Master of Business Administration-MBA Semester 3 Project Management – PM0010 - 4 Credits

(Book ID: 1236)

Assignment Set- 1 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.
Q.1 Explain the following a. Project Vs. Program Vs. Portfolio
b. Project work and Traditional functional work

Ans :Project Vs. Program Vs. Portfolio
Businesses use various terms to represent a range of project management services. Unfortunately these terms are often used interchangeably and inconsistently. This article attempts to clear the confusion and establish a common definition.

Project Management
Hopefully we all know what a project is. PMBOK defines a project as “a temporary endeavor undertaken to create a unique product, service or result”. In my terms, a project has a specific start and end date with a clearly defined deliverable produced. Project management is the application of knowledge, skill, tools, techniques and processes to effectively manage a team towards this final deliverable. In real life this means the management of a specific project (e.g. implementing a new accounting system). This project will start on a specific date and end according to our project plan with the delivery of your new accounting system. Pretty simple … something we can all understand.

Program Management
This is where the confusion seems to start. A program is a group of related projects managed together to obtain specific benefits and controls that would likely not occur if these projects were managed individually. While project management focuses on delivering the specific objectives of the project – program management is focused on achieving the strategic objectives and benefits of the integrated program. The implementation of an Enterprise Resource Planning (ERP) system is often performed as a program. The ERP system will include several specific individual projects (i.e. Finance, Purchasing, Materials Management, etc.). Each of these specific projects should be run by a project manager using a formal project management approach. The overall

grouping of these related projects will be run by a Program Manager. The Program Manager will be responsible for the rolling up of information from each of the projects and ensuring the overall program is driving towards achieving the business objectives. This requires each of the project managers to manage their individual projects in a fashion that easily integrates into the overall program plan (easily said – more challenging in actual practice). The Program Manager is also responsible for tracking and analyzing across the entire program. This involves considering risk management strategies not only for each individual project but also analyzing the „collective‟ risk across the program. The same goes for quality management, schedule management, cost management, communications, etc.

Portfolio Management
A portfolio is a collection of projects or programs grouped together to facilitate effective management of efforts to meet strategic business objectives. These projects or programs are not necessarily interdependent or directly related. Portfolio management is the centralized management of multiple projects, programs and possibly portfolios. This typically includes identifying, prioritizing and authorizing projects and programs to achieve specific strategic business objectives. The group of projects and programs within a specific business division could be an example of a portfolio. This might include the implementation of a Customer Relationship Management (CRM) program; Sales Data Warehouse program; Commission Tracking project; and a project to launch a new product within the Sales & Marketing Division. In this case the Portfolio Manager is managing this broad range of somewhat unrelated programs and projects towards a specific set of strategic divisional business objectives. The Portfolio Manager will become very involved in the frontend activities of identifying, prioritizing and initiating projects and programs. All of these activities will be within the context of achieving the strategic business objectives. The Portfolio Manager will also track these projects/programs to ensure they continue to deliver towards the expected strategic outcome in terms of quality, cost, schedule and scope. They will also be responsible for analyzing and tracking project management elements across the entire portfolio – looking for ways to leverage economies of scale, reduce risk and improve the probability of successfully delivering expected business results. http://www.klr.com/articles/Articles_PM_project_program_portfolio_mgmt.pdf

Project work and Traditional functional work
Project work and traditional work differ in significant ways , and it is important to understand these differences Functional Work Functional work is routine , ongoing work. Each day, secretaries, financial analysts, and car sales people perform functional work that is routine, even if their activities vary somewhat from day to day . A manager assigned to the specific function provides training and supervision and manages them accordingly to the standards of productivity in terms of typing speeds or sales quotas.

some organizations choose to select a person other than the project manager to handle these duties.The following are distinguishing characteristics of functional work  Functional work is ongoing routine work  Managers manage a specific function and provide a technical direction  People and other resources are assigned to the functional department  Functilonal departments are responsible for the approved objectives of the function. The following are distinguishing characteristics of a project wor:   Project work is a unique. The construction of a headquarters building for ABC Industries is an example of a project. over seeing the contractors and managing the schedule and budget. a project is a “temporary endeavor undertaken to create a unique product or service” Projects are temporary because they have a definite beginning and a definite end. The method of making the procurement decision can be identical in both cases. A project manager manages a specific project. and preparation of a . The first of these processes is planning purchases and acquisitions. In this step. such as technical competency. Project Procurement is where the decision to procure and the funding to pay the invoice comes from a project budget. The unique work is defined by the building plans and has a specific beginning and end . There are six processes widely recognized by the project management industry as integral to project procurement management. Theya re unique because the product or service they create is different in some distinguishing way from similar products or services. determination of the contract type needed to secure the acquisition. Project Procurement process Project procurement involves a systematic process of identifying and procuring. needs that require outsourcing are identified. Project work : In contrast to ongoing functional work. through purchase or acquisition. Q. Completion of this step includes identification of the resources necessary for the acquisition. A project manager is responsible for the project . temporary endeavor. Operational Procurement is where decision to procure and the funding comes from the general budget as the commodities or services are required for the overall operation. Sources for obtaining the required goods. goods. Also list and explain the project procurement process. services or results are differentiated through a market analysis. It is usually a function of the project manager. project objectives are reviewed to ensure the acquisition does not stray from the stated objectives. In planning the procurement. however. or results from outside vendors who will carry out the work.standards of performance and quality and efficient use of resource . necessary project services.2 Compare Operation and project procurement.

Scatter diagram . and performance goals is essential to completing this step. it is necessary to describe in detail the products or services requested. Ishikawa diagram b. Flow chart c. contracts are negotiated. When requesting seller responses and proposals. Once the prospective sellers have been set apart. responsibilities. Q. Project procurement is not an exact science. Selected vendors are considered qualified based on their ability to provide the goods or services considering the constraints of the project. Although this process is generally accepted within the industry. At times. their interest in providing the goods or services. Once the contract is complete. Community colleges and extended education departments of universities often provide classes on this subject. Contract planning.procurement management plan. Pareto chart d. Administering contracts is critical to project procurement duties. Clearly outlining the obligations.3 Describe the role of project managers in Human resource management and communication management. requesting seller responses. Q. Contract closure involves evaluating the performance of vendor and documenting any lessons learned in executing the contract. the final step is to close the contract. the proposals of the selected sellers are evaluated in order to determine the best vendor to deliver the goods or services. Contract changes should be controlled and documented to prevent unnecessary legal claims. specific vendors are identified and placed on a qualified sellers list.5 Describe the following quality control tools: a. and selecting the seller are the next three processes that might be completed. Many courses are available that teach the strategies used by project procurement managers. After the sellers are chosen. actual execution may differ between organizations. and the reasonableness of their bids. Requests for proposals and bids should be documented to avoid problems. Satisfactory performance of the contract entails tracking the execution of stated goals. the project procurement manager may need to correct processes in order to obtain the desired results. In contract planning. The contract is audited to make certain all terms of the contract were fulfilled.

reverse fishbone diagram Description The fishbone diagram identifies many possible causes for an effect or problem. Fishbone Diagram Procedure Materials needed: flipchart or whiteboard. 1. Again ask “why does this happen?” about each cause. Especially when a team’s thinking tends to fall into ruts. process fishbone. Causes can be written in several places if they relate to several categories. reverse fishbone diagram Description The fishbone diagram identifies many possible causes for an effect or problem. CEDAC (cause-and-effect diagram with the addition of cards). Write it at the center right of the flipchart or whiteboard. 5. Write sub-causes branching off the causes. It can be used to structure a brainstorming session. It immediately sorts ideas into useful categories. Layers of branches show thorough thinking about the causes of the problem. Ask: “Why does this happen?” As each idea is given. Layers of branches indicate causal relationships. . If this is difficult use generic headings: o Methods o Machines (equipment) o People (manpower) o Materials o Measurement o Environment Write the categories of causes as branches from the main arrow. desired-result fishbone. Brainstorm the major categories of causes of the problem. focus attention to places on the chart where ideas are few. time-delay fishbone.Ishikawa diagram Also Called: Cause-and-Effect Diagram. Continue to ask “Why?” and generate deeper levels of causes. 6. the facilitator writes it as a branch from the appropriate category. When the group runs out of ideas. 4. Ishikawa Diagram Variations: cause enumeration diagram. Agree on a problem statement (effect). When to Use a Fishbone Diagram   When identifying possible causes for a problem. It immediately sorts ideas into useful categories. Fishbone Diagram Also Called: Cause-and-Effect Diagram. time-delay fishbone. desired-result fishbone. 2. Fishbone Diagram Example This fishbone diagram was drawn by a manufacturing team to try to understand the source of periodic iron contamination. Draw a box around it and draw a horizontal arrow running to it. It can be used to structure a brainstorming session. Brainstorm all the possible causes of the problem. 3. Fish Bone Diagram Variations: cause enumeration diagram. process fishbone. marking pens. CEDAC (cause-and-effect diagram with the addition of cards). The team used the six generic headings to prompt ideas.

Pareto charts are extremely useful for analyzing what problems need attention first because the taller bars on the chart." Applying the Pareto Principle to business metrics . The team used the six generic headings to prompt ideas. Pareto’s theory was advanced by Dr. is a vertical bar graph in which values are plotted in decreasing order of relative frequency from left to right. C . “Calibration” shows up under “Methods” as a factor in the analytical procedure. In the 1940s.Pareto chart A Pareto chart. In 1906. The Pareto chart gets its name from Vilfredo Pareto. Pareto noted that 20% of the population in Italy owned 80% of the property. It was Dr.” the idea “materials of construction” shows four kinds of equipment and then several specific machine numbers. He proposed that this ratio could be found many places in the physical world and theorized it might be a natural law. Fishbone Diagram Example For example. under the heading “Machines. “Iron tools” can be considered a “Methods” problem when taking samples or a “Manpower” problem with maintenance personnel. and also under “Measurement” as a cause of lab error. Joseph Juran. an American electrical engineer who is widely credited with being the father of quality control. Juran who decided to call the 80/20 ratio the "The Pareto Principle. also called a Pareto distribution diagram. Layers of branches show thorough thinking about the causes of the problem. Note that some ideas appear in two different places. an Italian Economist.Fishbone Diagram Example This fishbone diagram was drawn by a manufacturing team to try to understand the source of periodic iron contamination. which represent frequency. where 80% of the outcomes are determined by 20% of the inputs. clearly illustrate which variables have the greatest cumulative effect on a given system.

it was very clear that the real reasons for the decline of his business had nothing to do with his supply chain. the manager could see which variables were having the most influence. The chart illustrates the Pareto Principle by mapping frequency. the more impact it has on outcome. rude sales people and poor lighting were hurting his business most. In this example. those are the areas where he should focus his attention to build his business back up. In the example below. with the assumption that the more frequently something happens. however. SCATTER DIAGRAM What it is: . Because the values of the statistical variables are placed in order of relative frequency. The Pareto chart is one of the seven basic tools of quality control. After charting the frequency of the answers in his customer survey. By using hard data instead of intuition. which shows the cumulative relative frequency. parking difficulties. he assumed the decline was due to customer dissatisfaction with the clothing line he was selling and he blamed his supply chain for his problems. Following the Pareto Principle. A Simple Example A Pareto chart can be used to quickly identify what business issues need attention. XYZ Clothing Store was seeing a steady decline in business. A point-to-point graph.helps to separate the "vital few" (the 20% that has the most impact) from the "useful many" (the other 80%). By collecting data and displaying it in a Pareto chart. there can be no question about what problems are influencing the outcome most. Before the manager did a customer survey. may be superimposed on the bar graph. The independent variables on the chart are shown on the horizontal axis and the dependent variables are portrayed as the heights of bars. the graph clearly reveals which factors have the greatest impact and where attention is likely to yield the greatest benefit.

Interpret the data. Weak Negative Correlation The value of Y decreases slightly as the value of X increases. but the relationship is not easily determined. No Correlation There is no demonstrated connection between the two variables. it does not by itself prove that one variable causes the other. While the diagram shows relationships. Scatter diagrams will generally show one of six possible correlations between the variables: Strong Positive Correlation The value of Y clearly increases as the value of X increases. a scatter diagram can show that two variables are from a common cause that is unknown or that one variable can be used as a surrogate for the other.A scatter diagram is a tool for analyzing relationships between two variables. Scatter Diagram Example . 5. Draw the diagram. Strong Negative Correlation The value of Y clearly decreases as the value of X increases. Most often a scatter diagram is used to prove or disprove cause-and-effect relationships. Complex Correlation The value of Y seems to be related to the value of X. using concentric circles to indicate repeated data points. The pattern of their intersecting points can graphically show relationship patterns. In addition to showing possible causeandeffect relationships. Title and label the diagram. Gather 50 to 100 paired samples of data that show a possible relationship.) increasing on the horizontal axes from left to right and on the vertical axis from bottom to top. Use a scatter diagram to design a control system to ensure that gains from quality improvement efforts are maintained. etc. creating a square plotting area. Draw roughly equal horizontal and vertical axes of the diagram. Label both axes. One variable is plotted on the horizontal axis and the other is plotted on the vertical axis. Label the axes in convenient multiples (1. Weak Positive Correlation The value of Y increases slightly as the value of X increases. When to use it: Use a scatter diagram to examine theories about cause-and-effect relationships and to search for root causes of an identified problem. 2. Plot the paired data. How to use it: Collect data. Plot the data on the chart.

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Weak positive correlation .

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While having a risk management plan is obviously important. Need for risk management : Risk is inevitable within business environments. However. and time because you can work from the smaller tasks back up to the level of the entire project. resource allocation. monitoring the project. This also allows for better estimating of cost. The study aims to discuss the level of knowledge about Risk Management amongst organizations. Adopting a plan For organisations that have not yet developed a risk management plan. Taking and managing risk is part of what organizations must do to create profits and shareholder value. The WBS makes the deliverables more precise and concrete so that the project team knows exactly what has to be accomplished within each deliverable. The Work Breakdown Structure (WBS) is defined by A Guide to the Project Management Body of Knowledge 3rd Edition (PMBOK Guide) as: "A deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. . The most common way this is done is by using a hierarchical tree structure. government encouragements towards Risk Management. if employees and volunteers are not aware of its existence. yet 24 per cent thought that there was a lack of understanding at these levels of the importance of risk management. risk.Q6 . Buy-in from management Over 65 per cent of respondents believed that the CEO or the board was responsible for risk management. the following may assist with the process. and the advantages/disadvantages with Risk Management." There are three reasons to use a WBS in your projects. it is of little or no use to the organisation. such as from fraud. and controlling the project. The second reason for using a WBS in your projects is to help with assigning responsibilities. a market study by DeveloperEye. The first is that is helps more accurately and specifically define and organise the scope of the total project. However. List the benefits of WBS? Need for risk management in an organisation-comment. Each level of this structure breaks the project deliverables or objectives down to more specific and measurable chunks. public liability claims and information technology. the management of IT risks. Finally. it allows you double check all the deliverables' specifics with the stakeholders and make sure there is nothing missing or overlapping.com discovered that many organisations neither manage risk well nor fully understand the risks they are taking. not planning for risk at all can leave an organisation vulnerable to the increasing risks facing them.

where the board and management can be involved in the risk management process and can gain an understanding of the effects that risk can have on the organisation. A ‘risk register’ should record information such as the likelihood of the risk occurring. and any residual risk that the organisation cannot mitigate. Risk identification Once the board and senior management agree to the process. it is important to identify those risks that are faced by the organisation. the organisation can then make a decision about whether to take further steps to reduce risk. as many are known but are not communicated or documented. By running workshops among management. Creating a risk register Once risks are identified. employees and volunteers. another reason for buy-in is to ensure that adequate resources can be allocated to the risk management process. it is possible to obtain the input of those who may have a variety of views and be aware of different types of risk. Once classified. organisations need to document how those risks will be dealt with. Budgetary constraints With budgetary constraints a concern for 46 per cent of respondents. mitigation of the risk.One way to get buy-in from senior levels is to establish a risk committee. .

com/office/project-management/articles/12712. It represents a project‟s critical path as well as the scope for the project. Well known complements to network diagrams include the PERT and Gantt charts. A network diagram in project management is useful for planning and tracking the project from beginning to finish.1 Describe the various ways of representing network diagram logic.aspx#ixzz1ZXABk4x9 How do Network Diagrams work? Fig a: Arrow Diagram Fig b: Precedence diagram . Read more: http://www. A Network Diagram is a visual representation of a project‟s schedule. A good network diagram will be a clear and concise graphic representation of a project.SET 2 Q. .brighthub.

and Event D depends upon Event C‟s activities to be completed. The project management term organizational breakdown structure refers specifically to a tool that can be utilized by the project management team and or project management team leader in a hierarchal manner for the purposes of conducting and creating a thorough and clearly delineated depiction of the project organization for the purposes of creating an arrangement for the purposes of establishing a relationship between and among the various project related work packages as well as between those work packages and the project‟s pre-defined performing organizational units. A project OBS is a depiction of the project organization arranged to indicate the reporting relationships within the project context. they can help project management teams to visualize the planning they have put time and effort into. It is important to keep in mind that organizational breakdown structure is also written and recorded as organization breakdown structure with the same definition applied and typically using the same three letter anagram of OBS. If you work in IT you will most likely use the arrow diagram. by taking into consideration availability and capability of management and technical staff including subcontractors. where it is used to identify the organization responsible and accountable for every element of the WBS and Scope of Work (SOW). you see that Event C depends upon activities from Events A and B to be completed. The organizational breakdown structure should be established at the onset of the activity to help in the purposes of organization. Network diagrams are used whenever project management occurs. The arrow represents the activity that takes place during the event.” then the event nodes would designate the start and finish of this activity whereas the arrow would designate the activity itself. and approvals of all authorized work scope. For example. you can depict project dependencies. These event nodes refer to an instant when an activity is started or completed. to achieve project objectives. It also demonstrates who is responsible for which tasks. The diagram gives a quick-glance view of the project. management. depicted in Fig a. Because these project management tools are so useful. it is possible to conduct this in an ongoing basis . if a task in a project were “research competition‟s ad campaign. „A‟ and „B‟ each represents an event node. Cost breakdown structure The Organizational Breakdown Structure (OBS) is a project organization framework for identification of responsibility. In the diagram to the right. The OBS reflects the way the project is functionally organized. however. accountability. Using the arrow and node method. Q.2 Explain the following: a. The OBS is depicted on the Responsibility Assignment Matrix (RAM). The precedence diagram depicts activities in the order they occur. It is a direct representation and description of the hierarchy and organizations that will provide resources to plan and perform work identified in the Work Breakdown Structure (WBS). An event node occurs only when all activities entering the node have been completed. The arrow diagram depicts nodes for events and arrows for activities. The OBS helps management focus on establishing the most efficient organization.There are two types of network diagrams: The Arrow Diagram and the Precedence diagram. b. Organizational breakdown structure.

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Cost breakdown structure: In this era of globalization and networking. increasing emphasis on pre and after sales services. geographical reorganization of production. The business logic change may take the form of. Despite the nature of new business. however.b. for instance. or growing interest toward holistic system supplies. many companies are facing pressures to develop their business logic in striving to improve their growth or profitability rate. it is clear that it is not only revenues (or the potential for revenue) but also the costs of .

why the management of neither of the case companies have realized the cost effect of the changes in business logic and why such straightforward cost analyses have not been made in those companies. The objective of the paper is to analyze the use of cost breakdown structure in demonstrating and therefore also managing a business logic change. Cost structure illustrations have proved to be of significant assistance when demonstrating the impact of business logic change on organizations. The topic seems to be rather straightforward. .goods sold that will be affected during the change process. The paper is based on an action research case study in two machine construction companies. but it makes one wonder.

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