, variances and review

of progress reports may result into a change request to the schedule and
scope baseline or the project management plan. The change requests may
include corrective actions, defect repairs or project scope enhancement
requests. These change requests has to follow the integrated change
control route elaborated at 12.2 above.
Schedule Forecasts
Schedule forecasts are estimates of project’s future based on the work and
schedule performance information generated during the schedule control
process. Forecasts are updated and reissued.
Prominent among these updates are the schedule baseline, cost baseline
and schedule management plan.
Project Document Updates:
Prominent among these updates are the:
• Schedule data: Project schedule network diagrams are revised to

display approved balance schedule duration and approved revisions to
the schedule. If the schedule delays are very severe, it may be necessary
to issue new target schedule with realistic dates for directing the work
and measuring the performance and progress.
• Project schedule: Updated project schedule on the basis of updated

schedule model will be generated and issued to reflect the changes and
manage the project.
• Risk register: Risk register is updated to include the risks and risk
responses added due to schedule compression, fast tracking etc.
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Organizational Process Updates:
Organizational process assets that may updated include but are not limited
to:
• Causes of variances
• Corrective actions and the justification for the same
• Other types of lessons learned from the schedule control.
12.5 Communications Control
Communications control refers to the process of monitoring and controlling

communications throughout the entire project life cycle to ensure the
information need of the project stakeholders are met. The communications
control process will ensure that an optimal information flow among all
communication participant, at any moment in time.
The communications control process may trigger an iteration of the

communication planning and management process and/or manage the
communications process. Such iteration illustrates the continuous nature of
the project communications management process. Specific communication
elements, such as issues or key performance indicators (e.g., actual vs.
planned schedule, cost, and quality), may trigger an immediate revision,
while others may not. The impact and repercussions of project
communications should be carefully evaluated and controlled to ensure
that the right message is delivered to the right stakeholders at the right
time.
12.5.1 Inputs (Basis) for Communications Control
The major important documents/plans/information that formulates the

basis for communications control are elaborated below:
Project Management Plan
The project management plan describes how the project will be executed,
monitored, controlled, and closed. It provides valuable information for the
communications control process such as, but not limited to:
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• Stakeholder communication requirement,
• Reason for the distribution of the information,
• Timeframe and frequency for the distribution of required information,
• Individuals or group responsible for the communication of the

information, and
• Individuals or group receiving the information.
Project Communications
Project communications come from multiple source and may vary

significantly in their format, level of detail, degree of formality and
confidentiality. Project communications may include but are not limited to:
• Deliverables status,
• Schedule progress, and
• Costs incurred.
Issue Log (Record)
An issue log is used to document and monitor the resolutions of issue. It

may be used to facilitate communication and ensure a common
understanding of issues. A written log documents and helps to monitor who
is responsible for resolving specific issue by which date. Issue resolution
addresses obstacles that can block the team from achieving goals. This
information is important to the Communications Control process as it
provides both a repository for what has already happened in project and
platform for subsequent communications to be delivered.
Work Performance Data
Work performance data organizes and summarizes the information

gathered, and presents the result of comparative analysis to the
performance measurement baseline.
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Organization’s Process Assets
The organization’s Process Assets that may influence the control

communications process include, but are not limited to:
• Report templates,
• Policies, standards, and procedure that defines communications,
• Specific communication technology available,
• Allowed communications media, and
• Security and secrecy requirement.
12.5.2 Tools and Techniques for Communications Control
Information management system provides a set of standard tools for the

project manager to capture, store, and distribute to stakeholders about the
project’s performance. Some software packages allow the project manager
to consolidate report from several systems and facilitate report
distributions to the project stakeholders. Examples of distribution formats
may include table reporting spreadsheet analysis, and presentations.
Graphic representations can be used to create visual representations of
project performance information. Few of the common widely used
techniques are elaborated below:
Expert Judgment
Expert judgment is often relied upon by the project team to assess the
impact of the project communications, need for action or intervention,
action that should be taken, responsibility for taking such actions, and the
timeframe for taking actions. Expert judgment may need to be applied to
technique and/or management details and may be provided by any group
or individuals with specialized knowledge or training, such as:
• Expertise at other units within the organizations,

• Consultants,
• Stakeholders, including customers or sponsors,
• Professional and technical associations, and
• Subject matter expert
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The project manager, in collaboration with the project team, then

determines the actions required to ensure that the right message is
communicated to the right stakeholders at the right time.
Meetings
The communications control process requires discussions with the project

team to determine the most appropriate way to update and communicate
project performance, and to respond to request from stakeholders for
information. These discussions and dialogues are commonly facilitated
through meetings, which may be conducted face-to-face or online and in
different locations, such as the project’s site or the client’s site. Project
meeting also include discussions and dialogue with suppliers, vendors and
other project stakeholders.
12.5.3 Outputs of Communications Control
Work performance information organizes and summarizes the performance

data gathered. This performance data typically provides status and
progress information on the level of detail required by the various
stakeholders. This information is then communicated to the appropriate
stakeholders.
Change Requests
The Communications Control process often result in the need for

adjustment, actions, and intervention. As a result, change request will be
gathered as an output. These change requests are processed through the
integrated Change Control process and may result in:
• New or revised cost estimate, activity sequences, schedule dates

resource requirements, and analysis of risk response alternatives,
• Adjustment to project management plan and document,
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• Recommendations of corrective actions that may bring the expected

feature performance of the project back in line with the project
management plan, and
• Recommendations of preventive actions that may reduce the probability

plan of incurring future negative project performance.
Communications Control process may trigger update to the

communications management plan as well as other components of the
project management plan (e.g., stakeholder and human resource
management plans).
Project Documents Updates
Project documents may need to be updated as a result of the

Communications Control process. These may include, but not limited to:
• Forecasts,
• Performance reports, and
• Issue log.
Organizational Process Assets Updates
The organizational process assets that may be updated include, but are not
limited to, report formats and lessons learned documentation. This
documentation may become part of the historical database for this project
and may include the causes, reasons behind the corrective action chosen,
and other types of lessons learned during the project.
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12.6 Controlling the risks
Controlling the risks is the process of implementing risk responses plans,

tracking unidentified risks, monitoring residual risks, identifying new risks,
and evaluating risk process effectiveness throughout the project. The key
advantage of this process is that it improves efficiency of the risk approach
throughout the project life cycle to continuously optimize risk components.
Planned risk responses that are included in the risk register are executed
during the life cycle of the project, but the project work should be
continuously monitored for new, changing, and outdated risks.
Risk controlling process apply the techniques, such as variance and trend
analysis, which require the use of performance information generated
during project execution. Other purposes of the Control Risks process are
to decide whether:
• Project assumptions are still valid,
• Analysis shows an assessed risk has changed or can be retired,
• Risk management policies and procedures are being followed, and
• Contingency reserves for cost or schedule need to be modified in

alignment with the current risk assessment.
Risk Control can involve choosing alternative strategies, executing a

contingency or fallback plan, taking corrective action, and modifying the
project management plan. The risk response owner reports periodically to
the project manager the effectiveness of the plan, any unanticipated
effects, and any correction needed to handle the risk appropriately. Risks
Control also includes updating the organizational process assets, including
project lessons learned databases and risk management templates, for the
benefit of future projects.
12.6.1 Inputs (Basis) for Risk Control
The major important documents/plans/information that forms the

foundation for risk control process are elaborated below:
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The project management plan, which includes the risk management plan,
provides guidance for risk monitoring and controlling.
Risk Register
The risk register has key inputs that include identified risks and risk
owners, agreed-upon risk responses, control actions for assessing the
effectiveness of response plans, risk responses, specific implementation
actions, symptoms and warning signs of risk, residual and secondary risks,
a watch list of low-priority risks, and the time and cost contingency
reserves. The watch list is within the risk register and provides a list of low-
priority risks.
Work performance data related to various performance results possibly

impacted by risks includes, but is not limited to:
• Deliverable status,
• Schedule progress, and
• Costs incurred.
Work Performance Reports
Work performance report take information from performance

measurements and analyze it to provide project work performance
information including variance analysis, earned value data, and forecasting
data. These data points could be impacted in controlling performance
related risks.
12.6.2 Tools and Techniques for the Risk Control
Amongst the various tools and techniques used for controlling the risks,
following are the widely used ones. The selection/choice for a particular
project shall depend upon the nature, complexity and budget of the
project.
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12.6.2.1 Risk Reassessment
Control Risks often results in identification of new risks, reassessment of

current risks, and the closing of risks that are outdated. Project risk
assessment should be regularly scheduled. The frequency of assessment
depends on how the project progresses relative to its objectives.
12.6.2.2 Risk Audits
Risk audits examine and document the effectiveness of risk responses in

dealing with identified risks and their root causes as well as the
effectiveness of the risk management process. The process manager is
responsible for ensuring that risk audits are performed at an appropriate
frequency, as defined in the project’s risk management plan. Risk audits
may be included during routine project review meetings, or the team may
choose to hold separate risk audit meetings. The format for the audit and
its objectives should be clearly defined before the audit is conducted.
12.6.2.3 Variance and Trend Analysis
Many control processes employ variance analysis to compare the planned

results to the actual results. For the purpose of the controlling risks, trends
in the project’s execution should be reviewed using performance
information. Earned values analysis and other methods of project variance
and trend analysis may be used for monitoring overall project performance.
Outcomes of the analysis may forecast potential deviation of the project at
completion from cost and schedule targets. Deviation from the baseline
plan may indicate the potential impact of threats or opportunities.
12.6.2.4 Technical Performance Measurement
Technical Performance measurement compares technical accomplishment

during project execution to the schedule of technical achievement. It
requires the definition of objective, quantifiable measure of technical
performance, which can be used to compare actual results against targets.
Such technical performance measures may include weight, transaction
times, number of delivered defects, strength, capacity, etc. Deviations such
as demonstrating more or less functionality than planned at a milestone,
can help to forecast the degree of success in achieving the project’s scope.
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12.6.2.5 Reserve Analysis
Amount execution of the project, some risks may occur with positive or
negative impacts on budget or schedule contingency reserves. Reserve
analysis compares the amount of the contingency reserves remaining to
the amount risk remaining at any time in the project in order to determine
if remaining reserve is adequate.
12.6.2.6 Meetings
Project risk management should be an agenda item at periodic status

meeting. The amount of time required for that item will vary, depending
upon the risks that have been identified, their priority, and the difficulty of
response. The more often risk management is practiced, the easier it
becomes. Frequent discussions about risk make it more likely that people
will identify risks and opportunities.
12.6.3 Outputs of Risk Control Process
Work performance information, such as a Control Risks output, provides a

mechanism to communicate and support project decision-making.
Change Requests
Implementing contingency plans or workarounds sometimes results in

change requests. Change requests are prepared and presented to the
integrated change control process. Change requests can include
recommended corrective and preventive actions as well.
• Recommended corrective actions. These are activities that realign the

performance of the project work with the project management plan. They
include contingency plans and workarounds. The latter are responses
that were not initially planned, but are required to deal with emerging
risks that were previously unidentified passively.
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• Recommended preventive actions. These are activities which ensure

that future performance of the project work is aligned with the project
management plan.
In case the approved change requests have an effect on the risk

management processes, the corresponding component documents of the
project management plan are revised and reissued to reflect the approved
changes. The elements of the project management plan that may be
updated are the same as those in the Plan Risk Response process.
Project Documents Updates
Risk register is the major project document which will need updating with
reference to:
• Outcomes of risk assessments, risk audits and periodic review.
• Actual outcomes of the project’s risks and of the risk responses.
Organizational Process Assets Updates
The risk management processes produce information that may be used for
future projects and should be captured in the process assets. The
organizational process assets that may be updated include but not limited
to:
• Templates for the risk management plan including the probability and
impact matrix and risk register
• Risk breakdown structures
• Lessons learned from the project risk management activities
These documents shall be updated as needed and at project closure. Final

versions of the risk register and risk management plan templates,
checklists and risk breakdown structure are included.
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12.7 Cost control
Cost control is the most important control element of the project

management since it is directly impacting the business strategies and profit
margins of the organization. Also the stakeholders involved have the
conflicting interest. The production manager may be interested in meeting
the schedules whereas the quality control manager may be insist for the
quality throughout the project cycle. Above all the finance controller may
look at the cost control.
But the objective of the project is common for all that is “achieve the
project goal in terms of QCD, i.e., quality, cost and delivery.”
Considering this objective, each stakeholder must accept and agree that
strict cost control is necessary at all stages, for all aspects of the project
management and through all phases of project. Each stakeholder must
strive to strike the balance between the three important elements (QCD) to
ensure that finally the cost control is achieved as per the plan.
Cost control procedure process refers to monitoring status of the project in

order to update the costs and managing the changes to the cost baseline.
Cost control will provide the means to identify the variances against the
plan and take necessary corrective and/or preventive actions. For updating
the costs/budgets, one must have the information about the actual cost
expenditure.
Monitoring and controlling the expenses that do not relate to any

completion of the project work is key to effective cost control since
such expenses will not add any value to the project. Analyzing the
consumption of project funds and establishing the relationship between the
funds consumed and physical work accomplished is a critical task and must
be done by the experts. The final objective of cost control is to manage the
approved cost baseline and the changes to that baseline. Following are the
main activities/achievements expected from the cost control process:
• Influencing the factors that cause changes to the authorized cost

baseline.
• Ensure that all change requests are attended without any delay
• Managing the actual changes as and when they occur.
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• Ensuring that the cost expenditure do not exceed authorized funding by

period, by work completion and in total for the project.
• Monitoring cost performance to understand the variances.
• Preventing inclusion of unapproved changes in the reported costs and

resources usage.
• Informing all stakeholders about the approved changes and associated

costs.
• Bringing expected cost overruns within acceptable limits.
12.7.1 Inputs (Basis) for Cost Control
Following are the basic inputs required to exercise the efficient and
effective cost control.
• Project management plan: Cost baseline and cost management plan

are the important elements of project management plan which are useful
for cost control.
• Project funding requirements: These will information about the

projected funding requirements and anticipated liabilities.
• Work performance data: The data will include actual start and finish,
duration, completion status of deliverables and the costs incurred.
• Organizational process assets: The organizational process assets that
can influence the cost control process include but are not limited to
➡ Existing formal and informal cost control related policies, procedures

and guidelines
➡ Cost control tools and
➡ Monitoring and reporting methods to be used.
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12.7.2 Tools and Techniques for Cost Control
EVM, Forecasting, TCPI and Performance reviews are the widely used
techniques for controlling the project cost. All of them need not be applied
to all the projects. The selection/ choice will be decided by the complexity,
nature of the project and expertise available.
12.7.2.1 Earned Value Management
Earned value management (EVM) is a very versatile methodology that

combines scope, schedule and resource measurements. It integrates the
scope baseline with the cost baseline along with the schedule baseline to
form the integrated performance baseline. The performance measurement
data obtained from the EVM is then used to assess and measure the
performance and progress of the project. The principles of EVM can be
applied to all projects irrespective of the type of Industry.
Figure 12.1: Earned Value, Planned Value and Actual Costs
EVM develops and monitors three key variables (dimensions) for each work
package of the project and control account for each of them. (Refer Figure
12.1 and Table 12.1). The three variables are
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• Planned Value: Planned value is the authorized budget assigned to

scheduled work. This doesn’t include the management reserve. The PV is
allocated by phase over the entire project span. PV also sometimes
referred to as PMB, i.e., performance measurement baseline. The total
value of the project is referred to as BAC, i.e., Budget at completion.
• Earned Value: Earned value is measurement of work completed at any

point of time in terms of the authorized budget for the amount of work
that is completed. At any point of time, EV can’t be more than PV of that
component. EV is used to measure the % completion of a WBS element,
work package or the complete project at any point of time. Project
managers monitor EV both incrementally to decide current status and
cumulatively to decide indicate long-term process trend.
• Actual Cost: Actual cost is the total cost incurred in accomplishing work
measured for an activity to calculate EV. The AC may be defined as the
direct costs only or total cost including indirect costs also. There is no
upper limit for AC.
EVM also monitors the variances with reference to the approved

baselines and performance index are calculated for the cost and
schedule. The variances and performance index are explained in the
subsequent paragraphs.
• Schedule Variance: Schedule variance (SV) is the difference between

the PV and SV. It is the measurement of the schedule performance. It
will indicate whether the project is ahead of the schedule, behind the
schedule or exactly running on schedule. The EVM schedule variance will
be ultimately zero at completion of the project since all planned activities
shall be earned. For details, please refer Table 12.1 at Annexure 12.1.
• Cost Variance: Cost variance (CV) is the difference between the EV and
AC. It is the measurement of the cost performance. It will indicate
whether the project budget is a deficit or surplus at any given point (data
date). The EVM cost variance can be positive or negative at completion of
the project. The positive variance will indicate that there is surplus
budget whereas negative budget will indicate the deficit that is difficult to
recover. For details, please refer Table 12.1 at Annexure 12.1.
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The SV and CV are then converted to the efficiency indicators to reflect the
cost and schedule performance of any project and compare the
performance of different projects.
• Schedule Performance Index (SPI): SPI is defined as ratio EV/ PV. It

measures how efficiently the project team is utilizing the allocated time.
An SPI value less than 1 indicates that less work is completed than the
plan whereas SPI greater than 1 will indicate that more work than plan is
completed and there is possibility that the project can be completed
ahead of schedule. For details, refer Table 12.1 at Annexure 12.1.
• Cost Performance Index (CPI): CPI is defined as ratio EV/AC. This is

the most critical EVM measurement that it measures how efficiently the
project team is utilizing the allocated resources and funds. CPI value less
than 1 indicates cost overruns (extra expenses) for the work completed
whereas CPI greater than 1 will indicates the cost underrun (savings) for
the work completed and there is possibility that the project can be
completed with additional profit margins. For details, refer Table 12.1 at
Annexure 12.1.
12.7.2.2 Forecasting
As the project progresses, the estimate at completion (EAC) may be

required to project for many reasons. The EAC may differ from the BAC
(budget at completion). For forecasting, the EAC projections of conditions
and events in the project are done on the basis of current performance of
the project and work performance data available. The project’s past
performance data and any information that could impact the project in
future is also used for the forecasting.
EAC typically are the actual cost till that point of time (data date) plus the
estimated cost to complete the balance work (ETC). Based on the
experience till data date, the ETC is predicted by the project team. The
simplest method to calculate is the manual bottom-up summation. For
bottom-up summation, the ETCs are built on the basis of actual cost
incurred and the experience of the project team till the data date about
project performance. EAC = AC + BOTTOM-UP ETC.
EVM data can provide many statistical EACs. Three of them are very
common and are described below:
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• EAC forecast for the ETC at budgeted rate: In this case, it is

assumed that ETC will be completed at budgeted rate. In case the actual
performance is not favorable, the assumption that future performance
will improve must be supported by the risk analysis. EAC = AC + (BAC –
EV)
• EAC forecast for the ETC work performed at the present CPI: In
this case, EAC is calculated on the assumption that current trend of
project performance will continue. EAC = BAC/CPI
• EAC forecast for the ETC work considering both SPI and CPI factors: This
method is useful in case where project schedule is factor impacting ETC.
The weightage for the SPI and CPI is decided by the project manager to
take care of the variations. EAC = AC + ((BAC – EV)/ (CPI * SPI))
For better understanding and explanation, refer the Table 12.1 at Annexure
12.
Any of the approach used will provide an “early warning” if the EAC is not
within the acceptable tolerance.
12.7.2.3 To Complete Performance Index (TCPI)
The To Complete Performance Index (TCPI) is a measure of the cost

performance required to be achieved with the remaining resources in order
to meet specified organizational goal. It is expressed as the ratio of the
cost to finish the balance work to the balance budget. In case it is obvious
that the BAC is not viable, the EAC should be considered as BAC with
approval to calculate the TCPI with the equation
TCPI = (BAC – EV)/(BAC – AC)

— In this case, BAC is revised and replaced with EAC value. Refer Figure
If the cumulative CPI falls below the baseline as indicated in the Figure
12.2, all the future project work will have to be performed immediately in
the range of TCPI, as reflected in the topline to stay within the authorized
BAC. Whether this level of performance is achievable is a judgment call
based on number of considerations including risk, schedule, and technical
performance.
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Figure 12.2: To Complete Performance Index
12.7.2.4 Performance Reviews
Performance reviews measure, compare the cost performance against time

and schedule activities or work packages over/under running the budget
and estimated funds needed to complete the work-in-progress. With the
help of EVM, following information is obtained:
Variance Analysis: The cost and schedule variance are explained in detail
at 12.7.2.1 above.
Trend Analysis: Trend analysis will assess the project performance

against the time to indicate whether performance is improving or
deteriorating. Graphical representations are better for easy understanding
and rescheduling the future performance goals in the form of BAC versus
EAC and project completion.
Earned Value Performance: Earned value performance compares the

performance measurement baseline to actual schedule and cost
performance.
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12.7.3 Outputs of Cost Control
The cost control output shall be as follows:
• Work performance information: The calculated CV, SV, CPI, SPI, TCPI
and VAC values for the work packages are documented and
communicated to the stakeholders.
• Cost forecasts: Calculated EAC value or bottom-up EAC value is

documented and communicated to stakeholders.
• Change requests:
• Project management plan updates: Cost baseline and cost

management plan are the major elements that need updating.
• Project document Updates: Cost estimates and basis of estimates are

the prime updated documents in addition to the others.
• Organizational process Assets Updates: These will include but will

not be limited to:
➡ Causes of variances
➡ Corrective action chosen with justification
➡ Financial database
➡ Lessons learned from cost control.
12.8 Quality Control
Quality control refers to the process that monitors and records the result of
quality activities to assess performance and recommend changes for
improvement. Strong and effective means and measure provided by the
quality assurance system will yield accurate and consistent quality control
results. The major objectives of the quality control process are:
1. Identifying the poor process or product quality and recommending and/

or taking action to eliminate them.
2. Validating that project deliverables and work meet the requirements

specified by key stakeholders necessary for final acceptance.
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3. Record the information and data generated by the execution of quality

control activities.
12.8.1 Inputs for Quality Process
Following documents, data, information procedures build the foundation of

basis/inputs required for the quality control process,
• Project Management Plan
The project management plan contains the quality management plan,

which is used to control quality. The quality management plan describes
how quality control will be performed within the project.
• Quality Metrics
A quality metric describes a project or product attribute and how it will

be measured. Some examples of quality include: functional
requirements, average time required for assembly, and maximum
allowable size for transportation.
• Quality Checklists
Quality checklists are structured lists that help to verify that the work of
the project and its deliverables fulfill a set of requirements and decide
about the final acceptance/rejection/repairs.
• Work Performance Data
Work performance data can include:
➡ Planned vs. actual technical performance,

➡ Planned vs. actual schedule performance, and
➡ Planned vs. actual cost performance.
• Approved Change Requests
As part of the Integrated Change Control process, a change log update

indicates that some changes are approved and some are not. Approved
change request may include modifications such as defects repairs,
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revised work methods, and revised schedule. The timely implementation

of approved changes needs to be verified.
• Deliverables
A deliverable is any unique and verifiable product, result, or capability

that results in a validated deliverable required by the product.
• Project Documents
Project documents may include but are not limited to:
➡ Agreements,
➡ Quality control and change logs supported with corrective action
plans,
➡ Training plans and assessments of effectiveness, and
➡ Process documentation such as those obtained using either the seven
basic quality tools or the quality management and control tools.
• Organizational Process Assets
The organizational process assets that influence the Control Quality

process include, but are not limited to:
➡ The organization’s quality standards and policies,

➡ Standard work guidelines, and
➡ Issue and defect reporting procedures and communication policies.
12.8.2 Tools and Techniques Used for Quality Control
Number of quality control tools and methods are available. Widely used of
them are described in the following paragraphs. The selection/choice of
techniques/methods will be decided by the nature of output processes/
products/deliverables of the project and the inspection standards specified
by the customer; if any.
12.8.2.1 Seven Basic Quality Control Tools
The seven basic quality tools that are used for different aspects of quality
control include:
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• Cause and Effect Diagrams

• Flowcharts
• Checklists
• Pareto Diagrams
• Histograms
• Control Charts
• Scatter Diagrams
These may be used to analyze the results of control activities and identify
the reasons of rejection/non-compliances, check whether the process is
under control and suggest the corrective actions. Special training are
essential to select and apply the correct tool. The trained quality control
personnel can ensure the effective and efficient use of the tools to improve
the reliability of the quality control process.
12.8.2.2 Statistical Sampling
Various standards and sampling methods are available. The most suitable
plan is specified in the quality management plan, checklist, drawings,
technical specifications etc. Samples are selected and tested as defined in
the quality management plan.
12.8.2.3 Inspection
An inspection is the examination of a work product to determine if it

conforms to documented standards. The results of an inspection generally
include measurement and may be conducted at any level. For example, the
results of a single activity can be inspected, or the final product of the
project can be inspected. Inspections may be called reviews, peer reviews,
audits, or walkthrough. In some application areas, these terms have
narrow and specific meanings. Inspections also are used to validate defect
repairs.
12.8.2.4 Approved Change Request Review
All approved change requests should be reviewed to verify that they were
implemented as approved.
12.8.3 Outputs of Quality Control Process
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Quality control is the process which delivers outputs in the form of physical
deliverables, products in addition to the measurements, results etc. The
major outputs of quality control process are described in the subsequent
paragraphs.
12.8.3.1 Quality Control Measurements
Quality control measurements are the documented results of control

quality activities. They should be captured in the format that was specified
through the Plan Quality Management process.
12.8.3.2 Validated Changes
Any changed or repaired items are inspected and will be either accepted or
rejected before notification of the decision is provided. Rejected items may
require rework.
12.8.3.3 Verified Deliverables
A goal of the Control Quality process is to determine the correctness of

deliverables. The results of performing the Control Quality process are
verified deliverables. Verified deliverables are an input to Validate Scope for
formalized acceptance.
12.8.3.4 Work Performance Information
Work performance information is the performance data collected from

various controlling processes, analyzed in context and integrated based on
relationships across areas. Examples include information about the project
requirements fulfillment such as causes of rejections, rework required, or
the need for process adjustments.
12.8.3.5 Change Requests
If the recommended corrective or preventive actions or a defect repair

requires a change to the project management plan, a change request
should be initiated in accordance with the defined Integrated Change
Control process.
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Elements of the project management plan that may be updated include,

• Quality management plan, and

• Process improvement plan.
12.8.3.7 Project Documents Updates
Project documents that may be updated include, but are not limited to,
• Quality standards;
• Agreements;
• Quality audit reports and change logs supported with corrective action
plans;
• Training plans and assessments of effectiveness; and
• Process documentations, such as information obtained using the seven
basic quality tools or the quality management and control tools.
12.8.3.8 Organization Process Assets Updates
Elements of the organizational process assets that may be updated include,

• Completed checklists: When checklists are used, the completed

checklists become part of the documents and organizational process
assets.
• Lessons learned documentation: The causes of variance, the

reasoning behind the corrective action chosen, and other types of lessons
learned from control quality are documented so they become part of the
historical database for both the project and the performing organization.
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12.9 Procurement control
Procurement control is the process of managing procurements relationship,

monitoring contract performance, and making changed and corrections to
contract as appropriate. This process ensures that both the supplier and
buyer’s (organization) performance meets procurement requirements
according to the terms of the legal agreement.
Both the buyer and supplier will administer the procurement for similar
purpose. Each is required to ensure that both parties meet their
contractual obligations and their own legal rights are protected. The legal
nature of the contractual relationship makes it imperative that the project
management team is aware of the legal implications of action taken when
controlling any procurement. On large projects with multiple providers, a
key aspect of contract administration is managing interface among the
various providers.
Due to varying organizational structures, organizations treat contract

administration as an administrative function separate from the project
organization. While a procurement administrator may be on the project
team, this individual typically reports to a supervisor from a different
department. This is usually true if the performing organization is also the
supplier of the project to an external customer.
Control procurements includes application of the appropriate project

management processes to the contractual relationship(s) and integrations
of the outputs from these processes into the overall management of the
project. This integration will often occur at multiple levels when there are
multiple suppliers and multiple products, services, or results involved. The
project management processes that are applied may include, but are not
limited to:
• Direct and Manage Project Work: To authorize the supplier’s work at

the appropriate time.
• Control Quality: To inspect any verify the adequacy of the supplier’s

product.
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• Integrated Change Control: To assure that changes are properly

approved and that all those with a need to know are aware of such
changes.
• Risk Control: To assure that risks are mitigated.
Procurement Control process also has a financial management component

that involves monitoring payments to the supplier. This ensures that
payment terms defined within the contract are met and that supplier
compensation is linked to supplier progress, as defined in the contract. One
of the principal concerns when making payments to suppliers is that there
is a close relationship of payments made to the work accomplished.
The Procurement control process review and documents how well a

supplier is performing or has performed based to the contract and
establishes corrective actions when needed. This performance review may
be used as a measure of the supplier’s competency for performing similar
work on the future projects. Similar evaluations are also carried out when
it is necessary to confirm that a supplier is not meeting the supplier’s
contractual obligations and when the buyer contemplates corrective
actions. Procurement Control includes capturing the necessary details for
managing any early terminations of the contracted work (for cause,
convenience, or default) in accordance with the termination clause of the
agreement. These details are used in the close procurements process to
terminate the agreement.
Agreement can be amended to any time prior to contract closure by mutual

consent, in accordance with the change control terms of the agreement.
Such amendments are typically captured in writing.
12.9.1 Inputs for Controlling the Procurements
Following are the basic inputs required to exercise the efficient and
effective procurement control.
The project management plan describes how the procurement processes

will be managed from developing procurement documentation through
contract closure.
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Procurement Documents
Procurement Documents contains complete supporting records for

administration of the procurement processes; this includes procurement
contract awards and the statement of work.
Agreement
Agreement is understanding between parties, including understanding of

the duties of each party.
Approved Change Request
Approved Change Request can include modification to the terms of the

contract, including the procurement statements of work, pricing, and
descriptions of the products, services or results to be provided. All
procurement-related changes are formally documented in writing and
approved before being implemented through the procurement control
process.
Work Performance Reports
Supplier performance-related documentation includes:
• Technical documents. Supplier developed technical documentation and

other deliverables information are provided in accordance with the terms
of the contract.
• Work performance information. The supplier’s performance reports

indicate which deliverables have been completed and which have not.
Work performance data includes
1. The extent to which quality standards are being satisfied,
2. The costs that have been incurred or committed, and
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3. Identification of the supplier invoices that have been paid. All data are
collected as part of project execution.
12.9.2 Tools and Techniques Used for Procurement Control
12.9.2.1 Contract Change Control System
A contract change control system defines the process by which can be

modified. It includes the paperwork, tracking systems, disputes resolution
procedures, and approval levels necessary for authorizing changes. The
contract change control system is integrated change control system.
12.9.2.2 Procurement Performance Reviews
A procurement reviews is a structured review of the supplier’s progress to

deliver project scope and quality, within cost and on schedule, as compared
to the contract. It can include a review of supplier-prepared documentation
and buyer inspections, as well as quality audits conducted during supplier’s
execution of the work. The objective of a performance review is to identify
performance successes or failures, progress with respect to the
procurement statement of work, and contract non-compliance, which allow
the buyer to quantify the supplier’s demonstrated ability or inability to
perform work. Such reviews may take place as a part of project status
reviews, which would include key suppliers.
12.9.2.3 Inspections and Audits
Inspections and audits required by the buyer and supported by the

supplier, as specified in the contract, can be conducted during execution of
the project to verify compliance in the supplier’s work process or
deliverables. If authorized by contract, some inspection and audit teams
can include buyer procurement personnel.
12.9.2.4 Performance Reporting
Work performance data and reports supplied by supplier are evaluated

against the agreement requirements. Work performance information from
this evaluation is then reported as appropriate. Performance reporting
provides management with information about how effectively the supplier
is achieving the contractual objectives.
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12.9.2.5 Payment Systems
Payment to the suppliers are typically processed by the accounts payable

system of the buyer after certification of satisfactory work by an authorized
person on the project team. All payments should be made and documented
in strict accordance with the terms of the contract.
12.9.2.6 Claims Administration
Contested changes and potential constructive changes are those requested

changes where the buyer and supplier cannot reach an agreement on
compensation for the change or cannot agree that change occurred. These
contested changes are variously called claims, disputes, or appeals. Claims
are documented processed, monitored, and managed throughout the
contract life cycle, usually in accordance with the terms of the contract. If
the parties themselves do not resolve the claim, it may have to be handled
in accordance with alternative dispute resolution (ADR) typically following
procedure established in the contract. Settlement of all claims and disputes
through negotiation is the perfect method.
12.9.2.7 Records Management System
A record Management System is used by the project manager to manage

contract and procurement documentation and records. It consist of a
specific set of processes, related control functions, and automation tools
that are consolidated and combined as a part of the project management
information system. The system contains a retrievable archive of contract
documents and correspondence.
12.9.3 Outputs of Procurement Control Process
The major procurement control output shall be as follows:
12.9.3.1 Work Performance Information
Work Performance Information provides a basis for identification of current

or potential to support claims or new procurements. By reporting on the
performance of a vendor, the organization increases knowledge of the
performance of the procurement, which support improved forecasting, risk
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management, and decision-making. Performance reports also assist in the

event when there is a dispute with the vendor.
Work Performance Information includes reporting compliance, which

provides procuring organizations a mechanism to track specific deliverables
expected and received from vendors. Contracts compliance reports support
improved communications with vendors so that potential issues are
addressed promptly to the satisfaction of all parties.
12.9.3.2 Change requests
Change requests to the project management plan, its subsidiary plan, and
other components, such as the cost baseline, and procurement plan, may
result from the Procurements Control Process. Change request are
processed for review and approval through the Integrated Change Control
Process.
Requested but unresolved changes can include direction provided by the

buyer or action taken by the supplier, which the other party consider a
constructive change to the contract. Since any of these constructive
changes may be disputed by one party and can lead to a claim against the
other party, such changes are uniquely identified and documents by project
correspondence.
Elements of the project management plan that may be updates include,

• Procurement Management Plan: It is updated to reflect any approved

change requests that affect Procurement Management, including impacts
to costs or schedules.
• Schedule Baseline: If there are slippages that impact overall project

performance, the schedule baseline may need to be updated to reflect
the current expectations.
• Cost Baseline: If there are changes that impact overall project costs,
the cost baseline may need to be updated to reflect the current
expectations.
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12.9.3.4 Project Documents Updates
Project Documents that may be updated include, but are not limited to,
Procurement documentation. Procurement documentation may include the
Procurement contract with all supporting schedules, requested unapproved
contract changes, and approved change requests. Procurement
documentation also includes any supplier-developed technical
documentation and other work performance information, such as
deliverables, supplier performance reports and warranties. Financial
documents including invoices and payment records, and the results of
contract-related inspections.
12.9.3.5 Organizational Process Assets Updates
Elements of the organizational process assets may be updates include, but

are not limited to:
• Correspondence. Contracts terms and conditions often require written

documents of certain aspects of buyer/supplier communication, such as
the need of warnings of unsatisfactory performance and requests for
contract changes or clarification. This can include the reported results of
buyer audits and inspections that indicate weaknesses the supplier needs
to correct. In addition to specific contract requirements for
documentation, a complete and accurate written record of all written and
oral contract communications, as well as actions made, are maintained
by both parties.
• Payments schedules and requests. All payments should be made in

accordance with the procurement contracts’ terms and conditions.
• Supplier performance evaluation documentations. Supplier

performance evaluation documentations is prepared by the buyer. Such
performance evaluation document the supplier’s ability to continue to
perform work on the current contract, indicate if the supplier can be
allowed to perform work on future projects, or rate how well the supplier
performing the project work. These documents may form the basis for
early termination of the supplier’s contract or determine how contract
penalties, fees, or incentives are administered. The results of these
performance evaluation can also be included in the appropriate qualified
supplier list.
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12.10 SUMMARY
• Project Control and Monitoring is the topmost priority aspect of the

project management throughout project life cycle since it will determine
the final fate of the project and can tell us corrective measures required
to ensure successful accomplishment of the project.
• The unique nature and inherent feature such as uncertainties and

dependencies emphasizes the need for tracking, reviewing and reporting
the progress of each activity to meet the performance objectives defined.
• Monitoring includes collecting, measuring and distributing performance

information.
• Control includes deciding on corrective/preventive actions and/or

replanning the follow-up actions in order to ensure that the action taken
are effective to resolve the performance issue addressed.
• Integrated change control is the process which ensures that all changes
are made with its consideration and impact for the overall project.
• The integrated change control approach shall benefit to ensure

documented changes within the project are considered in an integrated
fashion and the project risks are reduced and kept under control.
• Project scope control refers to the process of monitoring and managing

changes to the scope baseline with an objective of maintaining same
within the project management plan.
• The uncontrolled expansion to product or project scope without

adjustments to time, cost and resources is referred to as a scope creep.
• Project performance measurements are used to assess the magnitude of

variation from the original scope baseline.
• Schedule control refers to the process of monitoring the status of the

project activities in order to update the progress and manage the
changes to the schedule baseline for achieving the plan.
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• Schedule control will help to identify the deviations from the plan and
take necessary corrective and/or preventive actions in order to minimize
the risks.
• Communications control refers to the process of monitoring and

controlling communications throughout the entire project life cycle to
ensure that the information need of the project stakeholders are met.
• The communications control process will ensure that an optimal

information flow among all communication participants, at any moment
in time.
• Controlling the risks is the process of implementing risk responses plans,

tracking unidentified risks, monitoring residual risks, identifying new
risks, and evaluating risk process effectiveness throughout the project.
• The key advantage of risk control process is that it improves efficiency of

the risk approach throughout the project life cycle to continuously
optimize risk components.
• Cost control is the most important control element of the project

management since it is directly impacting the business strategies and
profit margins of the organization.
• With the common project objective of the project that is to “achieve the
project goal in terms of QCD, i.e., quality, cost and delivery.” Each
stakeholder must accept and agree that strict cost control is necessary at
all stages, for all aspects of the project management and through all
phases of project.
• Monitoring and controlling the expenses that do not relate to any

completion of the project work is key to effective cost control since such
expenses will not add any value to the project.
• Analyzing the consumption of project funds and establishing the

relationship between the funds consumed and physical work
accomplished is a critical task and must be done by the experts.
• The final objective of cost control is to manage the approved cost

baseline and the changes to that baseline.
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• Quality control refers to the process that monitors and records the result
of quality activities to assess performance and recommend changes for
improvement.
• Procurement control is the process of managing procurements

relationship, monitoring contract performance, and making changed and
corrections to contract as appropriate.
• Procurement controls process ensures that both the supplier and buyer’s
(organization) performance meets procurement requirements according
to the terms of the legal agreement.
• The Procurement control process reviews and documents how well a

supplier is performing or has performed based to the contract and
establishes corrective actions when needed.
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12.11 ACTIVITIES TO IMPLEMENT LEARNING and

ENHANCE UNDERSTANDING
1. Considering execution of a building construction project list down the

inputs required for:
a. Monitoring and control the project work

b. Procurement control and
c. Quality control
2. For the construction project, identify minimum 5 numbers of

communication outputs and prepare the change request for
communication with local government body to avoid delays of project
plan sanctions.
3. Simulate a project schedule with all necessary details and conduct a

EVM study to find:
a. Cost performance of the project

b. Schedule performance of the project
c. Calculate CPI, SPI and TCPI.
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1. Monitoring is an activity of project management; that is required to be

performed throughout the project cycle, which includes _______
a) collecting
b) measuring
a) distributing performance information
b) All of them
2. Which of them is not used to monitor & control the project work?
a) Expert judgement
b) Analytical techniques
c) policies
d) PMIS
3. The integrated change control approach shall benefit to ensure

fashion & the project risks are reduced & not kept under control
a) True
b) False
4. In addition to expertize of the project management team; the expertize

may be utilized from pool of stakeholders, consultants, professional &
technical associates, subject matter experts etc.
a) True
b) False
5. Which of these are the necessary inputs for efficient & effective scope
control?
a) Project management plan
b) Requirements documentation
c) Requirements Traceability matrix
d) All of them
Correct Answer:- (1) - d, (2) - c, (3) - b, (4) - a, (5) - d
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ANNEXURE 12.1
Table 12.1
Earned Value Analysis
Measurement Abbre- Definition Method of Use Equation Interpretation

Variable vation of Result
Planned Value PV Budget allocated

to the scheduled
work.
Earned Value EV The measure of Calculate the EV = Sum of

work performed planned value of the planned
expressed in all the work value of
terms of the completed completed
budget authorized (earned) to a work
for that work. point in time,
usually the data
date, without
reference to
actual costs.
Actual Cost AC The actual cost Add up actual

incurred for the cost of all work
work performed completed to a
on an activity point in time,
during a specific usually the data
time period. date.
Budget at BAC The sum of all Calculate the

Completion budgets value of total
established for the planned work, the
work to be project cost
performed. baseline.
Cost Variance CV The amount of Calculate the CV = EV– AC Positive = Under

budget deficit or difference planned cost.
surplus at a given between the value Zero = On
point in time, of work planned cost
express as the completed to a Negative = Over
difference point in time, planned cost
between the usually the data
earned value and date, and the
the actual cost. actual cost to the
same point in
time.
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Schedule SV The amount by Calculate the SV = EV– PV Positive = Ahead

Variance which the project difference of schedule
is ahead or behind between the of Zero = On
the planned work completed schedule
delivery date, at a to a point in time, Negative =
given point in usually the data Behind schedule.
time, expressed date, and the
as the difference work planned to
between the be completed to
earned value and the same point in
the planned value. time.
Variance at VAC A Projection of the The estimate VAC = BAC– Positive = Under
Completion amount of budget difference in cost EAC planned cost.
deficit or surplus at the completion Zero = On
expressed as the of the project. planned cost
difference Negative = Over
between the planned cost
budget at
completion and
the estimate at
completion.
Cost CPI A measure of the A CPI of 1, means CPI = EV/AC >1 = Under
Performance cost efficiency of that the project is planned cost
Index budgeted exactly on 1 = On planned
resources budget, that the cost <1 = Over
expressed as the work actually planned cost
ratio of earned done so far is
value to actual exactly the same
cost. as the work
planned to be
done so far. Other
values show the
percentage of
how much costs
are over or under
the budgeted
amount for work
planned.
Schedule SPI A measure of A SPI of 1.0 SPI = EV/PV >1= Ahead of

Performance schedule means that the schedule
Index efficiency project is exactly 1= On schedule
expressed as the on schedule, that <1= Behind
ratio of earned to the work actually schedule
planned value done so far is
exactly the same
as the work
planned to be
done so far. Other
values show the
percentage of
how much costs
are over or under
the budgeted
amount for work
planned.
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Estimate at EAC The expected total If CPI is expected EAC = BAC/CPI

Completion cost of completing to be the same
all work expressed for the reminder
as the sum of the of the project,
actual cost to date EAC can be
and the estimate calculated using:
to complete.
If future work will EAC = AC +
be accomplished BAC – EV
at the planned
rate, use:
If the initial plan EAC = AC +

is no longer valid, Bottom-up ETC
use:
If both the CPI EAC = AC +

and SPI influence ((BAC – EV)/
the remaining (CPI * SPI))
work from the
bottom-up, use:
Estimate to ETC The expected cost Assuming work is ETC = EAC –

Complete to finish all the proceeding on AC
remaining project plan; the cost of
work. completing the
remaining
authorized, work
can be calculated
using:
Re-estimate the ETC = Re-

remaining work estimate
from the bottom-
up.
To Complete TCPI A measure of the The efficiency that TCPI >1 = Harder to
Performance performance that must be = (BAC – EV)/ complete
Index must be achieved maintained in (BAC – AC) 1= completed.
with the order to complete <1= Easier to
remaining on plan. complete.
resources in order
to meet a
specified
management
goal, expressed as
the ratio of the
cost to finish the
outstanding work
to the budget
available.
The efficiency that TCPI >1 = Harder to

must be = (BAC – EV)/ complete
maintained in (EAC – AC) 1= Completed
order to complete <1= Easier to
the current EAC. complete
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
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CLOSING/HANDING OVER THE PROJECT
Chapter 13
Closing/Handing Over The Project
Objectives
Project management through all phases is carried out with an objective of

meeting the project objectives, produce the deliverables and accomplish
the project successfully. The accomplishment is not achieved till the final
phase of “project closing” is completed since as stated earlier all projects
are of “temporary” nature and are moving towards the logical end.
The closing of the project may not be always with successful

accomplishment of the project objectives and deliverables. Some projects
may have to be closed without accomplishing the project objectives due to
various reasons. The projects whether closed logically after achieving the
project objectives or without accomplishment the project objectives make
the team members/stakeholders to learn many lessons during its journey
through all the phases such as initiation, analysis, planning, budgeting,
execution and monitoring and control.
Our objective here is to assess and understand:
• The reasons for premature closing of the projects.
• How the closing of various projects under various conditions is completed

successfully.
• The activities carried out during the project closing phase.
• How the lessons learned are recorded and incorporated in the project
assets.
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Structure:
13.1 Purpose of Project Closing and Handing Over
13.2 Reasons for Premature Closing of the Projects and Lessons from
Such Projects
13.3 Categorization of Projects for Closing and Handing Over
13.4 Objectives of Project Closing
13.5 Scope of Activities for Project Closing and Handing Over
13.6 Executing Closure of the Project
13.7 Celebrating the Project Closure
13.8 Summary
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13.1 Purpose of project closing and handing over
It is important to ensure that a project is properly closed for two reasons.

First reason is that if not closed properly, there is a tendency for projects to
drift on and become, or develop into, other projects. The tendency for
projects to run on into the sand must be avoided. It leaves everyone
feeling dissatisfied and unrewarded for the work (often extra work) that
they have done. Often, nobody checks that all the project’s objectives have
been completed or exceeded. They may notice that the project is
underspent and spend the budget on something else or the project may
just drift into overexpenditure and then be considered an unsuccessful
project.
Second reason is that it is important to ensure that the work of the project
team is acknowledged with formal closing of the project and the
contractual/assignment requirement are fulfilled. Also the closing of a
project team is always accepting the charge/responsibility to the
operations team. With the formal closure procedure and announcement,
project manager can ensure release of the resources for the organization
to pursue/take up new endeavors.
Due to the strict monitoring and maintaining of the Project Definition and
the Project Plan, the project will not only be under control but may be
officially closed at the end. It is at the end of a project that we see the
benefits of tight control. The time and effort spent ensuring that any
extra work was specified, budgeted, resourced and fully authorized
will be rewarded by an ‘on-time-on-budget’ project report. Similarly,
the voices of dissatisfaction can be dispelled (or at least reduced to silence)
when the project report reveals that the project delivered all that it was
defined to do, but not those elements that were authorized to be removed
from the project so that it could deliver its product/service/result by a
defined date.
It is very essential that the lessons to be learned from the project are
formally investigated and recorded for use on the next project which will
improve the project performance efficiency and benefit the organization in
future. This activity will be carried out only with the formal closing of the
project.
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13.2 Reasons for premature closing of the projects and

lessons from such projects
As mentioned above, there may be a situation/reason that will compel the

organization for the premature closure of the project. The typical reasons
for such premature closing includes:
• Need of the project is no more valid (For example: A product

development project is discontinued since the product has become
redundant due to a more advanced product)
• Project cancelled by the indenting organisation
• Change in statutory/legal policies (For example: Special economic

zone (SEZ) is withdrawn by the government)
• Project is not commercially viable (For example: a five star hotel

building in progress was decided to keep on hold because the ROI in a
changed scenario)
• Project is stuck and not progressing because of disputes.
The projects for which outcome is achieved are successful. But if it is

forecasted that the outcome cannot be achieved to an acceptable quality,
there is little point in continuing to expend resource on it.
Even if the end outcome cannot be achieved, formal closure of the project
is necessary since the project can still be a success if it shows why the
outcome cannot be achieved or, that the outcome cannot be achieved in
the way that the project was attempting to achieve it. It is also a success if
the lessons learned along the way enable others to avoid similar pitfalls or
mistakes.
The success of such a project is more dependent on the quality of

knowledge management and dissemination than on final outcome or
product. If such a project achieves the desired outcome that it was testing,
then that is a bonus.
Such projects require particular attention and focus on the learning

aspect. When things go wrong, there is a natural tendency to focus
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on why. When things go well, there is less of an imperative to

identify and record why it is going well.
The lessons learned report is important for such project since in spite
following the scientific approach for the project something has gone wrong.
It is necessary to identify the things; that has gone wrong. A ‘Lessons
Learned’ report shall gather all information that may be useful to other
projects. It documents what went well and what went badly and why. It
describes methods used to estimate, to plan, to manage and to control the
project and how effective/efficient they were. It contains any
recommendations for future projects to either take up, or avoid, ways of
working and should contain some measurement of how much effort was
required to produce the various products or process changes.
13.3 Categorization of projects for closing and handing

over
By this time, we have well accepted the principle that each project is of
unique nature. Because of this unique nature, all the projects can’t be
handled with the same philosophy for closing. Each will need a different
treatment and philosophy for closing including a report on lessons learned.
Considering the requirement of different approach for each of the project,
the projects are normally categorized as follows for closing purpose.
13.3.1 Improvement Projects within the Organisation
These may be improvements of service/product improvement or a software

program sponsored by the organizations for their own use. The scope of
the project may be limited to decide, validate and implement the
improvement or only decide and validate the improvements. (For example:
Addition/mapping of a process in the project management module,
Improvement in the logistic services for material dispatches,
Improvements in the car engine to improve fuel efficiency etc.).
13.3.2 Improvement Projects for a Customer/Organization
Same as 13.3.1 above but the output of the projects shall not be for the
organizational use but shall be the deliverables to the customer. The
customer may be other organization with an NGO as sponsor. (For
355
example: Improvements in the cremation facility used by a XYZ village and

sponsored by a Rotary Club.)
13.3.3 Subproject of Larger Project taken up by the Organisation
In this case, the larger project is divided into number of smaller units and
each unit is executed as an independent project with an independent
project management team. (For example: If an organization has taken up
the project for the construction of a complete airport, the check-in facility,
construction of the air strips, control room, baggage handling system for all
terminals etc. can be the subprojects.)
13.3.4 Subproject of a Customer’s Larger Project
Same as 13.3.3 above but the project shall be subproject of the

customer’s larger projects. There may be many organizations that are
supplying various subprojects to the customer. (For example: Consider the
oil and gas exploration project of the ABC Oil Corporation in which ABC Oil
Corporation can allot the piping design, supply and erection to X company,
supply of gas compression facility to Y, Emergency flaring system to Z and
so on.
13.3.5 Larger Project taken up by the Organisation
Consider the airport facility or Oil and Gas exploration facility in above
examples. If this whole project is contracted to one organization with a
contractual requirement of closing the complete project in one go.
13.4 Objectives of project closing
While closing the project, manager shall review all prior information from
the previous phase closures and ensure that all project work is completed
to meet the project objectives. But project work completion is one aspect
for closure; it is necessary that all other related aspects are also
considered and the relevant actions are taken for closure of the project. In
order to achieve the effective project closure, project closure should be
done with focus on following objectives
• Satisfactory completion as per the project management plan to meet the

exit criteria is achieved.
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• The project team is ready in all respect to transfer/transferred the

projects product/ services or results to the next phase/project and/or to
production/operations.
• All the project records are collected, consolidated and compiled;
• Project performance, success or failure is audited with reference to cost,

schedule and scope.
• Lessons learned information is collected, consolidated and compiled.
• All project information including organizational process assets are

updated and archived.
• Report on customer satisfaction level with reference to the contractual

requirement is generated.
• The budget and resource requirements for the performance monitoring

during the warranty period are identified and approved; irrespective of
whether it is a contractual a requirement.
13.5 Scope of Activities for project closing and handing

over
Project manager’s role is very important in the project closure since the
interaction, co-ordination and actions in alignment with the project closing
objective by all the stakeholders are essential. In order to ensure that all
objectives as mentioned in 13.5 above are met, the project manager and
team has to take certain actions and ensure completion of the activities
that are listed below:
• Obtaining acceptance by the customer/end-user/sponsor to formally

close the project
• Conducting post-project or phase-end reviews
• Recording impacts of tailoring to any process
• Documenting lessons learned
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• Updating the organizational process assets
• Updating all project documents and archiving the same in the PMIS for
use as historical data
• Preparing the final documentation for customer as per the contractual

requirements
• Close out all procurement activities of all relevant agreements
• Perform team member’s assessment and release project resources
• Identify the co-ordination team with responsibility, risks during the

monitoring period and responses for the same including fallback plans
• Preparing final overall project performance report.
13.5.1Handing over the Products to Appropriate Interested Parties

and Acceptance by the Customer/End-user/Sponsor to Formally
Close the Project
The accepted deliverables, product acceptance and release documents

from Quality Control and the organizational process are the basic inputs for
this activity. (Refer Sample Checklist for project handover at Annexure
13.1). This checklist will be based on previous projects experience, it will
have certain unique check points as per type of project.
The agreed procedure between the organization and customer shall be

followed to execute the handing over.
The acceptance report in the standard organizational template signed and

accepted by the customers’ authorized representative shall be the output
documents and records
13.5.2 Conducting Post-project or Phase-end Reviews
The entire project’s work performance data, work performance information

and work performance review reports generated as per the project
management plan from time to time are the basic inputs for the post-
project reviews.
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Post-project reviews shall be conducted immediately after the acceptance

of project deliverables in case they are realized and the project objectives
are met.
In case the project objective realization is not evident, immediately the

post-project review can be conducted after a period agreed between the
organization and the customer.
In case of phase-end review, it should be conducted immediately after the

phase deliverables are accepted.
The post-project review conducted as per the organizational procedure

may generate some issues which should resolve with a time-bound plan
that is mutually agreed by both parties.
13.5.3 Recording Impacts of Tailoring to Any Process
This will be ensured through the integrated change control procedure by

raising the change requests and ensuring that the updated process is
archived.
13.5.4 Documenting Lessons Learned
Documenting the lessons learned is an inevitable aspect of every project

management process and shall be done as a routine practice through all
phases of the project. During the project closing phase, the consolidation,
compilation of these lessons learned must be done for easy understanding
tracking and use for future projects.
13.5.5 Updating the Organizational Process Assets
Updating the organizational process assets is also a routine practice for

each and every project management process and these are appeared as
the process outputs. During project closure, a check against the change
requests, revision records must be done to ensure that each and every
change requested whether verbal or written is recorded, attended and
implemented as per the review decision on the change requests. The
typical updates, if any, can be highlighted in the final project closing report.
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13.5.6 Updating All Project Documents and Archiving the Same in

the PMIS for Use as Historical Data
Updating the project documents is done as routine practice for each and
every project management process and these are appearing as the
updated project document outputs.
This applies to the entire range of project documents including drawings,

analysis reports, calculations, communications, approvals, technical
specifications, quality control reports, operating instructions, erection
commissioning procedures and so on. This also covers the entire range
documents received from the customer as project input specifications.
During project closure, a check against the change requests, revision

records must be done to ensure that each and every change requested
whether verbal or written is recorded, attended and implemented as per
the review decision on the change requests. After a thorough check and
approval, the updated project documents shall be uploaded in the PMIS
and the hard copies handed over as historical data to the concerned
authority.
The typical updates, if any, that may have impact on the deliverables in
future or can pose some risks shall be highlighted in the final project
closing report.
13.5.7 Preparing the Final Documentation for Customer as Per the

Contractual Requirements
This shall be done as per the contractual requirements and the customers’
intended needs for smooth trouble-free operation of the project in future.
The final documentation provided shall be legible and indexed for easy
accessibility and tracking. The sufficient number of copies as per the
requirement in both soft and hard form shall be provided. There will be a
check list with open points if any & Action plan with target date will be
prepared and signed by all stake holders.
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13.5.8 Close Out All Procurement Activities of All Relevant

Agreements
Closing of procurement shall be done as explained in Chapter 11, 11.8 with

a confirmation that all project objectives are achieved and the deliverables
are accepted. If necessary, all the pending procurement agreements shall
be cancelled as per agreed terms between the supplier and the
organization. Excess buying, if any, must be identified, recorded and
included in the final report with reasons and lessons learned to avoid the
same in future projects.
The excess material must appear in the stock register in order to ensure
that same used and consumed in the upcoming projects. At site , ensure
that returnable tools etc given to contractors are returned, Reconciliation
done and signed off with debit notes raised.
13.5.9 Perform Team Member’s Assessment and Release Project

Resources
This shall be done considering the roles and responsibilities of the team
member, the project management plan and the final deliverables required
from him/her. While doing the team members assessment, other inputs
such as the resources engaged, the risk faced, risk responses provided and
the approach for all these shall be considered.
As an output of the assessment the recommendation for release of the

resources, the engagement level needed for the project under closure must
be done. The noteworthy efforts of the team member along with the
weaknesses must be specified in the lessons learned. Site HR
representative & PM should ensure performance appraisal notes updated
for each team members including person on deputation for short duration.
13.5.10 Identify the Co-ordination Team with Responsibility, Risks

During the Monitoring Period and Responses for the Same
Including Fallback Plans
This activity must be done by the project manager in consultation with the
project team members and the business manager. In some cases, the
performance guarantee for agreed period may be the contractual
requirement.
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Irrespective whether it is a contractual requirement or not, it is necessary

that the project executed is kept under monitoring by the organization. It
is always preferred that for certain period, the project is under joint
supervision, operation and monitoring. During such period, the project
manufacturer/user can demonstrate the operation to the end-user/end
customer and monitor the performance against the project objectives. The
monitoring may not be necessarily at project location.
In order to do this, the project manager along with the project team
members shall identify:
• Team to monitor the project with roles, responsibility, communication and

reporting method with response time
• The scope of responsibility share between organization and customer
• Budget requirements
• Commercial terms with customer if this is not part of the contract
• Risks anticipated during such period and response plan for the same
• The monitoring period if not decided in the contract.
All the details above shall form the part of the final project report.
13.5.11 Preparing Final Overall Project Performance/Closure

Report
The final overall project performance/closure report shall be a summary of

the project executed supported by the statistical data and a guide for the
similar project execution in future with guidelines for the do’s and don’ts.
The final report shall consider and provide briefing on all project
management aspects including:
• Performance with reference to scope baseline
• Performance with reference to cost baseline
• Performance with reference to schedule baseline
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• Performance with reference to all resource requirements including human

resource
• Lessons learned
• Risk management performance
• Special achievements
• Team performance of the project team including customer relation

management
• Support from other organizational departments.
• Constraints within the organizational process assets.
(Refer the Sample Project Closure Report for an IT Project at Annexure

13.2 and a Sample Project Closure Template at Annexure 13.3.)
13.6 Executing Closure of the project
Executing closure of the project shall not be a tough task provided the
activities elaborated at 13.5.1 to 13.5.11 are carried with the focus on
objectives elaborated at 13.4. The standard project closing procedure from
the organizational process assets or the procedure agreed with the
customer that is part of the contractual requirements shall be followed.
The closure of projects under category 13.3.1 and 13.3.2 is easier as

compared to the others since the product is known; scope is limited;
revisions are obvious; risks and uncertainties involved are minimal; scope
of updating the documents is minimal and budgets are not expected to
vary to a large extent. Refer the chart provided at Annexure 13.4
indicating the level of relationship between the activities and the type of
project for guideline.
The closure of projects under category 13.3.3 will be complex as

compared to 13.3.1 and 13.3.2 since the scope will be more than an
improvement project, level of uncertainties and risk will be more. Other
factors such as listed below will have to be considered and shall have
impact on the project closure process.
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• Inputs from previous subproject in link,

• Progress and performance of previous project in link
• Outputs from the project under closure
• Acceptance of these outputs to the successor subproject in link
• Progress and performance of the successor project
• Organizational overall project performance requirement, priorities and
strategies for fund allocation.
Since all the subprojects are being executed by the same organization,
they may run in parallel or in sequence and the lead and lags may be
adjusted as per the overall project performance and hence the closure of a
particular may be postponed or proponed to align with the overall project
schedule variance.
The closure of project under category 13.3.4 shall be equally complex but
the individual project supplying organizations shall not have to bother
about the progress and performance of other projects and can insist for the
closure of the individual project that is supplied by the organization.
The closure of project under category 13.3.5 shall follow the approach
similar to 13.3.3, i.e., closing of the subprojects one by one and then
closing of the whole project. The closing of subprojects may be an internal
activity of the organization to follow the systematic approach and ensure
that the closure of total project is smooth and supported with closing of all
subprojects.
13.7 Celebrating the project closure
Celebration of the project closure event irrespective of “how the celebration

is?” is the most important part of the project management not only for the
project team members but for all the stakeholders, business organization
and the customer.
The event is expected to be celebrated in the presence of all project team

members, all stakeholders, customer, business and operations in-charge
and the project steering committee members. The project should have a
lead role in organizing and conducting the celebration. The agenda of
project celebration should cover:
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• Presentation on highlights of the project
• Presentation on the project performance on scope, schedule and cost
• Presentation on constraints and risk management
• Presentations on special achievements
• Presentations on lessons learned
• Unwinding and sharing experiences of the project team members
• If possible, the organization should share the commercial part of the

project including the profit margins
• Appreciation and rewards to the deserving project team members.
The project closure celebration event will:
• Formally announce the closure of the project with a message to the

customer.
• Create awareness amongst all stakeholders for closing all the budget
heads and stop additional expenses.
• Prompt all the stakeholders to release the resources engaged.
• Prompt the business marketing team to book another project.
• Boost the morale of the team members.
• Charge them with positive energy to take up new endeavor.
Thus project closing celebration event is successful closing of one

endeavor and opening of the other to continue the project
management for ever -------
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13.8 SUMMARY
• Project management through all phases is carried out with an objective

of meeting the project objectives, produce the deliverables and
accomplish the project successfully. The accomplishment is not achieved
till the final phase of “project closing” is completed since as stated earlier
all projects are of “temporary” nature and are moving towards the logical
end.
• Some projects may have to be closed without accomplishing the project

objectives due to various reasons. The projects whether closed logically
after achieving the project objectives or without accomplishment the
project objectives make the team members/stakeholders to learn many
lessons.
• If not closed properly, there is a tendency for projects to drift on and

become, or develop into, other projects. The tendency for projects to run
on into the sand must be avoided.
• Also the closing of a project team is always is always accepting the

charge/ responsibility to the operations team.
• The time and effort spent ensuring that any extra work was specified,
budgeted, resourced and fully authorized will be rewarded by an ‘on-
time-on-budget’ project report.
• The typical reasons for such premature closing includes:
➡ Need of the project is no more valid project cancelled by the indenting

organisation
➡ Change in statutory/legal policies
➡ Project is not commercially viable
➡ Project is stuck and not progressing because of disputes.
• Project closure should be done with focus on the following objectives:
➡ Satisfactory completion to meet the exit criteria is achieved.
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➡ Transfer the projects product/services or results to the next phase/
project and/or to production/operations.
➡ All the project records are collected, consolidated and compiled.
➡ Project performance, success or failure is audited with reference to

cost, schedule and scope.
➡ Lessons learned information is collected, consolidated and compiled.
➡ All project information including organizational process assets are

updated and archived.
➡ Report on customer satisfaction level with reference to the contractual

requirement is generated.
➡ The budget and resource requirements for the performance monitoring

during the warranty period are identified and approved.
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13.9 ACTIVITIES TO IMPLEMENT LEARNING and ENHANCE

UNDERSTANDING
1. Prepare a consolidated checklist for the handing over the units (flats) to
the customers.
2. Prepare the consolidated project closure report with reference to the

sample report provided at Annexure 13.3.
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13.10 EXERCISE
1. It is important to ensure that the work of the project team, is

acknowledged with _______ of the project & the contractual/
assignment requirement are fulfilled.
a) formal closing
b) informal closing
a) proper closing
b) precise closing
2. Which of these are the reasons of premature closing of the Projects?

a) Need of the Project is no more valid
b) Change in statutory/legal policies
c) Project is not commercially viable
d) All of them
3. The integrated change control approach shall benefit to ensure

fashion & the project risks are reduced & not kept under control
a) Satisfactory completion as per the project management plan to
meet the exit criteria is achieved.
b) The project team is ready in all respect to transfer/ transferred
the projects product/ services or results to the next phase/
project &/or to production/ operations.
c) Project performance, success or failure is not audited with
reference to cost, schedule & scope.
d) Both A & B
4. The entire project’s work performance data , work performance

information & work performance review reports generated as per the
project management plan from time to time are the basic inputs for the
post project reviews
a) True
b) False
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5. ______ the lessons learned is an inevitable aspect of every project

management process & shall be done, as a routine practice through all
phases of the project.
a) Saving
b) Documenting
c) Reading
d) Following
Correct Answer:- (1) - a, (2) - d, (3) - d, (4) - a, (5) - b
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ANNEXURE 13.1
Sample Checklist for Project Handover
Project Manager
• Have you agreed the circumstances of the handover and the reasons for
it taking place?
• Have you provided an overview of the project?
• Have you provided details of the software and hardware platforms?
• Have you arranged to hand over all project related mail and documents
on your shared or local drives, and other personal data areas?
Customer
• Have you provided the new PM with all relevant customer information?
• Identify Key Customers and their area of expertise/responsibility? (and

background)
• Have you provided a Customer Area Org Chart?
• Have you provided a list of Customer area contacts, including:
a. Names?
b. Addresses?
c. Phone numbers, Fax Numbers, Mobile and Pager, (home numbers, if

applicable)?
d. Preferred titles?
• Have you given the new PM an overview of ‘our’ perception of the

Customer Business? (including potential opportunities and conflicts)
• Have you personally introduced the new PM to the Key Customers?
371
Staff
Have you provided the following details about the team:
a. Names, roles and responsibilities, classification?

b. Key people, areas of expertise, any relevant background, etc.?
c. Status of Personal Development Reviews?
d. Training plan?
e. Team structure?
f. Contractors, companies, rates and renewal dates?
g. Any higher duties, leave, promotions, etc.?
• Have you briefed the new PM on all informal staff matters? (known
conflicts, personality clashes, potentials etc.)
• Have you personally introduced the new PM to all staff?
• Have you provided details about your Supervisor/Manager and the rest of
the management team?
• Have you provided details about any other key people you deal with?
Financials
• Have you provided details of the Service Agreements?
a. The Labor component and how it was calculated?
b. The Processing component for Development and how it was

calculated?
c. The Processing component for Production and how it was calculated?
• Have the Service Agreements been signed?
• Have you provided the budget details for the current year?
• Have you provided the budget bid for the next year?
• Have you got released project specific Bank Guarantees ?
372
Reporting
Have you documented the reporting mechanisms used:
a. From the staff to you?

b. From you up?
c. Corporate details?
d. Team Briefs, old copies, format, future?
• Have you provided old project status reports?
Technical/Documentation
• Have you outlined the state of the User Requirements?
a. Are they documented?

b. Does someone know where they are?
• Have you outlined the state of the Functional Spec or equivalent?
• Have you provided a data model?
• Have you outlined the state of the Technical Spec(s)?
a. Does it include the Database design?

b. Does it include the Data Dictionary?
c. Does it include the rationale for any technology decisions?
• Have you outlined the standards used for programming, analysis, design,
etc.?

b. Are they really a standard?
c. Are they really used by everyone?
• Have you outlined the Configuration Management approach?
• Have you outlined the Configuration Management procedures?
• Have you outlined the Configuration Management tools?
373
• Have you outlined the Change Control approach and procedures?

b. Are they really followed by everyone?
• Have you outlined the state of the log of System Enhancement Requests?
a. Have you documented where it is?

b. Have you documented whose responsibility it is to maintain it?
• Have you outlined the state of the log of System Problems?
a. Have you documented where it is?

b. Have you documented whose responsibility it is to maintain it?
• Have you outlined the test strategy, test plan, test data, predicted
results, sign off procedures etc. or at least the location of that
information?
• Have you provided details of any Performance and Capacity issues?
a. Are there any Performance test results?

b. Is there any demonstration of the adequacy of the hardware and
software platform?
• Have you provided details of the log of maintenance call-outs by support

staff?
• Are the monthly statistics of call outs categorized and monitored?
• Have you outlined the state of the Project Schedule?
a. Have you documented where it is kept?

b. As the update procedure documented?
c. Have you documented? How recent it is?
d. Have you documented what changes are outstanding?
374
• Have you outlined the state of the Project Charter?
a. Have you documented where it is kept?

b. Is the update procedure documented?
c. Have you documented how recent it is?
d. Have you documented what changes are outstanding?
• Is there a methodology used?
a. If so, what is it and to what extent is it used?
• Are metrics kept, and used?
a. If so, what type and to what extent?
Issues Management
a. Are you using Standard Procedure?

b. Are you using an automated system?
c. Is the system documented?
d. Do you have the documentation?
e. Have you provided a briefing on all outstanding Issues?
❖ Have you explained your filing system?
a. Have you identified the most commonly used files?

b. Have you identified the electronic files and their location?
c. Have you identified the paper based files and their location?
❖ Is there any other Project documentation that is relevant?
Future
• Have you outlined the (possible) future directions of the team, project
and customer business?
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Project site specific checklist-

• Is all site locations cleaned, scrap / Tools & fixtures taken back / toxic &
plastic waste disposal done , proper informative board displayed ( like
location number, pole or tower number etc ).
• Project site Land documents checked and handed over to avoid future
ROW ( Right of way ) , it is applicable to Turn key / Green field projects
like laying off power transmission line, setting up new wind or solar part ,
setting up new factory / plants.
• All statutory permissions are concluded – like village administration ,
collector okay, environment clearance etc.
• Project site- Deposits / Security money, refund ensured – Land lease,
Guest houses, Temporary electric connections , Temporary Telephone &
Internet connections , Road permits etc.
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ANNEXURE 13.2
Sample Project Closure Report 1
Project Central Date August 19, 2010

Name Electronic
Records
Repository
(CERR)/TRIM
Implementation
(Change of
Scope)
Executive Sandra Jaramillo Lead Agency SRCA

Sponsor
Project Marla Gabaldón/ Agency Code 369
Manager Peter Chacon
Project Description (Provide a Brief Description and Purpose for this Project)
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The purpose of the project was to provide the State Records Center and Archives
(SRCA) with a needs assessment analysis of the SRCA’s ability to implement and
manage a Central Electronic Records Repository CERR) along with a thorough analysis
of the IT infrastructure requirements to support such a system. The CERR is an
enterprise content management (ECM) solution that will enhance the SRCA's ability to
provide agencies with a state-of-the-art tool for capturing, managing, storing and
providing access to electronic public records. This is a multi-phase, multi-year project
which supports managing electronic records in a systematic and economical manner
that complies with State record keeping laws and regulations. The needs assessment
was completed in June 2009 by Vincent and Associate and included: an as-is analysis
of current SRCA business processes; a to-be-analysis of SRCA business processes; an
IT infrastructure analysis; a report on current enterprise content management
solutions available; an ECM implementation strategy; an SRCA staffing analysis; and
CERR needs analysis recommendations.
Funding for phase I of this project was appropriated during the 2008 legislative session
(Laws 2008, Chapter 3, Section 7, Item 16). The agency received a multi-year
appropriation of $150.0 for expenditure in FYs 2008 through 2010 to conduct an
assessment of the SRCA operations. As only $87.0 of the original $150.0 was
expended for the assessment, DoIT approved a project Change-of-Scope on June 24,
2009 to allow for the purchase of a COTS application as a replacement for the SRCA
warehouse records inventory application used to manage the location and retention of
inactive paper and microform records. The COTS application, a records location and
retention tracking module, is one module within an ECM system that will serve as the
first step towards implementation of the CERR.
During FY 2010, the SRCA purchased hp TRIM, through a State Purchasing Division
statewide price agreement with ABBA technologies. Implementation of the application
began in January 2010; however, due to problems with validation of the data from the
old system and its migration to the new, the SRCA requested reauthorization of the
appropriation. The appropriation was reauthorized for expenditure through FY 2012
(Laws 2010, 2nd Special Session, Chapter 6, Section 7, Item 8). Full implementation of
hp TRIM was completed by July 14, 2010.
Schedule and Budget
Planned Start 9/1/2008 Actual Start Date 9/15/2008

Date
Planned End 6/30/2010 Actual End Date 7/14/10
Date
Planned Cost: $150,000 Actual Cost: (Total) $149,912.06

(Budget)
Professional $150,000 Professional Needs Assessment:

Services Services $68,677.14
Project Management:
$18,254.25
Integration (Change of
Scope): $42,586.47
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Hardware N/A Hardware $4,846.20

(scanners)
Software $20,000 Software $15,548.00
Network N/A Network N/A
Other N/A Other N/A
Appropriation History (Include All Funding Sources, e.g., Federal, State,

County, Municipal Laws or Grants)
Fiscal Year Amount Funding Source(s)
2009 $150,000 Subsection 16 of Section 7 of Chapter 3 of Laws

2008
2010 $150,000 Extension to Subsection 16 of Section 7 of Chapter

3 of Laws 2008
2012 $150,000 Extension - Laws 2010, 2nd Special Session,

Chapter 6, Section 7, Item 8.
Scope Verification
Requiremen Yes No Explanation/Notes

ts Review
Were the ×
project
objectives
(expected
outcomes)
accomplished
?
Were all N/A IV and V waived

deliverables
submitted
and
accepted?
Have all ×
contracts
been closed?
Have all final

payments ×
been made
(i.e., invoices
paid)?
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Has adequate ×
knowledge
transfer been
completed?
Transition to Operations: (Describe Agency Plan to Migrate Project Solution to

Production. Include DoIT Impact if Different than Previous Report)
The final Image 2000 (I2K) database file was delivered via FTP to UrsaNav, the
integration vendor. UrsaNav working at their home office migrated the I2K data into
the hp TRIM database. SRCA retrieved the migrated data file via FTP and working with
UrsaNav installed onto a local server at the SRCA. UrsaNav staff was on site at SRCA
the week of July 5, 2010 to complete the data migration, address outstanding issues,
and install data entry web forms.
System testing was performed by the SRCA. In order to certify data integrity, a two per
cent subset of the total number of records in the TRIM system was verified using the
I2K legacy system. Additionally, web form testing was completed by creating records
and verifying the record data in TRIM. All errors were reported to UrsaNav until the
SRCA could certify that all issues had been resolved.
The TRIM Context software application has been fully deployed in production since July
14, 2010.
Maintenance/Operations
Yes No Explanation/Notes
Are there x $5,220.00 annually

recurring
maintenanc
e/
operational
costs for
the
product/
service?
Are there any x

recommende
d
enhancement
s or updates?
Funding source for maintenance/operational costs? (Describe) Maintenance and

operating costs are included in the SRCA FY 12 appropriation request.
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Business Performance Measures (Complete for all phases)

Comments:
Phases Completion Date Goals/Objectives Amount Results
Initiation May 2008 Develop Project $0.0 Project

Charter and certifications
Project were
Management Plan. approved.
Planning December 2009 Develop functional $86,931 Functional and

specifications for technical
the Needs specifications
Assessment. were identified
by RMD and IT
staff. Vendors
were selected
to complete
the Needs
Assessment
and Project
Management
of the CERR.
June 24, 2009 Change of Scope: Software

Purchase COTS products were
application as a evaluated and
replacement for the hp TRIM
the warehouse Context
records inventory software
application used to application was
manage the selected by
location and RMD staff.
retention of paper Purchase made
and microform through a
records. The COTS statewide price
application is one agreement.
module within an
ECM system that
will serve as the
first step towards
implementation of
the CERR.
381
Impleme- July 2010 Fully deployed hp $62,981 Worked closely

ntation TRIM Context with
application integration
software. vendor to
ensure that
deliverables
were met.
Production cut-
over and
transition to
operations July
12, 2010.
System and
web form
testing.
Close-out October 2010 Close-out CERR $149,912 All contracts

project per DoIT complete. All
requirements. invoices paid.
Product
acceptance
document.
Lessons
learned.
Closeout
documents for
PCC.
Lessons Learned
• Due to the funding expiring at the end of FY 10, an aggressive but unrealistic
timeline was established in order to complete the project. Deliverable deadlines
were not met by the integration vendor consequently requiring an amendment to
the contract resulting in a project delay. The funding extension should have been
applied for the previous year.
• Establishing functionality requirements for the web form development were not
as clear as they should have been and created unintended ambiguity. Much more
thought in every aspect of the requirements should have been studied and
assumptions not made.
• Involvement by the contracted vendor should have been made much sooner. The
SRCA allowed the contract vendor to have minimal involvement in assisting with
the project. Their eventual participation as intermediary between SRCA and
integration vendor assisted with clarifying expectations and meeting deadlines
and taking responsibility for project deliverables.
382
IT System Analysis
On this document, or as an attachment, provide a summary response,
including changes, to the following IT infrastructure topics relating to
this project:
• Describe or estimate this project’s impact on the State Datacenter

infrastructure.
- Hardware (List type of hardware anticipated. Keep in mind the State
Datacenter may have pre-built hardware stacks available): None – all
hardware resides in the SRCA server room.
- Network (Include Diagram): There is no impact to the DoIT network. A VPN

was created so that the Records Center in Albuquerque could submit the
web forms. The network traffic on the SRCA LAN is unaffected as the
previous Image 2000 was a web-based system.
- Software / Applications (Provide application schematic if available): hp TRIM

Context will have no affect on the DoIT datacenter infrastructure
Hosting Considerations (If not hosted at the State Datacenter describe your
strategy to host at the State Datacenter): The SRCA has received exemptions
from the requirement to move production servers to the DoIT datacenter.
Business Continuity Strategy

On this document, or as an attachment, provide a summary response,
including changes, of your business Continuity Strategy.
• Emergency and Disaster Management - Nightly tape backups are performed
and stored offsite.
• Business Resumption – Restore server and software.
• Operational Recovery Planning - Recover system software from original
software disks and tape backup.
383
Security Strategy (Application and Data Security Process, Plan, or

Standard)
• Physical Access Control: Server hardware and HP Trim Software are housed
in a secure data center with keycard access control implemented.
• Software Access Control: All HP Trim users require a software username and
password assigned by the system administrator.
• Network Access Control: Outside user access is controlled by a firewall

hardware appliance with rules to control VPN connections from remote
Albuquerque Records Center Site.
Project Sign Off
The signatures below certify that this project has been completed in accordance
to the specified budget, schedule, scope, and achieved the intended outcome.
Stakeholders Name: Signature Date
Executive Sponsor
(or Designee)
Lead Agency Head
(or Designee)
CIO IT Lead
Project Manager
384
ANNEXURE 13.3
Sample Project Closure Report 2
Project Name:
Department:
Focus Area:
Product/Process :
Logo of the
Organisation
Document Owner(s) Project/Organization Role
Project Closure Report Version Control
Version Date Author Change Description
Note: For standard sections of the Project Closure Report template that
have been excluded from the present document, the section headings have
been moved to the Project Closure Report Sections Omitted list at the end.
385
TABLE OF CONTENTS
1. PROJECT CLOSURE REPORT PURPOSE

2. PROJECT CLOSURE REPORT GOALS
3. PROJECT CLOSURE REPORT SUMMARY
3.1 Project Background Overview

3.2 Project Highlights and Best Practices
3.3 Project Closure Synopsis
4. PROJECT METRICS PERFORMANCE
4.1 Goals and Objectives Performance

4.2 Success Criteria Performance
4.3 Milestone and Deliverables Performance
4.4 Schedule Performance
4.5 Budget Performance
4.6 Metrics Performance Recommendations
5. PROJECT CLOSURE TASKS
5.1 Resource Management

5.2 Issue Management
5.3 Risk Management
5.4 Quality Management
5.5 Communication Management
5.6 Customer Expectation Management
5.7 Asset Management
5.8 Lessons Learned
5.9 Postproject Tasks
5.10 Project Closure Recommendations
6. PROJECT CLOSURE REPORT APPROVALS

7. APPENDICES
7.1 Project Closure Report Sections Omitted
386
PROJECT CLOSURE REPORT PURPOSE
Project Closure Report Purpose
[Replace this text with your own statement of purpose, or use the
following sample.]
The Project Closure Report is the final document produced for the project and is
used by senior management to assess the success of the project, identify best
practices for future projects, resolve all open issues, and formally close the
project.
PROJECT CLOSURE REPORT GOALS
Project Closure Report Goals
[Replace this text with your own statement of purpose, or use the
following sample.]
This Project Closure Report is created to accomplish the following goals:
• Review and validate the milestones and success of the project.

• Confirm outstanding issues, risks, and recommendations.
• Outline tasks and activities required to close the project.
• Identify project highlights and best practices for future projects.
PROJECT CLOSURE REPORT SUMMARY
Project Background Overview
Project Background Overview
Replace this text with a brief description of the project background.
• What were the original goals, objectives, and success criteria?
• Refer to project overview statement and/or project charter for this

information.]
387
Project Highlights and Best Practices
Project Highlights and Best Practices
Project Highlights:
• [Highlights]
[Highlights]
Best Practices:
• [Best Practices:]
• [Best Practices:]
Project Closure Synopsis
Project Closure Synopsis
[Replace this text with a brief description of why the project is being
closed.
• Is it being closed because all project objectives and deliverables

have been met?
• Or is it being closed for other reasons (loss of funding, shift in

strategy, etc.)?]
388
PROJECT METRICS PERFORMANCE
Goals and Objectives Performance
Goals and Objectives Performance
[Replace this text with a comparison of actual project performance to

project objectives.]
Success Criteria Performance
Success Criteria Performance
[Replace this text with details of project performance in terms of

targeted success criteria.
• Were all criteria achieved? To what level of success?

• If some criteria were not achieved, what were the reasons?
• Is achievement anticipated at a later date?
• Who is responsible for measuring continued progress?]
Milestone and Deliverables Performance
Milestones and Deliverables Performance
[Replace this text with an outline of actual performance of project

milestones and corresponding deliverables.
• Were all deliverables achieved with high quality and customer

acceptance?
• If not, what were the reasons?
• Is achievement anticipated at a later date?]
389
Schedule Performance
Schedule Performance
Project Schedule Overview:

[Replace this text with the Overview]
Project Schedule Control Process:
[Replace this text with the Control Process]
Project Schedule Corrective Actions:
[Replace this text with the Corrective Actions]
Project Schedule Integration with Managing Project:
[Replace this text with the Integration]
Budget Performance
Budget Performance
Project Budget Overview:

[Replace this text with the Overview]
Project Budget Corrective Actions:
[Replace this text with the Corrective Actions]
Metrics Performance Recommendations
Metrics Performance Recommendations
Replace this text with an outline of metrics performance

recommendations for the future.]
390
PROJECT CLOSURE TASKS
Resource Management
Resource Management
[Replace this text with an explanation of how resources were managed.
• What resource needs changed during the project?
• Outline the steps to be taken in shifting project resources to other

projects.
Explain how project knowledge (IP) from project team members will be
captured and retained for future projects.]
Issue Management
Issue Management
[Replace this text with a list of any issues still outstanding at the end of
the project.
• Will each issue be resolved?

• Who will continue to report on each issue's progress?]
Risk Management
Risk Management
Project Risks Mitigated:

[Replace this text with the Risks Mitigated]
Outstanding Project Risks:
[Replace this text with the Outstanding Risks]
391
Quality Management
Quality Management
[Replace this text with a description of how quality management

processes were used and integrated into the project, and how quality
control measures provided quality assurance.]
[Replace this text with an outline of the project communication

process.
• How effective was the process?
• What changes were made during the project?]
Customer Expectation Management
Customer Expectation Management
[Replace this text with a brief description of how customer

expectations were managed.
• Did these expectations vary during the course of the project? If so,
how?]
Asset Management
Asset Management
[Replace this text with a list of assets remaining at the end of the
project.
• How will those assets be dispositioned?
• Who will manage the disposition process?]
392
Lessons Learned
Lessons Learned
[Replace this text with a list of successes and shortcomings to

remember for the future.
• Which activities and processes worked well?
• Which could have been improved, and how?]
Post-project Tasks
Post-project Tasks
[Replace this text with a list of outstanding issues for this project.
• What actions are not yet completed? Who is responsible for them?
• Which success criteria are not yet met? Which deliverables are not
yet achieved?
• Which training requirements are still outstanding?
• This information can be summarized from details in the preceding

sections.]
Project Closure Recommendations
Project Closure Recommendations
[Replace this text with a list of recommendations arising from review of

closure tasks.
• The main recommendation would usually be to gain project closure

approval from the Project Sponsor, including agreement that the
project has fulfilled all of the requirements as documented and that
the Project Sponsor is satisfied that all outstanding items have been
satisfactorily addressed.]
393
PROJECT CLOSURE REPORT APPROVALS
Prepared By __________________________________
([Job Title])
Approved By __________________________________
([Job Title])
__________________________________
([Job Title])
__________________________________
([Job Title])
Approval Date __________________________________
APPENDICES
Project Closure Report Sections Omitted
• [Omitted section]
• [Omitted section]
394
ANNEXURE 13.4
Relationship Matrix Project Closure Activities vs. Project Categories
Project Category 13.3.1 13.3.2 13.3.3 13.3.4 13.3.5 Remarks/

Special
Instructions
ACTIVITY
13.5.1 M S S S S Follow the

project closing
13.5.2 NA L M S M procedure from
organization’s
13.5.3 NA NA M S M process assets
or contractual
13.5.4 L L S S S
project closure
13.5.5 NA NA S S S procedure.
13.5.6 M M S S S
13.5.7 NA S S S S
13.5.8 M S S S S
13.5.9 L L S S S
13.5.10 NA L M M S
13.5.11 L M S S S
Project scope L M S S S Follow the

performance performance
measurement
Project cost L M S S S procedures from
performance organization’s
Project L M S S S process assets.
schedule
performance
Notes: NA : No relation L : Low relation M : Medium relation S: Strong

relationship
395
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
396

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PROJECT MANAGEMENT

Sub Code 400

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Prof. Kanu Doshi Prof. B.N. Chatterjee

Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Prof. B.N. Chatterjee Prof. Vineel Bhurke

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Prof. Sandeep Kelkar Mr. Anuj Pandey

Prof. Dr. Swapna Pradhan Course Editor

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Mr. P.M. Bendre Course Coordinators

Mr. Ajay Prabhu Ms. Kirti Sampat

Mr. A.S. Pillai Mr. Kishor Tamhankar

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

1st Edition, June 2014 2nd Edition, September 2021

Chapter No. Chapter Name Page No.

2 Business-Project Relation and Project Culture 9-19

3 Basic Concept of Project and Various Types of Projects 20-31

4 Methods of Generating Business Ideas 32-46

5 Transformation of the Business Ideas into Projects 47-61

6 Introduction to Project Management and Phases of 63-100

7 Project Initiation Phase 101-148

8 Project Data/Requirement Analysis and Final Project 149-190

9 Budget, Investment and Approvals 191-212

10 Project Planning and Scheduling 214-261

11 Project Execution 262-295

12 Project Monitoring and Control 297-350

13 Closing/Handing Over the Project 351-396

In the modern era and global environment, Management Science is the

During our journey of Distant Learning Program for PROJECT

For ease of understanding, learning and to maintain the sequential flow of

The Part II will introduce us to the various phases of the projects as

(i) Initiation Phase

(iii)Budgeting, Investments and Approval Phase

(vi)Control and Monitoring Phase

And then so-called brainwork phases of the projects, i.e.,

(i) Initiation Phase

(iii)Budgeting, Investments and Approval Phase will be deliberated in

The Part III is focused on the so-called action phases as follows:

(vi)Control and Monitoring Phase

• Handover and closing the projects and management of these will be

In this, we will also throw some light on:

• Learning and implementation of improved process for future as

Each chapter is deliberated in detail with reference to the Objectives

Objective type self-assessment exercise with multiple options available at

Objective of this chapter is to elaborate the frequently used term ‘business’

2.1 What is Business?

2.1 What is Business?

Business is an economic activity which is related with continuous

The shopkeeper/retailer, wholesaler/distributor, manufacturer and the

2.2 Definitions of Business

2.2.1 The term business is defined by the management experts in various

Robert Stephenson defines business as, “The regular production or

According to L.R. Dicksee, “Business refers to a form of activity conducted

Lewis Henry defines business as, “Human activity directed towards

Thus, in a wider comprehensive scope, business deals with

2.3 Salient features of Business

Following are the major inherent features of any business.

2.3.1 Exchange of Goods and/or Services

2.3.2 Deals in Numerous Transactions

Whereas exchange of goods and services is a regular feature; a