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Evaluation vs.

Management
Dr. Syed Amir Iqbal
Resource Person

Dr. Syed Amir Iqbal

Project Management

Project Managing Vs. Evaluation
• Project Management:
• Once the Project has been selected, we start
managing it
• Management is accomplished in 5 process:
Initiating, Planning, Executing, Monitoring &
Control and Closing
• As the lifecycle of the project starts we start
managing it
• A number of Org. define its body of knowledge

• Project Evaluation:
• Help in making decision about which project
to do & why.
Dr. Syed Amir Iqbal
Project Management
• Accomplished before the project
can be

2

Project or Capital Expenditure
 Involves a current outlay of funds in the
expectation of a stream of benefits extending far
into the future.
 In accounting perspective, Capital Exp. is an exp.
that is shown as an Asset on the balance sheet.
 The field of Project Evaluation and Feasibility
Analysis has the following fundamental issues:





Capital Investment – Importance and difficulties
Types of Capital Investments
Phases of Capital Budgeting
Levels of Decision Making
Facets of Project Analysis
Feasibility Study

Dr. Syed Amir Iqbal

Project Management

3

Capital Budgeting
• Capital budgeting is a complex process
Planning
that may be divided
into six broad phases.

• Phases:
Analysis

Selection

Financing
Implement
ation

Dr. Syed Amir Iqbal

Review

Project Management

4

Project Analysis • The important facets of project analysis are: Dr. Syed Amir Iqbal Project Management 5 .

Project Screening Models Dr. Syed Amir Iqbal Project Management .

Screening models are numeric or nonnumeric and should have: Realism Capability Flexibility Ease of use Cost effectiveness Comparability Dr.Project Selection Screening models help managers pick winners from a pool of projects. Syed Amir Iqbal Project Management 7 .

patent. Syed Amir Iqbal Project Management 8 . fit. All models only partially reflect reality and have both objective and subjective factors imbedded Dr.Screening & Selection Issues • Risk – unpredictability to the firm • Commercial – market potential • Internal operating – changes in firm ops • Additional – image. etc.

Syed Amir Iqbal Project Management 9 .Project Screening Approaches o Checklist o Simple scoring models o Analytic hierarchy process o Profile models o Financial models Dr.

Syed Amir Iqbal Project Management . Syed Amir Iqbal Resource Person Dr.Project Management Growth Dr.

project management. • finance. Syed Amir Iqbal Project Management 11 .Project Management  General systems theory implies the creation of a management technique that is able to cut across many organizational disciplines. • engineering.  and so on—while still carrying out the functions of management. or matrix management. • marketing. Dr. This technique has come to be called systems management. • manufacturing.

Project Management 1940-85 Dr. Syed Amir Iqbal Project Management .

Intercontinental Ballistic Missile. Syed Amir Iqbal managers time for Project Management were both 13 .  During cold war.  Filtering of information wasted customer and contractors. and the Polaris Submarine.  Failure was blamed to the line managers in action. several line responsible for the projects.Project Management Evolution  During 1940s. the defense arms development were performed under the umbrella of project managers (solely responsible and accountable for success or failure of a project. Dr.  B52 Bomber.  Customers were not have single point of contact. even jet fighters and tanks developed under the project management teams.

more companies departed from informal project management and restructured to formalize the projectfivemanagement Following questions help determine whether process. SyedAre Amir Iqbal several functional boundaries toManagement Project be crossed? If any of the question answered “yes”. formal project management is necessary: Are the jobs complex Are there dynamic environmental considerations? Are the constraints tight? Are there several activities to be integrated? there Dr. 14 .Project Management Evolution   By 1970 and early 1980s.

 Shifting people from the project to project may hinder employees’ growth and development within their fields of specialization.  Long-range planning may suffer as more focus on fulfilling the requirements of temporary projects. Dr.Major Problem in Project Management  Project priorities and competition for talent may interrupt the stability by upsetting the normal business of the functional organization. Syed Amir Iqbal Project Management 15 .  Delegation of authority to middle management cause them to occupy the power positions.

4. Syed Amir Iqbal Project Management 16 . 5. the commitment of time and money appears to become inflexible. 3. 2. The capital committed to the project prior to the use of the end item appears to be increasing. As technology increases. The inevitable counterpart of specialization in organization. Technology requires more and more specialized manpower. there are driving forces behind PM. 1.John Kenneth’s Imperatives of Technology Other than limitation. The time span between project initiation and completion appears to be increasing. Dr.

 Employees weren’t informed about how PM works.  Employees were not convinced that executives were in total support of the change (to PM). Syed Amir Iqbal Project Management 17 . Dr.  Executives selected inappropriate projects or project managers for the first few projects.Failure to Project Management  There was no need for project management.  No attempt to explain the effect of the PM organizational structure on the wage and salary administration.

Project Management 1985-2010 Dr. Syed Amir Iqbal Project Management .

Driving Forces of Project Management There are six driving forces that lead executives to recognize the need for project management: 1 . Organizations are quite resistant to change Executive understandin unless driven by the executives g 5 . 2 . External : Do project with competitive price. Small project recover cost of overall R&D. ess quality. Project Management small companies experiencing growing pains 19 . Customer expectations Some organizations sell solutions (PM expertise) to the customers rather than products 3 . Capital projects Large capital projects or a multitude of simultaneous projects. Competitiven Internal : To do project internally. New product development Dr. 4 . Syed Amir Iqbal 6 Efficiency Organizations that are heavily invested in R&D activities.

Syed Amir Iqbal Capital Projects SURVIVAL Customer Expectations Competitiveness Project Management 20 .Ultimate Driving Force to PM Efficiency and Effectiveness New Product Development Executive Understanding Dr.

Speed of Maturity Internal Efficiencies & Effectiveness Non-Project-Driven and Hybrid Organizations Project-Driven Organizations Competitiveness Fast Dr. Syed Amir Iqbal Speed of Maturity Project Management Slow 21 .

• Project management creates organizational instability and increases conflicts. • Project management makes the organization more Project Management 22 efficient and effective. • Project management will increase the amount of scope changes. • Project management will provide better control of scope changes. . Dr. Syed Amir Iqbal Present View • Project management allows us to accomplish more work in less time and with less people.Benefits of Project Management Past View • Project management will require more people and add to the overhead costs. • Profitability may decrease. • Profitability will increase.

• All projects will benefit from project management. Dr. • Project management provides a means for problem solving. • Project management increases quality. Syed Amir Iqbal Present View • Project management will allow us to work closer with our customers. • Only large projects need project management. Project Management 23 . • Project management will create problems. • Project management will increase quality problems.Benefits of Project Management Past View • Project management is really “eye wash” for the customer’s benefit.

• Project management allows people to make good company decisions. • Project management focuses on suboptimization by looking at only the project. • The cost of project management may make us noncompetitive. Project Management 24 . Dr. • Project management delivers products to a customer.Benefits of Project Management Past View • Project management will create power and authority problems. Syed Amir Iqbal Present View • Project management will reduce the majority of the power struggles. • Project management will increase our business. • Project management delivers solutions to a customer.

Syed Amir Iqbal Tim e Project Management 25 . Benefits  How long it’ll take to achieve the benefits of PM?  This point can be pushed to the left by training and education Additional Profits from Better Project Management Cost of Project Management $ Pegged ? Dr.Cost Vs.

Syed Amir Iqbal Project Management .Resistance to Change Dr.

and thereby Dr.  Organizations can most effectively run on a by project” basis.  Profitability was identified through marketing and sales. project managers were given the responsibility for profit and loss.  Hybrid organizations are typically non–projectdriven firms with one or two divisions that are project-driven. Syed“management Amir Iqbal Project Management 27 .  In the non–project-driven sectors of the marketplace. corporate survival was based upon products and services.Industry Classification  In Project-driven companies.

Program process Management Product Management Project Management 28 . Project Management Dr. • Multiple career paths • Short product life cycles • Income comes from projects • Marketingorient.Industry Classification Project – Driven • PM has P&L responsibility • PM is a recognized profession Hybrid • Production driven but with many projects • Emphasis on new product Present develop. Syed Amir Iqbal NonProject-Driven • Very few projects Past • Profitability from production • Large brick walls • Long life cycle products • Need for rapid develop.

New processes supporting project management Dr. Syed Amir Iqbal Project Management 29 .

cooperation.  As companies become mature in PM. teamwork and trust are absolutely essential for informal PM. Syed Amir Iqbal Project Management 30 . Dr. emphasis is on guidelines and checklists (informal PM)  Customers have a strong voice in whether formal or informal PM will be used.Informal Project Management  Informal PM is based upon guidelines rather than the policies and procedures that are the basis for formal PM.  Effective communications.

Syed Amir Iqbal Project Management .Project Management’s Maturity & Excellence Dr.

senior management looks at “key performance indicators. processes. and even culture.Project Management Maturity “Maturity in project management is the implementation of a standard methodology and accompanying processes such that there exists a high likelihood of repeated successes. Syed Amir Iqbal Project Management what it did wrong. exists. 32 .” it allows the organization to maximize what it does right and to correct Dr.  At the closure of project debriefing.”  Maturity implies that the proper foundation of tools. techniques.

 Maturity models provide the necessary framework to:  Analyze and critically evaluate current practices  Compare those against chief competitors or general industry standard  Define a systematic route for improvement Dr. Syed Amir Iqbal Project Management 33 .Project Management Maturity  Defense and Construction Industries are much more advanced in how they manage projects.

Mgmt. Syed Amir Iqbal Project Management 34 .Life Cycle Phases for Project Management Maturity • • Exec. Line Mgmt. Growth Maturity Embryoni Executive Acceptance Acceptance • Development of• a Development of a Recognize cmethodology • Managemen Visible executive Embryonic Line management management cost/ support • Need • Use of lifesupport cycle tschedule control Executive Line management system • Benefitsphases • Acceptance understanding commitment • Commitment to • Integrating cost • Applications • Line management planning of PM and schedule • Project education Minimization of control Line • What •must • Willingness to • Developing an “creeping sponsorship scope” Managemen be done Growth Maturity • of Willingness to release employees educational • Selection a t of to for PM training program project change way Acceptance tracking system doing business enhance PM skills Dr.

Life Cycle Phases for Project Management Maturity Embryonic Line Managemen t Acceptance Dr. Syed Amir Iqbal Executive Managemen t Acceptance Growth Maturity Project Management 35 .

Syed Amir Iqbal Maturi ty Project Management 36 .Life Cycle Phases for Project Management Maturity Embryoni • Recognize c Executive need • Recognize benefits Managem ent Acceptanc e • Recognize Line applications Managem Growt • Recognize h ent what must be Acceptanc edone Dr.

Life Cycle Phases for Project Management Maturity Executive Manageme Executive nt Embryoni Managem • Visible executive support Acceptance c Line Managem ent Acceptanc e Dr. Syed Amir Iqbal ent Acceptanc e • Executive understanding of project management • Project sponsorship • Willingness to change way of doing business Growt h Maturi ty Project Management 37 .

Life Cycle Phases for Project Management Maturity Line Management Executive Acceptance • Line management Embryoni Managem support c ent • Line management Acceptanc commitment e • Line management education Maturi Growt • Willingness to release ty h employees for project management training Dr. Syed Amir Iqbal Project Management 38 .

Syed Amir Iqbal Project Management 39 .Life Cycle Phases for Project Management Maturity Growt • Development of a hExecutive methodology Embryoni Managem • Use of life cycle phases c ent • Commitment to Acceptanc planning e Line • Minimization of scope” Managem“creeping Maturi Growt ent • Selection of ty h a project Acceptanctracking system e Dr.

Life Cycle Phases for Project Management Maturity Maturity Embryoni c Line Managem ent Acceptanc e Dr. Syed Amir Iqbal • Development of a Executive management cost/ Managem schedule control ent system Acceptanc • Integrating cost and e schedule control • Developing an Maturi Growt educational program ty h to enhance project management skills Project Management 40 .

Syed Amir Iqbal Project Management 41 . Phase Issue Recommendation a) Embryonic Recognizing the need b) Executive Management Acceptance Executive understanding of PM c) Line Management Acceptance Line Management Support d) Growth Development of a PM methodology e) Maturity Phase Developing an educational program to enhance PM skills Dr.Phases for Project Management Maturity For each of the following items provide a recommendation for addressing and resolving the issue that will allow an organization to progress toward achieving Project Management Maturity.

identify areas for improvement in schedule. maintain management support and visibility. explain the benefits of PM. Syed Amir Iqbal Project Management 42 . continuous improvement through reviews and feedback. document lessons learned Dr. establish enterprise-wide processes.Phase a) Embryoni c Issue Recognizing the need Recommendation Explain the benefits of repeatable processes. cost and requirements management b) Executive Executive Provide supporting information about project Management understanding successes and the use of best practices Acceptance of PM c) Line Line Management Management Acceptance Support Obtain and communicate management support to functional managers. acknowledge the needs of the functional managers d) Growth Development of a PM methodology Establish a PMO. standardize methods. provide PM training e) Maturity Phase Developing an educational program to enhance PM skills Establish PM as a career path. provide training to all levels of employees.

Developing Project Management Maturity Project management maturity models:  Center for business practices  Kerzner’s project management maturity model  ESI International’s project framework  SEI’s capability maturity model integration  PMI’s OPM3: Organizational Project Management Maturity Model Key Feature of these Maturity Models is the important recognition that: Change does not occur Abruptly Dr. Syed Amir Iqbal Project Management 43 .

understanding about organizational project management and to measure their maturity against PM Best Practices. Project Management 44 .OPM3 Model  The purpose of this standard is to provide. Improvement and Dr.  Based on Knowledge. Syed Amir Iqbal Assessment.

OPM3 provides guidance in placing these in order of importance.  Assessment : the organization uses an assessment tool to determine areas of strength and weakness in relation to the body of Best Practices. and this sequence Dr.OPM3 Model  Knowledge : Familiarity with the contents of the Standard is essential. Syed Amir Iqbal forms the basis for any Project Management 45 .  Improvement : Provides list of incapability in the organization.

OPM3 Model – Maturity Assessment Dr. Syed Amir Iqbal Project Management 46 .

Syed Amir Iqbal graphs 2 and 3. and 4) a composite view of Dr. based on their responses: 1) the organization’s overall position on a continuum of organizational project management maturity. 3) the organization’s maturity in terms of each process improvement stage. 2) the organization’s maturity in terms of each domain. 1 3 2 4 Project Management 47 .OPM3 Model – Maturity Assessment The results also generate four charts/graphs showing.

training programs. little support Dr. no common language.PM Maturity – Generic Model High Maturity Institutionalized. organizational support Low Maturity Ad hoc process. Syed Amir Iqbal Project Management 48 . seeks continuous improvement Moderate Maturity Defined practices.

Dr.Project Management Excellence “Organizations excellent in project management are those that create the environment in which there exists a continuous stream of successfully managed projects and where success is measured by what is in the best interest of both the company and the  Excellence goes project. Syed Amir Iqbal Project Management 49 .” well beyond maturity.  Project must have maturity to achieve excellence.

Project Management Excellence Dr. Syed Amir Iqbal Project Management 50 .

Likewise.  Failure can be viewed as success if the failure is identified early enough so that the resources can be reassigned to other Dr. Syed Amir Iqbal Project Management 51 . organizations in which all projects are completed successfully are not taking enough risks and are not working on enough projects.”  It is unrealistic to believe that all projects will be completed successfully.Project Management Failure “Executives who always make the right decision are not making enough decisions.  Some people contend that the only true project failures are the ones from which nothing is learned.

Project Management Failure
“Executives who always make the right
decision are not making enough decisions.
Likewise, organizations in which all projects are
completed successfully are not taking enough
risks and are not working on enough projects.”

 It is unrealistic to believe that all projects
will be completed successfully.
 Some people contend that the only true
project failures are the ones from which
nothing is learned.
 Failure can be viewed as success if the
failure is identified early enough so that
the resources can be reassigned
to other
Dr. Syed Amir Iqbal
Project Management

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Project Life Cycle

Dr. Syed Amir Iqbal

Project Management

Product Life Cycle

A project life cycle is the series of phases that a project
passes through from its initiation to its closure.

The phases can be broken down by functional or partial
objectives, intermediate results or deliverables,
specific milestones within the overall scope of work, or
financial availability.

Phases are generally time bounded, with a start and
ending or control point.

Every project has a definite start and a definite end,
the specific deliverables and activities that take place
in between will vary widely with the project.

Dr. Syed Amir Iqbal

Project Management

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Generic Life Cycle
 All projects can be mapped to the following
generic life cycle structure

Starting the project,

Organizing and preparing,

Carrying out the project work, and

Closing the project.

 The project life cycle is independent from the
life cycle of the product produced by or
modified by the project.
Dr. Syed Amir Iqbal

Project Management

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Syed Amir Iqbal Project Management 58 .Generic Life Cycle Dr.

Generic Life Cycle Dr. Syed Amir Iqbal Project Management 59 .

 Project phases are used when the nature of the work to be performed is unique to a portion of the project.Project Phases  A project phase is a collection of logically related project activities that culminates in the completion of one or more deliverables. and are typically linked to the development of a specific major deliverable. Syed Amir Iqbal Project Management 60 . Dr.

 The closure of a phase ends with some form of transfer or hand-off of the work product produced as the phase deliverable.  This phase end represents a natural point to reassess the activities underway and to change or terminate the Dr.Characteristics of Phases  The work has a distinct focus that differs from any other phase. Syed Amir Iqbal project if necessary. Project Management 61 .  Achieving the primary deliverable or objective of the phase requires controls or processes unique to the phase or its activities.

a phase starts only when the previous phase is complete.Phase to Phase Relationship Sequential relationship. but may eliminate options for reducing the overall schedule. Syed Amir Iqbal Project Management 62 . In a sequential relationship.  The step-by-step nature of this approach reduces uncertainty. Dr.

and can result in rework if a subsequent phase progresses before accurate information is available from the previous phase. • May require additional resources to allow work to be done in parallel. a phase starts prior to completion of the previous one. Dr. • May increase risk.Phase to Phase Relationship Overlapping relationship. In an overlapping relationship. Syed Amir Iqbal Project Management 63 .

are ones in which the project scope. there is a substantial base of industry practice. Syed Amir Iqbal Project Management 64 .  Predictive life cycles are generally preferred when the product to be delivered is well understood.  These projects proceed through a series of sequential or overlapping phases. Dr. are determined as early in the project life cycle as practically possible. and the time and cost required to deliver that scope. with each phase generally focusing on a subset of project activities and project management processes.1-Predictive Life-cycle  Also known as fully plan-driven. or where a product is required to be delivered in full to have value to stakeholder groups.

Syed Amir Iqbal Project Management 65 .1-Predictive Life-cycle For example.  Construction of building  Software development  Power plant installation Dr.

while increments successively add to the functionality of the product. Dr. Syed Amir Iqbal Project Management 66 .2-Iterative and Incremental Life Cycles  Iterations develop the product through a series of repeated cycles. Future iterations may enhance those deliverables or create new ones. a deliverable or set of deliverables will be completed.  At the end of each iteration. activities from all Project Management Process Groups will be performed. allowing the project team to incorporate feedback.  During an iteration.  Each iteration incrementally builds the deliverables until the  exit criteria for the phase are met.

Syedculture. Amir Iqbal Project Management  67 . or  When the partial delivery of a product is beneficial and provides value for one or more stakeholder groups without impact to the final deliverable or set of deliverables.   When an organization needs to manage changing objectives and scope.  To reduce the complexity of a project. Large and complex projects are frequently executed in an iterative fashion to reduce risk. For example Implementation of new standards in an organization Dr.2-Iterative and Incremental Life Cycles Iterative and incremental life cycles are generally preferred.

Dr. but differ in that iterations are very rapid (usually with a duration of 2 to 4 weeks) and are fixed in time and cost.  The overall scope of the project will be decomposed into a set of requirements and work to be performed.  Adaptive methods are also iterative and incremental. sometimes referred to as a product backlog.3-Adaptive Life Cycles  Adaptive life cycles (also known as change-driven or agile methods) are intended to respond to high levels of change and ongoing stakeholder involvement. Syed Amir Iqbal Project Management 68 .

 when requirements and scope are difficult to define in advance.  Design of new passenger and jet planes.3-Adaptive Life Cycles Adaptive methods are generally preferred.  Implementation of advanced electronic products. and  when it is possible to define small incremental improvements that will deliver value to stakeholders. Syed Amir Iqbal Project Management 69 .  When dealing with a rapidly changing environment. Dr. For example.

Syed Amir Iqbal Project Management 70 .Product Life Cycle General phases of Product Life-Cycle  Research and development  Market introduction  Growth  Maturity  Deterioration  Death Dr.

The life-cycle phases of a project include:  Conceptual  Planning  Testing  Implementation  Closure Dr. about life-cycle phases of a project. there is no agreement among industries. Syed Amir Iqbal Project Management 71 . This is understandable because of the complexity and diversity of projects.Project Life Cycle Today. or even companies within same industry.

Project Life Cycle Dr. Syed Amir Iqbal Project Management 72 .

 Analysis of risk and the resulting impact on company resources.  The conceptual phase also includes a “first cut” at the feasibility of the effort. Syed Amir Iqbal Project Management  Bidding decision and development of the total bid 73 . Dr.Project Life Cycle 1.  Initial preparation of documentation. Planning Phase  Identification of the resources required.  Establishment of realistic time. and performance parameters. Conceptual Phase  Preliminary evaluation of an idea. 2. cost.

product life-cycle phases of market introduction. growth. maturity. and Dr. Testing Phase  Is predominantly a testing and final standardization effort.Project Life Cycle 3.  Almost all documentation must be completed in this phase. Implementation Phase  Integrates the project’s product or services into the existing organization. . 4.  For product development project. Syed Amir Iqbal Project Management 74 a portion of deterioration.

 The closure phase evaluates the efforts of the total system and serves as input to the conceptual phases for new projects and systems.Project Life Cycle 5. Syed Amir Iqbal Project Management 75 .  This final phase also has an impact on other ongoing projects with regard to identifying priorities. Closure Phase  The reallocation of resources. Dr.

 The closure phase evaluates the efforts of the total system and serves as input to the conceptual phases for new projects and systems. Closure Phase  The reallocation of resources. Syed Amir Iqbal Project Management 76 .  This final phase also has an impact on other ongoing projects with regard to identifying priorities.Project Life Cycle 5. Dr.

Syed Amir Iqbal Project Management 77 .Project Life Cycle Dr.

Syed Amir Iqbal Project Management 78 . even they are in the same industry. It is due to the complexity and diversity of projects. different life cycle phase.Project Life Cycle Phase Definition of Different Industries Different organizations have. Dr.

Syed Amir Iqbal Project Management 79 .Project Life Cycle of Computer Programming PLANNING PHASE DEFINITION AND DESIGN PHASE RESOURCES/EFFORT CONCEPTUAL PHASE IMPLEMENTATION PHASE CONVERSION OR TERMINATION PHASE Resources Utilized TIME Dr.

Project Life Cycle of Construction Dr. Syed Amir Iqbal Project Management 80 .

Effects of Project Life Cycles Client Interest Project Stake Resources Creativity Conceptualizatio n Dr. Syed Amir Iqbal Planning Execution Uncertaint y Termination Project Management 81 .

Resistance to Project Management Business Unit/Entity Reasons for resistance a) Sales Potential loss of power & position with the customer. more training requirements f) Manufacturing Potential loss of experienced resources to the project g) Engineering May not agree with the methodology. as overhead Dr. may not support the planning process. Credit given to the PM b) Marketing Potential for the PM to become associated with the marketing function. loss of control. new job description. Customer has more contact with the project manager. c) Finance and Accounting Development of independent accounting systems. may perceive project mgt. Syed Amir Iqbal Project Management Responses or actions that will minimize resistance 82 . Fear of loss of credit for sales. d) Procurement Bypassing of the established processes e) Human Resources Potential additional workload.