CHAPTER 1 Strategic – it is a project that is vital to support the long term

PROJECT MANAGEMENT IN TODAY'S TIME mission of increasing revenue and market share.
Examples:
 New product design
WHAT IS A PROJECT?
 Development projects
A project is a temporary unique group activity intended to meet
specific objectives with constraints and requirements in scope,
budget, schedule, resources, performance factors and value
THE PROJECT LIFE CYCLE
designed to meet customer needs.
A project life cycle is also referred to as project lifespan. A project
Based from the definition, a project is different from other
life cycle is a compilation of a commonly sequential project phases
organizational efforts being undertaken by most organizations
from the time it is originally envisioned until the time it is either
because of the following reasons:
make use of as a success or discarded as a failure.
 It has an established objective
 It has a defined life span with beginning and an end There are four stages a project undergoes namely, initiating,
 It requires the involvement of several department & planning, executing and delivering.
professionals
 It is doing something that has never done before
 It has specific time, budget, resources, performance and
THE PROJECT LIFE CYCLE
value added requirements
1. Initiation – this stage states the objective and technical
A project should have a deliverable. A deliverable is the measure
specifications for the project, the scope of work decided, the
and tangible outcomes or the result of the completion of the
necessary resources identified, teams are form and important
project or the end of the project's lifecycle. It may be:
organizational stakeholders involved.
 hardware deliverable (table, prototype, equipment)
 software deliverable (reports, studies, handouts) 2. Planning – all comprehensive specifications, schemes, schedule
 interim deliverable (could be any of the two) and other plans are developed; the project is broken down to
individual pieces; assignments are prepared; and the process of
completion is clearly described.
WHAT THE CLASSIFICATIONS OF A PROJECT?
3. Execution – actual work of the project is conducted, the system
Compliance – it is a must project to meet the new requirements is developed, or the product created or constructed. The
enforced by the management itself and regulating bodies like the manpower is also laid out. The calculations, cost, and specification
government. Penalties await non- compliance. were made on time for control.
Examples:
4. Closure – this occurs when the project is completed and
 Healthcare protocol projects
transferred to the customer, its resources reassigned and the
 Environmental regulation projects
project formally ends.
Emergency – it is a "must-do" project that is required to meet
emergency condition. If not done will impair operation and will
not be able to fulfill the core competencies of the firm. THE 5 PROJECT LIFE CYCLE VARIABLES
Examples:
 Rebuilding projects 1. Client Interest – This is the intensity of eagerness or
 Renovation projects concern by the project's intended internal or external
clients.
Mission critical – it is a project critical to the mission of the firm. If 2. Project Stake – The amount of investment by the
not accomplished shall cause immediate and unacceptable organization in the project which may increase as the
negative impact to the business. life of the project becomes longer.
Examples: 3. Resources – This is the commitment of financial, human
 Construction of a data center for an application/network & technical resources that might amplify over the course
services provider of the life cycle of the project.
 A new facility to test products 4. Creativity – It is the level of innovation needed by the
project principally at some point in the development
Operational – it is considered a necessary in order to give full stages.
support to the present operations like delivery systems upgrading
5. Uncertainty – This is the degree of risk related with the
for efficiency, product costs cutback and performance
project. Normally, the riskiest is at the early part of the
enhancement.
project when many challenges are still unknown.
Examples:
 Six Sigma projects (Define, Measure, Analyze, Improve,
Control)

Frezel B.
PRIMARY GOALS OF A PROJECT 5. Enhance focus on customer

Project goals prioritize what is most essential. In order for the
project to progress the organization must be responsible for the
completion of the project driving it onwards in a speedy, secure,
and realistic manner. The prime goals of a project are as follows.
1. Conclude the project within the planned timetable.
E.g., GANTT Chart
Customer satisfaction is the objective of every business.
Customers demand for customized products and services that
provide for their individualized needs and requests. Project
management is important in the development of more
customized products and services.
6. Small projects mean big troubles

Month Month Month It is the major challenge for management to prioritize resources
Activities
1 2 3 among projects in the portfolio. Small projects of done
1. Conceptualization inefficiently will soon add up to a huge amount of money.
2. Planning
Advantage and Disadvantages of Project managements
3. Execution
Advantages Disadvantages
4. Monitoring & evaluation
1. Resourcefulness 1. Overhead
2. Less cost & better quality 2. Methodology, process,
2. Complete the project within the programmed budget. &stakeholders limitation
3. End the project with the identical level of quality. 3. Better affiliation with 3. Non-creativity
4. Terminate the project within the detailed guidelines. customers/stakeholders
5. Make the best of the task that has been given. 4. Improved teamwork
atmosphere
5. Touch of professionalism

WHY PROJECT MANAGEMENT?

Because project management is the science and art in the

application of knowledge and techniques to execute projects
effectively and efficiently towards the goals of the organization.
The following are few of the environmental forces that make a
good project management.

1. Shorten project life cycle

Speed is now a source of competitive advantage in terms of

project’s life cycle (1-3 years). The earlier you create a feasible and
effective project, the better turnout for the organization since
businesses are now forming teams in order to place new products
and services in the market as soon as possible.

2. Worldwide competition

The demand of the market is quality products and services in

reasonable amount. So many organizations today are using quality
management and improvement to achieve better results in doing
business. In order to be flexible and efficient in getting things
accomplished project management is employed with focus on
time, cost and performance.

3. New knowledge bang

As time progress, projects are becoming more complex and

advanced. In today’s digital age of divergent technologies,
materials, specs, codes, aesthetics, equipment and required
specialists add more to product complexity. Project management
is an important discipline that makes things simple.

4. Organizational rightsizing

It is necessary for survival to dramatically restructure the

organizational life. Nowadays, outsourcing important parts of
project work is a business style.

Frezel B.
CHAPTER 2  Application – a protective dike if a flood is threatening
STRATEGIC MANAGEMENT AND PROJECT SELECTION the plant of a factory. Online library search system.

Competitive necessity (we will lose sales if we don’t change it) –

Strategy – is making a decision how the organization will compete
the choice to embark on the project is founded on a desire to
its rival in the industry where it is participating. A project coverts
preserve the company’s competitive position in the market
strategy into a new product, service, and process. The project
 Application – Modernized manufacturing facility;
management should therefore have a very good understanding of
restructuring educational programs.
the strategy and mission being implemented by the organization.
Product line extension (will it fit?) – a project to develop and
Project management maturity – is the progressive advancement
distribute new products evaluated on the level to which it fits the
of project and multi-project management proficiency in approach,
forms product line.
methodology, strategy, and decision-making process. The project
 Application – the new Apple Ipod which also plays video.
maturity is a continuous process of improvement via identifiable
incremental steps. Comparative benefit model (how does it look in the context of
other projects) – often used to select from list of projects that are
Most of the organizations starts with unplanned project
complex, difficult to assess, and often non-comparable. The one
management practices, with no common language and methods
with the most benefit to the firm is selected
to undertake a project. As the firm becomes more mature, it
 Application – selection of company cars
establishes common practices for adoption, begins to train pool of
project management professionals, set up procedures and
processes for launching and controlling its projects among others.
When a firm chooses a project selection model, the following
criteria developed by Shouder 2021 are the most significant

HOW TO DETERMINE A FIRM’S MATURITY? Realism – the model should mirror the reality of the manager’s
decision situation together with the various objectives of both the
Generic model of a project management maturity
firm and its managers. It should consider the firms facilities,
Institutionalized, seeks continuous
capital, human resources, technology, etc.
High maturity improvement, and maximizes available
tools efficiently.
Capability – should be complicated enough to deal with numerous
Defined practices. Training programs
Moderate maturity organizational support somehow uses time periods, simulate different situations both inside and
available tools. external to the project (like strike, interest rate changes, system
No common language, little support, new to behavior changes, etc.) and optimize the decision.
Low maturity
the business.
Flexibility – the model should offer convincing outcomes among
the conditions that the firm may experience; it should have the
WHAT IS PROJECT SELECTION AND MODELS? ability to be modified or to be self-adjusting with ease to answer
most of the difficulties that may come along the way like tax laws
Project selection – is the process of appraising a project or groups change, new tech advancements.
of projects and afterward deciding to execute some of them in
order to realize the objective of the organization. Ease of use – the model should be realistically convenient, not
require a long time to carry out, and be simple to imply and
Model – offers an abstraction of a more intricate reality. Since
comprehend. It must not need the out-of-ordinary explanation,
project selection is a decision-making activity it is easier to use
data that are hard to obtain, unnecessary personnel, or out of
models for different kinds or purposes.
stock equipment.
There are diverse project selection models used by modern
Cost – the data gathering and modeling cost should be low in
business organizations. Some belong to non-numeric model which
relation to the cost of the project and must certainly be less than
are older and simple whereas for numeric model uses numbers to
the probably benefits of the project.
measure both objective and subjective criteria.
Easy computerization – the model should be simple and suitable
to collect and accumulate the information in a computer
database, similarly it should e accessible and handy in relation to
NONNUMERIC MODELS OF PROJECT SELECTION
moving the information to any standard decision support system.
Sacred Cow (the boss wants to do it) – it is a project
recommended by a senior and influential official in the
organization.
NUMERIC MODELS OF PROJECT SELECTION
 Application – undeveloped idea for a new product, for
the development of a new market. Payback period – measures the time it will take to recover the
project investment.
Operating necessity (the basement is flooded) – the project is
obligatory in order to keep the system operating.
Frezel B.
 𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤
This implies that the shorter the PaybackPeriod, the more
desireable the investment.
Net present value – it is a numerical calculation that allows the
present value of an investment based on expected income from
that investment in future years minus the cost of the project.
Benefit Cost Ratio – It is the ratio of the present value of cash
inflows, at the required rate of return , to the initial cash flow of
the investment. Also known as the profitability index.
𝑃𝑉 𝑖𝑛
𝐵𝐶𝑅 =
𝑃𝑉 𝑜𝑢𝑡
 if BCR > 1, then the project should be considered, and
otherwise if <1

SOLVING FOR PRESENT AND FUTURE VALUE Project Portfolio Management is a set of business practices and
systematic process of selecting, supporting and managing a firms
Future value example: sets of projects as a strategic porfolio based on cost, benefits and
use of resources ensuring the alignment of programs and projects
How much money will I have one year from now if I invest P
with organizational objectives.
10,000 with an expected annual return of 10%?
There are three phases in PPM cycle and these are:
𝐹𝑉 = 𝑃𝑉 (1 + 𝑟)𝑛
= 10,000 (1 + 10%) 1 1. Preparation
= 10,000 (1 + 0.10) 1 2. Execution
= 10,000 (1.10) 1 3. Performance Management
= 10,000 (1.10)
FV = 11,000.00

Whereas:
FV = the future value of investment
r = annual rate of return
n = number of years

Solving for the present value

Present value example:

How much money do I need to invest to achieve P121,000 in one

year with an expected annual return of 10%?

𝐹𝑉
𝑃𝑉 =
(1 + 𝑟 )𝑛

121,000
𝑃𝑉 =
(1 + 10% )𝑛

121,000
𝑃𝑉 =
(1 + 0.10 )𝑛

121,000
𝑃𝑉 =
(1.10 )1

121,000
𝑃𝑉 =
1.10

𝑃𝑉 = 𝑃ℎ𝑝 11,000.00

Whereas:
PV = the present value of investment
r = annual rate of return
n = number of years

NUMERIC MODELS OF PROJECT SELECTION

Internal Rate of Return – It is the discount rate at which the net

present value of an investment becomes zero. The higher IRR the
return on investment.

Frezel B.
CHAPTER 3 2. The techniques must promote honesty among
MANAGEMENT CONFLICTS & NEGOTIATIONS negotiators.
3. Make the solution take place on the project that must
gratify the needs of the bargaining parties, other parties
Conflict is unavoidable every time two or more individuals
to the conflict, and the parent organization.
interrelate, whether in the place of work or at home. The
following are the fundamental issues that can cause conflict in an
The following are the propositions recommended by experts in
organization.
creating an effective negotiating strategy.

1. Separate the objective from the problem

2. Focus on interests and not in positions
FUNDAMENTAL ISSUES FOR POTENTIAL CONFLICT
3. Prior to trying to achieve agreement formulate
Ambiguous definition of responsibility. When it is vague who is in alternatives for win-win situation.
charge for what area of a project or task. The roles and
responsibilities of the team members are spelled out clearly and
approved by everyone involved prior to the start of project to
avoid conflicts from happening.

Conflict of Interests. The individual may be lured to fight for his

individual goals, when a person’s own goals are at odds with the
goals of the organization. This situation shall form a conflict that
will impede success of the project.

Scarce Resources. Rivalry over resources, like money, time and

materials, could be the cause for the teams to destabilize each
other, leading to conflict among departments or other work
groups. Making clear picture of the available resources from the
start will facilitate good approach.

Interpersonal Relationships. It is not always simple to reserve

individual prejudices when entering the workplace. However, it is
vital to know what those prejudices are and handle them properly
before conflict crops up.

SOME WAYS TO RESOLVE CONFLICTS

1. Talk directly
2. Choose a good time
3. Plan ahead
4. Don't blame or name-call
5. Give information
6. Listen
7. Show that you are listening
8. Talk it all through
9. Work on a solution
10. Follow through

Negotiation

 It is an indispensable process for parties to a conflict in

order to put solution on their issues.
 It is the process of engaging in a conflict exchange offers
and counteroffers by two conflicting to find a mutually
acceptable agreement.
 The objective of negotiation is to lessen or put an end to
the conflict

In order to succeed using negotiation process, it is essential to

know how to bargain. Generally, there are three key requirements
to take into reflection when negotiating the parent organization.

1. Conflicts must be resolved with no irredeemable

damage to the project’s objectives.
Frezel B.
CHAPTER 5
PROJECT ACTIVITY PLANNING
Before the start of any project, the first thing to do is
planning to an appropriate level of detail. Failure to
plan sufficiently diminishes the chances of project’s
success. Any rational project manager surely
recognizes the value of planning a project well.
Customer Test and Evaluation. It is a critical aspect of
project management involving complex systems that
must satisfy specification requirements of the
customer.
Preparation and Maintenance. It is the guide in the
preparation for the implementation of the project and
the sustenance of all resources.

Project Planning entails describing apparent, distinct

activities and the work required in order to finish each
activity in a particular project. Project plans are
normally created by jotting down the order of
activities needs to implement the project from start to
finish. The following are the nine segments of a
projects life cycle.

NINE SEGMENTS OF PROJECT’S LIFE CYCLE

Concept Evaluation. It is a type of evaluation in which

the product/project concept developed so far is
review.

Requirements identification. It is determining the

resources needed for the completion of the project
like labor, equipment and materials.

Design. It is creating the blueprint of the project with

technical details that will enable the development
team to proceed with the build or configuration of the
solution. It should be approved to ensure compliance
with the standard.

Implementation. This is the manner of completing the

project.

Test. This segment will detail all levels of testing to be

performed during the build/configure/test phase of
the project. Iterations of testing cycles as well as
environments to be utilized for the testing should be
included.

Integration. It is the coordination of the various

elements of the project in order to meet their mutual
goals of scope, schedule and budget to meet the
entire project goals.

Validation. It confirms that the work being considered

matches the details in project scope and project
management plan.

Frezel B.