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ECH 3603

PROJECT DEVELOPMENT
AND MANAGEMENT
Prof Dr Azni Idris

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Course Evaluation:
-

Assignment 20%
Test 1
20%
Test 2
20%
Final exam
40%

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Main Synopsis
• Introduction to project management
• Project development and
management
• Management in detail design
• Project evaluation and cost analysis
• Project financing and quality
assurance
• Malaysian government regulations
• Case studies

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Program outcome (PO) 4 .

5 th Edn. Construction Project Management – Planning. Contemporary Engineering Economics. R. P.. C... J.R. and Iles-Smith.. J. Indiana. Tata McGraw Hill. Delhi. 1999.References 1.K. Wysocki. 5. 4th Ed.S. and Mantel. 4. Clements. Wiley Publishing. South Western. Wearne S. 1993. R. 2003.K. Park.P. John Wiley & Sons. London. Effective Project Management. 5 . G. Scheduling and Controlling. Lawson. New York. Project Management for Process Industries. 2.. 3rd Ed. Effective Project Management. IChemE. Project Management: A ManagementApproach. 2012. 2000.J. Gido. 6.. and J.. Meredith. K.H. New York. 2004 3. S. Chitkara. and McGray. AddisonWesley Publishing Company.

with specific start and end dates. • Every project has its unique features and construction procedure.What is a project ? • A Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform. 6 . • It is temporary in nature.

? 7 .Type of projects Give examples of a project …. Chemicals processing … • A Processing Plant or factory • A Processing Plant Upgrading facilities • A Production change or renovation works Mechanical project … ? Civil and structure project ….? Utilities project ….

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• Basic components in a project: – Planning – Design – Procurement – Construction or fabrication – Commissioning 11 .

Other projects …. • - Management projects Planning a training sessions Business and feasibility studies Safety audits Environmental Impact Assessment Research projects 12 .

• Projects have budgets. • Projects have schedules. • Measures of quality apply. • Projects have specific objectives (or goals) to achieve. • Projects require the effort of people. 13 . • Projects require resources.Characteristics of a Project Key features of these definitions are that a project has the following characteristics: • A project is a unique undertaking: each one will differ from every other in some respect.

Objectives of a Project • Project Objectives: – Performance – Time – Cost • Expectations of clients inherent part of the project specifications • There are ancillary (process) goals: – Improving the organization's project management competency & methods – Individual managerial experience gained – The health of the project team and the organization – Environment 14 .

What is Project Management ? Definition: 1. 15 . Projects involve risk and are typically constrained by limited resources. A novel undertaking or systematic process to create a new product or service the delivery of which signals a completion. A process for conducting work that produces a new product of one sort or another. 2.

Projects are usually required to be accomplished within limited resources.3. the delivery of which signal the completion of the project. A process or undertaking that encompasses an entire set of activities having a definable starting point and well defined objectives. 16 .

• Concept definition document . It is used to derive the System Specifications and the Statement of Work.Project Concept • An imaginative arrangement of a set of ideas.A document describing the concept selected for development and the results of investigating alternative system concepts. Also known as System Concept Document. 17 .

Also known as Idea. • The first of four sequential phases in the generic project life cycle. 18 . Feasibility or pre-Feasibility Phase. the goals and objectives of the project are established and a sponsor is identified. Economics.Concept Phase • The first phase of a project in which the need is examined. alternatives are assessed.

the recognition of a need for a project and a study to decide whether it is practical or not. 19 . usually followed by a recommendation whether or not to proceed with a/ the project. etc. • A broad-scale plan that takes place well before begins.Concept Study • Consideration of an idea that includes a review of its practicability. suitability. cost-effectiveness.

From concept to finish… 20 .

Learning outcome…. • What are the 3 most important lessons learnt ? 21 ..

22 .Project Life Cycle • Project Life Cycle: changing patterns of resource usage and level of activity over the course of the project. • Time distribution of project effort is characterized by slowrapid-slow process.

• Stages of a conventional project: – Slow beginning – Buildup of size – Peak – Begin a decline – Termination (See Figure … nxt slide…) 23 .

How project moves with time Actual time Cumulativ e time 24 .

25 .The Project Life Cycle: Four Basic Phases typical project life cycle separated into its generally accepted four fundamental phases.

Monitoring Evaluation & Terminatio n • Minimal effort at the beginning stage • Increasing effort during implementation 26 • Decreasing effort when project moves towards the .Time Distribution of Project Effort Level of effort Peak Effort Level Time Concepti on Selectio n Planning. Scheduling.

Project Bar chart schedule typical building project bar chart which relates the master schedule activities to the phases. This is because it is a clearly defined point in time and its significance in the 27 life of a project is commonly understood. . You will see that the acceptance of a tender and award of the major contract is taken as an arbitrary zero on the time base.

PROJECT CYCLE Example: Project cycle in software development 28 .

Project Initiation Phase • • • • • • Initiate the project .definition Identify the Project Manager Develop the Project Charter Conduct a Feasibility Study Define Planning Phase Sign off on the Project Charter 29 .

Project Planning Phase • Organize and staff the project • Develop a Project Plan • Sign off on the Project Plan 30 .

Project Execution Phase • • • • Execute the Project Plan Manage the Project Plan Implement the project’s results Sign off on project’s completion 31 .

Project Close-out Phase • Document the lessons learned during the project • After-implementation review • Provide performance feedback • Close-out contracts • Complete administrative close-out • Deliver project completion report 32 .

Select Project Size using either work effort or budget.000 3 300 .000 $25.000 2 100 .000 33 4 600 . and on the budget required (if any) to complete the project. Project Classification — Sizing Matrix Work Effort Project Size Budget (Hours) 1 <100 < $3.600 $25.000 $10. whichever results in the higher class.Project size Sizing A Project Project size is based on work effort represented by the estimated effort (not duration) required to complete the work.300 $3.5.000 .$10.000 .

Implementation iv. Post-project review 34 . Detailed Planning iii. Pre-planning ii.Project Management Principles i.

Risk during life cycle • With most projects there is some uncertainty about the ability to meet project goals • Uncertainty of outcome is the greatest during the beginning of a project • Uncertainty declines as the project moves toward completion 35 .

Risk in making a costing… uncertainty Project Cost estimates 0 Time 36 .

• Cost estimation is done during project implementation • Degree of uncertainty is reduced after each forecast at T1 and T2 37 .

4 phases of the Project Life Cycle: 1. Conceptual and initiation phase • • • Start project Establish need – Terms of Reference (TOR) Pre-feasibility carried out 38 .

• Feasibility study – To check whether the project is feasible or not Questions: Do you need the project? When is the project needed? Does the project depend on other projects? Is there any other way to achieve the same objectives? 39 .

Identify major stakeholders and their interests and concerns. targets.PROJECT – Term of Reference (TOR) • Define objective – Identify the objectives of the project • Develop Terms of Reference (TOR) – What is TOR? – Set-up the project brief. TOR: Provide a brief description of the project and the surrounding context (up to 1 page of narrative). justification. Detailed background information (e. project action plan/ logical framework) 40 . policy. social. Include critical aspects of the biodiversity. and economic context of the project.g.

scope and deliverables • Who will participate . Terms of reference should include • What is to be achieved . They are guidelines for the way group members will work with each other and are usually the first task undertaken by a group. confirming a common understanding between members how they will make decisions and work together.resource.stakeholders. financial and quality plans • When the work will be achieved . roles and responsibilities • How it will be achieved .TOR • • Terms of reference are used to describe the purpose roles and structures of projects. reference groups and committees.a schedule and the 41 . working groups. Terms of reference provide a written basis for making decisions. This provides members of the group with a clear definition of the project's scope. objectives. They are usually documented by the project manager and presented to the group for approval.Vision.

State all donors and (where applicable) the precise funding sources. Also state the global (total) budget for this project.TEMPLATE FOR TERMS OF REFERENCE Project Background and Context . State the project duration and the evaluation period (if different) State which organization(s) are implementing the project Name of project owner. etc 42 . or landscape as appropriate. consultant. country. contractors. xxxxxx yyyyyy State the total budget for this donor (noting the contract currency and exchange rate used). Provide also the following key information: Project Location Project Name Project reference number Project budget Donor(s)/ funding sources Project duration lmplementing agency and partners Project executant Specify the region.

2. Design and development phase • • • Product or service design start Establish Detailed schedule (work plan) Establish completion plan and dates 43 .

3. Implementation or construction phase/fabrication • • Implement following Phase 2 requirement Follows time and schedule set in Phase 2 44 .

Commissioning and handover phase • • • • Acceptance of project Completion of project Project termination Start up phase (after handover) 45 .4.

Previous project closeBenefit -Appoint Project Manager out reports .Establish Project Manager . objectives Work Breakdown -Establish Project and business Structure (WBS) 46 -Project Charter goals .High-level timeline.Appointment of Project -Identify key stakeholders and Sponsor and/ or Project draft Stakeholder Matrix Owner -Perform Project Selection -Project Definition techniques to determine Cost/ Report (PDR) . deliverable. -Establish Project and business milestones.Phase 1 – Conceptualization/ Initiation Key activities Deliverable of each Phase -Develop business case and -Approval and sign-off of conduct Project Definition the Business Case Workshop .

Phase 2 – Design & Development Key activities -Develop detailed project plan -Feasibility study -Design and develop best alternative / solution -Develop detailed blueprints/ diagrams for the solution Deliverable of each Phase -Detailed design and/ or blueprint for the preferred alternative -Detailed financial costs and benefits -Prototype. pilot or reference site -Implementation plan -Rollout plan -Detailed project plan -Approval of the solution(s) and mandate to continue 47 .

Implementation Key activities Deliverable of each Phase .This phase is described as the -Solution and/ or ‘doing’ phase where the actual completed design solution or design is implemented in and/ or the live environment implemented -Change management plays a big role -Quality control -By now the design/ solution should report be robust enough to work in the ‘live’ -Change environment management -Some tweaking of the design may be reports -User acceptance required -The project plan is closely monitored reports -Earned value and progress is tracked -Earned value and project accounting schedules -Project accounts is conducted 48 -Contractors are instructed to -Progress reports .Phase 3 .

Phase 4 – Commissioning/ Handover Key activities Deliverable of each Phase -Final touches -Project close-out -Final testing report -Minor details -Signed-off project -Throwing the ‘big switch’ -Client acceptance -Turning on the new plant report/ signature -Commissioning/ -$$$$/ profits!!! Handover -Developing training materials -Developing user manual -Completing training/ 49 transfer of knowledge .

Links among process groups in a phase Initiating Process Planning Process Controlli ng Process Executin g Process Closing Process 50 .

Prior Phase Design Phase Initiating Process Planning Process Executing Process Controlling Process Closing Process Implementation Phase Initiating Process Planning Process Executing Process Controlling Process Closing Process Subsequ ent 51 Phase .

52 .Learning outcomes ….

Project Team People and their roles in a project 53 .

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Who is in a project team? Names Other names Definition Project Hierarchy Widely used Group name for all persons involved Project Director Output Manager Knowledgeable persons to make a project work -They own the project -Involve at strategic level Quality Control Monitoring/ advisory group Acts like a steering committee Project manager Project leader Person responsible at operation level Project leader Project leader Leads as sub-project Project team Widely used People selected to carry out the duties because of their skill Core team Widely used People in the 1st phase of a large project 55 .

Project Hierarchy • Objectives – to ensure the strategic requirement are considered. • E.g. .relationship between boss and the employee .: chart to represent organization structure.line of command in project & how project are controlled 56 .

People officially involved in the project (Hierarchy) Project Director Project Manager Team Member Quality Control Group Team Member Team Member 57 .

Provide guidelines and support .To set priorities .Delegate authority .Act as mentor for inexperienced project managers 58 .Project Director Jobs: .Monitor performance .Allocate resources .

To organize and coordinates all jobs .Project Manager Jobs: .To plan the work – NOT to do the work himself .To lead and supervise activities .To select the best team for a job 59 .To monitor and control project .

Cost control 60 .Project Manager (cont) Other duties .Negotiating purchase .Carry out problem solving .Produce progress reports .

Managing Director (CEO) Sales & Marketing Director 61 .

Branch Manager Divisional Manager Divisional Manager Divisional Manager Supervisor Supervisor Supervisor Staff Staff Staff 62 .

Project Team .Forming a (Dedicated) Project Team Corporation X Human Human Resources Resources Finance Finance & & Administration Administration Other Areas Marketing Marketing Engineering Engineering Manufacturing Manufacturing Procurement Procurement Project Manager MA1 MA1 MA2 MA2 MA3 MA3 EN1 EN1 EN2 EN2 EN3 EN3 MF1 MF1 MF2 MF2 MF3 MF3 PR1 PR1 PR2 PR2 Staff are assigned away from various departments to work full-time on the project.

3 significant learning outcomes …… 64 .