Q1. Comment on the following: a.
Importance of DMAIS in project management cycle:
The projectised mantras of production management can be broadly identified as –Define Measure, Analyze, Improve, Standardize (DMAIS). These projectised mantras help in identifying, evaluating, and selecting the right improvement solutions for managing a project. The mantras also help in identifying the critical issues thus assisting the organization to adapt to the changes introduced through the implementation of different solutions. Project Managers consider the five steps DMAIS as generic for any system of a journey towards excellence. The figure lists the five steps hidden in the acronym DMAIS. DMAIS is highly relevant in Project Management for the simple reason that each step gives out in detail the actions to be taken to ensure rediness for the next step. Verification for DMAIS implementation is possible with checklists which can be prepared and used by employees at all levels. The team members can be given training to follow them.
Let us consider each of five steps of DMAIS:
1) Define – This step requires that what is sought to be achieved is identified in
all its detail. The following are the inputs which will define what we are going to make.
it refers to the standards achieved by the best in the industry. A company’s product is set to meet them. ii) Customer Requirement: It refers to documentation of customer requirements. Proper Understanding of customer requirement is of utmost importance. You should deliver what a customer requires.
iii) Process Flow Map – It shows the activities that take place to the result
in the product at the end of them.
iv) Quality Function Deployment – This tool compare the quality
characteristics in a company’s product with those in their competitors and their relative importance to the customer. To acheve them, you find the technical specifications you have to incorporate in our product v) Project Management Plan – This includes the materials, men, activities ,schedules , milestone and so on.
2) Measure- in this step we measure the outcomes of the activities. This is done
using the following methods.
a) Data Collection: You need to collect the data about the work that is done
and compare as to how it corresponds with what is required.
b) Defect Metrics –You need to capture the deviations that are in the
effective portion of work in defect metrics. then you need to decide whether they are acceptable or need rectification. c) Sampling – if the volumes are high, you need to select a few of them and inspect them to see whether the entire batch is acceptable
3) Analyze: In this step, you have to analyze the data received from the
preceding step by using the following tools: a) b) c) d) Cause and Effect Diagrams – also called Fishbone Diagrams Failure Mode and Effect Analysis FEMA Root Cause Analysis Reliability Analysis
4) Improve: In this step, you have to implement the measures to remove the
defects found earlier for improving the process. This can be done using the following measures.
a) Design of experiments: The effect of changing values of parameters is
done in a controlled way. This allows you to experimentally determine the effect of variations determined. you can use the results for optimizing the process
b) Robust Design: The equipment design is made to robust to reduce the
c) Tolerances: the permitted deviations are made closer, so that the
capability of the process is increased Standardize – When improvements have become consistent, the methods adopted are standardized
b. Knowledge areas of project management:
Knowledge I sthe most powerful mover of the wheels of progress. K factor is an index of the extent to which one can mange today with yesterday’s knowledge
content and also the extent to which today’s knowledge will be used tomorrow. This would render the development process more productive. With the oppurtunities for juniors to access information from new knowledge bases, seniority is no more an automated scale for knowledge. It is important for leaders to recognize the knowledge potential o the younger members. It is equally important for younger members not to suppress their knowledge potential from its application. Knowledge can be lost if it is not updated and utilized. It is the task of every team member to maximize the K-factor in all directions. Intellectual propery rights have become a crucial asset of an organization in today’s cutthroat competition. These are the legal protections given to persons over their creative endeavors and usually give the creator an excusive right over the use of his/her creation or discovery for a certain period of time. It may include patents, copyrights, trademarks, and trade secrets. There are nine knowledge areas in Project Management: 1. Project Integration Management 2. Project Scope Management 3. Project Time Management 4. Project Cost Management 5. Project Quality Management 6. Project Human Resource Management 7. Project Communications Management 8. Project Risk Management 9. Project Procurement Management Each of the nine knowledge areas contains the processes that need to be accomplished within its discipline in order to achieve an effective project management program. Each of these processes also falls into one of the five basic process groups, creating a matrix structure such that every process can be related to one knowledge area and one process group.
or result. “to throw”. Project Characteristics The word PROJECT comes from the Latin word PROJECTUM from the Latin verb PROICERE. which are products. A project creates unique deliverables. Project characteristics: It is temporary – temporary means that every project has a definite beginning and a definite end. A work breakdown structure element may be a product. WBS A work breakdown structure (WBS) in project management and systems engineering. while projects are temporary and unique. The word PROJECT thus actually originally meant “something that comes before anything else happens”. or any combination. which denotes something that precedes the action of the next part of the word in time and ICERE. Project always has a definitive time frame. service. A project creates a capability to perform a service. or results. data. A WBS also provides the necessary framework for detailed cost
. which means “to throw something forwards” which in turn comes from PRO-. Project is always developed in steps and continuing by increments – Progressive Elaboration. A project in business and science is a temporary endeavor undertaken to create a unique product. Basically. a service.2 Write few words on:
a. The aim of a project is to attain its objective and then terminate.Q. it is planned to achieve a particular aim. is a tool used to define and group a project's discrete work elements in a way that helps organize and define the total work scope of the project. services. Some of the reasons to start a project can be: • A customer request or market demand • An organizational need • A customer request • A technological advance • A legal requirement Projects and operations differ primarily in that operations are ongoing and repetitive. b. a project is a means of organizing some activities that cannot be addressed within the normal operational limits. Generally.
A well-designed WBS makes it easy to assign each project activity to one and only one terminal element of the WBS. project. and contract.. Project managers use the techniques and tools to collect. materials. the WBS also helps map requirements from one level of system specification to another. and responsibility (e. A work breakdown structure permits summing of subordinate costs for tasks. At the execution of the project management goals. components.g. project managers use PMIS for budget framework such as estimating costs. During the planning process. Additionally the WBS is a dynamic tool and can be revised and updated as needed by the project manager The Work Breakdown Structure is a tree structure. a description of the task to be performed is generated. For each element of the work breakdown structure. tasks. combine and distribute information through electronic and manual means. duration. subsystems. The Work Breakdown Structure provides a common framework for the natural development of the overall planning and control of a contract and is the basis for dividing work into definable increments from which the statement of work can be developed and technical. c. PMIS Project Management Information System (PMIS) are system tools and techniques used in project management to deliver information. Since the planned outcomes are the desired ends of the project. execute and close project management goals. they form a relatively stable set of categories in which the costs of the planned actions needed to achieve them can be collected. etc. the WBS is developed by starting with the end objective and successively subdividing it into manageable components in terms of size. The PMIS is used to
.. Project Management Information System (PMIS) is used by upper and lower management to communicate with each other. subtasks. systems. Project Management Information System (PMIS) help plan. The Project Management Information System is also used to create a specific schedule and define the scope baseline. and work packages) which include all steps necessary to achieve the objective. the project management team collects information into one database. materials. The WBS is organised around the primary products of the project (or planned outcomes) instead of the work needed to produce the products (planned actions). This technique (sometimes called a System Breakdown Structure ) is used to define and organize the total scope of a project. cost. which shows a subdivision of effort required to achieve an objective. schedule. and labor hour reporting can be established. In addition to its function in cost accounting. etc. into their successively higher level “parent” tasks.estimating and control along with providing guidance for schedule development and control. for example a requirements cross reference matrix mapping functional requirements to high level or low level design documents. for example aprogram. In a project or contract.
Project Team . The results of these decisions must be both accountable and visible. cost. probably the majority of apparently successful projects do not reflect their optimum potential either. External Authority . including funds. budget and execute work to be accomplished in project management.The project manager must have the responsibility and authority to control the commitment of resources. some of them technical. manage materials.
. Then. within prescribed limits. the Project Management Information System is used to review the goals to check if the tasks were accomplished. On the other hand. Competence . which will help him to obtain their personal commitment. and keep a record for reporting purposes. the project management information system (PMIS) is used to plan schedules. their absence may well lead to sub-optimal success. if not outright failure. The Project's Executive has a vital role to play in achieving project success and should therefore insist on the following: Executive Support . During the close of the project. it is used to create a final report of the project close.The Executive must clearly demonstrate support for the project management concept by active sponsorship and control. collect financial data. or performance decisions should be made without the project manager's participation.The project manager must have the necessary managerial authority within his organization to ensure response to his requirements. schedule. While these prerequisites do not necessarily guarantee success of future projects. Project Management strategies-Internal & external Effective Internal Project Management Strategies. Projects fail for many internal reasons.The project manager must be seen as the authoritative agent in dealing with all parties. even the technical failures can often be traced back to a failure on the part of the project's executive management to recognize and deal with these inherent managerial risks.The project manager and his team members must be competent. Project Manager Involved in All Major Decisions .compare the baseline with the actual accomplishment of each activity. a number of prerequisites have been identified with the successful project. Commitment Authority .The project manager should have a say in the assembly of his project team. d. and be the responsible and single formal contact with them. However. As a matter of project experience. Internal Authority . support and required quality of service.No major technical. To conclude. some of them managerial. Other functional personnel assigned to the project must also be competent.
However.Management Information Systems information and control systems must be in place. In other words. it is essential to develop a sound stakeholder environment. both perceived and in reality. or at least sub-optimal results. Therefore. and on down to the project manager at the bottom. it has also been noted earlier that external conditions and events also represent uncertainty and risk to the successful accomplishment of the project. Developing a Sound Stakeholder Environment Just as the means of influencing the project's cultural environment. Some suggested steps in this process include: Learn how to understand the role of the various stakeholders. place the project stakeholders at the top of the chart. were discussed earlier. followed by the front-line project team members. was one of developing the right attitude. Perhaps this attitude is best reflected by adopting a mind set that reverses the traditional organization chart hierarchy.
. Perhaps the project team will then be better visualized as a truly service organization. Identify the real nature of each stakeholder group's business and their consequent interest in the project Understand their behavior and motivation Assess how they may react to various approaches Pinpoint the characteristics of the stakeholders' environment and develop appropriate responses to facilitate a good relationship Learn project management's role in responding to the stakeholders drive behind the project Determine the key areas which will have the most impact on the successful reception of the project Remember always that even a minor stakeholder group may discover the "fatal flaw" in the project and which could bring the project to a standstill. as described above. These conditions have been linked to the external stakeholders of the project.
Effective External Project Management Strategies Prerequisites for avoiding internal project failure. and how this information may be used as an opportunity to improve both the perception and reception of the project. designed to serve the best interests of a successful project outcome. so it is with developing a sound stakeholder environment.
The linked / assigned models can be opened by double-clicking on the assignment symbol. The system includes graphical process documentation. The assignment symbol of a function / process Interface indicates that there is a link to another model.3 What are the various SCMo soft wares available in project management? Explain each in brief. an overview and a detailed view of the relevant processes for SCMo. The system allows users to navigate through graphical structures to relevant documentation and processes which were created with the ARIS-Toolset.
Supply Chain Modelling
. The navigation between models is done via the assignment symbol. according to its objectives.Q. The entry point in the documentations system is the model “Process Overview SCMo”. The Process Documentation System gives.
The process documentation system is intranet based to provide immediate access to current. This model is the starting point for the navigation to other models. The content of the process documentation system includes the area supply chain management from the Odette Supply Chain Management Group. up-to-date process documentation. in the form of process chains. as well as the entire range of documentation related to the processes. This can be classified into two different navigations as shown in figure.
Microsoft Project Standard 2002 2. The Microsoft Project 2002 products in these solutions are: 1.Vertical Navigation
a) Vertical Navigation: The vertical navigation is the navigation on different levels. In the models there can be assignments for some functions. you would have a fair idea of how and to what extent project management processes could be automated. which can be at the start or end or even in the process itself. b) Horizontal Navigation: The horizontal navigation is on the same level. e.g. the challenge of “making things work” remains unchanged. Those links are represented by Process Interfaces. This normally works out too expensive for their comfort or within their tight budgets. Microsoft has a team project management solution that enables project managers and their teams to collaborate on projects. when another process is imbedded in the process. Microsoft Project Server Client Access License (CAL) 2002. Microsoft Project Server 2002 3.
. However.These two examples are currently the models on the lowest level. While software vendors are confident of “making it work”. two yawning gaps still remain: 1. for a Function Allocation Diagram or a sub-process that describes that function. Support Software Having learnt the basics of application software. the first models of processes are found on the sub-process level. Starting on the work package level and going downwards into more detail. Integration of multi vendor supported software applications The enterprise is normally in a dilemma – whether to look at the same vendors to support such customisation or not. Some processes have a link to other processes. In the model “Process Overview SCMo” those processes are assigned to the functions on Level 2. Business processes which are not covered in such software 2.
It provided solution that could offer on-going technical support and development past the end of the funding period of the project. Since the beginning of the project ARROW has worked actively and closely with Fedora and the Fedora Community. 4. The other carrot which these vendors offer is a unilateral transfer of the facility to customise themselves which is seen as a huge advantage. The various support software that may be used for managing projects are: 1. digital theses and electronic publishing.
. combining open source and proprietary Software . well architected underlying platform and a flexible objectoriented data model to be able to have persistent identifiers down to the level of individual data streams. The ARROW project’s Technical Architect is a member of Fedora Advisory Board and sits on Fedora Development Group. Their initial focus was on print equivalents such as thesis and journal articles among others. 2. while respecting access constraints Enables effective communication and collaboration between researchers
The vision of project ARROW: “The ARROW project will identify and test software or solutions to support best practice institutional digital repositories comprising eprints. It accommodates the content model to be able to be version independent. Fedora ARROW wanted a robust. 3. 5.Several software vendors have seized the opportunity with offerings that substantially fill these gaps effectively at a fraction of the costs quoted by the major vendors. This association is reinforced by VTLS Inc.Arrow is preferred support software because it: • • • • • • • • Provides a platform for promoting research output in the ARROW context Safeguards digital information Gathers an institution’s research output into one place Provides consistent ways of finding similar objects Allows information to be preserved over the long term Allows information from many repositories to be gathered and searched in one step Enables resources to be shared. VTLS President is a member of Fedora Advisory Board and VITAL Lead Developer sits on Fedora Development Group. ARROW FEDORA VITAL PILIN MS EXCHANGE SERVER 2003
The ARROW Project It is a consortia of institutional repository solution.” ARROW project wanted to be a solution for storing any digital output.
Limited exposure nationally or internationally 3. It currently provides: 1. Being developed in conjunction with the DART (ARCHER) Project 6.VITAL VITAL refers to ARROW specified software created and fully supported by VTLS Inc. VALET – Web Self-Submission Tool 5. VITAL has the following features: 1. VITAL Access Portal 4. Integration with or development of new tools that will allow value added services for repositories (for instance the creation of e-portfolios or CVs of research output of individual academics) PILIN – Persistent Identifiers and Linking Infrastructure There has been a growing realisation that sustainable identifier infrastructure is required to deal with the vast amount of digital assets being produced and stored within universities. Google Indexing and Exposure 8. Batch Loader Tool 6. VITAL Manager 2.
. Inclusion of datasets and other research output not easily provided in any other publishing channel 5. VITAL Portal 3.built on top of Fedora. Exploration of the research-teaching nexus tools that will allow value added services for repositories 7. VITAL architecture overview VITAL is part of creative development of ARROW institutional repositories. SRU / SRW Support 9. Addition of annotation capability 4. Handles Server (CNRI) 7. Inclusion of multimedia and creative works produced in Australian universities 2.
Plan for a sustainable. shared identifier management infrastructure that enables persistence of identifiers and associated services over archival lengths of time 3. scheduling. and crossgroup coordination Coordination and control of deployment of successive pre-release versions of Office System 2003 (including Outlook 2003)
• • Business Benefits •
Four percent overall direct cost savings Key enabler of the Microsoft ME initiative which through fiscal year 2003 has produced millions in overall consolidation savings including USE
. Use Microsoft Exchange Server 2003 to consolidate more than 70 messaging sites worldwide into seven physical locations Microsoft Model Enterprises (MME) Objectives • • • • • • • • • • • • • • Maximising the number of management tasks performed centrally Decreasing the number of sites through the consolidation of the smaller locations into a smaller number of RDCs Reducing the total number of infrastructure and application servers Standardising infrastructure and devices worldwide Solution Consolidation of 75 tail sites into 6 regional data centers (RDCs) using local storage area networks (SANs) Key Focus Areas Proactive. Support adoption and use of persistent identifiers and shared persistent identifier management services by the project stakeholders 2. detailed monitoring and analysis of WAN bandwidth utilisation and latency Effective but flexible approach to project planning. The broad objectives are to: 1.PILIN is a particular challenge for e-research communities where massive amounts of data are being generated without any means of managing this data over any length of time. Add Picture 5. Deploy a Worldwide Site Consolidation Solution for Exchange Server 2003 at Microsoft 4.
4 List the various steps for Risk management.
.IT Benefits • • • • Improved server utilisation Improved server management Strengthened security Increased reliability
Q. Also explain GDM and its key features. Methods that can aid risk identification include checklists of possible risks. Risk assessment and identification: The assessment and identification focuses on numerating possible risks to the project.
Risk management may be classified and categorized as: 1. surveys. meetings and brainstorming and reviews of plans.
based on which it average weighted average value is calculated. discuss with the team members.” The next step is to set priorities and determine where to focus risk mitigation efforts. For each risk rate the probability of its happening as low. The risk mitigation step must be properly executed by incorporating them into the project schedule. and others might not be serious enough to worry about. “Lack of Management buy in. the frequency of a particular event occurring is determined. To prepare this report. if you had a risk of a key person leaving.” “Database expert might leave. Risks such as. first pick out the items that rate 1 and 10. respectively.” and “people might leave. Refer to a list of commonly used risk mitigation steps for various risks from the previous risk logs maintained by the PM and select a suitable risk mitigation step. you might decide that it would have a large impact on the project. 3. In addition to monitoring the progress of the planned risk mitigation steps periodically revisit project. The project manager can also use the process database to get information about risks and risk management on similar projects. This priority scheme helps push the big risks to the top of the list.process and work products. Rank the risk based on the probability.using a simple scale from 1 to 10 (where 1 is very unlikely and 10 is very likely). but that it is not very likely. To determine the priority of each risk item. we have the group agree on how likely it thinks each risk item is to occur. assign probability values in the ranges given for each rating. and how likely it is to occur. Ex: Now that the group has assigned a priority to each risk. make fresh risk analysis to determine whether the priorities have Risk Analysis The first step in risk analysis is to make each risk item more specific. Risk Control: The main task is to identify the actions needed to minimize the risk consequences. Risk prioritization: focus on the highest risk. For each risk. If necessary. using a simple scale from 1 to 10 (where 1is little impact and 10 is very large).” are a little ambiguous. Some of the identified risks are unlikely to occur. and the small risks to the bottom. For example. Each outcome of an event resulting in a risk situation in a risk analysis process is expressed as a probability. This approach requires a quantitative assessment of the risk probability and the risk consequences. each risk item to understand how devastating it would be if it did occur. calculate the product of the two values. Risk analysis can be performed by calculating the expected value of each alternative and selecting the best alternative. 2. In these cases the group might decide to split the risk into smaller specific risks. “manager Jane decides that the project is not beneficial. medium. Then rate the other items relative to these boundaries. To use this numbering scheme. Select the top few risk items for mitigation and tracking. The results of this review are reported in each milestone analysis report. The group then rates how serious the impact would be if the risk did occur. It is a usual practice to analyze risk either by sensitivity analysis or by probabilistic analysis. it is ready to select the
. likelihood and impact. In the process below. During the analysis. Prioritization requires analyzing the possible effects of the risk event in case it actually occurs. medium or high. high or very high. generally called risk mitigation steps. such as. In the probability analysis.” and “Webmaster might get pulled off the project. In sensitivity analysis a study is done to analyse the changes in the variable values because of a change in one or more of the decision criteria. assess its impact on the project as low.
Some projects select a subset to take action upon. Special Features of GDM Some of the special features of GDM are: uts across Geographical and Time Zone Barriers C Unimaginable Speeds of Response and Introduction. To get started. Application of these Microbial Entities to rest within multiple Projects or Products or even as add-ons suit belated Customer Needs. you might select the top 3 risks. b) Modularization . Accuracy. Approach through Standardization of these Microbial. The key Features of GDM are: • • • • Standardization Modularization Minimum Customization Maximum Micro structure
Adoption of a Combination of the Greatest Common Multiple and the Least Common Factor of a Large Mass of Microbial Components): a) Standardization . Common Pool of Microbial Components Largely Independent of Skill Sets required at Delivery Stages Highly automated Processes Quality Assurance as a Concurrent rather than a Control Process
.items to mange. or the top 20%. based on the priority calculation.Minimum Changes or Modifications to suit Individual Customers. Global Standards of Design focusing on highly standardized Methods and Processes of manufacture or Development.Splitting of the Product Modules further into much smaller entity identifiable more through characteristics rather than application Features. Entities even across Multiple Modules. with limited Individual Functioning Capability but powerful and robust in combination with other Modules. Adopt Plug and socket Concepts with minimum adaptable joints or Connections.Ingenious Design and Development of Components and Features which are like to be accepted by 90% of Worldwide Customers. d) Maximum micro structuring .Product or Solution split up into smallest possible individual Identifiable Entities. c) Minimum Customization . GDM – The Global Delivery Model (GDM) is adopted by an Industry or Business such that it has a capability to plan design. Economy and Reliability. while others choose to work on all of Project the items. deliver and serve to any Customers or Clients Worldwide with Speed.
So updating data is a very
. Manufacture and Delivery for better Logistics Mapping of Economical Zones rather than Geographic Zones Continuous Floating virtual Inventory to save Time and Efforts. opportunities. new technology. Importance of data management in project managementComment.
Q. To be useful. all of which affect the way you function. Most of the data go on changing because the aforesaid sources have uncertainty inherent in them.
Data management consists of conducting activities which facilitate acquiring data. political upheavals. suppliers. Acquisition of data is the primary function. human resources. market conditions.
There should be data about customers. processing it and distributing it. government regulations. data should have three important characteristics – timeliness.5 Answer the two parts: a. Management of acquisition lies in ensuring that these are satisfied before they are stored for processing and decisions taken on the analysis. economic activities. sufficiency and relevancy.Near Shore Development.
. the information is important for decision making based on the value of the investment throughout the project lifecycle. ERP packages too help in integrating data from all sources and present them to individual members in the way they require. Many times he will have to inform and seek sanction from top management. When all these are done efficiently the project will have no hold ups an assure success.. A proper MIS will take care of all these aspects. ROI should be quantified in terms of dollars and should include a calculation of the breakeven point (BEP). the BEP may move out in time; if the project is ahead of schedule or under budget the BEP may occur earlier. and increased customer and employee satisfaction.important aspect of their management. It contains details about all materials that go into the project at various stages and has to be continuously updated as all members of the project depend upon it for providing materials for their apportioned areas of execution. A project manager will have to analyse them. Any project that has developed a business case is expected to refresh the ROI at each key project decision point (i. ROI should reflect actual returns observed through pilot projects and prototypes. reduced cost. Storing what is relevant in a form that is available to concerned persons is also important. ROI may include the benefits associated with improved mission performance. speed. In either case. ROI information is used to assess the status of the business viability of the project at key checkpoints throughout the project’s lifecycle. and the consequences of under or nonperformance. discover further data from other sources and see how he can use them and take decisions. The management will have to study the impact on the overall organisational goals and strategies and convey their decisions to the manager for implementation. or flexibility.
b.Return on Investment (ROI) is the calculated benefit that an organization is projected to receive in return for investing money (resources) in a project. stage exit) or at least yearly.e. there is an opportunity for utilising some of them when others do not need them. based on project spending and accomplishments to date. To ascertain availability at some future point of time. backlogs. Since information is shared by all members. Where appropriate. increased quality. When a project is underway dataflow from all members of the team will be flowing with the progress of activities. What is the significance of reviewing ROI?
ROI . the investment would be in an information system development or enhancement project. If the project is behind schedule or over budget. Bill of Materials is a very important document in Project Management. Within the context of the Review Process. the agency’s management capacity. lead times are important for all the members. the likelihood of cost overruns. The data may be about some shortfalls for which the member is seeking instructions. ROI should be recalculated at every major checkpoint of a project to see if the BEP is still on schedule. ROI should reflect such risk factors as the project’s technical complexity. information about orders placed. For example. which is the date when the investment begins to generate a positive return.
and capitalization data from which Return on Investment (ROI) is derived was not required for a particular project. In each case above. calculation of benefits and costs. In such a case. It requires all agencies to capitalize items acquired or developed for internal use if the expected service life is two or more years and its cost meets or exceeds the agency’s threshold for internal use software. the project would be expected to calculate and track its ROI. Some of the major benefits experienced by sites that installed the information system that would be important to include in the memorandum are: a) Decommissioning of mainframe computers b) Reduction/redirection of labour c) Elimination of redundant systems d) Ability to more cost effectively upgrade all sites with one standard upgrade package. including employee salaries and benefits for both Federal and Contractor employees who materially participate in the Software project.If the detailed data collection. then it may not be realistic or practical to require the retrofit calculation of ROI once the project is added to the Review portfolio. and labour involved in determining the cited benefit. For the Project Management Review. identify the specific site. In subsequent Reviews of the information system. Program managers are considered to be the source of cost information for internal use software projects. The memorandum will be used as tool for responding to any future audit inquiries on project ROI. it is recommended that a memorandum of record be developed as a substitute for ROI. The standard requires capitalization of direct and indirect costs. The memorandum should provide a brief history of the program. it is recommended that the project leader replace the text on the ROI document through – 1) a note stating which stage of its cycle the project is in; (2) A bulleted list of the most important points from the memorandum of record; and (3) a copy of the memorandum of record for the Review repository. There is one notable exception to this guidance. If capitalization data is collected for the project in the future. the ROI slide can be eliminated form the package. and a summary of the process used to identify and select system enhancements. Any internal use software project in the maintenance phase of its lifecycle that adds a new site or undertakes an enhancement or technology refresh that reaches the cost threshold established by Standard will need to satisfy capitalization requirements. a description of the major benefits realized to date with as much quantitative data as possible. systems. Identify any costs or dollar savings that are known or have been estimated.
2. The word "software" does not appear in definitions of CMMI. CMMI is a trademark owned by Software Engineering Institute of Carnegie Mellon University. The main sponsors included the Office of the Secretary of Defense (OSD) and the National Defense Industrial Association. CMMI helps "integrate traditionally separate organizational functions. and provide a point of reference for appraising current processes. and delivery — CMMI for Services (CMMISVC). CMMI can be used to guide process improvement across a project. Product and service acquisition — CMMI for Acquisition (CMMI-ACQ). Service establishment.6 XYZ Company implements CMMI level-03. the Software CMM. 2008). It is not as specific to software engineering as its predecessor. It decides to advance the existing project management. This generalization of improvement concepts makes CMMI extremely abstract. A CMMI model may also be used as a framework for appraising the process maturity of the organization. management. 3. the delivery of all kinds of services. CMMI models provide guidance for developing or improving processes that meet the business goals of an organization. and the Software Engineering Institute (SEI) at Carnegie Mellon University. CMMI in software engineering and organizational development is a process improvement approach that provides organizations with the essential elements for effective process improvement. provide guidance for quality processes. CMMI was developed by the CMMI project. government. set process improvement goals and priorities.
. According to the Software Engineering Institute (SEI. government and the Carnegie Mellon Software Engineering Institute (SEI). What are the steps to be followed by the organization to drive project management to a new horizon?
Capability Maturity Model Integration (CMMI) is a process improvement approach that helps organizations improves their performance. CMMI originated in software engineering but has been highly generalised over the years to embrace other areas of interest." CMMI currently addresses three areas of interest: 1. such as the development of hardware products. To make further changes it decides on starting a new division in the organization. and the acquisition of products and services. which aimed to improve the usability of maturity models by integrating many different models into one framework. Product and service development — CMMI for Development (CMMI-DEV). a division. or an entire organization. The project consisted of members of industry. CMMI was developed by a group of experts from industry.Q.
The staged representation is designed to provide a standard sequence of improvements. or CMF. CMMI Version 1. In 2002. The table below lists the process areas that are present in all CMMI constellations. The continuous representation is designed to allow the user to focus on the specific processes that are considered important for the organization's immediate business objectives. development) used. Version 1. and can serve as a basis for comparing the maturity of different projects and organizations. CMMI representation CMMI exists in two representations: continuous and staged. The staged representation also provides for an easy migration from the SW-CMM to CMMI.
There are Five maturity levels. However. The CMM was developed from 1987 until 1997. This collection of eight process areas is called the CMMI Model Framework.2 followed in August 2006.1 was released. maturity level ratings are awarded for levels 2 through 5: Maturity Level 2 – Managed
. Key process areas are the areas that will be covered by the organization's processes.CMMI is the successor of the capability maturity model (CMM) or software CMM. the process areas it contains will vary. CMMI model framework Depending on the CMMI constellation (acquisition. or those to which the organization assigns a high degree of risk. services.
each of which addresses a different area of interest.Organizational Process Performance Maturity Level 5 – Optimizing CAR . v1.Organizational Training PI . version 1. acquisition.Configuration Management MA .Supplier Agreement Management Maturity Level 3 – Defined DAR .2 was released in November 2007.Causal Analysis and Resolution OID .2 was released in February 2009. v1. and Services).3—Plans for the Next Version
.Decision Analysis and Resolution IPM .Integrated Project Management +IPPD OPD .Quantitatively Managed QPM . It addresses product and service development processes.Technical Solution VAL . It addresses guidance for delivering services within an organization and to external customers.2 was released in August 2006.3 is expected to be released in 2010.Product Integration RD . Acquisition.Project Monitoring and Control PP .Requirements Development RSKM .Validation VER – Verification Maturity Level 4 .Requirements Management SAM .Organizational Innovation and Deployment CMMI models CMMI best practices are published in documents called models.Process and Product Quality Assurance REQM . CMMI for Services (CMMI-SVC).Measurement and Analysis PMC .Quantitative Project Management OPP . and outsourcing processes in government and industry.Organizational Process Definition +IPPD OPF . provides models for three areas of interest: development.Organizational Process Focus OT . CMMI for Acquisition (CMMI-ACQ). acquisition. and services.Project Planning PPQA .CM . v1. v1.2. CMMI Version 1. CMMI Product Suite (includes Development.Risk Management TS . It addresses supply chain management. The current release of CMMI. CMMI for Development (CMMI-DEV).
CMMI-compliant processes. There are three classes of appraisals.g. A class A appraisal is more formal and is the only one that can result in a level rating. The Standard CMMI Appraisal Method for Process Improvement (SCAMPI) is an appraisal method that meets all of the ARC requirements. that an informal (SCAMPI C) appraisal be performed. To determine how well the organization’s processes compare to CMMI best practices. SCAMPI also supports the conduct of ISO/IEC 15504.Regardless of which model an organization chooses. SEI has maintained statistics on the "time to move up" for organizations
. instead. 2. CMMI best practices should be adapted by an organization according to its business objectives. To inform external customers and suppliers of how well the organization’s processes compare to CMMI best practices 3.This approach requires that members of the EPG and PATs be trained in the CMMI. Depending on the type of appraisal. More modern approaches that involve the deployment of commercially available. an organization is appraised. The appraisal results can then be used (e. Many organizations find value in measuring their progress by conducting an appraisal. by a process group) to plan improvements for the organization. and to identify areas where improvement can be made.
Appraisal An organization cannot be certified in CMMI.. and that process areas be prioritized for improvement. Results of an appraisal may be published (if the appraised organization approves) on the CMMI Web site of the SEI: Published SCAMPI Appraisal Results. Achieving CMMI compliance The traditional approach that organizations often adopt to achieve compliance with the CMMI involves the establishment of an Engineering Process Group (EPG) and Process Action Teams (PATs). which focus on identifying improvement opportunities and comparing the organization’s processes to CMMI best practices. assessments etc. can significantly reduce the time to achieve compliance. Appraisal teams use a CMMI model and ARC-conformant appraisal method to guide their evaluation of the organization and their reporting of conclusions. A. also known as SPICE (Software Process Improvement and Capability Determination). the organization can be awarded a maturity level rating (1-5) or a capability level achievement profile. B and C. Appraisals are typically conducted for one or more of the following reasons: 1. To meet the contractual requirements of one or more customers Appraisals of organizations using a CMMI model must conform to the requirements defined in the Appraisal Requirements for CMMI (ARC) document.
5% are assessed at level 2: Managed. Sutherland et al.8% of the organizations with 1001–2000 employees are rated at the highest level (5: Optimizing). 2002). These statistics indicate that. The Software Engineering Institute’s (SEI) Team Software Process methodology and the Capability Maturity Modeling framework can be used to raise the maturity level. 2002).
. Interestingly. However. the best practices are equivalent and result in equivalent process improvement results. since 1987.. 70. David J. The continuous approach yields one of six capability levels. The combination of the project management technique earned value management (EVM) with CMMI has been described (Solomon. quality and customer satisfaction. Anderson (2005) gives hints on how to interpret CMMI in an agile manner. schedule. The staged approach yields appraisal results as one of five maturity levels. the XP requirements management approach. Of the small organizations (<25 employees).adopting the earlier Software CMM and primarily using the traditional approach. To conclude with a similar use of CMMI. These statistics have not been updated for the CMMI. was evaluated as not compliant with CMMI. a software engineering method. They believe neither way is the 'right' way to develop software. the CMMI model mostly deals with what processes should be implemented. The median increase in performance varied between 14% (customer satisfaction) and 62% (productivity). productivity. (2007) assert that a combination of Scrum and CMMI brings more adaptability and predictability than either one alone. both approaches have much in common. For example. These results do not guarantee that applying CMMI will increase performance in every organization. but that there are phases in a project where one of the two is better suited. CMMI can be appraised using two different approaches: staged and continuous. the median times to move from Level 1 to Level 2 is 23 months. which relies on oral communication. Other viewpoints about using CMMI and Agile development are available on the SEI Web site. and not so much with how they can be implemented. while 52. Turner & Jain (2002) argue that although it is obvious there are large differences between CMMI and agile methods. The differences in these approaches are felt only in the appraisal. A small company with few resources may be less likely to benefit from CMMI. has been evaluated with CMM/CMMI (Nawrocki et al. and from Level 2 to Level 3 is an additional 20 months. Extreme Programming (XP). They suggest one should combine the different fragments of the methods into a new hybrid method.
Applications The SEI published that 60 organizations measured increases of performance in the categories of cost. this view is supported by the process maturity profile (page 10).
Through one of the mail point is Adequate availability of resources.
Concept of PMO is gaining ground in Project Management because enterprises need to ptimize resources – especially knowledge and people – across many projects. Communication should flow up and down the business organization. The statement should be communicated to everyone in the company. The Committee should be staffed by top departmental executives with the responsibilities of goal setting. Obtain Upper Management Support. and films. comprehensive policy statement. quality circles. Create New Organizational Components. training. Productivity at the junior level can be assumed and controlled only if all other supporting elements of business are well balanced. job enrichment. The responsibilities of all organizational components must be clear and well established.1 Providing adequate resource is key to productivityComment. The Chief Executive Officer should issue a clear. Studies show a characteristic of successful. Economies are achieved and customer satisfaction gained resulting in more profits and repeat contracts. 5. Open Communications. growing businesses is that they develop a "corporate culture" where employees strongly identify with and are an important part of company life. 2. Increasing productivity means changing the way things are done. This is a very broad element encompassing the quality of work life. 4.Q. and feedback channels established. otherwise frustration sets in and commitment is lost. The Productivity Managers are responsible for the day-to-day activities of measurement and analysis. The review of projects – their methodology and the important of interpersonal relations will help in achieving the productivity of the personnel. Through
. 3. Higher productivity cannot be expected if they are not motivated. advice. Goals and objectives should be set. worker motivation. experience shows a PIP likely will fail. problems targeted and rank ordered. reporting and monitoring requirements developed. guidance. incentive systems and much more. Top management also must be willing to allocate adequate resources to permit success. Involve Employees. Without top management support. Through publications. Key elements of a Productivity Improvement Program: 1. This sense of belonging is not easy to engender. and general control. Plan Systematically. A Steering Committee to oversee the PIP and Productivity Managers to implement it are essential. Success doesn't just happen. worker attitudes. employees must be told what is going on and how they will benefit. Desired changes must be communicated. meetings.
An assembly of various units of their production forms a products and a variety of such products make up the business of the company. formulas and worksheets developed. Traditional Vs. employee involvement. They will have all the resources required to do all jobs or operations to complete it. is to keep it as simple as possible without distorting and depreciating the data. Their creativity and innovation is particular respect of jobs. with departments.
Q. sections having an hierarchy of managers and their assistant. sources of data identified.
Traditional organizations: These have the formal organisation structure. however. This is the technical key to success for a PIP.
. No one particular member or a department or a team is responsible for the completion of any particular product. The goal. cooperate among themselves to achieve high productivity.2 Compare the following: a. Productivity must be defined. It has been found that a sense of ‘ownership’ of the project motivates them for being creative. They will become specialists and be insular. the corporate culture and productivity both can grow. a more detailed analysis is helpful. Measure and Analyze. and equitable incentives. Measurement is so critical to success. All of them function on a continuous basis catering to a series of requirements issued by the planning department. Measuring productivity can be a highly complex task. Projectised organizations: These have teams comprising members who are responsible for completing one completely deliverable product. benchmark studies performed. functions. Projectised Organization. Most importantly. and personnel assigned.basic fairness. Most of them do not get exposed to other areas of operations in the organisation. they have a time schedule within which all the elements of the projects have to be completed. 6.
b. get the average simple/medium/complex (S/M/C) programs from the baseline. Top-down estimation
Bottom up approach: The bottom up approach consists of the following: _ Project manager first divides the product under development into major modules _ Each module is subdivided into smaller units _ Project manager defines a standard for manufacturing and self-testing as:
• • •
Identify modules in the system and classify them as simple. medium or complex. As much as possible. Bottom-up Vs. use either the provided standard definitions or definitions from past projects If a project specific baseline exists. build effort for
KSF will also provide an input to effective exit strategy (EES).
Q. one needs to constantly evaluate from time to time .
Macro issues in project management Evolving Key Success Factors (KSF) Upfront: In order to provide complete stability to fulfillment of goals. The easiest way would be for the team to evaluate each step for chances of success on a scale of ten. Refine the estimates taking project specific factors into consideration. the consideration of what will constitute the success of completing a project and assessing its success before completion. language and other attributes to look for similar projects in process database. fix the productivity level for the project _ Obtain the overall effort estimate from the productivity and size estimates. Use data from these projects to define the build effort of S/M/C program. or from similar projects. KSF rides above normal consideration of time and cost – at the levels encompassing client expectation and management perception – time and cost come into play as subservient to these major goals. Use effort distribution data from the process capability baselines or similar projects to estimate the effort for the various phases.3 List out the macro issues in project management and explain each.
Top-Down Approach The top down approach consists of the following: _ Get the estimate of the total size of the product in function points _ Using the productivity data from the project specific capability baseline from the general process capability baseline. use project type. Exit here does not mean exit from the project but from any of the drilled down elemental activities which may prove to be hurdles rather than contributors. The KSF should be evolved based on a basic consensus document (BCD). KSF should be available to the management duly approved by the project manager before execution and control stages.•
If a project specific baseline does not exist. technology. Broad level of KSF should be available at the conceptual stage and should be firmed up and detailed out during the planning stage. Empowerment Title (ET): ET reflects the relative importance of members of the organization at three levels:
. If no similar project exist in the process database and no project specific baseline exist refine the estimates based on project specific factors.
Budgeted cost of work scheduled (BCWS) iii. This step is most difficult since junior members have to respond and resist to being pushed through sheer innovation and performance – this is how future leaders would emerge. The key here is the active participation of members in the decision making process. A senior with a better decision making process will work closely with the project managers as well as members to plan what best can be done to manage the future better from past experience. Actual cost of work performed (ACWP)
Management By Exception (MBE): “No news is good news” . _ Group leaders are empowered additionally to actindependently towards client expectation and are also vested with some limited financial powers. _ Managers are empowered further to act independently but to maintain a scientific balance among time. The right feeling of ownership is important. cost.MBE is more important since organizations are moving toward multi skilled functioning even at junior most levels. Similarly. The PDM process is made scientific through: i. MBE provides and facilitates better implementation of effectiveness of empowerment titles . The bend limit of MBE can be evolved depending on the sensitivity of the nature and size of the project. apart from being a virtual advisor to the top management. Earned value management system (EVMS) ii. Budgeted cost of work performed (BCWP) iv. If a member wants help he or she locates a source and proposed to the manager only if such help is not accessible for free.
. expectation and perception. The ownership is distributed among all irrespective of levels – the term equally should be a\voided here since ownership is not quantifiable. Partnering Decision Making (PDM): PDM is a substitute to monitoring and control. a member should believe that a team leaders silence is a sign of approval and should not provoke comments through excessive seeking of opinions._ Team members empowered to work within limits of their respective allocated responsibilities – the major change from bureaucratic systems is an expectation from these members to innovate and contribute to time and cost. In short leave people alone and let situation perform the demanding act.
know how to do it and have the courage and will to do it.Highest levels of trust.
.They have the power of taking along with them others. fairness and honesty are expected while dealing with people both within an outside the organisation. * People Relationships .Any leader without followers cannot be successful. This includes the customers. Endowed with these it will be easy to be effective. know why they are doing it. * Leadership – These managers lead by exhibiting the characteristics of leadership. * Integrity . They know what they should do. He delegates freely and supports them. The top management will look for these in a person who they want to employ for project management. shareholders.Q. The manager builds up his team based on the core values of sincerity. objectivity and dedication. thus ensuring cooperation and commitment during implementation. He makes them a part of the decision making process. He ensures that his subordinates get opportunities for growth based on performance.4 Describe the traits of a professional manager in details?
Traits of the professional manager: The following traits enable a manager to be effective in his functioning. They have excellent human relationship skills.
* Quality – The quality philosophy should not cover only the product quality. Such a work culture is very conducive for problem solving – which is the aim of all creativity. This happens when they have open minds. but every process that has gone into making it. arriving on time. but motivates his entire team to do it. Economy of words when instructions are given. Ethics is something they practice diligently. the manager’s thinking about any problem is what can I do for him and all actions will be in that direction. They ensure that functioning is clean. This is the simple path of performance management. directors. These are communicated to the employees. Their transactions will be transparent. their quantity and their intended usage. Check actual performance Vs. Standards set. seek further information and consider all possible alternatives and come out with some new and unique solution. acknowledging compliance. To mange any criterion. * Innovation and creativity . team members – any person who needs your services. They need our solutions for their problems. Such actions observed by their team members enthuse them and a spirit of adventure will bring about better solutions faster. Reset objectives for next period Objectives/Performance standards are set. A saying goes the human mind is like a parachute. So. They will draw from their experience from diverse fields. This comes by appreciation and encouragement. employees. If there any shortfalls he arranges for training them so that their performance improves.It is now recognized that every organized two sets of customers. The following seven step model will be useful: Objectives/Performance standards are set.Professional managers think beyond the obvious. remembering the promises and above all a keen eye for details and patience to make others know what they want are components of quality. External customers – clients and all members of society we come in contact in connection with our business. Review/monitor the above. the government and society at large. They exhibit a keenness to go behind a problem and attempt to find the root cause of the problem. it is useful only when it is open.dealers. Their persistence will reward them. The quality of the input. if needed. * Customer Orientation . that they get help to do so and their effort is recognized. Internal customers are people in the organisation – employees. Then measures of
. Thus the team members know that they are expected to perform. Jointly decide on corrective action. * Performance Management The professional manager not only ensures that his performance is at peak all times. it is necessary to measure the factors that were responsible for ‘what is’. Identify gaps. whose needs of demands you satisfy.
Comparison on every detail is made. training. Particular areas are chosen for improvement. may help in reallocating the job. This is brought about by the culture and communication system in the organisation. Information sharing brings in trust and promotes belongingness. Review/monitor the above Review helps in resetting the goals when they cannot be achieved for various reasons – shortage of resources. consult their colleagues or bosses. team members and organisation. Then the outcomes – are they as they were expected.
. Standards set This is the evaluation phase. But if performance is not good the reasons and extent having been identified. The extent to which they affect the functions of the job itself are identified jointly decide on corrective action.
Identify gaps Gaps mean the shortfall in performance standards. Check actual performance Vs. or even diverting the operation. time etc. The tendency seen is that most managers strongly identify with their own departments. It is possible that some objectives cannot be met at all. and the difficulties faced in utilization and how they were resolved.the utilizationthe processes used. so that there will be no hiccups at the end of the period. Differences are recorded. their suitability. units or divisions and they lack a sense of organisation. This is the basis for evaluating performance. the project. These are communicated to the employees This procedure ensures that they know what is expected of them and help them to adjust their activities in such a way as to meet them. the course of action for effecting corrections are decided. For every employee the level of achievement is set in terms of quantities and extent to which the performance approached the standard. Giving extra responsibilities. Reset objectives for next period The targets are revised either upward or downward depending on the conclusion of the appraisal process. This enables them to seek help. if needed There is a possibility that the performance has exceeded the set standards. learn– so that they will meet the expectations. The immediate supervisor is also involved. the shortfalls can be made up with the allocation of extra resources.
• Identification with the organisation A sense of pride and belonging goes with
the“ownership” of the job. Performance closer or beyond expectation is the degree of quality. By monitoring. relocation is considered. The communication to his boss.
professional manager has the ability and capacity to cope with change.
monitor project progress.
facilitate resolution of project issues. Today. facilitate resolution of related project issues. many organizations are using interventions such as team building. and other activities. But managers often hesitate to empower their subordinates as they feel insecure and show a sense of uncertainty. survey feedback.
Chief Financial Officer – Approve investments in corporate / major information
systems projects. Further the positive and negative consequences of change need to be discussed and understood before implementation.5 List the major participants of project review process.
The following is a list of key participants and their responsibilities in the Project Management Review Process:
Chief Information Officer (CIO) – conduct project senior management reviews.
Empowering employees: The professional manager should possess the ability to empower his employees down the line.
• Coping with changes: It is often said – ‘The only constant in this world is change’.
. manage project funding and authorize work activities. ensure project reporting. He accepts the fact that change is inevitable and is ready to implement change at the workplace. which in effect means every manager should be aware of the company’s plans. present project status. approve changes to
project scope. Empowerment is the process by which employees are encouraged to take decisions pertaining to their area of work. Many managers are not even ready to delegate their authority to subordinates and end up only delegating responsibility. it is essential that employees are involved in the implementation of change. Also highlight roles and responsibilities of each. conduct project management reviews. This leads employees developing a sense of pride in their jobs. To implement change successfully.
Program Managers – develop or approve project deliverables. Empowerment ensures execution of his duties. to ensure that employees build up a strong sense of identity and pride in the organization they work for. Thus a professional manager has the attitude to accept change as a way of life and takes it in his stride. The professional manager practices empowerment and encourages employees to grow and develop in their positions. A
Q. products and policies.In the light of increased competition and ever changing strategies to develop business orientation.
Systems Owners – develop or approve project deliverable. An obvious corollary to this is that the organization’s communication policy too should be conducive to such information sharing. present project status.
provide support to systems owners and project managers. They review and comment on project deliverables and work products. but the profit on an average is the same each year. for a finite time. participate in discussion. The senior management feels that although they are making profits. provide input as appropriate. Therefore the basic characteristics of joint venture can be summed up as: 1) Based on a Contractual Agreement. a new entity and new assets by contributing equity. manage resolution of project issues.
Key project stake holders and other invited participants – attend the review
meeting. The JV parties agree to create. schedule and support the review meetings. which the management should follow in this venture?
Every business aims to commence its activities in the foreign market. Therefore some prefer to enter in to strategic relationships and one such is the Joint Ventures. The foreign market provides with both opportunities and risks. and assets and the control of the enterprise.6 ABC organization has been in software business since last 20 years. prepare project management review and senior management review presentations. present project status. They then share in the revenues.
Project Managers . expenses. Can you suggest some guidelines.
. A Joint Venture is an entity formed between two or more parties to undertake economic activity together.performs day to day project management. advise the CIO and associate CIO’s. They decide that they would make some additions to the business and decided to go ahead with development of some high technology for better profits. develop project
management Investment process Program staff – Evaluate major information systems which receive CMIP funding and prepare report to the top.
The business ventures abroad are not a new phenomenon in the independent India. The Strategic Goals are as follows: Diversification Synergies. The Internal reasons are as follows: Building on company’s strength. Access to innovative managerial practices. Improved Agility. Creation of stronger competitive units. Access to new technologies and customers. making globalization of Indian business an integral part of economic reforms. management and control.2) Specific limited purpose and duration. Speed to market. it has assumed specific significance after the Indian government started economic reforms in the year 1991. Internal Reasons. However. losses. Defensive response to blurring industry boundaries. Reasons for setting Joint Ventures abroad The reasons for setting up joint ventures can be contributed to three main factors and they are: 1. Competitive Goals. 1. Strategic Goals. Transfer of technology/skill Indian Joint Ventures Abroad India started opening its economy a decade ago to integrate with global economy. 3) Joint Property Interest 4) Common Financial and Intangible goals and objectives. Economies of scale and advantages of size. Significance of Indian Joint Ventures Abroad
. 5) Shared profits. 2. Improving access to financial resources. The initiatives were taken way back in the 1960s with the first ventures of Birlas in Ethopia in the year 1964. The Competitive Goals are as follows: Influencing structural evolution of the industry. Spreading on costs and risks. 3. 3. 2.
International trade is considered to be imperative for economic development. The firms thus face the problem of searching new markets and cheaper sources of raw material. there are increasing pressures for newer. Reduce Fixed costs per product. Further.Economic borders of various countries have been opened on this premise under the aegis of world trade organization. The huge investments in new product and technology development demands higher levels of production to ensure operations of the firms above the breakeven point. Shared technologies can be used beyond JV. A local JV partner knows the market. Automatic Route Under the Automatic Route. Their growth and development. Advantages Financial resources can be shared. Allows for Investor diversification. prior approval is required from the concerned regulatory authority both in India and abroad). Advantages and Disadvantages A business while deciding upon whether to go for a joint venture should make a thorough analysis on its business goals. Competitive strengths of two parties can be combined. Local Management of a JV can be unknown Broadly there are two schemes under which an Indian Party can set up a JV abroad. whose economy has moved from the level of necessity to comforts and luxuries levels. high reliability and attractive finish etc. The criteria for direct investment under the Automatic Route are as under:
. which generally have small population. Reduces local Friction. namely the Automatic Route and the Normal Route/Approval Route. Economic incentives add value to JVs. however. labour and other resources. the firms have to go for development of capital intensive technologies. Direct management of business activities. The scale of operations required over a period of time reaches a level that is well above the entire domestic demand in most of the developed countries. an Indian Party does not require any prior approval from the Reserve Bank for setting up a JV abroad (in case of investment in the financial sector. better and superior products with consistent quality. In countries. thus. with the labour becoming increasingly costly. Disadvantages JV profits are shared. depends upon internationalization of the business.
Normal Route Proposals not covered by the conditions under the automatic route require the prior clearance of the Reserve Bank for which a specific application in form ODI with the documents prescribed therein is required to be made to RBI. etc
. Bhutan and Pakistan is up to 100% of its net worth and the investment is in a lawful activity permitted by the host country . The Indian Party routes all the transactions relating to the investment in a JV through only one branch of an authorized dealer to be designated by it. Requests under the normal route are considered by taking into account inter alias the prima facie viability of the proposal. experience and expertise of the promoters. (CIBIL)/RBI or under investigation by the Enforcement Directorate or any investigative agency or regulatory authority.The total μfinancial commitment of the Indian Party in JVs in any country other than Nepal. The Indian Party is not on the Reserve Banks exporters caution list / list of defaulters to the banking system published/ circulated by the Credit Information Bureau of India Ltd. business track record of the promoters. benefits to the country.