EDPM Totality of Project Management

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li
Totality of Project Management leading to

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Certicate In Project Management Experience Sharing by PM Stalwarts
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Module 1
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Understanding The Totality of Project Management
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Knowing is not enough; we must apply - Goethe
i2P2M’s Unique Revolutionary approach to Learning and Development (L&D)

Transforms Training from Expenditure to Investment with High ROI.
Revolutionising Management
Transforming Learning to Competency Development to its Implementation
and Demonstration at workplace of the Benefits Accrued
Building
Teams
Competence Project
Ledership
Sustainable
Values
Transparency
i2P2M believes that knowledge is scalar. It only has magnitude. The development of
competency takes place only when knowledge is applied in real live situations. After each
module of 3 days, participants are required to write a report highlighting the principles learnt
in the classroom and it's implementation at workplace.
In 2011, a new beginning was made to equip our future leaders to deal with the complexities
of the future with a little more certainty. i2P2M believes that the senior level management
team needs exposure to the best practice in project management to create a better future for
their company.
In June 2011, the part time International Executive Diploma in Project Management
(I/EDPM) was launched which has created a new global benchmark in executive education.
We Create Project Leaders.
I/ EDPM - an experience never experienced before

Totality of Project Management (TPM)
Table of Contents
Unit 1 : PM Fundamentals 1 - 17
• Introduction
• What is a Project?
• Programmes and Portfolio
• Project Management
• Project Life Cycle Phases & Approaches
Unit 2 : Conceptualize 18 - 31
• Need Analysis
• Business Case
- Benefits Realization, PESTLE, Investment Appraisal
• Project Charter
Unit 3 : Stakeholder Management, Planning, Success Criteria 32 - 44

• Managing Stakeholder Expectations
• Stakeholder Register
• Developing the Project Plan
• Success Criteria & Success Factors
Unit 4 : Managing Scope 45 - 59

• Scope Statement
• Work Breakdown Structure (WBS)
• Scope Baseline
• Scope Creep
Unit 5 A : Time Management - Part 1 60 - 71

• Activity Relationships
• Floats
• Developing Network Schedule
• Precedence Diagramming Method (PDM)
• Critical Path Method (CPM) Analysis
Unit 5 B : Time Management - Part 2 72 - 82

• Gantt Charts
• PERT, Standard Deviation
• Schedule Compression
• Managing Resources
Unit 6 : Cost Management 83 - 96

• Cost Estimations
• Estimation Techniques
• Cost Baseline
• Project Budget
Unit 7 : Managing Quality 97 - 111

• Quality Concepts
• Quality Planning, Assurance, Control
• Quality Tools
_______________________________________________________________________________________
© Centre for Excellence in Project Management (CEPM) i
A-48, Sector 5, Noida 201301, India (M) +91 9999684622 ; rjain@cepm.com ; www.cepm.com
Table of Contents contd
Unit 8 : Interfaces, Org. Structures, Roles & Responsibilities 112 - 121

• Internal and External Interfaces
• Functional, Matrix, Project Org. Structures
• Roles – Sponsor, Project Manager, Team
• Responsibility Assignment Matrix
Unit 9 : Risk & Opportunity Management 122 - 144

• Risk Categories, Risk Terms
• Risk Identification, Assessment, Response, Control
• Risk Tools
• Issue Management
Unit 10 : Communication & Information Management 145 - 154

• Communication Model
• Types of communication
• Barriers to Communication
• Managing Information
Unit 11 : Procurement & Contracts 155 - 172

• Procurement Guidelines
• Procurement Steps
• Types of Contracts
• Contract Administration
Unit 12 : Earned Value Management System 173 - 183

• What is PV, EV, AC
• Schedule Variances, Cost Variances
• SPI, CPI; Tracking Performance Against Plan
• Forecasting
Unit 13 : Managing Changes, Configuration Management, Problem Solving 184 - 193

• Change Process & Change Control
• Managing Configuration
• Problem Solving Methods
Unit 14 – Team Performance, Leadership, Motivation & Managing Conflicts 194 - 211
• Team Development & Performance
• Leadership Styles
• Motivating Team
• Resolving Conflicts
Unit 15 : Health, Safety & Environment, CSR 212 - 220

• Managing Health & Safety at workplace
• Environmental Considerations
• What is CSR, UNIDO CSR Guidelines
Unit 16 : Integrate, Deliver & Closeout 221 - 234

• Project Integration
• Product Integration
• Administrative & Contract Closeout
• Post Project Evaluation & Lessons Learned
_______________________________________________________________________________________
© Centre for Excellence in Project Management (CEPM) ii
Brief Profile of the Resource Person - Mrs. Ruchira Jain, (CSPM)
Mrs. Ruchira Jain, Certified Senior Project Manager (CSPM) is the Managing Director, Centre for
Excellence in Project Management (P) Ltd. (CEPM).
 She was deeply involved in various facets of project management dissemination in CEPM since
1995 and became it’s Managing Director in 2012.
 In 2007 Ms. Jain became 1st person in India to be certified as a Certified Senior Project
Manager. Her assessment was done by assessors from Germany.
 She is also the first Asian woman to have been certified as a Certified Project Management
Associate in 2000.
 Has played a key role in organising CEPM’s 28 Global Symposiums on Project Management that
it holds every year since 1992. The 1st three conferences were held in association with UNDP.
 A top rated, sought after trainer, Ms. Jain has trained 11,000+ professionals since 2001 from
leading private and public sector companies like ABB, Adani, BG India, Birla Mgmt. Centre,
CITEC, DRDO, DVC, EdCIL, Fortis, GAIL, HFCL, HPCL, Idea Cellular, Indian Oil, Infineon
Singapore, IRCON, IPA, ISRO, JSPL, JCB, JICA, Jubilant, Johnson Controls, L&T, Maruti Suzuki,
Ministry of Statistics & Programme Implementation, NTRO, NHPC, Nuclear Power, NTPC, NPC,
Navitasys, ONGC, Power Grid, Punj Llyod, SAIL, Siemens, Tata Projects, Tata Power, Tecnimont
ICB, Teri Hydro, Thermax, RVNL, etc.
 She is the key architect of the globally well known and widely used Project Management
e-learning site – www.pmGURUonline.com launched in 2003 which was/is used by persons from
leading companies like AAI, BHEL, Infosys, WIPRO, Genpact, NTPC, Headstrong, IREL, IPRCL,
Jaguar Overseas, L&T, NHPC, Oil India, IFCI, IREL, SAIL, SJVNL, Agilent technologies, Adobe,
E&Y, ESC France, US Bureau of Census, IIM Calcutta, IMT, Veltech, IGNOU, Thermax etc. etc.
 Was an Invited speaker at the Project Management World Congress held in Panama in 2015 and
in the World Project Management Forum in 2020.
 Has been a keynote speaker at various international and national PM forums including twice at
IEEE in new Delhi, and the Global Symposiums in Project Management.
 She was a Board Member of the Education & Training Board of IPMA for three terms from 2008 -
2012 and was only person from India in the E&T Board.
 Ms. Jain has written two books:

Her 1st book titled ‘Totality Of Project Management’ was released in December 2013 by
Dr. V. Moily, then Hon’ble Minister of Petroleum, Government of India.
Her 2nd book titled ‘Building A Project Oriented Society’ was released by Mr.Suresh
Prabhu, then Hon’ble Minister of Industry and Commerce, Government of India.
 She also holds the Certificate in Project Risk Management (CrtPRM), Certificate in Complex PM
(CrtCPM), Certificate in Earned Value Management (CrtEVM) and the International Executive
Diploma in Project Management (IEDPM).
________________________________
_______________________________________________________________________________________
© Centre for Excellence in Project Management (CEPM) iii
Your trusted partner
Centre
for Excellence in Project Management (P) Ltd.
CEPM's Services
strengthening project management since-1992
650+ clients from public, private, central /
state governments. Persons trained from 20+ countries.
CEPM
Global Symposiums on Project Management
Learn | Share the best practices
World Project Management Forum

Centre for Excellence in Project Management (P) Ltd. (CEPM) Interconnected world
formed in 1992 laid the scientic foundation of project
management in India through the International conference Project Management Training
Gain knowledge | Demonstrate benets
organised in association with UNDP in 1992.
CEPM has exposed millions on project management through TV, Project Management Consulting
national newspapers, interviews and conducted 1000+ Satisfying stakeholders
programs on varied aspects of project and program
management. CEPM is your trusted project management partner.
Competency Development
CEPM's agship Totality of Project Management curriculum has Making A Difference
exhaustive coverage of entire PM processes from concept to
commissioning across 8 project life cycle phases covering hard
TM
and soft skills and addressing India specic issues is in line with P M K Q Project Management Knowledge Quotient
NITI Aayog’s recommendations for the project management Assess | Act | Enhance
curriculum.
Real Time Computer Based Project

Inaugural World Project Management Forum Meet 2019 Management Simulation Games
Risk free | Gain 2 years' experience in 1 day
Organisation Management Maturity Assessment

(Project, Risk and Human Capital)
Assess | Act | Maximise competitiveness
National Project Management

Team Excellence Award (PMTEA)
(2019) Inaugural session of the 27th Global Symposium dedicated to the 1st Participate | Show your mettle
World Project Management Forum Meet in New Delhi. Ruchira Jain, MD,
CEPM welcoming the delegates, (L-R) Yaduvendra Mathur, Fmr. Special
Secretary, NITI Aayog; Veikko Valila (Finland), Adesh Jain, Founder WPMF, CEPM's Training Website
e-Learning
TKA Nair, Chairman, AIC of i2P2M, Dr Hiroshi Tanaka (Japan), Dr. AK Singh, pmGURUonline launched in 2003.
Director General, DRDO; Raphael Albergarias (Brazil), Air Marshal Rajeev Widely used across 20+ countries
Sachdeva AVSM, Deputy Chief, Integrated Defence Staff. Training is available 24 x 7…from anywhere…
any time… at users pace and convenience
(2011) CEPM was honoured to have Dr. APJ Abdul Kalam, Former President of (2018) 60 participants of CEPMs workshop on
India gave the Special Address at the Global Symposium on Project Management Totality of Project Management at SCOPE
CEPM
Global Symposiums on Project Management World Project Management Forum (WPMF) Meet
(2017) Chief Guest, Hon’ble Minister, Shri Suresh Prabhu giving (2019) 27th Global Symposium was dedicated to the First World Project Management
the Inaugural Address at the Global Symposium Forum (WPMF) Meet. 8 out of 37 signatories of WPMF Charter are seen here.
Ÿ CEPM unique in holding symposium every year Ÿ Had record participation from 120 institutions/companies
Ÿ 27 Global Symposiums organised Ÿ Speakers from all the continents
Ÿ Stalwarts from all over the world Ÿ WPMF Charter released
Ÿ Participation of 50000 professionals Ÿ NITI Aayog and two Central Ministries supported event
Ÿ Participation from 95 countries Ÿ Sponsored by 5 major corporations
Link to download brochure : www.cepm.com/gs2020_pdf
Project Management Training

The 8 project life cycle phases of Totality of Project Management
TPM WORKSHOP
(TPM) is in line with NITI Aayog’s recommendation.
Conceptualize
Plan
Change if Required
Organize
Plan & Deliver
Implement
Control
Integrate
Participants engrossed in the Totality of Project Management training
leading to the Certicate In Project Management (CIPM) credential Deliver & Closeout
Knowledge Leverage
Ÿ 500+ In-company programs
Ÿ 300+ Public workshops Totality of Project Management (TPM) curriculum covers :
Ÿ eLearning 24x7 used worldwide since 2003 Ÿ 8 Project Life Cycle Phases
Ÿ Totality of Project Management (TPM) Body of Knowledge – Ÿ 36 Knowledge Areas - most exhaustive
covers 8 project life cycle phases from concept to Ÿ 120 Project Management concepts
completion of the project
Ÿ Addresses India specic issues
Ÿ Services rendered in 20 countries
Ÿ Certicate In Project Management (CIPM) exam is aligned to
Ÿ We have trained persons from 500+ companies
Ÿ Large portfolio of Project and Program Management Training
covering Risk, Project Appraisal, Project Monitoring, Time, CEPM's agship program Totality of
Agile, Contracts, Cost, Team Building, Conict Resolution etc. Project Management which leads to the
Ÿ Training imparted through Classroom & Online Modes Certicate In Project Management (CIPM) PrCB 002
is administered by the independent International Accreditation as per
ISO/IEC 17024:2012
Link to download brochure : section 8, not-for-prot company, for the
Certiﬁcate In Project Management
www.cepm.com/training_pdf International Institute of Projects and
Program Management (i2P2M).
YOU MAY DELAY BUT TIME WILL NOT. i2P2PM is the only Indian Company with this accreditation in
- BENJAMIN FRANKLIN
Project Management.
CEPM
Organisation Management Maturity Assessment (OMMA) National Project Management Team Excellence Award (PMTEA)
for Project, Risk and Human Capital Management
PARTICIPATE... SHOW YOUR METTLE
CEPM, one of Asia-Pacic's leading organisation in carrying out
This unique team award is the only such award globally
applied research in project management has developed 3 most
which is based on 100% objective assessment.
comprehensive Maturity Assessment methodologies to benchmark
Launched by CEPM in 2018 it has attracted wide
organisations across Six Levels. OMMA is done by mapping the
industry interest. PMTEA uses most objective way of
current practices of an organisation to 12 attributes which are different
judging the team's skills in managing projects where
for Project, Risk and Human Capital Management assessment.
team needs to take hundreds of complex decisions
Organisation Project Management Maturity Assessment (OPMMA) through computer simulation games and team can see the cause and
effect relationship of each decision. The performance is monitored by
Organisation Risk Management Maturity Assessment (ORMMA)
relevant experts in UK.
Organisation Human Capital Management Maturity Assessment (OHCMMA)
6
5 1 ADHOC (Lowest) 4 LEADERSHIP Trophy
4
Trophy
3 2 RITUAL 5 VISIONARY plusCashAwardof
plusCashAwardof
2 Rs.1.5Lacstothe
Rs.25,000/-tothe
1 3 COMPULSIVE 6 PASSION (Highest)
WINNINGTEAM RUNNER-UPTEAM
2 A1 A2
A1 Current Maturity (2.5 on a scale of 6)
CEPM Trophy Trophy
1
A3
A1
Maximum Maturity is Level 6.

A10 A4 plusCashAwardof plusCashAwardof
Rs.25,000/-tothe Rs.25,000/-tothe
A9 A5 A1 to A12 are 12 attributes to carry out
A6 organisation management maturity assessment SECONDRUNNER-UPTEAM BESTIOCDIRECTORATETEAM
A8
A7
Recently in one of the competitive bids for carrying out Organisation 38 teams (2018-2019) from 21 companies have participated such as:
Project Management Maturity Assessment, CEPM was 30% better in
technical evaluation and 50% less costly making it cost effective by a
NITI Aayog IIT Delhi
factor of 2.5 to the next nearest.
Some of the 4 attributes out of 12 attributes are listed below :
Project Management: Connection between strategic intent and
project management, Project success criteria, Project management Simulations which will be used in National PMTEA are also used in
processes, Role of supporting functions. leading global organisations and Top 20 business schools such as :
Risk Management: Application of risk management processes,
Management including risk processes Identication and assessment
across project life cycle, Risk culture and appetite.
Human Capital Management: Team building & Leadership,

Organizational culture & values, Management Motivation and
Engagement, Openness to new learning.
PMTEA 2019 Winner Trophy was lifted by PMTEA 2019 Runner-up Trophy lifted by
NTPC (Lara) Team NITI Aayog Team
CEPM was consultant to BHEL to evolve project management maturity assessment model
in 1997. Over 900 senior executives including top level of management were involved.
Adesh Jain then Director-in-charge CEPM evolved a global rst of its kind 6 level maturity WINNING ISN'T EVERYTHING, BUT WANTING TO WIN IS.
model with 12 major attributes in assessing BHEL's project management maturity. - VINCE LOMBARDI
CEPM
Project Management Knowledge Quotient (PMKQ) Assessment Real time computer-based
TM project and business
PMKQTM measures the Knowledge Quotient
P M K Q simulation programs
in the eld of project management. An
Project M anagement KKnowledge
Management nowledge Q uotient
Quotient assessment tool containing 48 questions it
Assess | Act | Enhance measures the current PM knowledge and
strengths and weaknesses of users. This
breakthrough concept is used by CEPM at the start of all their training In 2016 CEPM became the Indian partner of Prendo Simulations of UK,
programs to help the faculty to understand the strengths and a world renowned leader in project simulation programs that provide
weaknesses of the participants for more effective training. CEPM has excellent learning to participants where they have to make complex
assessed over 9000 professionals from 100+ companies and on decisions in managing the projects. Simulations are on key topics -
average the PMKQ Score is only 27%. PMKQ assessment should be Stakeholder Management, Leadership, Leading Change, Decision-
carried out across organisations as a starting point. Making Challenges, Post Merger Integration etc. More than 500
Professionals from 70 companies have gone through the simulations.
In-company simulation programs were also held e.g. University of
Chicago Delhi Center, Tata Motors, L&T IPM etc.
Project Management Consulting
Same programs are used in top business schools like Wharton,
CEPM has been providing project management consulting for over two
INSEAD, Oxford, London Business School and MIT for their Advanced
decades. Some of the consulting services provided by us are:
Management courses and in leading companies like Google, SAP,
ONGC: to evolve attributes of an Effective Project Manager. UNOPS, Total, Deloitte etc.
49 attributes were identied.
CEPM Publications (14 Books)
BHEL: for training & consulting to bring greater awareness on
Project management and provide guidelines for strategic
initiatives to improve the level of project management
maturity in BHEL.
Indian Oil: to evolve a comprehensive project management

Body of Knowledge covering Time, Cost, Quality and Scope (2013) Dr. M.V. Moily releasing CEPM MD, (2017) Suresh Prabhu releasing Ruchira Jain's
and integrate PM processes. Ruchira Jain's book 'Totality of Project Management' 2nd Book 'Building A Project Orientated Society'
Ministry of Statistics and Programme Implementation (MOSPI), CEPM has published 14 major books on project management covering
Govt. of India in 2006: for a study on the Certication for Project diversified topics such as projects, programs and portfolios and Agile
Managers. The repor t submitted to MOSPI had far reaching methodology.
implications in strengthening project management in India. Centre
for Excellence in Project Management
Centre
for Excellence in Project Management
Research Project
on Nucleus of a Task
NEW DIMENSIONS IN
T-Circles
PROJECT MANAGEMENT IN 90's
Profile of an Effective Project Manager
CEPM provides consulting in implementing few recommendations

Q-Circles
J-Circles
Sponsored by:
READINGS & CASE STUDIES
C-Circles
Compiled & Edited by: Adesh C. Jain
Oil and Natural Gas Corporation Limited
given by par ticipants who have undergone CEPM's training / Ruchira Jain
ADESH JAIN
competency development programs that are accepted by their

management after the training program is completed. Implementation is
done with the help of the participants.
Some of our major clients are For Communication:
Ms. Ruchira Jain

1st Certied Senior Project Manager of India (CSPM)
Managing Director,
Centre for Excellence in Project Management (P) Ltd. (CEPM)
1st Floor, A-48, Sector 5, Noida 201 301

Mob.: +91 – 9999684622 / 23 | Tel.: (91-120) 242 0444
Email: info@cepm.com | rjain@cepm.com | Website: www.cepm.com
www.pmguruonline.com CIN No.: U74899DL1985PTC022028
Part No. CEPM-180320V1

Totality of Project Management

(TPM)
Training Designed, Developed, Delivered & Owned

by:
Centre
for Excellence in Project Management (P) Ltd. (CEPM)
+91 9999684622 / rjain@cepm.com
www.cepm.com / Training site: www.pmguruonline.com
© CEPM Totality of Project Management (TPM)
TPM curriculum has very extensive coverage

of all aspects of project management. It
covers both cutting edge skills, tools and
techniques as well as soft skills plus important
topics like Health, Safety, Environment and
CSR
TPM is also globally unique as it is across 8

Project Life Cycle phases beginning from the
Conceptualize phase to Deliver & Closeout
plus Knowledge Leverage
© CEPM © Totality of Project Management (TPM)
© Centre for Excellence in Project Management Pvt. Ltd. (CEPM) www.cepm.com 1

The entire course has been divided into 16

units and each unit ranges between 40
minutes to 1 hour. Unit 5 has two sessions.
The Units are given in the order they are to be
done. At the end of each unit we have 4 Q&As
relevant to the unit. In addition we also have 3
more questions to be attempted by you after
each unit.
There is also 3 sets of Day-wise exercises and
once you complete all the 16 units you will
also have access to a set of 50 questions
covering the entire course.
 TPM curriculum also prepares persons for the ISO 17024:2012

accredited Certificate In Project Management (CIPM)
credential examination
 The Certificate In Project Management (CIPM) is administered by

the independent, section 8, not-for-profit company, International
Institute of Projects and Program Management (i2P2M)
 i2P2PM is the only Indian Company with ISO 17024:2012
accreditation for it’s Certificate In Project Management
 NITI Aayog, the think tank of India has recognised i2P2M as one
of the 4 Global PM Certification Bodies

About Certificate In Project Management

(CIPM) Exam
 Total Time : 2.5 Hours
 Total Marks : 200
 Total Questions : 150 Multiple Choice Questions
in 4 Sections across 8 PLC phases
Section 1: Knowledge Leverage + Conceptualize phases
Section 2: Plan + Organize phases
Section 3: Implement + Control phases
Section 4: Integrate + Deliver & Closeout phases
 Passing Score : Overall 60% across all 4 sections

50% in each section is Must
About Certificate In Project Management

(CIPM) Exam
Exam has 4 types of questions
 Type 1: Has 1 answer from 4 options. Carries 1 mark
 Type 2: Has 1 answer from 5 options. Carries 2 marks
 Type 3: Select 1 answer from 4 options. Needs
calculations. Carries 5 marks
 Type 4: Scenario based questions. Carries 3-5 marks
Negative Marking: 25% of Marks allotted for question
deducted for wrong answer
Most Robust Examination process

I am Ruchira Jain, the Managing Director of

Centre for Excellence in Project Management (P) Ltd. (CEPM)
– the foremost training and consulting company
I am honoured to be the 1st Certified Senior Project Manager (CSPM)

from India in 2007 of the International Project Management
Association. Over the years I have trained 11,000+ professionals in
project management in India and outside India.
I am pleased to be your resource person for this TPM program.
CEPM has 650+ clients worldwide. Some of them are:


Project Life Cycle (PLC) Phase – Knowledge Leverage
Unit 1 : PM Fundamentals
 What is a Project
 Programmes and Portfolio
 Project Management
 Project Life Cycle Phases & Approaches
PM Project life cycle

projects (PLC) phases
Fundamentals
Portfolio Programme
© CEPM Totality of Project Management (TPM)
Why Projects?
To Create New Make Changes
 Products  In existing
 Services products and
 Infrastructure services
 Business
processes
ProjectS
Projects span all sectors
• Business / Industry • Can involve Single /
• Government Multiple organisations
• Social sector • Many countries

Projects
 Projects, large and small have been
undertaken through the centuries
 Massive projects such as the Pyramids,Taj

Mahal, Colosseum and the Great Wall
undertaken centuries ago required massive
amounts of labour and material
 But there were no cost

/ time constraints
Project Characteristics
Temporary
Definite beginning
& end Unique
Project life product / service /
cycle outcome
approach PLC
Predefined
Face Risks Key Project Goals
Known / Characteristics
unknown
Schedule
Resources Timeframe
Limited $
Quality / Budgets
Performance Prefixed
from beginning
Some graphics used are from The Noun Project

Operations Vs Projects
Key differences between Projects & Operations
Projects Operations
Temporary Ongoing
Unique Repetitive
Aims to achieve project Objective is to sustain
objectives & close project the business
Future orientation Present Orientation
Create new things Maintain existing things
Project Management
What is Project Management (PM)?
Project Management is the processes and body of
knowledge of specific skills, tools & techniques
used to bring structure and planned order to
deliver projects successfully
PM combines “Hard” and “Soft” skills

Hard skills – tools & techniques
Soft skills – the human aspects e.g.
people, team work, leadership, conflict
resolution, motivation, communication

Project Management – an Art & Science

The things we can see
Tools &
Science (17%) Techniques
Behavioural
Art (83%)
Attitude, Leadership, Motivation,

Conflict resolution, Ethics
Image from pixabay
Project Management
Understand specific requirements of all the

stakeholders
Manage the triple constraints - Scope, Time

and Cost to required Quality/performance criteria
Plan the work in detail : ‘Why’, ‘What’, ‘Who’,

‘Where’ ‘When’, ‘How’ and ‘How Much’
Make one person, generally the Project

Manager accountable for the project
Project Management – is most efficient to manage change

Benefit Realization Management
Front Ending
Adequate time and focus of the project’s front-
ending ensures that we achieve the visualised
benefits as an outcome of the project
Project Management Methodologies

Aim is on efficient delivery of output –
on Time, within Cost to required Quality
What is a Programme?
A Programme is a group of many independent
projects that are all related to a common objective
The projects in the program are managed in a
coordinated way to deliver additional benefits and
better control to the organization which cannot be
achieved by managing each project individually
When all the projects are completed the
program is completed Programme
Project
Project

What is a Programme?
Programme management can cover:
 A group of projects that are undertaken to achieve
a common objective e.g. a business aim
 An interdependency between a number of projects
 Creates more business benefit for the organization
 Resource allocation amongst the related projects in the programme
 Aim is to realise overall benefits for the business,

and not just for a single project
 The organization’s business strategy is
implemented through projects
What is a Portfolio
 A portfolio is a collection of different projects, programs,

sub-portfolios, and operations that may or may not be
directly related to each other
 They are all managed as a group to support and meet
the strategic objectives of the organization
 The overall objective of the program or projects in the
portfolio is to meet the strategic objectives of the
portfolio

Project Life Cycle (PLC)

 The Project Life Cycle (PLC) is the sequence of phases
that a project goes through from it’s concept to closure
 Each phase is associated with related processes and
some deliverables
 Projects are broken up into various phases to improve
control of the project at all levels
 The PLC provides the basic foundation of the actions
that have to be performed in the project
 Number of Phases and names of each phase in the PLC
may vary depending on the industry/sector
Totality of Project Management PLC is divided

into these 8 generic phases
 Conceptualize
 Plan
 Organize
 Implement
 Control
 Integrate
 Deliver & Closeout
 Knowledge Leverage
These phases are sequential, iterative and overlapping

Project Life Cycle (PLC)

Some Advantages of a PLC phased approach are:
Allows better planning, scheduling, estimating,

reviews and control of the project
Work can be broken up into

manageable blocks or phases
– Each phase will have specific deliverables
More efficient resource allocation as
resource requirements vary with phase
Better cost control – funds needed for next phase,

can be planned & released as needed
Characteristics of A Life Cycle
Opportunity to add Value

High
Low Cost to make change
Life Cycle of Project (Time)

Characteristics of A Life Cycle
Uncertainty of Success
High
Amount at Stake
Low
Life Cycle of Project (Time)
Different Life Cycle Approaches
Predictive life cycle or Waterfall model

Traditional, sequential approach where most planning is done
upfront. Execution is done in a single pass. The business value is
delivered at the end of the project when all work is completed.
Iterative life cycle approach

Scope is basically determined in beginning but project goes through
many iterations. More functionalities are added with each iterative
cycle. Aim is to optimize the final product instead of speedy delivery
Incremental life cycle approach

Here speed of delivery is important. Smaller useable deliverables are
provided to the customer. The final product of the project is ready only
after the final iteration is completed.

Agile (Adaptive) life cycle approach

 Agile approach is both iterative and incremental
 It believes that project requirements are
expected to change
 Every project needs to be handled differently
and the existing methods need to be tailored to
best suit the project requirements
 Agile life cycles should meet the principles of the
Agile Manifesto
In February 2001, 17 thought leaders met at the Snowbird

ski resort in Utah, USA and came out with the widely
recognized Manifesto for Agile Software Development
that outlines the basics of agile methodology.
The Four values of the Agile Manifesto are:
 Individuals and interactions over processes and tools

 Working software over comprehensive documentation
 Customer collaboration over contract negotiation
 Responding to change over following a plan
© Centre for Excellence in Project Management (P) Ltd 2018

Iteration based Agile

 The project tasks are divided into small equal duration
time frames called time boxes which deliver specific
features for a release
 With each iteration the work items are further refined and
delivered frequently to the customer
 Each build is incremental in terms of features. Most
important features are completed first.
 The final build holds all the features required by the
customer

Flow based Agile
 Features are taken by the team from the backlog depending
on it’s capacity to work instead of an iteration based schedule
 A task board is used to define and manage the work flow as it progresses
 Each work period can be of a different size based on the requirements
 An incremental deliverable that can be used by the customer is the key
measure of project’s progress
Hybrid life cycle

 Here the predictive, incremental, and agile approaches are combined
through the project
 Elements that are known follow a predictive approach while elements still
evolving follow an adaptive approach


Traditional Methodology Agile Methodology
More rigid top down approach Less rigid approach
Resistant to change Welcomes change

Focus is on Processes not Focus is more on Product
the Product to be delivered less on Processes
Project manager responsible Team shares responsibility for
for project success project success
Requirements finalized at Requirements frequently
project beginning changed in project execution
More suited to projects where Better for volatile, innovative
design can be finalized initially projects likely to have many
e.g. construction changes e.g. software, R&D
Agile Methodologies
Agile development is an umbrella term that has many
frameworks and methodologies such as:
 Scrum
 Extreme programming (XP)
 Kanban
 Dynamic Systems Development Method (DSDM)
 Feature Driven Development (FDD)
 Crystal
© Centre for Excellence in Project Management (P) Ltd 2018

How Projects Come into Existence

NN AA
Ee nn
Ee aa Project
ll Business Project
Dd Go-
yy Case Charter Ahead
ss
Ii
ss
Regular Reviews
Implement Project
Deliver
& Control Manage-
& Closeout
ment Plan
Takeaways for this Unit
Projects are undertaken to realise our vision. They

1 are the vehicle to create something new
A Programme is a group of many independent projects

2 1
that are all related to a common objective
Project management skills is essential to deliver projects on

3 time, within cost and to the required quality
Following a project life cycle approach enables better planning,

4 scheduling, estimating, reviews and control of the project


PLC Phase – Conceptualize
Unit 2 : Conceptualize
 Need Analysis
 Business Case
 Project Charter
Business case
Project Charter
NPV $ Investment appraisal
IRR
1
Need Analysis
A Need analysis is done as a first stage in a project
 Needs Emergence
 Needs Recognition
 Needs Articulation
Need Analysis is initial look to see whether

a project is needed

Need Analysis
Need Emergence
A new project need commonly arises to fulfill
the strategic goals and vision e.g. market
1 demand, customer requirement, new legislation,
technology upgrade etc.
1
Need Recognition
2 Proposed need is evaluated for relevance with vision
and goals of organization and prioritized. It’s validity
and urgency is studied & rated against it’s other needs
Need Articulation
3 High priority needs are detailed out to check viability
in financial and non-financial planes
Business Case
More business?
Opportunity More competitive?
Social benefit?
COST BENEFIT
Business Analysis $$ $$$
Case
Strategy

Role of Business Case in Projects

Business Case is “owned” by the Sponsor.
Sponsor is responsible for it’s development.
Inputs from experienced PM, consultants etc.
 Shows the justification for the

project and the change expected
 Enables informed decisions regarding

proposed project. Justifies the investment
 Used to review & revalidate investment
Benefit Realization Management

 Achievement of the strategic goals through the project
 Aim to add value to organisation through the project
 Ensure benefits are sustainable
Have SMART Benefits

Specific Not vague. Clear description
Measurable Quantifiable
Attainable Challenging, but achievable
Relevant Consistent with long term vision
Time Bound Have a time frame for completion

Role of Business Case

A formal Business Case details out different
aspects of proposed project
 Key project requirements to achieve
business goals
 High level scope, timeframe, cost, quality,

risks, assumptions, constraints etc.
 Links project to organization’s strategy and it’s

priority in business plan
 Documents project’s financial / non-financial feasibility
Business case – Key Contents

Executive
Assumptions / Summary Project
constraints objectives
Rough cost Deliverables
of project & KPIs
Project Business Investment
financing case contents data
Expected PESTLE
business benefit analysis
Implementation High level risks
Strategy Overall time,
/ opportunities
cost, quality
8

Business Case – Key Contents

Investment appraisal using techniques like:
 Payback Period
 Net Present Value
 Internal Rate of Return
Non- Financial factors like:

 Operational survival
 Competitive position
 Comparative analysis
PESTLE Analysis
PESTLE Analysis
 National and International politics,
Political government policies, political stability,
media
 Global factors e.g. trade tariffs

Economic  National factors - exchange / inflation / interest rates
/ Central bank policies
 Micro factors like demand and supply
 Population growth, age, male-female ratio

Social  Income / literacy level
 Dominant religion / cultural barriers
10

PESTLE Analysis
Techno-  Is technology tested or new? Availability,

logical reliability, spare parts, service providers,
innovation, automation, competitors
 Local laws that will impact the proposed

Legal project, laws binding foreign partners,
contractual disputes
 Physical environment – climate, terrain, water,

Environ- roads, transport
mental  Environmental regulations - project impact related
to air pollutants, smoke, gas, industrial effluence,
waste disposal, noise, land use etc.
11
Investment Appraisal
– Payback Period
Payback Period is the time expected to be taken by a
proposed project to recover the original investment
i.e. cash outflow invested to deliver the project.
 Payback Period is achieved when the cumulative cash flow

becomes equal to the initial investment. Shows time taken
for an investment takes to reach it’s break even point
 Once the original investment is recovered further cash flows
are not considered
 Highest ranking is given to project having shortest payback
period
12

Investment Appraisal
- Payback Period Example
Cumulative Cash Flow till

year 4 = $85,000 Initial Investment = $100,000 in Yr 0
Shortfall = $15K
Cash Flow in Yr 5 = $70K
Per month cash Flow Yr 5
= 70K / 12 = 5,833
15K / 5833 = 2.57 months
Cumulative Cash Flow
= Initial Investment (100K)
in 4 years & 2.57 months
Payback period for Project A is 4 years 2.57 months
13
Investment Appraisal - Payback Period
Advantages Disadvantages
 Good as an initial filter  Does not look at the cash
flows of entire product life
 Favors projects with faster
returns, better for company  Calculation stops once the
liquidity original investment has
been recovered
 Effective for high risk
situations  Ignores Time Value of
money
14

Time Value of Money

Time Value of Money relates to not merely the amount
of money we actually get but also when we get the money
It is based on the concept that money that we have today is
worth more than the identical amount of money we get in future
WHY?
 Money has potential earning capacity. Money can earn interest and
grow over time
 The purchasing power of money depreciates or falls with time
 People would rather have money today than in the future. A dollar in
hand today is better than a dollar in future
15
Time Value of Money
Now $100 in bank After 1 Year After 2 Years

@10% interest
$100 $110 $121
100 x 1.10 110 x 1.10
PV FV
Discounting
16

Discounted Cash Flow (DCF) method

DCF is based on concept of Time Value of Money.
A future stream of expected cash flows (FV) are
adjusted for it’s value today (PV) using a discount rate
 DCF relates future cash flows over the useful life of the
project’s output to a common base value
 Expected Cash flows of proposed project are adjusted for
money over time and brought to what the cash flow would
be worth in today’s monetary terms by discounting it
 Discounted Cash Flow provides more realistic
picture of potential project’s financial feasibility
17
Net Present Value (NPV)

 Net value of a potential project is quantified in today's
monetary terms. Entire useful life of the product
/ service is considered
 NPV shows project’s net value in today's monetary terms -
what the future cash flow will be worth in today’s terms
 Each year cash flows individually discounted using a
discount rate and converted to Present Values (PV)
Higher the NPV, Negative NPV
more profitable Loss making
the investment investment
18


Present Value (PV) = FV / (1 + r)n
FV = Future Value; r = Discount rate; n = No. of years
NPV = ∑PV - Initial Investment
We can derive a Discount Factor

DF@10%
(DF) and use the DF to get the
Present Value (PV) for easier Yr 1: DF = 1/1.10 = .909
calculations. Yr 2: DF = 1/1.21 (1.10 x 1.10) = .826
The expected cash flow is multiplied Yr 3: DF = 1/1.331 = .751
by the relevant DF to get the PV
Discount Factor (DF) = 1 / (1 + r)n For PV : Multiply cash flow of Yr1 by .909
: Multiply cash flow of Yr2 by .826
19

NPV shows project’s net value in today's monetary
terms - what future cash flow will be worth today
Calculate Present Value (PV) of cash flow

1 for each year separately
2 1 up all the Present Values (PV) for

Sum
entire project
Subtract project's Initial Investment from

3 cumulative PV to obtain the project’s NPV
4 Higher the Discount rate, Lower the NPV
20


Yr0 = Initial Investment $100K
5 year product life; Discount
Yr1 = 25K x .909 or 25 / 1.10
Rate is 10%. All fig. in ‘000s
= 22.73
Yr Discount Inflow Outflow Cash PV Cash
Yr2 = 25K x .826 or 25K/ 1.210 Factor Income Expense Flow Flow
@10%
(1.10 x1.10) = 20.65
0 1.00 -100 -100 -100
Yr3 = 20K x .751or 20K / 1.331
1 .909 45 20 25 22.73
(1.10 x 1.10 x 1.10)
= 15.02 2 .826 60 35 25 20.65
Yr4 = 15K x .683 or 15K/1.464 3 .751 65 45 20 15.02

(1.10 x 1.10 x 1.10 x 4 .683 100 85 15 10.25
1.10) =10.25 5 .621 160 90 70 43.47
Yr5 = 70K x .621 or 70K/1.610 PV for Yr 1 to Yr 5 = $112,100
(1.10 x 1.10 x 1.10 x Less Initial Inv = $100,000
1.10 x 1.10) = 43.47 NPV = $12,100 21
Investment Appraisal - NPV
Advantages Disadvantages
 NPV more realistic –  Accuracy depends on

considers time value of the Discount Rate used
money and prediction of future
 Considers whole useful cash flows
life of product/service  Not so good to compare
 Enables decision projects of different sizes
making in companies and time spans
22

Internal Rate of Return (IRR)

IRR is calculated to nullify impact of time value of
money on proposed project. IRR is the discount rate
that makes the proposed project’s Present Values of
future cash flows equal to the project’s initial investment
 IRR is that Discount Rate which, when applied to the

cash flows of a project gives a nil NPV i.e. NPV = 0
 IRR technique gives an idea of the percentage return
on the initial investment
 IRR expresses profitability in percentage while NPV
expressed profitability in absolute terms
23
Internal Rate of Return (IRR)
 IRR arrived at by trial and error
 Shows Discount Rate at which project will break even
 Higher the IRR, better the project
 IRR compares projects in percentage rate of return.

NPV compares projects is in absolute value
Select project if IRR greater than cost of capital.

Reject project if cost of capital higher than the IRR.
24

Project Charter
After Business Case is approved a Project
Charter issued. Charter formally authorizes the
project to go ahead.
 Sponsor is responsible for issuing of Project

Charter but it can be issued by an outside person
/ organization associated with funding
 A contract act as Project Charter for contractor
 Project Charter forms the link between project and
the on-going work of the organization
Project Charter gives the PM authority to use the
organization's resources for the project
25
Project Charter – Key Contents
Formally
authorizes project Names PM &
Assumptions
& Constraints level of
authority
Manpower & High level
Resource Scope &
Project
requirements Deliverables
Charter
Expected
High level
business
Risks
benefits
Key $ Milestone
Stakeholders Expected schedule
Budget
26

Need Analysis looks at the validity and priority for

a project and is followed by the Business case
1
Business case looks at a project’s feasibility. PESTLE
2 1
Analysis gives a 360 degree view of the reality around
the potential project
Success of a project lies in bridging the gap

3 between the Visualised and Realised benefits
4 Project Charter formally authorises the project to go

ahead
27


Project Life Cycle (PLC) Phase - Plan
UNIT 3 : Stakeholder Management, Planning,
Success Criteria
 Managing Stakeholder expectations
 Stakeholder Register
 Developing the Project Pan
 Success Criteria & Success Factors
Stakeholders
Success Project resources
Management
Criteria Plan
Project Stakeholders
Any individual, group, organization,

statutory body directly involved in the
project or that may be affected by the
project activities and the project
outcome is a stakeholder

Key Stakeholders
Customer
Project
/ client
Manager
Project Manager
Performing Sponsor Project
Organisation Contractor Sponsor
Customer
Contractors / Team
Suppliers Members
Secondary Stakeholders Like
Activists Regulatory Environment

bodies
Media Local
Inspectors community
Employees
Policy Labour
Users NGOs Society makers unions
at large
Managing stakeholders effectively is key to project success.
PM needs to systematically gather and analyze information to

determine which interests should be considered when
planning and implementing project
5

Managing Stakeholder Expectations

The Challenge?
Different stakeholders will have different
expectations, needs, vested interests &
expectations from same project e.g. on time,
on budget, more profit, better sales etc.
Further, stakeholders can also:

 Have different levels of power and
influence on project work, strengths and
limitations
 Have Negative / Positive attitude towards
project
Our understanding of physical systems

is still far more advanced than our
understanding of social systems.
Jay W. Forrester, MIT
6.1

Stakeholder Analysis
PM needs to understand all stakeholder requirements
and attitudes to manage each stakeholder
For each stakeholder determine:

 What requirements must be met
 Their Expectations from the project
 Their level of influence and interest in project work
 Their attitude, strengths, limitations regarding project
 How to effectively communicate with each stakeholder
Develop a strategy to engage the stakeholders and
nullify any negative impact they may have on project
7
Power/Interest grid for mapping stakeholders

Most Important
High Provide required
Manage closely and
information to keep
actively. Consult
satisfied regularly
Power
Least Important Ensure stakeholder
Provide minimum kept informed.
Low information. Monitor Involve in their area
for any changes of interest
Low Interest High
Manage closely - has High interest & High power in project

Keep satisfied - has High power, Low interest in project
Monitor - has Low interest, Low power
Keep informed - has High interest but Low power
8

‘standard’ stakeholder analysis

Power/Interest grid for mapping stakeholders
High Dangerous Important

Enemies Allies
Power
Quiet Nice
Low
Saboteurs Friends
Oppose Attitude Support
From Prendo Simulations

8.1
Championing
“sentiment analysis” +3
Support
Approval: “yes”
+2
Commitment
LEVEL OF SUPPORT
Co-operation
what do you need? +1
Compliance
Neutrality
,0
Inertia
Obstruction
-1
Antagonism
Opposition
-2
Rejection: “no”
Mutiny
-3
Sabotage
From Prendo Simulations

8.2

Stakeholder Register
A Stakeholder register should be kept which lists all the
stakeholders, their requirements, impact, influence, attitude
and a strategy to engage with them.
Stakeholder Register – sample heads

Name Dep Project Key Main Impact Influence PM PM
Contct Res- Reqmnts Expec- on & Actions Actions to
info ponsblty e.g. Vital, tations project Attitude to Increase
Important, Reduce support
if possible opposn.
 Can plan to manage a stakeholder individually or in a group

9
Project Plan
The Roadmap to Successful Delivery
Proper
planning
across all A project without
a plan is like
aspects
a journey without
crucial for any destination
project
success
10

Triple Constraints of Project Management
Focus is on balancing SCOPE,

COST and TIME within the
frame work of QUALITY,
meeting customer expectations
The planning details will be

progressively elaborated as details
become more clear over time
11
Why Plan the Project?

To know:
What What will be How to
resources will produced? monitor &
be required? control the
work The
What work Acceptance
must be done? What risks criteria
are involved
What Quality & how to To
Requirements? minimize
What costs them? Guide project
will be execution
incurred?
12

Project Management Plan (PMP)

From the Business case / Project Charter
Who will do The Resources, tools & Project

the work & detailed techniques, IT needs, costs and
Responsibil schedule Technical issues, budget
ities Quality, validation &
testing, Risk,
Procurement, Change,
Communication etc.
13
Project Management Plan (PMP)

Detailed plans for different aspects of project developed
& integrated into the Project Management Plan (PMP)
A key document - is ‘owned’ by the PM

Controls and guides project execution. Is
baseline for the project progress & review
Is developed by PM with project team
Is approved by the Sponsor / client
Facilitates stakeholder communication
14

Project Management Plan (PMP) – Key Contents

 Executive summary with key aspects of the project
 Project's Success Criteria
 All deliverables ordered by time with responsible owners
 The WBS and the PBS
 Assumptions e.g. current staffing levels will continue
 Constraints - time, cost and quality
 Guarantees, Liabilities, Exclusions, Pending issues
 Technical & Commercial details
The plan guides the project execution
15
Project Management Plan (PMP) – Key Contents
Scope Plan
Registers Schedule
Plan
Baselines
Cost Plan
Staffing Project
Management Quality
Plan
Plan Plan
Change
Plan Risk Plan
HSE Plan Procurement Communication

Plan Plan
16

Project Planning
The project plan:
 Provide the baseline for progress measurement and
project control
 Provide guidelines to team and management on the
development phases and estimates related to cost,
schedule, resources etc.
 The project plan provides a reference regarding the quality
expectations in the projects output i.e. the product of the
project
Baselines are used to monitor project performance
17
Project Success Criteria
Success Criteria are

the Qualitative and
Quantitative criteria
by which project
success will be judged
by the different
stakeholders
18

Should be clearly defined with stakeholders

in Conceptual phase. Includes Internal &
External parameters
Traditional view - a project is successful if completed

on time, within budget and meet's required quality /
performance criteria
The measurable values of success

criteria are known as Key
Performance Indicators (KPI)
19

 Benefits are materialized
 Owner satisfied
 Project is completed on time / within cost
 Project meets the functionality / stipulated quality
 The project team is satisfied
 Benefits reach end users
 Project contributes to economy /
local community
20

Project Success Factors

Factors required for success – more within control
of the client, PM, sponsor, team, top management etc.
 Goals are clear and agreed with stakeholders
 Support from senior management
 Clear Scope from client / sponsor / users
 Timely communication with all stakeholders
 Realistic Schedule / Cost Estimates
 Motivated team
 Subject matter expertise
 Effective Risk management Product
21
Some Factors leading to Project Failure
 Vague objectives, scope not well defined

 Poor planning and control
 Inadequate information between management,
project owner, client, consultant
 Too many changes through the project
 Unrealistic scope, schedules and budgets
 Distrust among team / client
22

Managing stakeholders expectation is challenging

and crucial as stakeholders have diverse
1 expectations from project
2 1
Project management plan comes out of business case and
project charter – the key document to guide project execution
3 Success Criteria to be well defined at the start of

a project
4 Some factors for project failure like scope creep, poor

planning and eye for detailing must be kept in view
23


PLC Phase – Plan
Unit 4: Managing Scope
 Scope Statement
 Work Breakdown Structure
 Scope Baseline
 Scope Creep
WBS Product
WBS Service
Dictionary
Scope Statement
CO
QLTY
Managing the Scope
SCOPE
Scope looks at the project deliverables and the

total work required to complete the project
successfully.
We need to manage the work to ensure the
project includes all the work required, and only
the work required, for completing the project
successfully.

Managing the Scope

Scope consists of two aspects:
Product Scope
– Elements of the product / service to be
delivered by project. Covers detailed
characteristics, specifications, inclusions /
exclusions etc. defined without any ambiguity.
Project Scope
– All the work and only the work needed to
deliver the product / service.
Scope Management Plan
A Scope Management Plan is developed

as part of the Project Management Plan
that shows how the the project will be
defined, validated and controlled.

Scope Management Plan
Plan describes steps needed to manage the project’s

scope and the process to manage scope changes.
How scope will Role and

How WBS will
be identified, responsibilities
be structured
defined, of team
and developed
classified, members
documented,
managed and What is the How to manage
controlled acceptance scope change
criteria for the requests after
deliverables? scope finalized?
Collect Scope Requirements

 Collect, analyze and understand the needs and
requirements to be met in the project for the
different stakeholders
 List out all the deliverables of the project – characteristics,
specifications, functional and non functional requirements
 The communication requirements such as reports, tests
and other information to be provided
 Should use different tools and techniques to discuss and
gather the information such as brainstorming, interviews,
questionnaires, surveys, expert judgment etc.

Detail out the Scope

Begin by developing a Scope Statement
Aim
To provide a detailed description of the project’s
deliverables + the work to be performed
 Creates a better  Is later used as a key

understanding of input to develop the
scope and acts as an Work Breakdown
agreement between Structure (WBS)
project team and
 Scope should be clear,
customer
unambiguous and
clear to all
7
Scope Statement – How to Develop?
Use
Project Charter
Cost benefit Expert
Business case
analysis Advice
Product
Breakdown Stakeholder Requirements
inputs Brainstorming Analysis
Historical
Records Product Analysis –
System Analysis / Product
Breakdown /
Systems analysis

Scope Statement – Suggested Contents

 Product description - the product characteristics
to be described in detail
 Deliverables – all deliverables including the interim

deliverables, documentation, interiem/ final reports
 Project objectives – what is the success criteria
e.g. cost, schedule and quality
 Assumptions / Constraints
 Acceptance criteria - conditions that must be met
 Any Exclusions (what is not included in scope)
Breakdown Structures
Breakdown structures are a key mechanism used to
create order in the project and ensure nothing is
omitted from the project e.g. PBS, WBS, RBS, CBS
Product Breakdown Structure (PBS)
PBS is a hierarchical break-up of components and
sub-components of equipment / software / machinery to
be produced by project or procured for project e.g. for a
computer the PBS will detail out the screen size, type of
processor, amount of memory etc.
PBS useful to:
Procure different Understand Estimate likely
parts at best the work costs for each
possible rates required component
10

Scope Management - WBS

Once the Scope Statement is detailed out,
we can begin developing the project’s
Work Breakdown Structure (WBS)
N A
E n
Work
E aScope
l Breakdown WBS
DStatement
y Structure Dictionary
s (WBS)
I
s
WBS is the backbone tool to Plan and Control project
11
A Work Breakdown Structure WBS
The Work Breakdown

Structure (WBS) is a
deliverable or a task oriented
hierarchical decomposition
showing all the work to be
done by project team to deliver
the project’s product /service
and achieve the project
objectives.
12


To develop the WBS ASK:
What do we What are the What are the

want to major component
accomplish in outputs of parts of this
this project? this project? project?
List the Separate each

major deliverable into
deliverables sub-deliverables
13
According ISO 21511
Each descending level of the WBS should

provide more detailed definition of the work
The project’s entire scope of work should

include work to be done by the project
management team, other team members,
subcontractors, and other stakeholders
14

Developing the WBS
WBS is developed by PM with team using:

collective experience, brainstorming, expert
1 opinion, templates, input from stakeholders etc.
2 Review the entire scope of the project
Decompose all elements into smaller more

3 manageable components. Deciding number of
levels important
4 Check? Is it possible to develop cost and duration
estimates? If yes, stop. If not, decompose further
15
WBS Levels
Level Top most level / Name of the project

1
Work not
reflected Can be based on project phase, the Level
in WBS is product, department or mix of all. 2
considered
out of More Decompose each component
scope levels in more and more detail
Lowest level – can allocate work, Work

estimate the time and cost and Package
manage and control the work
16

Some guidelines in Developing the WBS

100% Rule
 The WBS should
include 100% of the Parent- Child relationship
work, and capture all One parent can have
the work/deliverables many ‘children’ but a ‘child’
– internal, external, can have only one parent
and interim
Can use a:
 The sum of the work
Top-down approach,
at a ‘child’ level must
Bottom-up approach or
equal 100% of work at
combination of both
it’s parent level
17
Some guidelines in Developing the WBS
 WBS is developed by the PM with the team
 Keep in mind each level of the WBS should be

a smaller piece than it’s upper level
 Some elements will be broken down further than

other elements
 Use a numbering pattern that reflects the level of

the WBS element
 Use WBS templates for easier development
18

Work Breakdown Deliverable

Structure
WBS WBS WBS WBS

1.1 1.2 1.3 1.4
WBS WBS WBS WBS WBS WBS WBS

1.1.1 1.1.2 1.1.3 1.3.1 1.3.2 1.4.1 1.4.2
1.1. 1.1. 1.1. 1.1. 1.1. 1.1. 1.3. 1.3.

1.1 1.2 2.1 2.2 3.2 2.1 2.2 WBS WBS
3.1
1.4.2.1 1.4.2.2
19
WBS Example based on Deliverables & Functionality

Hydro Power Project (Deliverable / Product based)
Dam Penstock Power House Spillway Power lines
Catchment Surge tank Pumps Gated Transmsn lines

Reservoir Turbine Ungated Tower
Control Gates Generator
Hydro Power Project (Functionality based)
Civil Engineering Mechanical Engineering Electrical Engineering
Geological eng Design Design

Structural eng Manufacturing Engineering
Environmental eng Turbine selection Transmission lines
20

Work Breakdown Structure - Example

Residential
Construction
Build Build Internal External Services

Foundation Structure services
Earth Work Base Preparation Blinding

Compound Wall
Driveway
Shuttering Concreting
Water Supply lines

Anti-termite Polythene Work
Sewage Lines
Layout Excavation Leveling

Electric Connection
21
Work Breakdown Structure Example

SW Project
1.1 1.2 1.3 1.4 1.5 1.6

Prepare Prepare Code SW SW Deployment
SRS Design Software Testing Documentation
Documents
1.1.1 1.2.1 1.3.1 1.4.1 1.6.1
Gather Prepare Code Test module SW
Requirement HLD Module1 1 Transition
1.1.2 1.2.2 1.3.2 1.4.2 1.6.2

Analyze Prepare LLD Code Test Module 2 User
requirements Module 2 Acceptance
1.1.3 1.4.3 1.6.3

1.2.2.1
Document Integration SW
LLD Module 1
SRS Test Training
1.2.2.2
LLD Module 2
Code of
Accounts
22

Work Breakdown Structure - Example

New Car
Concept Planning, Procur- Production Testing Close-out

-ualize Eng.& Design ement
Need Stakeholder Bill of Exhaust Sub Close

analysis analysis Materials System Assembly contracts
Business Develop Electronic Engine test Technical

Suppliers
case Ind. Plans system report
Design Mech Quality Mech Sub Fuel systm Finance report
Project
Charter System Inspectns Assembly
Electronic Lessons
Design Elec system
Chassis learned
System
Gear Suspension
Design Struc
System Cooling
Field testing
Design S/w Fuel
System
Aerodynamic
23
Work Packages
Is Lowest level of WBS. Work is controlled
and monitored at this level. Should have:
 Scheduled start / finish dates
 Have a time phased budget
 Some deliverables
 Details of the work to be done
- Scope of work, quality, milestones,
acceptance criteria, resource requirements etc.
 Only one person to be accountable
 Work can be assigned to contractor/ team
24

Why WBS is a key tool in Projects
Foundation tool
Org, Risk, to plan & control
entire project Primary input
Cost, Res, RBS
for planning
Resp Matrix
Basis for Common
Breakdown understanding
Structures
Bottom up cost
Assign work
allocation
Input for Risk Track progress

network identification
25
WBS Dictionary
A Deliverable
WBS Dictionary
WBS 03
- Compilation of
WBS 02
detailed • WBS Identifier / WBS Name

WBS 01
description of • Code of Accounts

each Work • A Statement of work
• Duration Estimate
Package
• Responsible Org Unit
• Milestones
• Resource requirements
• Technical Specifications
• Quality requirements
• Acceptance Criteria
• Risks
• Assumptions
• Constraints
26

Scope Baseline
The scope baseline is the original baseline + any
approved changes.
Scope Baseline comprises of 3 documents:
1. Scope Statement 2. WBS 3. WBS Dictionary

Build
Scope Foundation WBS
Stnt Dictionary
Earth Base
Work Preparation
The scope is progressively elaborated as more

details are known
27
Scope Changes
If any major scope change is approved during

project execution the Scope Baseline and the
Project Management Plan will be revised.
Scope Creep - a common problem i.e.

uncontrolled scope changes after project begins
without corresponding increase in time or
budget or both.
28

Scope Management Plan is developed as part of the

Project Management Plan. It describes steps needed
1 to manage the project’s scope
Scope looks at the deliverables and total work

2 1
required to complete the project successfully
Work Breakdown Structure (WBS) is a key tool

3 in managing deliverables. Work Packages are
lowest level of WBS
4 Scope baseline is the original scope baseline +/-
any approved changes.
5 Scope Creep is a common problem faced in projects
29


Project Life Cycle Phase - Plan
Unit 5: Time Management - Part 1

 Activity relationships
 Floats
 Develop network schedule
 Precedence Diagramming Method
 Critical Path Method analysis
schedule Critical Dependencies

Floats path
Lead Lag
resources
1
Time Management
An important goal and a key concern

in projects is to meet the project’s
deadlines
■ All project activities should be identified and a detailed
project schedule developed
■ The schedule shows the planned dates for and meeting
milestones
“ Lost time is never found again ”

- Benjamin Franklin
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of Project Management
Management (TPM)(TPM)

Time Management
■ How much time will the project take?
■ Which activities are critical activities?
 What are the planned start/end dates?
■ How much float in non critical activities?
■ Time Buffers / Reserves are often added in the schedule as
Contingency to meet potential risks
 Once execution begins planned schedule is the baseline to
monitor and control project progress
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Project Networks
Networks are the most powerful tool to control

the project work as project progresses
CPM is a project scheduling method used to determine the
Early Start (ES), Early Finish (EF), Late Start (LS) and Late
Finish (LF) of each activity.
The Critical Path determines the earliest possible
completion date of the project.
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To Develop the Network Schedule
Decompose the work packages into activities

to be performed
Sequence the activities based on logical

relationships
Identify & estimate all resource requirements
for each activity – type & quantity
Estimate activity durations using appropriate

estimating techniques and skill level of resource
Develop and analyse the network schedule
Activity Relationships
Input for an 4 Logical

Activity relationships
 Identification ID  Finish to Start (FS)

 Name  Start to Start (SS)
 Duration  Finish to Finish (FF)
 Interrelationships  Start to Finish (SF)
Activity duration should be realistic.

Consider past experience, skill level,
availability of manpower, raw
materials, equipment, total work
required including all holidays etc.
6
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Finish To Start (FS)

The ‘from’ activity must Finish before the
‘to’ activity can start
From activity To activity
A B
Finish Start
A: Gather requirements B: Start design
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Start To Start (SS)

The ‘from’ activity must Start before the
‘to’ activity can Start
A
From activity Start
To activity B
Start
A: Perform 1st test B: Record results
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Finish To Finish (FS)

The ‘from’ activity must Finish before
the ‘to’ activity can Finish
A
From activity Finish A: Perform last test
To activity B
Finish B: Finish recording all results
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Activity Relationship
Start To Finish (SF)

The ‘from’ activity must Start before the
‘to’ activity can Finish
A Activity B cannot
B
Finish until it’s
From activity Start Finish
predecessor,
activity A has
Started
To activity
A: Launch new website
B: Close old website
10
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Activity Activity
Modifiers Dependencies
 Mandatory
 Lag
 Discretionary
 Lead
 External
11
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Activity Relationship – Modifiers
Lag
A modification in the In a FS relationship
logical relationship that B has a Lag of 1 day
causes the successor
task to be delayed. A
B
Days
A percentage of the work completed is often used for Lag
12

Activity Relationship – Modifiers
Lead
A modification of the In a FS relationship
logical relationship B has a Lead of 1 day
that accelerates the
successor task. A
Days
A percentage of the work completed is often used for Lead
13
Activity Relationship
Mandatory or ‘Hard’ Logic’ External
Work requires a specific Based on outside factors

work sequence or a legally e.g. political, government
required sequence. This rules, other projects
could be within
performing organizations Discretionary or ‘Soft Logic’
control or outside the
performing organizations Based on experience or best
control practices
14
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Project Network Diagram
Activity On A schedule model

Node (AON) Lay
Cable
where Activities are
Precedence represented by Nodes
Diagramming Arrows show logical
Method dependencies for sequence to
perform the activities
A B C Precedence Diagramming
Method (PDM) allows use of all
D E F 4 logical dependencies
15
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Critical Path Method

(CPM) uses a
2 - Pass System
 A Forward Pass to calculate the Early Dates
 A Backward Pass to calculate the Late Dates
16


Forward Pass Backward Pass
ES Late Start (LS)
Early Start (ES)
The latest time by
The earliest time a task
which a task can begin
can start based on the
without violating a
network logic and
schedule constraint /
schedule constraints. LS
p j end date.
project
Critical Path Method
EF
Late Finish (EF)
Early Finish (EF)
The latest time a task
The earliest time a task
can be completed
can finish based on the
without violating a
network logic and
schedule constraint or
schedule constraints. LF
the project end date.
17
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Project Networks
FLOAT / TOTAL FLOAT /
PATH FLOAT / SLACK
Length of time a non- FLOAT = LF - EF or LS – ES
critical task can be delayed of the activity
or extended without
affecting the project end ES EF
date. Shows the measure 6 9 Activity A has a
A
of time flexibility available 13 16 Float of 7 days
in the activity. LS LF
If the float is negative i.e. Late date is less than Early Date
it shows amount of time activity is running behind schedule
18
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Project Networks
FREE FLOAT
FREE FLOAT
= ES of Successor – EF of Current
Length of time a non- ES ES
EF EF
critical activity can be 3 6 6 9
If two activities
delayed or extended A C converge into a
without delaying the 10 13 13 16 single activity,
earliest start date (ES) LS LF LS LF then only one of
of it’s successor ES EF these two
Activity B has a activities can
activities. 3 5
B have a free float.
11 13
Free Float of
1 day
LS LF
19
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Work Package to “Lay an underground Cable”

Decomposed to 5 activities for network
2d
7d
Order
Cable Deliver 5d 1d
Cable
at site Lay Test
Start 7d
Cable Conne Finish
Dig ctivity
Trench
at site Activity Duration (Days)
Order Cable 2
Get Cable delivery at site 7
Dig trench for laying cable 7
Lay the cable 5
Test connectivity 1
20

Critical Path Method (CPM) analysis

7 4
Forward Pass 3 10 10 14
B E
3 10 10 14
3 TF=0 TF=0 5 Backward Pass
0 3 14 19
A F
0 3 14 19
TF=0 2 8 TF=0 Critical
3 5 5 13 Path is
C D A-B-E-F
4 6 6 14
TF=1 TF=1 FF=1
21
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Critical Path
 Is the Longest path in the network
 Usually has zero float Forward
pass
 Network can have more than one Critical
Critical Path Path
deadlines
 Negative float in critical path Backward pass
shows project is behind schedule resources
 Critical path can change through
the project decisions
Network forms the Schedule baseline against which

project’s progress is controlled & monitored
22
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Key Takeaways for this Unit
Meeting the project’s time line is an important concern

1 and KPI in projects
2 1 The project’s network schedule forms the schedule

baseline.
3 Finish to Start is the most commonly used activity relationship.

PDM is the most widely used network diagramming technique
4 The Critical Path which is the longest path in the network drives
the project’s end date
5 Time Buffers are often added in the schedule as contingency to

meet potential risks
23


Project Life Cycle Phase - Plan
Unit 5: Time Management - Part 2

 Gantt charts
 PERT, Standard Deviation
 Schedule compression
 Resource Histograms
schedule Histogram
Crashing Milestones
Fast Tracking
PERT
Gantt charts resources
1
Gantt / Bar Charts
Gantt chart developed by Henry Gantt around 1915 is a

bar chart used to show the project schedule
It has horizontal
bars that show the
Start time and End
time of the activities
at a summary level
or at activity level
which are drawn
against a common
time scale

Gantt / Bar Charts

Gantt charts are easy to draw, read
and understand
Length of the bar shows the activity
duration Drawback – Traditional
It provides a clear picture of the Gantt charts do not show
project status activity dependencies
Summary of ten's of activities can
be depicted by one bar
Can easily view planned project
schedule versus the progress
Excellent tool for management
reviews and reporting of progress
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Linked Bar / Gantt Charts

Unlike the traditional bar charts, modern Gantt charts
also referred to as Linked bar charts show the activity
dependencies and floats
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Milestone Charts
Milestone charts are used to
show end dates for completing
key activities in the schedule
Milestone Chart
Milestones have zero duration
Provide an excellent overview of

project’s progress
Used for management reporting of
progress
Commonly used for making

payments to contractors
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Program Evaluation and Review Technique

(PERT)
PERT is used for Time and Cost estimating when it is

difficult to arrive at an estimate
Estimate uses a weighted average to reduce the risk.
Also referred to as a 3 time estimate
Each activity Optimistic (O) for best case These 3

is assigned 3 Pessimistic (P) for worst case
estimates are
estimates used to
Most Likely (ML) for most likely calculate the
PERT mean
PERT = O + 4ML + P
6
6
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Program Evaluation and Review Technique

(PERT)
Activity Optimistic Most Likely Pessimistic PERT Duration
A 20 30 40 30
B 70 120 146 116 PERT
C 40 50 72 52 Duration
calculation
PERT duration 20 + 30 (4) + 40 = 20 + 120 + 40 = 30 for the
for Activity A 6 6 three
PERT duration activities –
70 + 120 (4) + 146 = 70 + 480 + 146 = 116 A, B & C
for Activity B 6 6
PERT duration 40 + 50 (4) + 72 = 40 + 200 + 72 = 52
for Activity C 6 6
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Standard Deviation (SD) (σ)

Standard Deviation is a statistical tool that is
used to measure the variability in the data
To calculate the SD the Pessimistic (P) and Optimistic (O)
estimates of the activity are used as shown in the formula
SD = (P - O) / 6
By combining Standard Deviation with the activity PERT

Mean and applying the property of the Normal
Distribution curve we can arrive at a confidence level of
completing an activity within a certain time range
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Standard Deviation (SD)

For confidence of completing activity in a time range
Calculate 1 SD for the activity using formula
1 (P-O)/6
‘+/-’ the SD on both sides of the activity’s PERT Mean to
2 first calculate a duration range
Then apply the Normal Distribution curve to get a confidence

3 level / probability of the completing the activity in this
duration range
4 Depending on confidence level required a multiple of SD is used

equally on both sides of the PERT Mean to make the time range
Standard Deviation (SD)

Calculating a time range to predict approximate 68-95-99% confidence
of completing the activity within that range
 For a 68% confidence we need to ‘+/-’ 1 SD to PERT mean
 For a 95% confidence we need to ‘+/-’ 1 more SD (2 SD)
 For a 99% confidence level we need to ‘+/-’ 1 SD again (3 SD)
1 SD prediction 2 SD prediction 3 SD prediction

Activity can be Activity can be Activity can be
completed with completed with completed with
68.26% confidence 95.44% confidence 99.74% confidence
between PERT between PERT between PERT
mean ± 1 SD mean ± 2 SD mean ± 3 SD
10
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Standard Normal Distribution
Empirical Rule for a normal

distribution states that :
68.26% of the data falls within

one standard deviation.
95.44% percent within two

standard deviations, and
99.74% within three standard

deviations from the mean.
11
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Standard Deviation (SD) for an Activity

PERT Mean Standard Range at
Most Pessi-
Activity Optimistic or Deviation 68.2% (1SD)
Likely mistic
Duration (1 SD) confidence
A 20 30 40 30 3.3 26.7 – 33.3
B 70 120 146 116 12.6 103.4 – 128.6
C 40 50 72 52 5.3 46.7 – 57.3
For Activity A: Duration range Based on Normal Distribution

at 1 SD = curve there is a 68.26% chance
1 SD = 40 - 20 of completing Activity A
6 30 - 3.3 = 26.7 between
= 3.3 30 + 3.3 = 33.3 26.7 and 33.3 days
12
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Standard Deviation (SD) for an Activity

PERT Mean @ 68.2%
Activity O ML P (1 SD)
or Duration Confidence
A 20 30 40 30 3.3 26.7 – 33.3
B 70 120 146 116 12.6 103.4 – 128.6
C 40 50 72 52 5.3 46.7 – 57.3
For activity B For activity C

There is a 68.26% There is a 68.26%
confidence level we will confidence level we will
complete activity B complete activity C
between between
103.4 and 128.6 days 46.7 and 57.3 days
13
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Standard Deviation – Project Level

 Step 1: For each activity in the critical path (A, B and C)
calculate it’s PERT duration and Standard Deviation
 Step 2: Calculate the Variance for each activity
Variance (σ ) = {(P - O) / 6}2
 Step 3: Square root of the ∑ Variances of all critical path
activities in project gives 1 SD at project level
Critical Optimistic Most Likely Pessi- PERT 1 SD Variance

Activity (O) (ML) Mistic (P) Duration (Days)
A 20 30 40 30 3.3 10.9
B 70 120 146 116 12.6 158.8
C 40 50 72 52 5.3 28.1
198 14.1 197.8
At project level (A+B+C)
days (Sq rt. ∑ Var.) (∑ Variance)
We have a 68.26% confidence project will be completed between 184 to 212
days. For this we ‘±’ 1 SD (14.1 days) to project duration (198 days).
14

Managing the Schedule
Is Project
behind
schedule?
Crash and Fast Track Critical

Path activities to reduce the
project’s end date
15
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Duration Compression - Crashing
 Crashing done only for critical path activities

 Extra resources added to critical path activities to
reduce their duration
 First select activities that will cost minimum to crash
 Can use more overtime / faster worked materials,
more skilled resources
 Costs likely to increase
 Crashing possible only up to a point – law of Diminishing
Returns
16
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Duration Compression - Fast Tracking

 Only critical path activities are fast tracked
 Work normally done sequentially is overlapped
e.g. order equipment before design finalized
 Critical Path activities are carried out in
parallel to accelerate the project end date
 Fast tracking requires much more control and

co-ordination.
 Is risky due to possibility of rework
17
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Resource-Limited Scheduling
Maximum number of Activities are always
resources available to the scheduled so that the pre-
project is fixed and cannot determined level of
be exceeded. Could arise due resources is never exceeded
to factors such as availability
of limited facilities / Resource Limited
equipment or health and Scheduling often causes
safety requirements the specified project
duration or project end
date to be extended
18
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Time Limited Scheduling

 Used when project’s end date is fixed and cannot
be extended e.g. opening of events like Olympic
games with heavy penalties for time overruns
 All resource constraints are relaxed to avoid any delays in the

project’s end date
 Activities are scheduled so that the specified project duration

or any imposed date is not extended
 Helps PM to meet an agreed upon finish

date
19
Resource Histogram & ‘S’ curve – to organize resources
‘S’ curve
16 Histogram
14
shows the
resources to
be used per
unit of time
‘S’ curve
shows the
cumulative
Histogram resources
20

Gantt charts provide an overview of the start and end

1 time of project activities against a calendar
2 1Gantt charts are primarily used to review and report project’s progress
Program Evaluation and Review technique incorporates uncertainty
3 by using a 3 time weighted average to arrive at the activity duration
The percentages for 1 SD, 2 SD, 3 SD are always the same. Used with
4 PERT it provides a confidence level of completing an activity in a time range
5 Managing the schedule is important to meet the planned end date. Critical
activities are used for duration compression and Floats to manage resources
21


Unit 6 : Cost Management
 Cost Estimation
 Estimation Techniques
 Cost Baseline
 Project Budget
Estimate Costs Budget

ROM
Analogous
1
Cost Management
Cost is the third leg of the Triple

Constraints, and is a key aspect in planning,
managing and controlling the project

Cost Management
Managing the costs in any project consists of three

key areas namely:
 Estimating the costs for performing all the project
work
 Determining the project’s budget & finalizing the Cost
baseline to know how much and when we need the money
 Monitoring and controlling the costs
Cost Management Plan

The Cost management plan sets the format and
standards by which project costs will be measured,
reported and controlled. It covers as aspects like:
 Units of measurement: the base units that will be used to
measure different resources used in the project
 Precision levels: for recording activity cost estimates
 Control thresholds: acceptable variances that will be tolerated
 Budget changes: Identifies who has the authority to approve
changes to the budget
 Reports: The reporting formats, frequency of report generation and
persons to whom the cost reports will be sent

Cost Estimating
Estimating Costs
 Estimates are made prior to making the
budget for likely cost for total project work
 Is generally shown in units of currency but at times can
be given as man hours
 Is the likely costs of all the resources and the work effort
needed to complete project such as labour, material,
equipment and services
 Estimate accuracy improves through project
 Estimates are generally more reliable when made by
functional organization or persons responsible for the activity
Estimating Techniques
Estimates should be based on realistic inputs such as:
Government
Best Quotations
Data
Practices / Industry
data Accuracy of the
Estimator’s
estimates
knowledge Available improve as more
Information Expert details become
Opinion available through
the project

Type of Costs
Costs can be looked at in different ways:
Direct costs
 Costs directly attributable
to a process, product and Variable costs
job e.g. labour, material,  Costs that change with
plant & equipment, amount of production and
contractor the resources used e.g.
Indirect costs material, supplies, salaries
 Costs associated with the Fixed costs
enterprise e.g. taxes,  Costs that do not change with
licenses, administrative level of output and resources
salaries, training, legal used e.g. rent, set-up costs
Types of Estimates
Estimates can be broadly classified as:
Conceptual estimates – that are used in

the early stages of the project
Detailed estimates that is used to control project

costs
 Estimate includes procurement, fabrication,
installation of materials & equipment but not
to extent of nails & screws etc.

Types of Estimates
Accuracy range of the estimate depends on a number
of characteristics of the input information as well as the
estimating process e.g.
 Availability of the information when making the estimate
 Project complexity – is it a first-of-it’s kind project or a repeat project?
 Technology being used in project - tried and tested or new technology?
 Type of project - R&D type of project or a routine business project?
 Type and quantity of resources required
 Assumptions / uncertain conditions e.g. market conditions, political stability
 Skill and knowledge of the estimators
 The estimate will undergo several iterations of refinement
Types of Estimates
Rough Order of Magnitude estimate (Ball Park)
Initial estimate based on past experience
 Estimate is based on high level objectives
 Minimum information and drawings is available when
making the estimate
 Inputs from past experience of similar projects done earlier
 Based on different surveys across various sectors and past
experience of similar projects the accuracy range of our ROM
estimates can be in the range of:
L: -25% to -50% / H: +50% to +70%
10

Types of Estimates
Budget / Preliminary estimate
Made when scope and schedule is finalized
 A Budget estimate is made once the project’s scope
and schedule is basically finalized
 This estimate is often used more by the project owner for
activities such as bid proposals, bid evaluations, contract
change orders etc. and not for controlling the project
 According to different surveys, depending on the sector and the
experience of similar projects done earlier, the accuracy range of
Budget estimates can be in the range of:
L: -10% to -15% / H:+25% to +30%
11
Types of Estimates
Detailed or Definitive estimate
Is used to monitor the project
 This estimate is made using well defined detailed data,

specifications, unit drawings, engineering drawings etc.
$$  Is made during detailed planning so the work can be fully
detailed out for arriving at the estimate
 According to different surveys, depending on the sector
and past experience of similar projects the accuracy
range of Detailed estimates can be in the range of:
L: -3% to -5% / H: +10% to +15%
12

Types of Estimates
Estimates through the project
ROM Budget Definitive

-25% to +75% -10% to +25% -3% to +10%
-50% to +50% -15% to +30% -5% to +15%
Above estimates are based on different surveys
13
Analogous estimating technique
 Generally used in early phases when
minimum information available
 Is a top-down estimate
 Estimate arrived at by comparing proposed project with a
similar project done earlier
 Technique relies on previous experience for
estimates. Accuracy will vary with past knowledge
 Uses values of aspects like scope, cost, activity
duration from past estimate to estimate for future
14

Parametric estimating technique
 Uses project characteristics in a mathematical model
to calculate an estimate for activity parameters. This
technique is best for skill based, repeatable work
 Commonly used for construction and software sectors
 Parametric models are used to estimate how much the product
(or project) will cost based on physical attributes e.g. weight,
volume, power, lines of code, price per sq. foot
 Used at project level and detail level $
15
Bottom up estimating technique
 A detailed estimate built up from the

knowledge of the design of the system
 Costs are collected for all work package activities
- resources, billing rates, raw materials etc.
 Costs rolled up to project level
 Most expensive and time consuming method but also
most accurate estimate
 Resources needed first estimated and are then
converted into monetary terms
16

Three Point estimating technique
 In three point estimating a range of cost estimates is used

by taking three data points instead of a single data point and
calculating the weighted average of the range
 The range of for activity’s cost is taken after factoring in risk and uncertainty
 Most Likely Case – a realistic assessment based on the most likely
scenario
 Best Case – likely cost based on the optimistic scenario
 Worst Case - likely cost based on the pessimistic scenario
17
Three Point estimating technique
Based on the assumed distribution of the values within
the range of the Best, Most Likely and Worst case
estimates we can calculate the expected costs
This can be based on a Beta distribution which uses a weighted
average or a Triangular distribution which uses a simple average.
Beta distribution Triangular distribution

(BC+4ML+WC) (BC+ML+WC)
6 3
18

Expert Judgment
Estimates are made by consulting relevant experts

who have experience, training or specialized knowledge of
similar work to provide inputs and guidance about variables e.g.
 labor rates, material costs, inflation, risk factors etc.
Inputs can be gathered from the project manager, different

stakeholders, operations staff, team members, client, consultants,
industry experts, government data etc.
Expert judgment helps to arrive at a more realistic cost estimates
19
Contingency Reserves
A Monetary provision kept in the Budget
Estimated costs for "known unknowns" that

Contingency are included in scope and cost baselines
Reserves Contingencies are funds included in the cost baseline based
on past experience to cover uncertainty and risk exposure
Amount kept is often 5% to 10% of base estimate to cover aspects

like:
 Planning and estimating errors and omissions
 Minor price fluctuations
 Design developments and changes within the scope
 Variations in market and environmental conditions
20

Management Reserves
Is not included in the Cost Baseline
Additional budget kept by Owner for

Management unpredictable parts of project –
Reserves "unknown unknowns"
Using of the management reserve generally requires
Management clearance
Management Reserve is generally not an estimated

allowance but a random figure kept by management.
Amount kept is usually assessed according to past
performance, organization’s policy, risk etc.
21
Cost Breakdown Structure (CBS)
Cost Breakdown Structure (CBS) is a breakdown of the

costs of the various components of the Work
Breakdown Structure (WBS) including all works or
services done by the subcontractors.
Cost Breakdown structure
is used to compare the
actual costs with the
budget, and integrate to
the cost control system.
22

Cost Budgeting
Budgeting Costs
 Costs are allocated to schedule activities
$ or work packages
 A time phased budget created for costs by
aligning costs with the project schedule
 A cost baseline is established to measure
the project’s performance
$
 Chart of Account - A numbering system used
to monitor Project Costs by category e.g.
assets, liabilities, material, equipment, labour
23
Cost Baseline
Cost budget 137000
Management reserve 7000
Cost baseline 130000

Bottom-up estimating
Contingency reserve 10000
Project 120000
Work packages 50000 70000
Activities 10000 15000 5000 40000 30000
24

Cost Baseline
Is the time phased budget for the project.
Is used to measure, monitor and control project’s
overall cost performance
 Is the total estimated cost for
the project
 Shown as an ‘S’ curve
 Large projects can have
different cost baselines for the
project e.g. internal labour
costs, contractor labour costs,
material costs
25
Control / Cost Accounts

A Control Account is an assigned WBS Level used
to monitor the cost and schedule performance of a
significant element of the work.
It is a major management control point for:
 Cost Summarization
 Variance Analysis and Reporting
 Responsibility Assignment
 Scope Description
 Corrective Action Planning
The Detailed budget is developed at Work Package level
26

Budget Estimating
 Managing costs is a significant challenge. PM must
keep track of the money spent and control the costs
 We need to have a balance between overestimating and
underestimating the money needed to perform the project work
 Budget is based on the WBS, the resource estimates for manpower,
equipment, material, effort estimates, and the project’s schedule
 Estimates become more accurate over time. The definitive estimate
is used to monitor the project costs
 Contingency funds is added to the base cost estimate to cover the
monetary impacts of uncertainty in the estimates and project risks
27
Estimates should be based on realistic inputs with a

balance between overestimating and underestimating.
1
ROM estimates can range from -25% to +75%, Budget
2 estimates from -15% to +30%, Detailed estimates
1 -5% to +15%.
from
Key estimation techniques used are Analogous,
3 Parametric, Bottom-up, 3 Time estimates and Expert
judgment
4 A cost baseline is established to measure and monitor the

project’s performance.
5 Two types of monetary reserves are kept - Contingency
reserves and Management reserves.
28


Unit 7 : Quality Management

 Quality Concepts
 Quality Planning, Assurance, Control
 Quality Tools
What is Quality
Cost of Control Chart
Quality
Pareto chart Inspections
What is Quality
Quality is “the totality of characteristics

of an entity that bear on its ability to satisfy stated
or implied needs”
- ISO
“Degree to which a set of inherent characteristics

fulfill requirements”
- American Society for Quality

Quality Terms
What is Quality?
Fit for Use Fitness for Purpose

- Fit for use by customer - Meet the customer’s
requirements & purpose
Management
Responsibility
Conformance Customer
to Requirements Satisfaction
3
Some Quality Terms
 Propounded by Philip Crosby the

Zero goal is to improve processes to avoid
Defects all defects
 Quality should be built into the process so
there will be no costs for poor quality
Prevention  Prevention aims to do things correctly first time

vs and prevent defects from happening
Inspection  Inspection examines the product to check if it
conforms. Rework after removing defects is
more costly

Some Quality Terms
 Quality is the degree to which a customer

Quality vs or end user’s requirements are met
Grade  Grade is level / functionality of the product or service
having same functional use but different technical
specifications
 Is a Japanese philosophy that stresses

constant process improvements through small
Kaizen incremental changes involving all employees
 Kaizen aims to make the work environment
more efficient and effective
Total Quality Management (TQM)
TQM is an approach used to implement

quality improvement programme
involving everyone across the organization
 Get ideas from employees

 Environment of participative leadership
 Improve the customer service
 Benchmark major activities to improve
 Reduce cycle time

Quality Gurus – Walter A Shewhart
 Shewhart is known as father of modern quality control

 He combined disciplines of statistics, engineering, and
economics
 Worked at Bell Labs where he influenced Deming & Juran
 Is well known for creating concept of Statistical Process Control,
Sampling and developing Control charts to reduce variations in a
manufacturing process
Quality Gurus – W. Edwards Deming

Deming’s Plan-Do-Check-Act (PDCA) cycle
An iterative 4 step approach to continually improve processes
Implement See how to

corrective actions improve present
needed in plan Act Plan practices
Test & check Check Do Implement

got desired improvement plan
results or not on small scale
 Management commitment essential

85% in meeting quality is management responsibility
8
Quality Management Plan

It documents how the quality will be
implemented and will meet the applicable
standards, policies, legal needs and
customer expectations. It includes:
 Quality standard to be achieved

 Product Acceptance Criteria
 Roles and responsibilities
 Procedures, processes, tools & techniques
and standards to be followed
 Metrics to be used to check the quality
QUALITY
Quality
Management
Quality Quality Quality

Planning Assurance Control
10
Quality
Policy Quality Planning
What
Quality Define Quality
Actions/Process/
Requirement Standard
Procedures?
Statutory
Requirement Quality Assurance
Are we following the right processes?
Feedback to QP and QA Do we need to modify processes?
Quality Control
End
Defect NO Results YES
Repair/Rework complying with
Standards?
11
Quality Planning
Identifies quality standards applicable
Plans Actions to achieve the standard

required by the customer and law
The project’s quality is driven by

company’s quality policy
12
Quality Assurance
Quality Assurance
Demonstrates that the

work is being done according to the
quality plan and will satisfy
the relevant quality standards
According to ISO 9000, QA is:

“Focused on providing confidence that quality
requirements will be fulfilled.”
13
Quality Assurance
QA ensures compliance of the
process not the product result
Reviews
Pre planned Audits and Reviews used to check
compliance that all procedures being met as planned
Audits
QA is pro-active and aims to prevent
defects from entering the system
14
Quality Control
Activities to verify that results comply

with relevant quality standards &
identifies ways to eliminate causes
of unsatisfactory results
QC is reactive and is used to measure and check

that the results meet the quality requirements
15
Quality Costs
Cost of Conformance
Prevention Costs to prevent quality problems and

costs keep failure costs at a minimum e.g.
- making plans, identifying specifications for incoming
materials, education, training, equipment maintenance
Appraisal Costs incurred to detect defects by measuring and

costs monitoring quality e.g.
- inspections, quality audits, testing, evaluation that
incoming materials meet specifications etc.
16
Quality Costs
Cost of Nonconformance
Internal Internal failure costs - incurred to remedy

Failure costs defects before leaving organization e.g.
- waste, rework, scrap, redesigning, failure
analysis etc.
External External failure costs – customer determines their

Failure costs requirements not satisfied e.g.
- repairs and servicing, liabilities, warranties, handling
of complaints, rejected or recalled products etc.
17
Quality Tools & Techniques

Key Quality Control Tools
 Control charts
 Pareto diagrams
 Cause-and-effect diagrams
 Flow charts
 Histograms
 Inspection
 Sampling
 Benchmarking
 Checklists
18
“If I had 8 hours to chop down a tree,

I’d spend 6 sharpening the axe.”
— Abraham Lincoln
19
Control Chart
 See how a process changes with data plotted over time
Used to decide if the product or service is “in control”
 Control limits set within a specified range or at 3 SD
 Tool does not provide causes for deviations or solutions
Out of Control
12 UCL
±3
±2
±1
8 CL
4 LCL
Rule of Seven
0
Readings over Time
20
Control Chart
An Upper Control Limit (UCL) and a Lower Control Limit
(LCL) shows acceptable process limits e.g. weight, length,
height, temperature
Control Charts also show the data trend and identify potential
causes of defects
Rule of Seven Common cause Special cause
If there is a run of seven A random variation Variation that can be
successive data points present in all controlled at the
trending in one direction processes. Requires local or operational
or fall within UCL & LCL management level. Is indicated by
but are on same side of decision to be a persistent trend
central line shows there is corrected. approaching control
some abnormality in the limits.
process.
21
Pareto Chart
A Pareto chart based on the Pareto principle is a
histogram that ranks number of defects in order of
frequency or importance.
The chart shows the total errors in each cause.
Pareto analysis Benefits Pareto analysis Limitations
 It helps to segregate the  It does not help in finding the
problems and their causes root cause of the problem
 Can focus on solving the  It shows the frequency of a
few causes creating the problem, not the severity
maximum problems  It focuses on past data which
 Is easy to draw and an might not be significant to
excellent visual tool current or future scenarios
22
Pareto Chart Example – Late for office

Pareto chart is also known as the 80/20 principle
150 100.0%
135 90.0%
120 80.0%
105 Cumulative %
Frequency 70.0%
Traffic: 60 90 60.0% Traffic: 40%
Children: 40 75 50.0% Children: 66.7%
Car: 20 60 Car: 80%
40.0%
Sick: 15 45 30.0%
Sick: 90%
Ovrslept: 10 Overslept: 96.7%
30 20.0%
Guests: 5 Guests: 100%
15 10.0%
0 0.0%
Traffic Children Car Sick Overslept Guests
Vertical bars represent frequency of defects in descending order,

and the line represents a cumulative percentage of the defects.
23
Cause & Effect Diagram

(Ishikawa / Fishbone Diagram)
It is a visual tool Brainstorm and Each category is

designed by decide on major further broken down
Ishikawa to show the categories that into sub causes to
relationships among could be causing show deeper levels
different variables the problem of causes that could
and the problem be generating the
which is the Effect problem
24
Cause & Effect Diagram Example
25
Histogram
Number of
Attendees
Histogram is a chart with

columns representing the
distribution.
In a normal distribution, the

histogram is a bell shaped
curve, else it will take
different shapes based on
the data of the distribution
26
Quality Tools
Sampling
 A smaller set of data is

Benchmarking
taken from a larger
population and  Measures different aspects of the
Inspections are carried project’s performance to other
out to determine whether projects to see where the project
the level of performance stands against high performing
meets a pre-determined projects
standard or not  Comparisons can be made with
 Includes measuring, internal or external projects
examining and testing of  Used for process and product
different properties improvement
27
Quality Tools
Checklists
 Checklists are structured
list of items / actions to be
carried out in order to Flowcharts
verify, check or inspect
 An excellent visual tool, flowcharts
 Is a simple but very useful
are a graphical representation of a
and widely used tool in all
workflow, process or sequence of
fields
steps
 Useful to check that
 It shows the relation between
everything required is
different components of a system
included or has been
by using different symbols like
actioned upon
ovals, rectangles, diamonds
28
Quality, as per the requirement should not be

1 compromised
2 1 First time right reduces rework

Quality is broken into three main processes of
3 Planning, Assurance and Control
4 Quality Assurance is pro-active while Quality

Control is reactive
5 Management is responsible to have a quality culture in

the organisation
29

Project Life Cycle (PLC) Phase - Organise
Unit 8 : Interfaces, Org. Structures, Roles & Responsibilities

 Internal & External Interfaces
 Functional, Matrix, Project organizations
 Roles - Sponsor, Project Manager, Team
 Responsibility Assignment Matrix
Sponsor
Interfaces
Project Matrix Functional
Manager RAM Projectized
1
Interface Management
Interface Management - Some Definitions
Management of formal and informal boundaries
and relationships between people, systems,
functions, equipment, or concepts.
Management of communication, coordination and responsibility

across a common boundary between two organizations,
phases, or physical entities which are interdependent
PM plays a key role in managing the interfaces that occur

among people, departments and disciplines - not only the
project team
e.g. engineering, consultants, contract administration,
quality, change management, document management etc.
People Interfaces
 Superiors
 Subordinates
 Team members
 Clients
 Contractors, subcontractors
Technical Interfaces
 Architects
 Engineers
 Designers
 Technical experts
Organizational Interfaces
 Between functional departments
 Suppliers of technology, services, equipment, hardware
Poorly coordinated and controlled boundary

conditions among project entities cause
various interface issues
e.g.
• Design errors
• Mismatched parts
• Systems performance failures Key to effective
• Coordination difficulties Interfacing in the project
• Construction conflicts is
EFFECTIVE
COMMUNICATION
Sponsor - Role & Responsibilities

Sponsor represents interests of persons
funding the project and is involved at an
overall level in the project
Responsible for defining project’s investment aims and
achieving the business benefits
Arranges funding for the project
Links the project with the on-going business
Provides management commitment to project
Decides the priority between the constraints
Guides the project at a strategic level
Sponsor - Role & Responsibilities
 Approves the Project Management Plan

 Provides buy-in for project throughout organization
 Appoints the Project Manager
 Reviews the project’s progress
 Recommends project termination if required
 Acts upon important issues raised by PM
 Reviews lessons learned for future use
Project Manager - Role & Responsibilities

Responsible to manage project and deliver the
project on time, within budget to specifications
 ‘Owns’ the project management plan

 Integrates and co-ordinates entire project
 Manages stakeholder’s expectations
 Monitors & controls all aspects of the project:
A B C  Develops the network schedule for the project
D E F  Communicates with all the stakeholders - team
members, management, contractors
 Risks Identified, Assessed, Managed, Reassessed
Project Manager - Role & Responsibilities

 Determines the resource requirements
 Leads and motivates the team members
 Ensures all changes properly documented
 Reviews project progress and takes corrective actions
 Hands over deliverables to client / sponsor
 Closeout the project
 Record lessons learned for future use
PM is responsible for day-to-

day management of project
Team Members
Actually perform the work.
They should:
 Maintain the harmony and unity of the team
 Perform the work they are assigned responsibly
 Be innovative in getting the work done
 Be open and forthright
 Discuss any problems before they get
out of control
Self Dimension to achieve unachievable
SENSE SENSE
OF OF
OWNER- EXCITE-
SHIP MENT
IN WORK
Accountable Self Awareness
Self
SENSE
OF
CONFI-
DENCE
Qualifications
10
Responsibility Assignment Matrix (RAM)

RAM is made using projects WBS and OBS. Sample RACI chart
Persons
Activity Arun Druv Mira Sara Krish
Define A R I I I
Design I A R C C
Develop I A R C C
Test A I I R I
R - Responsible Persons who performs the work

A - Accountable One person. Ensures correct completion of work
C - Consult Will provide relevant information
I - Inform To be kept updated about work and it’s progress
11
Project Organization Structures

There are three key types of Organization Structures
 Functional
 Matrix
 Weak Matrix - PM given less power than FM
 Balanced Matrix – Both have equal power
 Strong Matrix – PM given more power than FM
 Projectized
12
Functional Organization
 Grouped by department
or function CEO
 Each employee has a
clear boss
HR Production Marketing Accounts
 Interdepartmental
& Finance
communication is via the
Functional head
HR Production Marketing Finance
 Staff and Project persons Employee Employee Employee Employee
are assigned part time to
the project HR Production Marketing Finance
Employee Employee Employee Employee
 PM more like a expediter
or coordinator. HR Production Marketing Finance
Functional manager has Employee Employee Employee Employee
the authority
13
Functional Organization
Advantages
 Best for routine work, Disadvantages
with occasional projects
 No single point of
 Broad manpower base direct responsibility for project
Shared knowledge across  Organisation is concerned
organisation with routine ongoing work
 Better functional support  Cumbersome coordination
 Good communication between departments
channels
 Slow customer response
 Easier budget, cost control
 Less innovation
14
Projectized Organization
 Projects are main

work of the company. CEO
 Everything organized
around projects Project Project Project
Manager Manager Manager
 PM is given
maximum formal Team Team Team
authority and Member Member Member
independence to
manage the project. Team Team Team
Member Member Member
 PM has ultimate
control on all the Team Team Team
resources. Member Member Member
15
Projectized Organization
Advantages
Disadvantages
 Best where projects is main
income of company  Often duplication of effort,
resources, facilities
 PM has almost complete
authority over project team  People retained though they
may not have new project
 All resources available to
PM as and when needed  Technical base less strong.
No line dept. to maintain skills
 Good communication
channels  Slower career growth
 Fast reaction time  Skill & knowledge remains in
same group
16
Strong Matrix Organization
CEO
 Project staff report
to both PM and
Functional
Manager Research & Production Marketing Project
Development Mgmt
 PM assigned full
time to project R&D Production Marketing Project
Employee 1 Employee Employee Manager
1 1
 PM & Functional
R&D Production Marketing Project
Manager share Employee 2 Employee Employee Manager
decision making 2 2
and authority R&D Production Marketing Project
Employee 3 Employee Employee Manager
3 3
17
Matrix Organization
Advantages
 Best where both projects &
operations important Disadvantages
 PM has good control / authority  Dual reporting system – two
over project work. Can commit bosses PM & Function Mgr
company’s resources
 Conflicting / changing
 Function manager to support priorities between PM and
PM. Both share responsibility for Functional manager
the project
 Multidimensional work and
 Efficient allocation of resources information flow
 Strong technical base available  Structure more difficult to
to all projects implement initially – more top
management involvement
initially
18
Key Takeaways for this session
The Project Manager plays a key role in planning,

1 coordinating and managing the project interfaces
2 1 Roles and responsibilities should be clear to all persons. A formal

Responsibility Assignment Matrix clarifies the level of responsibility
The Sponsor, Project Manager and team members all have to work
3 cohesively for project success
The Project Manager is responsible to deliver the project on time,

4 within cost to the required specifications
5 The organization structure shows the reporting structure and level of

authority given to the project manager
19

Project Life Cycle (PLC) Phase – Plan / Implement
Unit 9 : Risk & Opportunity Management

 Risk Categories, Risk Terms
 Risk Identification, Assessment, Response, Control
 Risk Tools
 Issue Management
Mitigate
Brainstorming
Decision Tree PI matrix
Delphi Risk
REGISTER Risk Register
Issue register
Risk & Opportunity Management
Risk: Opportunity
Any uncertain Any uncertain event
event or condition or condition that
that will have a will have a positive
negative impact on impact on a project
a project objective objective if it occurs
if it occurs is a risk is an opportunity
A risk has a cause and, if

it occurs, a consequence
Uncertainty
Negative Positive
impact impact
Threats Opportunity
A negative uncertainty An positive uncertainty

i.e. threat i.e. opportunity
Creates Can
issues Increase increase
expenses Value Create
Slows Reduce new
progress expenses Benefits
Can reduce Enhance
value Reputation
Risk is an Uncertainty And you need,

that Matters to manage it
All Threats and opportunities

There are other are Uncertainties,
Uncertainties that but
don’t matter all Uncertainties are not
Threats and Opportunities
Source: RiskDoctorVideo – Dr. Andrew Delo interviews Dr. David Hillson

5
Some Risk Categories
Internal
Risks Project Schedule Too Optimistic
Risks that
Technology used
can be
controlled
to some Manpower
extent by
the Project Accuracy of estimates
Manager
External
Risks New government regulations
Risks that Foreign exchange rate may go up

cannot be
controlled Excessive rain can delay project
by the
PM
Political and social risk
P/S
Organizational Fund availability dependent

risks on loans
Risks that Resources not available

when required
are specific
to the
Project priority may be shifted
organization
Schedule expectations
& High Risk Proposals
Project Poor use of PM techniques

Management
risks Manpower allocated is
inexperienced
Project
Management Scope ill defined
methodologies
and processes
not followed
9
Managing Risk - Steps

 Develop a Risk Management Plan
 Prepare a Risk Register
 Identify all possible Risks

 Qualitative risk analysis
 Quantitative risk analysis
 Plan Risk Responses to deal with the risks
 Monitor Risks Continuously
Most of these processes are updated throughout

the project life cycle
10
Risk Management Plan

Aim is to make an overall strategy to deal with
potential risks. The plan should cover areas like:
 Methodology - approach, tools, data sources etc.
 Roles and responsibilities
 Budgeting for risk management activities
 Timing to carry out risk management activities
 Key risk categories
 Probability and Impact matrix
 Stakeholders’ risk profile/tolerances – specific to project
 Reporting formats, Tracking System, Risk register format
11
Risk Register
A structured log kept of all identified risks along
with all relevant information related to each risk
 Risk name, description and risk id.

 Probability / Impact of the risk along with it’s effect on
cost, schedule etc. and P-I ranking of the risk
 The risk owners for each risk and responsibility
 Risk response strategies selected to deal with the risk
 Contingencies and Fall back plans
 Risk window when risk likely to occur
 Risk register provides good historical information
12
Risk Identification Tools
Assumption Documentation
analysis Reviews SWOT
analysis
Brainstorming Cause & effect
Delphi diagram
technique
Checklists
Interviews Root cause
identification
Flowcharts
13

Brainstorming
 Use an experienced facilitator
 List all ideas – all are good
 Use WBS and risk categories for identification
 Involve team members, other stakeholders
 What is said is important – be non critical
 Identify maximum possible risks
 Generates lots of inputs
14
Delphi Technique
 Expert opinion from subject matter experts

 Participants are anonymous
 Facilitator sends participants a questionnaire
 Response collated and circulated few times
 Less biased as participants unknown
 Can be done from far
15

SWOT Analysis
S W
Strength Weaknesse
s
O T
Opportunities Threats
16

SWOT Analysis
 Strengths Strengths and
 Weaknesses Weaknesses are internal
 Opportunities Opportunities and Threats

are external
 Threats
SWOT helps us to:
 Address weaknesses and deter threats
 Capitalize on opportunities
 Take advantage of our strengths
 Understand our business better
17
Assumption Analysis
 Assumptions of likely future events made in project
e.g. availability of equipment, resources etc.
 The likelihood of risks in the project increases when the
assumptions turn out to be erroneous or false.
 Assumptions made should be analyzed for two aspects:
The sensitivity (Impact) of the assumption is assessed qualitatively
on a scale such as crucial, vital, important and unimportant.
The stability (Probability) of the assumption checks how likely it is
that the assumption will prove to be wrong or false.
18
Risk Analysis – to prioritize risks
Qualitative Quantitative
Risk analysis Risk analysis
 A qualitative risk assessment  Risk probability assessed

should always be carried out using specific values
to prioritize risks
 Numerical analysis of effect
 Two independent aspects of identified risks on project
evaluated for each risk objectives
- its Probability (P) of
occurrence and Impact (I)  More rigorous than
Qualitative assessment
 Both combined & assessed
 Optional analysis
 Subjective evaluation
19
Probability – Impact Matrix

P-I Matrix is a key Qualitative risk tool
Subjectively assess two independent

PI aspects - Probability of risk occurring
and it’s Impact on project
Risk score is assigned to each risk
PxI based on both Probability &
Impact (Probability x Impact)
Risks rated and ranked in order

of importance
20

P-I Matrix is a key Qualitative risk tool
Four levels of risks have been defined in our example

based on their Probability x Impact (PI) factor.
Category 1 - this has a PI factor of 9, which

requires maximum attention
Category 2 – this has PI Factor of 6, which

requires good amount of attention
Category 3 – this has PI Factors of 3 and 4,

where comparatively less attention is needed
Category 4– this has PI Factors of 1 and 2,

where least attention is needed
21
22
Risk Ranking – Qualitative Analysis

Qualitative risk analysis leads to:
 List of prioritized risks and their PI ratings

 List of risks requiring response in the near-term
 List of risks for additional analysis and response
 Watch lists of low priority risks for later reviews

 Trends in qualitative risk analysis results
Risk Register should be updated at each step
23
Quantitative Risk Analysis
Numerical analysis of the risks
 Different techniques are used such as:

 Modeling and simulation (Monte Carlo)
 Decision tree analysis
 Expected monetary value analysis
 Sensitivity analysis
 Expert judgment
 Interviews
24

Modelling and Simulation (Monte Carlo)
 Monte Carlo, a simulation software is the most well known

and widely used quantitative analysis that is based on
statistical techniques
■ The simulation looks at uncertain scenarios and provides a probabilistic
analysis of different situations
■ Simulation is done hundreds or thousands of times using randomly generated

data resulting in a probability distribution of possible outcomes of what could
happen, and how likely it is to happen, and gives a complete picture and
what-if scenario for the project
25

Modelling and Simulation (Monte Carlo)
■ In the projects it is commonly used for schedule risk
analysis and cost risk analysis
■ For schedule risks the project network schedule and the
activity duration estimates are used while for cost activity
cost estimates are used
 For the network schedule, the project is ‘performed’ thousands of
times using different randomly generated durations for each activity
from the estimated duration range given for the activity
■ Two important outputs of the Monte Carlo simulation are histograms

and cumulative probability charts or S curves.
26

Decision Trees
 Commonly used in decision analysis to make
more informed decisions
 Helpful to formulate problems and evaluate options
 Each possible route or scenario is drawn and analyzed to
take best possible decision
 Considers possible future events for decision today
Decision nodes – typically represented by squares
Chance nodes – typically represented by circles
Involves mutual exclusivity – two events cannot occur together

27
Decision tree analysis
A schematic &
graphical
representation of
several decisions
followed by different
chances of the
occurrence.
Choice Chance Value

Node Node Node
28
Decision tree analysis

Picnic (80%) 4
2
Good Weather
40% Probability No Picnic (20%)
5 Probability of
having a picnic
1
6 = .4 * .8 (1-2-4)
Bad Weather Picnic (30%)
60% Probability
+ .6 * .3 (1-3-6)
3 = .50
No Picnic (70%)
7
29

Expected Monetary Value analysis
■ EMV uses decision trees to calculate a future
outcome that may or may not happen
■ Looks at both Probability and Impact
■ Value of each possible outcome is multiplied by it's probability of
occurrence and products are added
EMV = Probability * Impact
There is a 40% chance of getting a purchase order worth $100,000.

EMV = 0.4 x $100,000 = $40,000
30
Expected Monetary Value (EMV) Analysis

Value of each possible outcome is multiplied by it's
probability of occurrence and products are added
Uncertain Outcomes EMV
Aggressive Outcomes 20% Probability X +$50,000 +$10,000
Schedule
(EMV$14,000) 80% Probability X +$5,000 +$4,000
Uncertain
Outcomes 30% Probability X -$3,000 -$900
Conservative
Schedule
70% Probability X +$20,000 +$14,000
(EMV$13,100)
o Expected monetary value - Outcome x Probability of that outcome

o EMV of decision - sum of EMVs of all Outcomes from that decision
31

Sensitivity analysis
 Done to analyze potential impact of risk events on
project and determine which risk event has greatest potential to
impact project outcome.
■ All uncertain elements examined at their baseline values.
■ Value of one variable is changed while others are kept constant
■ Provides better understanding about which risk events will have
maximum impact on project objectives
32
Tornado diagram
Tornado diagrams often used to display Sensitivity analysis

 Material delivery delayed (-Ve Risk)
 Prototype passes all tests(+Ve Risk)
 Design on schedule(+Ve Risk)
 Requirements not clear (-Ve Risk)
 Lack of PM processes (-Ve Risk)
 No top management support (-Ve Risk)
■ Identified risks are displayed in form of a bar chart displaying both

negative and positive risks.
■ Length of the bar shows the uncertainty of the variable.
■ Highest impact variables plotted from top in descending order
33
Plan Risk Response
Process of developing options and

determining actions to enhance
opportunities and reduce threats to
the project’s objectives.
34
Risk Response Strategies
Remove root cause.

Avoid
Eliminate from project
Make third party

Threats Transfer
financially responsible
Reduce Probability or
Mitigate
Impact or Both
35
Remove uncertainty to
Exploit
use opportunity
Opportunities Share Make third party owner-

better equipped
Increase positive Impact
Enhance
/Probability or both
36
Escalate Escalate to upper levels
Opportunities & Threats
Accept the risk. Keep a

Accept
contingency reserve
37
Monitor and Control Risks
Track Identified Implement Risk

Risks Response Plans
Identify New Monitor Residual

Risks Risks
Evaluate effectiveness of the risk processes
38
Some Risk Terms

 Fall Back Plan – plan B if Plan A fails
 Secondary Risk – a new risk that arises due to

implementation of risk response plan
 Residual Risk - risk that will remain even after

implementing the risk response
strategy (no 100% solution)
 Risk Trigger – indicator that a risk is imminent. Risk

owner will initiate response plan
 Workarounds – unplanned responses to deal with

occurrence of unanticipated risks
39
Some Risk Terms

 Risk Tolerance – the degree or amount of risk that a
stakeholder can tolerate or
withstand e.g. 5% slippage
 Risk Threshold – is a stakeholder’s top limit beyond

which they will not accept a risk
 Risk Audits – to review risk process
 Mutual exclusivity – two events cannot occur together.

Only one of the two can occur
 Risk Reassessment – to review and update risks
40
Issue Management
What is an issue?
 An event that has occurred which blocks the
progress of the project work
 Significant problems, gaps, inconsistencies, conflicts that

occur unexpectedly and need to be resolved to avoid
negative impact on project
- technical faults, material shortage, staff problem,
accidents, equipment
 Issues require urgent action
41
Issue Management Steps

 Identifying an issue that deters project’s performance
 Documenting it in appropriate issue form
 Assessing it’s seriousness in terms of impact on project
 Making a team member responsible to resolve it
 Escalating issue if not resolved at project level
 Keeping track of it’s resolution progress
 Reporting status of the Issue Resolution
 Closing the issue once resolved
 Informing all concerned and document lessons learned
 Maintaining a formal Issue Log
42
Some Issue Categories
 Project Requirements
Lack of shared understanding of objectives /
environment
 Resources
Incorrectly estimated; Not available; Not skilled
 Methodology
Team not performing the right tasks, wrong work
sequence, no focus on work quality
 Support
Lack of management support / sponsorship
43
Maintaining an Issue Log

Issue Log - suggested contents
 Issue ID & description
 Category of issue
 Linkage with any existing issues
 Issue assigned to
 Complexity scale
ISSUE
 Severity scale REGISTER
 Issue priority
 Resolved by date
 Lessons learned
44
Issue Register
Complexity Severity
Issue Pend.
Issues Descriptions Scale Scale TCSPI
Id Issues
1-10 1-5
Requirement for Graphic User
1
Interface not fully identified 9 5 23 1035
Team member responsible for
2 TCSPI
design left job, new hire not done 6 4 30 720 is the Total
Test equipments being shared with
3 Complexity,
other projects 5 4 15 300
Severity,
Performance issue on graphics
6
display is reported by customer 6 4 4 96
Pending Index
Meeting with stakeholders to define
8
quality requirements still open 7 3 4 84
45
Pro-active risk management is essential for achieving

1 project success
2 1 Risk is an uncertainty that matters. All threats and opportunities are

Uncertainties, but all uncertainties are not threats and opportunities
Risk follows processes of Identification, Qualitative analysis

3 Quantitative analysis, Risk Response planning and Risk control
4 Different stakeholders will have different levels of risk tolerance and

risk thresholds
5 An issue is an event that has already happened and needs to be resolved

for the work to progress
46

PLC Phase – Implement & Control
UNIT 10 : Communication & Information Management

 Communication Model
 Types of communication
 Barriers to Communication
 Managing Information
Communication Verbal
Non-Verbal
model
Barriers to
Role of PM communication
1
Communication
Communication crucial factor for project success
Provides the critical link

between
People, Ideas and Information
in the project
Right information
to right person
at right time
in a cost effective manner
1
“The most important thing in communication

is hearing what isn’t said.”
– Peter Drucker
Communication Model
 Source – originator of the communication
 Encoder – Translate thoughts or ideas into a
language that understood by others
 Message – the actual output of encoding
Medium
Sender Receiver
Message Noise
Encode Decode
Feedback-Message
Decode Encode
Noise
2
Communication Model
 Channel – the medium used to carry the message
e.g. a memo / verbal communication
 Decoder – To decode the message received
 Receiver – The person to whom the message has

been sent
 Feedback – Is essential from receiver of message
Plan Communications
A formal communication plan should be made to look at:

 Strategy for meeting stakeholder communication requirements
 What will be communicated - format, content, level and
frequency. Include both external and internal stakeholders
 Person responsible for communicating the information
 Person or groups who will receive the information
 Methods or technologies used to convey the information,
such e-mail, press releases
 Constraints that can affect communications
 How the communication process will be managed
 Escalation process for communication conflicts
3
Communication Effectiveness
Communication can be:
 Verbal – Oral & Written
 Non Verbal (body language. No use of words)
The 7-38-55 rule concerning communication

Message Impact on the receiver: (Albert Mehrabian)
 7% impact of words that are spoken
 38% impact is paralinguistic – tone, voice way words are said
 55% impact is non Verbal – facial expressions, body movement,
gestures, eye contact , etc.
Effective communication requires:

 Talking, writing and listening
Communication Methods
 Push communication - Specific information
sent to specific recipients. Ensures message
sent but no certainty message received or
understood. e.g. reports, e-mails, memos
 Pull communication - Information placed in

central place which is retrieved by recipient at
their own discretion e.g. distribution of large
documents, internet, slide shows, pod casts
 Interactive Communication - Reciprocal method.

One provides information, other responds
e.g. meetings, conversations, video conferencing,
phone calls
8
4
Communication
Formal written Complex problems, plans, reports
Informal written Memos
Formal verbal Speech, presentation
Informal verbal Telephone, conversations
Timely and effective communication

with all the concerned project
stakeholders must for project success
Communication
 Sender: responsible to transmit the information and
ensure that information reaches recipient clearly
 Receiver: responsible to ensure they give feedback
 Internal communication: with persons actively involved in project work
 External communication: with key stakeholders not part of team. Is
more formal communication
 PM has to choose the communication medium to use
 As virtual environment and global communication is becoming more
important we can improve communication by using tools like Skype,
Zoom, GoogleDocs, Webex, WhatsApp, e-mails etc.
10
5
Communication Flow
Communication flows in three directions –
Upwards, Downwards and Horizontally.
Project Manager communicates with:
 Upper management, sponsor, client, functional
managers to ensure continued support
 Team members to solve their conflicts, motivate,
train, supervise them, coordinate activities
 Other departments, co-workers, other stakeholders
PM spends about 75% - 90% of their time in

some form communication
11
Communication
Project Manager improves communication by:
 Being a good communicator
 Building effective channels
 Good Listener
 Conduct well planned meetings, reviews
 Uses clear, circulated agendas
 Holds kick-off workshops
 Informal meetings
12
6
Problems with communication

Number of Channels = n (n-1)
2
2 persons,
1 channel
3 persons,
3 channels
4 persons, ?
6 channels
5 persons,
10 channels
13
Some Communication Barriers
 Different perceptions - goals and objectives

 Differences in attitudes - receiver and sender
 Personality clashes
 Technical barriers
 Hidden agendas
 Selective listening
 Cultural differences
 Message not clear
 Too many links
14
7
Poor Communication
Poor communication in team can lead aspects like:
 Misunderstandings and different interpretations

regarding project objectives
 Decreased productivity leading to missed deadlines
 Project being behind schedule and over budget
 Quality issues
 Conflicts among the team members
 Low team morale and low commitment
15
Information Management
 Acquisition : external sources e.g. client, consultants
 Retrieval : accessing information as and when required
 Creation : within project e.g. plans, eng. drawings, databases
 Distribution : to team, sponsor, contractor
 Supporting business processes : for reviewing / approvals
 Retention schedules : check information retention
 Configuration control : version control of documents
 Information security : information to authorized persons
Information should be
specific, relevant and meaningful
16
8
Gather work performance information, analyse it
against baseline data, and communicate
performance information to relevant stakeholders
We perform/use We prepare/send
 Plan Baselines  Performance Reports
 Work Performance data  Status reports
 Variance Analysis  Progress reports
 Earned value analysis  Risk Status
 Forecasting Methods  Forecasting
 Communication Methods  Change Requests
 Reporting Systems  Lessons learned
17
Type of Distri- Docu- Distri- Freq- Perso Audi-
Inform- bution ment bution uency n ence
ation purpose Format Method Respo
nsible
Require Under MS Meeting & During PM Project
ments stand Word Written project Team
customer Initiation
rqmnts
Weekly Proj MS E-mail & Weekly PM Relevant
status status Word Written stake-
update holders
Manage Check Power Written Two PM Sr

ment progress Point formal weeks Executive
update & discuss and
any HODs
problems
18
9
Key Takeaways for this unit
Communication which looks at the actual dissemination of

information is a crucial factor in project success
1
The PM spends 75% – 90% of their time in some form of
2 1 communication
Different stakeholders have different communication requirements
3 which have to be properly met
Overcoming the various barriers to communication is a major

4 challenge
5 Information management looks at the acquisition, creation, storing,

dissemination, retention and security of project information
19

UNIT 11 : Procurement and Contract Management

 Procurement Guidelines
 Procurement Steps
 Type of Contracts
 Contract Administration
Cost Plus Suppliers

EPC Fixed price
Make or Buy Contract $
Contractors Administration
1
Procurement
Procurement is acquiring of goods and

services involving Purchase, Lease,
License or otherwise of Goods, Works,
Services, Consultancy Services or any
combination required for the project
from outside the performing
organization.
Aims to get the best value for money from

suppliers and contractors for the project.
1
Procurement
Procurement process should be fair

Guidelines and transparent
All persons involved should follow

highest standard of ethics and integrity
All bidders be given equal opportunity

to bid
Bidders should have adequate time to

prepare bids
Procurement
Use a qualifying criteria for impartial

Guidelines
selection of contractor without

compromising quality
Specifications should not be tailor

made. Should cover terms of quality,
type, quantity etc.
Disclose evaluation/qualifying criteria

in tender
2
Stakeholders Expectations
Value for Equal

Transparency
Money opportunity
$
Quality Efficiency Protection of
small business
Procurement
Procurement department does
Centralized the procurement. PM provides all
Procurement requirements to procurement
– what and when
Decentralised PM fully involved in the procurement

Procurement process and awarding of the contract
For both Centralized and Decentralized procurement

once contract is signed the PM and project team are
responsible to administer the contract and ensure all
contractual obligations are met by contractor
6
3
Procurement Steps
Planning Identifying
Reviewing
for the Prospective
seller
procurement Sellers
responses
(Contractors)
S
O Award
Closing Administering
L process i.e.
the
V the contract Selecting
contract
E the sellers
D
Planning for Procurement
Determining what Planning for

and when to procure Procurement
The scope of work required

in each contract
M
B Make or Buy analysis
Preparing specifications for

the Contract
Initial cost estimates are
$ prepared
4
Identifying Prospective Sellers (Contractors)
Identifying Prospective Sellers
Identify all potential sellers
Finalize an evaluation criteria for

selecting appropriate contractors
Identifying Prospective Sellers

(Contractors)
Compiling Seller documents:
 Instructions to Bidders (ITB)

 Bid Rejection /Evaluation Criteria (BRC & BEC )
 General Terms and Conditions of contract (GTC)
 Scope of work including technical specifications (SOW)
 Special conditions of contracts (SCC)
 Price Schedule /Schedule of quantities (SOQ)
 Certificate of Compliance
10
Procurement Steps
Reviewing the Seller Responses
 Responses from prospective sellers are evaluated

against the pre-determined criteria
 A weighted evaluation criteria should be used for
selecting sellers such as:
 Technical merit, price, quality of goods / services,
experience, reliability, delivery date, financial
position, ethics, available facilities, cost etc.
11
Procurement Steps
Award Process i.e. selecting the sellers
Sellers are short listed and

then a suitable contractor is
awarded the contract after
allowable negotiations
between buyer and seller
12
Procurement Steps
Contract Administration
To ensure Contract changes - is change process being followed?

contractor Schedule Progress - is work being completed on time?
is meeting
all Quality checks - contract requirements being met?
contractual Contractor costs - if cost reimbursable contract
obligations
Performance Checks - inspections, test reports
Legal requirements - check all being met
13
Contract Changes
Manage Contract Changes
Must to follow a  Paper work

formal change  Tacking systems
approval process
 Dispute resolution procedures
and keep record of
all contract changes  Mutual Consent
to avoid having any
 Approval level
disputes later
14
Procurement Steps
Closing the Contract
Formal contract closeout is done to verify all contract

deliverables /work is accepted by the buyer:
 Deals with any pending contract issues/claims
 Update each contract file
 Hand over and get formal acceptance from buyer
 Records lessons learned for future use and learning
Claims may arise due to customer delays, errors in design
or specifications or disputed variations in contract work.
15
Contracts
Key elements
for a valid Offer
contract Acceptance Consideration
 Offer is proposal made by seller

 Acceptance by buyer to the terms
 Consideration the value that will be exchanged
 Capacity to contract – must be competent to sign the contract, have required

authority, not be a minor, no mental impairment, be of sound mind etc.
 Legal Purpose – must be for legal and moral work
 Free Consent – no coercion, fraud, misrepresentation
16
Framing Tenders – Important issues
• Bid Security • Payment terms

• Validity of offer • Rejection Criteria
• Scope of Work • Taxes / duties / Insurance
• Technical Specifications • Applicable Laws
• Bidders’ Eligibility criteria • Compliance to regulatory
• Evaluation methodology / statutory requirements
• Performance guarantees • Dispute resolution
• Delivery period • Liquidation Damages
17
Risk Management in Contracts
Bid Security
Money kept to protect Performance Security
buyer in case the bidder
withdraws before bid Successful bidder to
validity expires or if the furnish a Bank Guarantee
bidder fails to sign the as security should they fail
contract if selected. Is to meet the contract
generally less than 5% obligations. Is often 7.5%
of the bid value to 10% of contract value
All of above is as per the contract terms
18
Risk management in Contracts

Retention Money
Often for small contractors Liquidated damages
instead of a performance Is a pre-determined amount
guarantee, a small amount of money to be paid by
of cash is withheld from contractor to owner as
each bill as retention compensation for damages
money. 7.5% - 10% of each in case of breach of contract.
running bill is deducted Is generally about 0.5% of
until a certain minimum is contract value per week
reached subject to a maximum
All of above is as per the contract terms

19
Key Contract Details
 Complete Scope of Work (SOW)

 Performance requirements
 Schedule
 Payment terms, pricing adjustments for inflation
 Acceptance criteria
 Penalties, Retainage, Liabilities
 Handling changes
 Warranties and guaranties
 HSE management
 Contract termination rules, applicable country laws
20
Contracts
Three broad categories of contracts
Time and
Fixed Price Cost Plus Material
(Unit Rate)
Type of contract chosen will determine the

cost and performance risks of contractor and
the monitoring required by owner
21
Fixed Price (FP) Contracts

Fixed Price (FP) contracts
 Buyer must provide full details of work with
well defined specifications
 Seller quotation includes their profit margin
 Seller faces maximum financial risk
 Most commonly used contract
 Encourages contractor to be efficient and manage their
costs effectively
 Can have a bonus, cost escalation or penalty clause
22
Fixed Price Contracts
Types of Fixed Price (FP) contracts

 Firm Fixed Price or Lump Sum contract
Work is fixed. Payment is fixed
 Fixed Price contract with Economic Price Adjustment
Price is fixed but allows price adjustment based on a
pre-defined criteria. Good for long term projects
 Fixed Price Award Fee

Maximum award (bonus) is fixed in advance and is
awarded based on contractor’s performance
23
Fixed Price Contracts

Engineering Procurement, Construction (EPC)
contracts (Turnkey)
■ EPC contractor is single point of responsibility. Assumes time,
cost, quality risks for project. Use sub-contractors
■ Contractor carries out detailed design, procures all equipment
and material and constructs and delivers facility
as per requirements within time lines
■ Are free from price variation unless given in contract
■ Commonly used for construction and infrastructure projects
24
Type of Contracts

Fixed Price Incentive Fee (FPIF) contracts
 Is a Reward and Punishment type of contract tied to performance
metrics like cost, time, technical performance
 Costs expected to be incurred in performing the work referred to as
Target Cost and the Contractor’s Fee referred to as Target Fee is
negotiated in the contract
 Any cost savings and cost overruns are shared by both the owner
and contractor based on a pre-fixed Share Ratio
 Payment is subject to a maxim total payout known as Ceiling Price
25
Cost Plus Contracts
Cost Plus contracts
 Buyer will reimburse contractor all allowable project

expenses irrespective of how much it exceeds initial
estimates + money as their fee for doing the work
 Generally used when project details uncertain or long
duration project. Difficult for contractor to estimate a
fixed fair price with sufficient accuracy
 Owner cannot provide detailed work specifications
 Owner faces maximum financial risk
26
Cost Reimbursable Contracts
Types of Cost Plus contracts
 Cost Plus Fixed Fee contracts (CPFF)

- All allowable cost actually incurred for performing
work is reimbursed to the contractor
- Contractor’s fee is given based on a previously
fixed amount
 Cost Plus Percentage of cost contracts (CPPC)

- All allowable cost actually incurred for performing work
is reimbursed to the contractor
- Contractor fee is paid based on a percentage of the
costs actually incurred. The Fee is contractor’s profit
27
Cost Reimbursable Contracts
Types of Cost Plus contracts
 Cost Plus Incentive Fee contracts (CPIF)

 Actual project costs incurred are fully reimbursed to
contractor
 Contractor fee i.e. the Target Fee is a negotiated amount
given in the contract
 Target Fee is adjusted based on performance:
 Incentive added to Target Fee for good performance, and
penalty imposed for poor performance by adjusting the
Target fee using a pre-defined formula
28
Terminologies in CPIF & FPIF Contracts

 Target Cost: Costs likely to be incurred by contractor
in providing contracted product or service. Used to
measure final costs incurred by contractor
 Target Fee: Contractor’s fee. Is generally included in contract
 Target Price: This is the Target Cost + the Target Fee
 Share ratio: A prefixed ratio for sharing the cost savings / penalty
between the buyer and contractor
 Maximum & Minimum Fees: The maximum & minimum fee that can be
made by contractor – used only in CPIF contracts
 Ceiling Price/Price Ceiling: FPIF contracts only. Maximum payout by
owner for all actual costs + the Contractor’s Fee. Contractor to meet all
costs above this limit
29
FPIF and CPIF Contracts
 Final Price of contract

= Actual Cost + Contractor Fee
 Contractor Fee = Target Fee +/- Incentive or Penalty
= (Target Cost - Actual Cost) X Seller’s Ratio
 If Actual Cost incurred is less than the Target Cost then
Contractor’s Fee is increased by the Share Ratio
 If Actual cost incurred is more than the Target Cost then
contractor’s Fee is reduced by the share ratio
CPIF: Contractor’s fee is governed by Maximum & Minimum fee.
Allowable Actual costs incurred fully reimbursed to contractor
FPIF: Actual costs + Contractor fee payout is governed by Ceiling Price
30
Fixed Price Incentive Fee Contract - Example

Target Cost : 150,000
Final
Target Fee : 10,000 Contract Price
Target Price : 160,000 Actual Cost +
Contractor Fee
Share Ratio : 80/20 (Buyer/Seller)
subject to the
Ceiling Price : 175,000 Ceiling Price
Actual Cost : 170,000 = 175,000
• Contractor’s Fee = Target cost - Actual cost = - 20,000

• 20,000 * .20 = -4000 (Target fee reduced by sellers ratio of 20%)
• 10,000 - 4000 = 6000 (4,000/- deducted as penalty from Fee)
• Actual Cost + Target fee comes to: 176,000/-
• Ceiling Price is 175,000/- so 1,000/- more is deducted from fee
31
Cost Plus Incentive Fee (CPIF) contract - Example

Target Cost 210,000
Target Fee 25,000
Target Price 235,000
Share Ratio 80/20 (Buyer/Seller)
Minimum Fee 20,000
Actual Cost 250,000
Contractor’s Fee = Target cost minus Actual cost

• 210,000 - 2,50,000 = -40,000 x 20% = -8000 (20% penalty)
• 25,000 - 8000 = 17,000 (Target fee less share of cost overrun)
Contractor fee = 20,000/- (As Minimum Fee assured is 20,000)
Final Price of contract = Actual cost + Contractor’s fee

= 250,000 + 20,000 = 270,000/-
32
Rate Contract / Time & Material Contracts
Rate Contract / T&M contracts
■ Based on completing a fixed amount of work earlier

agreed to by seller and buyer
■ Seller paid depending on time taken to complete
this fixed work
■ Fixed rate paid for services rendered
■ Cost of materials reimbursed to contractor by buyer
■ Unit price / Rate Contract is similar – contract price
depends on no. of units supplied
33
Choosing a Contract
Which contract to choose?
Selecting appropriate contract essential for

successful contract performance
Type of contract chosen will determine the cost and
performance risks placed on the contractor and will
impact their performance
The amount of monitoring required by

buyer will depend on type of contract used
34
In most high value projects the maximum money is

1 spent in procurement
Procurement involves Planning the procurements, Identifying
21 prospective sellers, Reviewing seller responses, Awarding the
contract, Administering the contract and Closing the contract
3 A contract is a legally binding agreement between two or more parties.

Contracts consist of an Offer, Acceptance and Consideration
4 Three broad categories of contracts are Fixed Price, Cost Plus

and Time and Material contracts
5 Following a formal process and keeping full track of contract changes is

essential to avoid disputes
35

UNIT 12 : Earned Value Management System (EVMS)
 What is PV, EV, AC
 Schedule Variances, Cost Variances
 Tracking Performance Against Plan
 Forecasting
EV Variances
EAC
SPI $
SV CV PV
Performance reporting CPI
1
Earned Value Management System

■ Earned Value Management (EVM) is a project
management technique used to measure project
performance and progress and to forecast project
performance at the end of the project
■ It examines scope, cost and schedule concurrently
enabling a holistic view of project’s progress
■ Work is represented in terms of a cost based Schedule
structure that can be in currency or man hours
■ The scope, cost and schedule baselines form
an integrated performance baseline against Cost Scope
which performance is measured

3 measures are used to check if the work
is being accomplished as per the plan.
Earned
Value
(EV)
Planned Actual Cost

Value (PV) (AC)
Planned Value (PV)

PV shows the physical work that was
scheduled to be performed in terms of the
authorized budget to complete that work
PV is generated in planning
C phase. It shows the physical
o PV work scheduled to be
s completed as per network
t
PV is in monetary terms
Time
based on the authorized
budget to perform the work

Earned Value (EV)
EV is a measure of the work performed at a
given point in time against the plan. EV is
expressed in monetary terms as per the
authorized budget i.e. PV
EV shows the completed

C
PV planned work. EV value
o
s is against the
t EV Planned Value (PV) for
Time that period of time

Actual Cost (AC)
This is the total cost that is Actually Incurred

in accomplishing the completed work (EV)
AC is the actual money to

C
AC
be paid for the completed
o PV
work i.e. the EV
s
t EV
AC can be higher, same or
Time lower than EV

BAC - Budget At Completion
 BAC is the original total approved budget
allocated for completing the entire project
 It is the sum of all the PVs
 On a cumulative plot the BAC will be the last point

on the PV curve
C BAC
BAC does not
o
include profit s PV
t
Time
Different methods can be used for judging the EV of activities.

Some commonly used methods are:
50-50 method: 50% of activity is considered to be completed

when it begins. Balance 50% when completed
0-100 method: No benefit given when activity starts. Is

considered complete only after it is fully completed
100-0 method: 100% benefit is given when activity is started
There are many variations that can be used to above methods
Control Accounts (CA)
Control Accounts are

selected components in Are generally kept
the WBS that are used above the Work
for management control Package (WP) level
in EVMS
Each Control account can contain

more than one Work Package but
each work package should be
included only in one CA.

Performance
Variances
 Cost Variance (CV)
 Schedule Variance (SV)
Efficiency Factors
 Cost Performance Index (CPI)
 Schedule Performance Index (SPI)
% complete of project at a point of time

 (Cumulative EV / BAC) x 100
10

 SV: SCHEDULE VARIANCE
SV = EV - PV
+ve is good performance Shows the amount by
0 is on target which project is ahead or
-ve is poor performance behind planned schedule
 CV: COST VARIANCE

$ CV = EV - AC
+ve is good performance Shows the amount of
0 is on target budget deficit or surplus
-ve is poor performance
11

 Time Plane
SPI: Schedule Performance Index
SPI = EV >1 is good performance

PV =1 is on target Is a measure of the
<1 is poor performance schedule efficiency
 Cost Plane
CPI: Cost Performance Index
$ EV >1 is good performance
CPI = =1 is on target Is a measure of the
AC
<1 is poor performance cost efficiency
12
ETC Estimate To Complete (ETC) the

remaining work at review point
$
EAC - Estimate At Completion
 EAC forecasts the revised budget for the total project or
an activity based on the project’s current performance
$  To arrive at this figure the planned Budget At Completion
(BAC) is either adjusted for the to-date project
performance or for a new expected performance
13

EAC calculation will change with the assumption:
If current progress is expected to continue then:

$ EAC = BAC / CPIto-date
If current progress is expected to change to a new

assumed value then:
EAC = AC + (BAC – EV)
CPInew
If original BAC is to be modified then a new EAC

is:
EAC = AC + ETCnew
14
To forecast a new completion time of

project based on current performance:
New Duration = Original Duration / SPIto-date
15
BAC
C CV
AC
o SV
s
t
Progress
PV Review
EV
Slippage
Time
16

Project Status Determination
2
Under Budget Under Budget
1.5 & Behind & Ahead of
Schedule Schedule
CPI 1.0
Over Budget Over Budget
.5 & Ahead of
& Behind
Schedule schedule
0
.5 1.0 1.5 2
SPI
17
EVMS at a Glance
 Planned Value (PV)
 Earned Value (EV)
 Actual Cost (AC)
 Budget At Completion (BAC): total planned Budget for
project (sum of all PVs)
 Estimate to Complete (ETC): cost to complete the remaining
work at review point.
 Cost Variance (CV) = EV - AC
 Schedule Variance (SV) = EV - PV
18
EVMS at a Glance
 CPI (Cost Performance Index) = EV / AC
 SPI (Schedule Performance Index = EV / PV
 Work still to be done at review point = BAC - EV
 % complete of project = (To-date EV / BAC)*100
 % complete of an activity = (EV/PV)*100
 Original Project Duration (OD): original planned project
duration as per the network
 Estimated Cost At Completion (EAC): the revised total
project budget based on actual performance or an
assumed performance
19
EVMS - Forecasting Formulas

 Forecasting total project costs i.e. EAC
 If previous performance is expected to continue then:
EAC = BAC / CPI
 If future performance expected to change then:
EAC = AC + (BAC – EV) / CPI new
 If original PV is incorrect and a new PV given then:
EAC = AC + ETC new
 Forecasting total project duration i.e. a new duration

 If previous performance expected to continue then:
Duration = OD / SPI
20
EVMS is a great methodology to control project

1 performance
EVMS combines time, cost and the work to
2 1 be performed (Scope)
3 Three main measures are – PV, EV and AC
Three main derived factors are – Variances,

4 Indexes and % Complete
5 Three main forecasts are – EAC, ETC and

duration to complete the project
21

Unit 13 : Change Management, Configuration Management,

& Problem Solving
 Change Process
 Change Control
 Managing Configuration
 Problem Resolving Methods
Consistency Root cause

External changes SWOT
Internal changes Configuration control
1
Change Management
Change Management
 All projects are faced with some changes - can be in
any aspect of the project
 A formal Change Management process is crucial to
have proper control in all areas
 Scope commonly affected by changes
 Changes generally increase project costs
 All the change requests must follow the formal
Change Management process
 First step is to assess the impact of a proposed
change
Change Management
Change control process
 Define the change needed
 Use a standard Change Request Form to submit

the change
 Enter the change requested in a change register/log
 Assess the impact of the proposed change on project

time, cost, quality, risk or any other areas
 Approving authority to Approve / Reject / Defer the

change requested
4
Change Management
Change control process
 Document the approved or rejected change in
change register / other documents
 Inform all concerned stakeholders of change status
 Monitor and control implementation of the change
 Review the change
 Update approved change in all records
Change Management
Some Internal & External reasons for changes:
 Customer requests - these generally have to be

accepted and may be billed extra depending on the change
 Lack of due diligence
 Error or Omission in defining the scope
 Engineering design changes
 New Technology / Scope change
 Lack of proper planning
 New regulation
 Changes that add value
6
Change Management
Change Control Board (CCB)
 The board is given the authority to approve or deny
change requests
 The CCB will meet as required - once a week, once every
other week, once a month
 When emergencies arise, pre-established procedures allow PM
to implement the change on the spot
 CCB members may include stakeholders, managers, team
members and others who may not have any connection to project
 Some other names for CCB are technical assessment board (TAB),
technical review board (TRB) and engineering review board (ERB)
7
Change Management
How to ensure Changes Managed Properly?
Managing Change implies

Communication 3
Communicate….Communicate
&
Communicate
Configuration
Management
Configuration Management
What is Configuration Management?
Configuration management is
done to keep track off and
Functional &
control the functional and the
Physical physical characteristics of the
Characteristics project’s product or service
10
 Configuration managements ensures consistency

is retained between the components when some
of its parts are changed after approval
 First describes and records what is to be done and then
keeps track of all the changes in the drawings and plans
 Ensures latest versions are used in the project
 Keeps version control of all documents and drawings issued
Configuration All items in the configuration

Identification are uniquely identified
A system is evolved to monitor

Configuration and control all changes in the
Control configuration items
12
Configuration Full traceability of changes is

Status maintained. History of all changes
Accounting & current status kept
Configuration Audit ensures designs are same as

Auditing the ‘as built’ and that function and
performance criteria are met
13
Problem Resolution
Due to uncertainties projects face many

problems
A formal method should be used to resolve
problems more effectively
14
Problem Resolution Steps
Explore the Set goals

Identify problem
the What do you
Who else facing want to
exact
such problem? achieve?
problem
S
O Implement
Solution Select
L the selected
Effective? a solution
V Y solution
E
D N
15
Problem Resolution Methods

 Lateral Thinking
 Coined by Edward de Bono, a Maltese psychologist
and physician
 Is about reasoning not immediately obvious and
ideas that may not be obtainable by using only
traditional step-by-step logic
 Promotes shifting from the routine and using new or
unexpected ideas
According to De Bono
“We may need to solve problems not by removing the
cause but by designing the way forward even if the
cause remains in place.”
16

 Thinking Hats
 Uses 6 metaphorical hats - white, red, black,
yellow, green and blue.
 Each hat represents a different mode of thought
and are directions to think
 Encourages parallel thinking
According to De Bono the Six Hats

"separates ego from performance"
17
Six Thinking Hats
White Hat: Covers facts, figures, information gaps

Red Hat: For intuition, feelings and emotions
Black Hat: For caution & judgment. Very valuable
Yellow Hat: Logical positive hat. Thinking involves
why something will work and why it will offer benefits
Green Hat: For creativity, alternatives, proposals,
provocations and changes
Blue Hat: Overview or process. Does not look at the
subject itself but at the 'thinking' about the problem
18

SWOT Analysis
 Provides a framework for analyzing Strengths,
Weaknesses, Opportunities and Threats
 Internal factors - Strengths and Weaknesses
 External factors - Opportunities and Threats
Root Cause Analysis

 5 Why’s popularized by Toyota in 1970’s
 Cause and Effect analysis
 Brainstorming
19
A formal change management process is crucial to

1 have proper control in all areas
Configuration management maintains consistency of the functional

2 1 and physical characteristics of the product or service
Any change in a configuration item has to be approved through
3 the change control process
4 Effective communication is must for proper change management

in the project
5 Due to uncertainties projects face many problems. A formal method should

be used to better understand and resolve problems more effectively
20

Unit 14 : Team Performance, Leadership, Motivation,
& Managing Conflicts
 Team Development & Performance
 Leadership styles
 Motivating Team
 Conflict Resolution
Herzberg Democratic
Hierarchy Maslow
Performing
of needs
Autocratic Forming
1
Team Performance
“No matter how brilliant your mind or strategy,

if you’re playing a solo game, you’ll always
lose out to a team,”
- Reid Hoffman, LinkedIn cofounder
“Talent wins games, but teamwork and

intelligence win championships.”
- Michael Jordan, basketball legend
Team Performance
Project Teams
Teams are at core of the project
Uniqueness of project and uncertainty

creates large dependency on team
Project needs a high performing,

cohesive team that share same
aims & objectives
Team Performance
Teams are groups of Each team is unique

individuals that have and comprises of
common: persons having different:
Standard of
Objective behaviour Backgrounds
and identity Personalities
Norms Knowledge
Values
Loyalty Experience Diverse
Commitment Views
Have Culture
Diversity Skills
Team Performance
Good Team Poor Team
Attributes Attributes
Clear roles Blame Hiding facts

Imaginative culture
Supportive Personal Self centred
Trust agendas
Respect No clear
Innovative
Committed Lot of rework direction
Result Adaptive Uresolved
Oriented Demotivated conflicts
Team Performance
For teams to be effective, team members must be

able to work together towards a common goal
This develops as the team works together. Trust

plays an essential role in building effective teams
Over time team members begin to know each other,

their abilities, what to expect from each other, and to
know how you will coordinate your work
Team Formation
1 Forming
2 Storming
Bruce Tuckman, an educational
psychologist identified five stages of
3 Norming development that most teams follow
4 Performing
5 Adjourning / Mourning
Team Formation Stages
Forming
Team members only moderately effective.
There is uncertainty, lack of a common aim,
people are hesitant and unsure of each other
PM’s role - give direction, build

common grounds, help
members to understand each
other better

Storming
Is most difficult stage. Differences and hostilities
surface between team members leading to
arguments, different opinions, personality conflicts,
formation of groups /sub groups and cliques
Team performance may fall with unproductive differences
PM’s role - motivate and
educate team members,
address conflicts, clarify
project goals and manage
team conflicts
10

Norming
Team members start developing an identity and
set of norms and values with better understanding,
communication, sense of unity and cohesion.
Issues become more important than personalities
PM’s role - resolve issues

that came up, define and
assigning team roles and
responsibilities
11
Performing
Team is resourceful, focused, cohesive.

Members understand each other and are
committed to team goals. Problems are
tackled more confidently and innovatively
PM’s role - maintain performance,

control and coordinate work, appraise
performance, delegate work,
acknowledge good work
12
Adjourning / Mourning
Most of the work is completed and team

members start getting reassigned to other
projects
Team is disbanded and team members have
mixed feelings
Some team members are happy some sad to
leave
13
Team Performance
Actions to Motivate & Lead team members
Clarify each
Resolve team members
role in project Delegate
conflicts work
Hold workshops Acknowledge

about the Establish good work
Start-up
effective
meetings project Communications
Specify Hold team
goals events
14
Improving Team Performance

Developing competencies and encouraging interaction
of team members to enhance feelings of team trust
and co-operation for better team performance
Conduct
 Team-Building Activities
 Interpersonal Skills
Accomplish
 Reward & Recognition System
 Co-location Improved Team
 Training Performance
 SMART goals
 Clear communication
 Ground Rules for all
15
Leadership
And
Motivation systems
16
Leadership
Effective characteristics of Project Manager
 Leader  Integrator
 Committed  Budget conscious
 Goal oriented  Sees overall picture
 Communicator  Independent thinker
 Supportive to team  Creative
 Decision maker  Flexible
17
Leadership
Some Leadership styles that a PM can follow are:
Situational
Leadership Autocratic
Bureaucratic
Democratic
Laissez
faire
18
PM – Broad Leadership Styles

Autocratic
PM keeps tight control of staff and decides what is to be
done. Little regard for what sub-ordinates think or want
Manager receives information but fails to use it to make
decisions. Does not consult team members
Democratic
PM encourages team members to take part in decision
making. More informed decision making
Team feels more committed and involved, better
teamwork and co-operation
19

Laissez-faire
PM does not get directly involved in the work team is
doing. Allows team to manage itself. Hands-off approach.
More appropriate for highly matured team or research /
creative work – team highly skilled, experienced
Bureaucratic
PM’s focus is more on following the rules and procedures.
More appropriate where safety, security, money,
regulations or detailed work requirements critical
20
Hershey & Blanchard’s Situational leadership Model

Is adaptive leadership style that varies with competence
of followers. Leader uses a combination of :
High
Directive behaviour (Task)
- What to do, how to do, Supporting Coaching
Supportive
behaviour
close supervision
Supportive behaviour
Delegating Directing
(Relationship)
- Encourage, praise, positive
feedback, motivate. Low Directive High
behaviour
PM should use all depending on team member’s development

21
Maslow's Hierarchy of Needs Theory
 Developed by Abraham Maslow

in 1943
 Five basic human needs that
motivate people
 Behaviour of all persons
governed by their personal
needs
22
Maslow's Hierarchy of Needs Theory

Self Self-fulfillment, Growth, Creativity,
Actualization Learning, Developing potential
N
E Esteem Recognition, Respect, Attention,
E Needs Appreciation, Self worth
D Social Love, Affectionate relationships,
S Friends, Social status
Safety Job security, Stability, Freedom
Security from Physical harm
Physiological Air, water, food, shelter, clothing
23
Herzberg’s Two Factor Theory
 In 1960 Frederick Herzberg identified two

independent categories of need and motivation
 ‘Hygiene factors’ and ‘Motivators’
 Hygiene factors necessary to avoid becoming

dissatisfied and de-motivated with their job
 Motivators necessary for persons to be

motivated
24
Herzberg’s Factor Theory
Hygiene factors
 Company policies Motivators
 Peer, subordinate,
 Achievement
superior relationships
 Recognition
 Working conditions
 Work content
 Salary
 Responsibility
 Personal life
 Professional growth
 Status
 Security
25
Douglas McGregor’s Theory X and Y
Theory X believes
- Person is lazy, needs supervision
- Primarily driven by money
- Authoritarian management style suitable
Theory Y believes
- Person is self-motivated, involved in
decision-making
- Like to take responsibility
- Democratic management style suitable
26
Conflict Resolution
27
Conflict Resolution Techniques

Managing team conflicts
Five key methods to resolve conflicts:

 Withdrawal / Avoiding
 Smoothing
 Compromising
 Forcing
 Problem Solving / Confrontation
Is a combination of self interest (assertiveness)
and concern for other party (Co-operativeness)
28

Withdrawal / Avoiding
 Retreating or withdrawing from an actual or
potential disagreement/conflict
 No action is taken by the disagreeing parties.
Does not solve the problem
PM can use this method for conflicts

over trivial issues, to lessen tension
or when resolving the conflict could
increase immediate problem
29

Smoothing
 Emphasize areas of agreement and play down
areas of disagreement - give less importance to
or avoid areas of conflict
 Keeps the atmosphere friendly and less stressful in
team but does not solve problem
PM can use this method to encourage
a team member and help him/her to
grow by learning from own experience
30

Compromising
 This method uses a “give and take attitude”
 Both parties need to make some trade-offs so
neither party can win
 Gives some satisfaction to each concerned party –
but not ideal solution
PM can use to resolve conflict

in team temporarily to avoid delays
in work, or in making concessions
when negotiating for contracts
31

Forcing
 Uses authority to exert one’s viewpoint at the
potential expense of another
 PM uses his power and authority to force a solution
 Should be used as a last resort as ill feelings are
likely to return as a problem
PM can use forcing to make

quick decisions in crucial or urgent
situations or when he wants a
specific solution to be used
32

Problem Solving / Confrontation
 The issue kept as focus. Affected parties try to
resolve their disagreements by directly facing the
conflict
 Most direct and objective approach that pinpoints the
problem
 It provides a final solution to the conflict
PM can use confrontation

method when team is mature
33
Conflict Resolution
Some Common reasons for conflicts in workplace:
 Interdependence conflicts – work depends on inputs /
cooperation from others e.g. sales figures late
 Differences in style of working
 Differences in background – education,
gender, language, political affiliation
 Different leadership style of bosses

 Differences in personality - team member
lazy, always late
34
None of us are as effective as all of us. Team performance is at the peak

1 when team has one vision, one goal
Teams generally follows five stages of team development – Forming,

2 1 Storming, Norming, Performing and Adjourning
3 The PM has to lead and motivate the team
4 Motivation is a driving force and is responsible for the direction

and persistence of the work we do to meet our goals
5 Different strategies have to be used to resolve conflicts
35

Unit 15 : Health, Safety, Environment & CSR

 Managing Health and Safety at workplace
 Environmental Responsibilities
 What is CSR
 UNIDO CSR Guidelines
Safety CSR
Health Environment
OHSMS ISO 14001
Health, Safety,
Environment
Health, Safety, Environment

Health, Safety and Environment in projects is
beyond traditional time, cost and quality parameters
 Health and Safety is becoming more and more important
today - human life is most important
 Ensuring health and safety and sustainable environment policies
is important to decrease accidents, enhance productivity,
reduce costs and increase customer satisfaction
 Effective implementation of HSE especially in
industrial projects can prevent negative fallout
like poor quality, schedule delays, reduced
productivity and increased cost

Organization’s are responsible to:
 Ensure the health, safety and welfare of the work force
 Control the use and the storage of dangerous substances
 Control emissions of offensive substances in atmosphere
 Protect work force and other people from danger arising out of
activities of persons at work
 The United Nations has played a key role at a global level in
steering health and safety at workplace
 The International Labour Organization (ILO) and World Health
Organization (WHO) are both involved in different aspects of
health and safety at global level
4
Occupational Health & Safety

Management Systems (OHSMS)
OHSMS is fundamental for any organization’s risk
management strategy
 IS 18001:2000/ 2007 standard - gives requirements needed
by organizations to have a OHSMS
 Is compatible with ISO 9001 (Quality) and ISO 14001 (Environmental)
management system standards
 In March 2018 ISO 45001:2018 - “Occupational Health and Safety
Management Systems” was released which focuses on risk
rather than hazards like 18001
 ISO 45001 can be aligned with ISO 9001:2015 and ISO 14001:2015.
Occupational Health & Safety

Management Systems (OHSMS)
ISO 45001 concentrates on the interaction

between an organization and its business
environment
It takes a risk-based approach to the Organisation

Health & Safety management system itself, to
ensure that it is effective and that it is being
continually improved to meet an organization’s
ever-changing “context”.
Source: iso.org 6
Ensuring Safety in Construction

Safety is a key concern especially in
infrastructure projects. Some reasons are:
• Falls and trips

• Collapsing scaffolding, materials, buildings
• Mobile construction plant and machinery
• Moving vehicles, overturns
• Manual handling of tools, chemicals, electricity,
vibrating tools, hazardous substances etc.
Proper planning, precautions, safety training

all important to reduce accidents
7

Some steps organization’s can take in HSE
 Preventive measures to avoid accidents
 Legal compliance with all applicable regulations in HSE
 Ensure designs used are safe
 Relevant safety training to all personnel
 Conduct compliance audits
 Hold safety meetings and mock drills
 Assign responsibilities
 Conduct safety risk analysis
 Share lessons learned
Environment Management System
 Reducing carbon emissions is a major requirement

worldwide for the sustainability of planet earth
 Top management has a key role in following sustainable

development through environmental policies that will reduce
the risk of pollution and minimize their carbon footprints.
 ISO 14001:2015 specifies the requirements organisations

can use to enhance their environmental performance which
provide value for the environment, the organization
itself and stakeholders

ISO 14001:2015 helps an organization to achieve the
intended outcomes of its environmental management
system, which provide value for the environment, the
organization itself and interested parties.
The intended outcomes of an environmental management system include:
 Enhancement of environmental performance
 Fulfilment of compliance obligations
 Achievement of environmental objectives
ISO 14001:2015 is applicable to any organization, regardless of size and type
Source: iso.org 10

Factors like power, construction activities, use of heavy
machinery, transportation of materials, storage, waste
generation, waste disposal etc. all impact the environment
Some actions to reduce greenhouse emissions in projects are:
 Design more energy efficient buildings
 Promote use of renewable energy such as solar and wind power
 Use materials like fly ash in the concrete mix
 Use renewable agricultural products like straw or hemp insulation
 Carry out reforestation
 Reduce printing of reports and minimise travel
11
CSR
12
Corporate Social Responsibility (CSR)

 1992 UN conference on Environment & Development
in Rio de Janeiro attended by 172 countries was a key
global landmark for CSR initiatives
 In 2011 the EU defined CSR as “the responsibility of enterprises
for their impacts on society”
 Today CSR is a basic business consideration globally
 Is mandatory for organizations to meet CSR obligations in many
countries like India
 Sustainable development is possible only by meeting economic,
ecological and social responsibility
13

According to United Nations Industrial Development
Organization UNIDO :
“Corporate Social Responsibility is a

management concept whereby companies
integrate social and environmental concerns in
their business operations and interactions with
their stakeholders.”
In today's socially conscious environment, customers like to

buy products from companies that prioritize CSR
Source: unido.org 14

According to UNIDO, properly implemented CSR can
lead to a variety of competitive advantages, such as:
 Enhanced access to capital and markets
 Increased sales and profits
 Operational cost savings
 Improved productivity and quality
 Efficient human resource base
 Improved brand image and reputation
 Enhanced customer loyalty
 Better risk management processes
Source: unido.org 15
The Global Compact is a UN initiative that establishes ten

general principles for companies' CSR activities
The principles founded on internationally recognised conventions

relating to human rights, labour rights, the environment and anti-
corruption target a wide range of businesses and organisations
and are a good starting point for CSR activities
Source: unglobalcompact.org/ 16

The Ten Principles of Global Compact are:
 Make sure they are not complicit in
human rights abuses
 Abolish child labour
 Support and respect protection of
internationally proclaimed human  Support a precautionary approach to
rights environmental challenges
 Uphold freedom of association and  Undertake initiatives to promote
recognize right to collective bargaining greater environmental responsibility
 Eliminate all forms of forced and  Work against corruption in all its
compulsory labour forms, including extortion and bribery
 Eliminate discrimination in respect of  Encourage the development and
employment and occupation diffusion of environmentally friendly
technologies
Source: unglobalcompact.org/ 17
Top management plays a key role in business

1 following sustainable development policies
Projects especially construction projects can have high impact

21 on the environment
Having healthy personnel at workplace is better for morale and

3 the cost of replacing and training new personnel is lower
Environment, Environmental pollution, handling and hazardous

4 substances are all important factors for protecting the environment
5 Sustainable development is possible only by meeting economic,

ecological and social responsibility
18

PLC Phase – Integrate and Deliver & Closeout
Unit 16 : Integrate, Deliver & Closeout
 Project Integration
 Product Integration
 Contract Closeout
 Administrative Closeout
Project
Integration Close contracts
Product Verification
Integration Lessons learned
1
Integrate
Integration covers two aspects:
Project All the project work that has

integration to be performed needs to be
integrated
Product Integration of different components

integration and subcomponents to have a
complete product or service
Integrate
 Different processes and

project management activities
have to be identified,
assembled, coordinated &
consolidated together planning
Change control
 Integration requires good resources
coordination and control Teamwork Problem
 Integration is a key deadlines solving
responsibility of the Project decision making

Manager
Integrate
What do we need for effective Integration?
 Clear understanding of the project
 Integrating all the plans together
 Setting priorities for integration
 Following formal change control procedures
 Taking proactive actions as required
 Managing & controlling project execution
 Ensuring all documentation complete
Integrating Project Work

Integration of project work involves:
 Managing Stakeholders expectations

 Balance the competing constraints:
Scope, time, cost, quality, risks, resources
 Taking timely decisions Stakeholders
Baselines
 Updating the Plan and Baselines Change control
Scope
resources
 Following effective communication Problem
Time solving
 Managing risks through the project
 Taking Corrective & Preventive actions
Integrating Project Work

Integration of project work involves:
 Forecasting
 Checking variances
 Updating status
 Configuration control Stakeholders
Baselines
 Following change processes Change control

Scope
resources
Problem
 Monitoring project progress as per plan Time solving
 Ensuring project is properly closed

 Ensuring lessons learned directed to relevant body
Integrate the System / Product

To integrate the Product/System we need to consider
3 key areas:
Integration - for assembling and evaluation
Sequence of the product components
Integration - common environment for

Environment integrating and testing the product
Product - to examine and test the assembled

Evaluation components
Integration Sequence
Integration sequence must be considered when
developing the project management plan and
incorporated in the project’s network schedule
To integrate the product we consider aspects such as:

 Functionality of the components
 Components dependencies
 Nature of the work
 Customer’s need or priority
 Resource availability
 Technical complexity
Integration Environment
 Internal and External interfaces
e.g. mechanical / electrical / climate /
noise / electromagnetic / human-machine
/ message interfaces to be defined
and documented
 The environment can include test equipment,

simulators for unavailable product components,
pieces of real equipment, recording devices
 Integration platform should be properly maintained

with the help of formal change control and
documentation
Product Evaluation
Can be done at two levels :
Verification and Validation
Verification – is done to ensure that the

product meets its specified
requirements through:
 Checking of documents, process Passed
 Planned inspections Failed x
 Structured walkthroughs
10
Product Evaluation
Verification is done throughout the

development of the product:
- Verification of requirements
- Verification of the evolving work products
- Verification of the completed product
Verification is a static process
11
Integration of the System / Product
Validation – is done to demonstrate that the

complete product is satisfying the
requirements when used in its intended
environment (at site).
Validation involves actual testing and

can take place after or in parallel to
verifications
12
Integration of the System / Product

Validation covers aspects such as:
 Actual testing
 Testing environment parameters
 Discussions with users
 Functional demonstrations
 Threshold of performance deviation
 Allowable substitutions of components
Validation is a dynamic process
13
Example - Integrating a vehicle
We need to integrate both – the Vehicle

integration and the System integration
 Mechanical and functional integration of

systems and their components
e.g. Wiring, driver inputs, brake decelerates at
specific rate, accelerator takes speed at specific
rate, clutch controls, safety test
 Software development and integration of the

complete system
14
Deliver & Closeout

Project Closeout involves handing over of the project
deliverables and administrative closure of project
Key activities include:

 Delivering the project’s product and obtaining
stakeholder acceptance for the project
 Financial, legal and administrative closure
 Contract closure
 Releasing of project resources back into organizations
 Conducting of Inspections to verify scope met and
performance criteria met
15
Check Deliverables
WBS Dictionary provides input to

WBS check and verify that the completed
Diction- deliverables – the work packages
ary are as required
Any sub-standard deliverables that are

found should be sent back to
Implementation / Control for rework
16
Deliver & Closeout

We need To Check
 Has client accepted all deliverables?
 Project evaluated against performance goals
established in project performance plan?
 Actual cost of project tallied and compared to
approved cost baseline?
 All approved changes to cost baseline identified and their
impact on project documented?
 Are project systems and financial systems closed?
 Is training and knowledge transfer completed?
17
Project /Product Delivery:

 Acceptance criteria should be in place
 Project acceptance review meetings are held
to check:
 Physical Audits & Functional Audits
Physical audit Functional audit
Checks have all the Has product satisfied

project deliverables been its requirements?
received by customer ? – reliability, availability,
maintainability,
Are they as per the latest interface checks,
configuration items? environmental testing
18
Deliver & Closeout

Project / Product delivery checklist contains:
List of deliverables
Process of delivery
Time and cost estimation for delivery
Responsibility of the team members
Quality control and delivery procedures
Project testing before delivery
A formal acceptance certificate and
thanks to customer
Post project communication
19
Deliver & Closeout

Contract Closeout:
All contracts must be formally closed after
ensuring that the project work, test results and
delivery of product, services or result have been
satisfactorily completed as per contract terms
and accepted by buyer
Final payment is made after all the work has been

satisfactorily completed as per contract terms
Many companies keep a Contract Manager to

$
resolve contractor conflicts
20
Deliver & Closeout

Claims Administration:
 Final payment done after verifying work

delivered by contractor is satisfactory & meets
contract terms
 Inspections carried out to verify scope met fully
Keeping full
 Contract claims or disputes mostly relate to the documentation
monetary compensation for making changes is important to
 All contracts will not have contract claims minimize
claims disputes
 If claims or disputes cannot be settled then use
independent arbitrator for out of court settlement
21
Deliver & Closeout

Project /Product Delivery:
 Outcome of the Physical and Functional

review can be:
 Project Accepted
 Conditional Acceptance
 Project Not Accepted (rare)
22
Deliver & Closeout

Contract Termination
Owner can terminate the contract if contractor
fails to meet contract obligations
Procurement Audits
 Is a structured review done to assess
the suitability of the procurement
processes followed in the project
 Audit should cover the entire procurement
process including contract administration
 Procurement areas that can be improved are
identified and the process can be improved with
lessons learned in future projects.
23
Deliver & Closeout – Data Gathered

 As-built design details
 Record of the technical achievements
 Comparison of the final costs and benefits
 Schedule and cost variance reports for analysis
 Comparison of resource estimates with actual usage
 Quality reports / reasons for maximum quality problems
 Contract / owner correspondence completed
 NOC for contractor from owner / No Due certificate
 Material reconciliation
 Documentation
24
Deliver & Closeout

Post Project Evaluation:
Post project evaluation review is an important
review of project performance and lessons that can
be derived from the project.
Review should involve different stakeholders e.g.:

 Customers
 Sponsors
 Senior management
 Project management group
25
Lessons Learned
 Lessons learned captures all the things that have
been learned by the PM and the project team
members during the life cycle of the project
 Lessons learned become important assets of the
organization. They form a bank of information for use by
future projects
Contracts
Making use of lessons Risks
learned has always been management
recommended in almost
schedule
all the different areas of cost $
modern project planning
management. Quality
Changes
resources
26
Integration is a key requirement to deliver the project

1 successfully
2 1 Both the project work and the project’s deliverables have

to be integrated
3 The Project Manager has to control and coordinate the integration
Deliver & Closeout looks at both contract closure and

4 administrative closure
5 Formally recording lessons learned provides valuable inputs for the

organization for future projects
27
“In the human race, there is no finishing line”

It keeps on moving.
Dankeschon Dhanyavad
Grazie Merci
Gracias
28
©© CEPM
CEPM IEDPM
Module
© Totality M1Module
of Project 1 2020
Management
Ver (TPM)
2019
I EDPM I EDPM
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(a section 8 not for profit company)
I / EDPM I / EDPM Setting a new benchmark in Executive Education globally &
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“What makes Certificate

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In Project Management
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an experience never experienced an experience never experienced a must for professionals of an enterprise to create a common vocabulary”
I comprehensive
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covering 8 project life Advocate of JGC Corporation (2007)
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world-class CIPM credential.
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- Dr. B. Nag, Professor
I /IIM
EDPM
Calcutta (2015)I / EDPM
I / EDPM I / EDPM For more details contact:

I / EDPM I / EDPM Adesh Jain, Chairman,

International Institute of Projects and Program Management (i2P2M)
I / EDPM I / EDPM Mobile: +91 9999684621, 9810322048
Email: info@i2p2m.com, chairman@i2p2m.com

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I EDPM I EDPM

an experience never experienced an experience never experienced

I / EDPM I / EDPM Organised by

I / EDPM Module 4 (20 hrs)

Sharing by 14 Thought Leaders from

I / EDPM gurus from U.K. & Iceland

an experience never experienced

Totality of Project Management leading to

Knowing is not enough; we must apply - Goethe

i2P2M’s Unique Revolutionary approach to Learning and Development (L&D)

We Create Project Leaders.

I/ EDPM - an experience never experienced before

Unit 3 : Stakeholder Management, Planning, Success Criteria 32 - 44

Unit 4 : Managing Scope 45 - 59

Unit 5 A : Time Management - Part 1 60 - 71

Unit 5 B : Time Management - Part 2 72 - 82

Unit 6 : Cost Management 83 - 96

Unit 7 : Managing Quality 97 - 111

Table of Contents contd

Unit 8 : Interfaces, Org. Structures, Roles & Responsibilities 112 - 121

Unit 9 : Risk & Opportunity Management 122 - 144

Unit 10 : Communication & Information Management 145 - 154

Unit 11 : Procurement & Contracts 155 - 172

Unit 12 : Earned Value Management System 173 - 183

Unit 13 : Managing Changes, Configuration Management, Problem Solving 184 - 193

Unit 15 : Health, Safety & Environment, CSR 212 - 220

Unit 16 : Integrate, Deliver & Closeout 221 - 234

Brief Profile of the Resource Person - Mrs. Ruchira Jain, (CSPM)

 Ms. Jain has written two books:

World Project Management Forum

Real Time Computer Based Project

Organisation Management Maturity Assessment

National Project Management

Link to download brochure : www.cepm.com/gs2020_pdf

Project Management Training

Maximum Maturity is Level 6.

Human Capital Management: Team building & Leadership,

Indian Oil: to evolve a comprehensive project management

CEPM provides consulting in implementing few recommendations

Compiled & Edited by: Adesh C. Jain

Oil and Natural Gas Corporation Limited

competency development programs that are accepted by their

Some of our major clients are For Communication:

Ms. Ruchira Jain

1st Floor, A-48, Sector 5, Noida 201 301

Part No. CEPM-180320V1

Totality of Project Management

Training Designed, Developed, Delivered & Owned

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Totality of Project Management (TPM)

TPM curriculum has very extensive coverage

TPM is also globally unique as it is across 8

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Totality of Project Management (TPM)

The entire course has been divided into 16

© CEPM © Totality of Project Management (TPM)

Totality of Project Management (TPM)

 TPM curriculum also prepares persons for the ISO 17024:2012

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