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Introduction to Project

Management

Chapter 1
Presentation Outline
• Defining Project
• Examples of Project
• PMI and PMBOK
• Project management
• Evolution of Project management
• Project management framework
• Project Life cycle
• Project Scope
• Role of Project Manager
• Management by Objectives
• Cases Study-1
1. Defining Project
• A project is a pre-determined set of activities with a definite
beginning and a definite end.
• A project requires an organized set of work efforts.
• Projects require a level of detail that is progressively elaborated
upon as more information is discovered.
• Projects are subject to limitations of time and resources such as
money and people.
• A project has a unique combination of stakeholders.

“PMBOK Guide” by the Project Management Institute (PMI) defines a project as


“A temporary endeavor undertaken to create a unique product, service, or result.”
1. Defining Project
Characteristics of a Project
• Specific Purpose
• Specified Time
• Uniqueness
• Connected Activities
• Interdependency
• Stakeholders
• Lifecycle

“PMBOK Guide” by the Project Management Institute (PMI) defines a project as


“A temporary endeavor undertaken to create a unique product, service, or result.”
Examples of Project

• Building a new house

Creating a new TV commercial


• Developing a new software application

• Performing an assessment of current


manufacturing process
Project Management Institute (PMI)
• PMI was founded in 1969.
• It is the largest non-profit membership association for project management professionals.
• Over 450,000 members worldwide and over 280 local chapters.
• In India it has 8 chapters Bangalore Chapter ,Chennai Chapter ,Mumbai Chapter, North
India Chapter, Pearl City, Hyderabad Chapter, Pune-Deccan India Chapter, Trivandrum
Chapter, West Bengal Chapter.
• It plays an important role in developing standards, conducting research, providing
education and training, and networking opportunities in the field of Project Management.
• Some useful links
– https://www.pmi.org/
– http://www.pmi.org.in/
Project Management Body of Knowledge
(PMBOK)
• PMI publishes and regularly updates the PMBOK Guide.

• PMBOK sets standards for successful completion of projects across various industries.

• It describes the process of managing an entire project, and the tools and techniques used
to reach towards a successful outcome of a project.

• PMBOK compiles knowledge, practices and processes, which are generally accepted to
be the best in the discipline of project management.

• PMBOK is an internationally recognized standard (IEEE std. 1490-2003) that provides


fundamental concepts of project management regardless of the type of the project, be it a
construction project, a software development project, heavy-engineering project or
automotive project.
1. Project Management
The term project management consists of two terms, project and management.
• Project refers to a process that is temporary in nature and has certain start and end times.
• Management, on the other hand, is the act of achieving predefined goals through people
and other resources.

Project management – “the application of knowledge, skills, tools and techniques


to project activities to meet project requirements.” PMBOK Guide
2. Project Management

Source: Hubbard & Bolles, The Elephant in the Executive Suite – Project Management,
PM World Journal, pp. 4
3. Project Management
Objectives of Project Management
• Ensuring timely completion of projects

• Meeting the project schedule

• Maintaining the quality of the deliverables

• Ensuring the completion of project in the given budget

• Ensuring satisfaction of customer and other stakeholders


Ten project management knowledge areas
(recognized by PMBOK)
Project Integration Project Scope Project Time Project Cost
Management Management Management Management

Project
Project Quality Project Human Project Risk
Communications
Management Resource Management Management
Management

Project Procurement Project Stakeholders


Management Management
1. Evolution of Project Management (PM)
• PM emerged as a formal discipline in the 1950s

• Techniques for planning and controlling schedules and costs were


developed for huge Aerospace and Construction Projects in the 1950s and
1960s

• Manufacturing, Research & Development, IT, and Government projects


used and refined management techniques
2. Evolution of Project Management (PM)
• Software companies offered software for planning and controlling project
costs and schedules in the 1980s and 1990s

• Risk management techniques for complex projects have been applied to


less complex projects

• Rapid growth and change in information technology and


telecommunications fueled use of PM in the 1990s and 2000s in other areas
also.
Project Management Framework
• Project management framework (PMF) is a statement
that lays down all the required activities and tasks to
be undertaken in a project.

• A typical PMF consists of three parts:


– a project life cycle,

– a project control cycle, and

– tool and templates to facilitate the execution of the project


1. Project Lifecycle
Five Stage Project Lifecycle (PMBOK Guide)
• Initiating
• Planning
• Executing
• Monitoring and Controlling
• Closing
2. Project Lifecycle

Source: Kloppenborg T. J. (2012), Contemporary Project Management, pp.16-17


Project Scope
Scope of a Project
• Project Objectives
• Deliverables
• Milestones
• Technical Requirements
• Limits & Exclusions
• Constraints
Project scope – “the work that must be performed to deliver a product, service, or
result...” PMBOK Guide
From Triple Constraints to Multiple Constraints

Time Time

Resources Cost

Scope Scope

Quality Cost
Quality Risks

Traditional Model Modern Model


Often a balancing act

Customer Expectations Business Expectations


Scope Scope
Quality Quality
Schedule Schedule
Budget Budget
Resources Resources
Risks Risks
Role of a Project Manager
• Directly accountable for the project results,
schedule, and budget.
• The main communicator
• Responsible for the planning and execution of the project
• Works on the project from start to finish.
• The project manager often must get things done through
the power of influence since his or her formal power may
be limited.
Project manager – “the person assigned by the performing organization
to achieve the project objectives.” PMBOK Guide
Management by Objectives (MBO)
The following are few key features of MBO:
• It involves both superior and subordinate managers to define the
objectives of a project.
• It requires participation of management to identify if the objectives are
feasible and achievable.
• It is a systematic and rational technique that enables management to
utilize the available resources to accomplish the set objectives.
• It facilitates effective communication between superior and subordinate
personnel for the completion of the project.
Project Integration management

Close Project

Perform

Monitor and Integrated

Control Change
Direct and
Project Work Control
Develop Manage

Project Project Work


Develop
Project Management

Charter Plan
Case Study - PMBOK helps deliver Hong Kong’s
massive project
• West-East Gas Pipeline from mainland China to Hong Kong
• Challenges: Regulations, Communication issues,
Environmental requirements and project schedule.
• The project team used the best practices knowledge from
PMBOK for project management.
• PMBOK helped the project team in project planning, scope
management, quality monitoring, people management, risk & safety
management, communication, decision making and stakeholder
management.
• Results: Timely completion, no environmental damage and
zero accidents.
Project Organisation

Chapter 2
Presentation Outline
• Concept of Project Organization
• Project Organizational Structures
• Functional Organization
• Projectized Organization
• Matrix Organization
• The Project Management Office
• Projects as a Part of Functional Organizations
• Cases Study-2
1. Concept of Project Organization
The following are few key features of Project Organization:
• It is all about the human infrastructure of a project.
• It is a framework that defines the roles and responsibility of
the members of a project team and relationships among them.
• It categorizes individuals into three groups
– Directors of a Project
– Project Team
– Steering Committee
1. Project Organizational Structures
Most common type of organizational structures:
• Functional organizations
• Projectized organizations
• Matrix organizations

Organizational structures consist of work assignments, reporting


relationships, and decision-making responsibility.
1. Functional Organization
2. Functional Organization
• Clear lines of authority according to type of work
• Grouped by areas of specialization
• One and only one supervisor
• Functional manager
– Controls the budget
– Makes project decisions
– Coordinates project communications
Functional organization – “a hierarchical organization where each
employee has one clear superior, staff are grouped by areas of
specialization, and managed by a person with expertise in that area.”
PMBOK Guide
3. Functional Organization

Advantages of functional organizations


• Unity of command – Only one “boss” is giving
instructions.
• Workers learn readily from each other and keep
technical skills sharp.
• Upon project completion, workers continue to report to
the same functional manager.
• Share resources among multiple small projects.
4. Functional Organization

Disadvantages of functional organizations


• Slow communications across multiple functions and
channels
• Technical difficulty in incorporating input from other
disciplines
• Long communication channels make for slow decision
making and slow response to change
1. Projectized Organization
2. Projectized Organization

• The project manager has authority for budgets,


personnel, and decision making
• People are assigned to a project and report upward
through the project manager
• The reporting manager is a project manager, not a
functional manager
Projectized organization – “any organizational structure in which the
project manager has full authority to assign projects, apply resources, and
direct work of persons assigned to the project.” PMBOK Guide
3. Projectized Organization
Advantages of Projectized Organizations
• Traditional department barriers are reduced
– People from different functions report to the same manager
• Unity of command – only one “boss” is giving instructions
• Communication response times are fast
• Co-location – team members are physically close
– Enhanced project team identity
– Strong customer focus
– Effective integration effort
4. Projectized Organization

Disadvantages of Projectized Organizations


• Cost of assigning team members to only one part-time project

• Teams development work methods that differ from the organization

• Teams may fail to communicate lessons learned

• Discipline-specific competence may suffer


1. Matrix Organization
2. Matrix Organization
• The project manager and
functional manager share
authority
• Team members report to both
managers
• A combination of the task focus
of the projectized organization
with the technical capability of
the functional organization
Matrix organization – “any organizational structure in which the project
manager shares responsibility with the functional managers for assigning
priorities and directing work of persons assigned to the project.” PMBOK
Guide
3. Matrix Organization

Advantages of Matrix Organizations


• Shared resources between departments and projects
• Good cooperation between functional and project managers
• High-quality decisions are well received
• Continued development of discipline specific knowledge
• Effective integration
• Lessons learned shared effectively
• Flexibility – weak, balance, strong matrix
4. Matrix Organization

Disadvantages of Matrix Organizations


• Each employee has two “bosses”
• More sources of conflict
• More meetings
• More challenges to control
Progression of Organizational Structure

Organizational Functional Weak Matrix Balanced Matrix Strong Matrix Projectized


Structure
Who has Power? Functional Functional Equally Shared Project Project
Manager Manager Manager Manager
(almost all) (more) (more) (almost all)

Who
Functional Project
has
Manager Power ? Manager
The Project Management Office (PMO)
• A project management office (PMO) is a management
structure that standardizes the project-related governance
processes and facilitates the sharing of resources,
methodologies, tools, and techniques.
• PMO types
– Supportive
– Controlling
– Directive
Projects as a Part of Functional Organizations
• When a project is implemented in a functional organisation structure, it is
made a part of one of the functional divisions and the functional
division play a major role in ensuring the success of the project.
• Advantage of implementing a project in a functional organization
– Functional organizations offer maximum flexibility in the use of organization's
staff.
– Experts from various divisions within an organization are temporarily assigned
work responsibility.
– After the completion of their tasks, these experts can immediately resume their
routine assignments.
Case Study – Fast-track PMO implementation rescues Finolex’s
troubled projects and enhanced customer satisfaction
• Project: Finolex’s expansion to new fields like healthcare.
• Challenges:
– IT resources, Increasing demand, organizational resources, cost, business
practice standardization and performance enhancement.
– Failure in implementing PMO.
• Solution:
– Hired PM solutions for PMO implementation.
– PM solutions delivered the PMO in 6 months time
– PM solutions helped Finolex in selecting project portfolio management
tool.
• Project Outcomes:
– Enhancement in the morale of the project manager.
– Improved project performance.
– Higher customer satisfaction.
Operating and Environmental
Feasibility

Chapter 3
Presentation Outline
• Feasibility Study
• Operating feasibility
• Capacity and resource requirement in project
• Increasing plant capacity
• Selecting project location
• Environmental feasibility
• Cases Study-3
1. Feasibility Study
Different feasibility studies to select the right project

• Operating feasibility

• Market feasibility

• Technical feasibility

• Economic/Financial feasibility

• Legal and Regulatory feasibility

• Environmental feasibility

• Social feasibility
2. Feasibility Study
• Hoechst AG, a pharmaceutical firm, uses a scoring portfolio model with 19
questions in five major categories when rating project opportunities. The five
categories include: probability of technical success, probability of commercial
success, reward to the company, business strategy fit, and strategic leverage (ability
of the project to employ and elevate company resources and skills). Within each of
these factors are a number of specific questions, which are scored on a 1 to 10 scale by
management.

• The Royal Bank of Canada has developed a scoring model to rate its project
opportunities. The criteria for the portfolio scoring include project importance
(strategic importance, magnitude of impact, and economic benefits) and ease of
doing (cost of development, project complexity, and resource availability).
Expected annual expenditure and total project spending are then added to this
rank-ordered list to prioritize the project options. Decision rules are used (e.g.,
projects of low importance that are difficult to execute get a “no go” rating).

Source:-page 71, Project Management: Achieving Competitive Advantage, Second Edition, by


Jeffrey K. Pinto. P
1. Operating Feasibility

Factors Affecting Operational Feasibility

• Project development schedule

• Project delivery date

• Organizational culture

• Existing business process


2. Operating Feasibility
Operational feasibility study helps organizations to:

• Assess the potential of a project

• Evaluate the probable impact of the project on the environment

• Implement the project efficiently

• Review the implemented project periodically

• Analyze the impact of the project on end users

• Utilize resources judiciously


Capacity and resources requirement in a Project
While starting a new project a project manager may need to plan for the
following:

• Attaining New skills: Specific training programmes for human resource.

• Manpower hiring: New staff may need to be hired.

• Process Implementation: New processes need to be implemented.

• Capacity requirement planning: Assessing the capacity requirements,


generate replenishment schedules, production schedules.
Increasing Plant Capacity

The following factors may affect the capacity of a Plant

• Input constraints

• Investment cost

• Market situation

• Government policies
1. Selecting project location
The following factors may affect a manufacturing plant project location:

• Proximity to market

• Proximity to raw material

• Infrastructure

• Labour and wages

• Government policies

• Climatic conditions

• Safety needs
2. Selecting project location
• Policies of Central Government for Plant • Technological requirements
Location • Specifications of a product/service

– Regional factors • Uncertainties and interdependence on

– Community factors other technologies


• Ease of technology availability
– Safety factors
• Organization's capacity to adopt the
• Legal Aspects in Selecting Plant Location
technology
– Disposal of waste material
• Cost of acquiring, installing, and
– Labour issues maintaining the technology
– Protection from flood and fire • Obsolescence of technology
– Power and water supply • Safety parameters
1. Environmental Feasibility
• Organisations must properly examine the environmental impact of the project.

• For example, an industrial project that involves the use of chemicals may produce
poisonous gases and other hazardous solid and liquid wastes that can cause
environmental pollution. In addition, the machines used in the project may also produce
sound, heat, and radiation, which can be harmful for living organisms.

• Organisations need to consider the following environmental issues before selecting the
location of a project:
– The types of waste materials produced

– Provisions for the decomposition of waste materials

– The impact of poisonous gases and other wastes on the environment

– Alternatives to minimise the hazardous effect of the wastes


2. Environmental Feasibility
Concept of Industrially Backward Areas
• The industrial policies of the governments are considered while taking location decisions of
organisations for setting up new plants.

• In India, the industrial development of backward areas for balanced regional development has
always been a priority.

• As per the Industrial Policy Resolution of 1977, “the Government attaches great important to
balanced regional development of the entire country so that disparities in levels of development
between different regions are progressively reduced”.

• Majority of the industrial development since India’s independence has been restricted around
metropolitan areas and big cities.
3. Environmental Feasibility
Incentives for Selecting Plant Location in Industrially Backward Areas

A, B, C Categories of Backward Areas and Their Eligibility for Subsidy:

Category Percentage of Subsidy Maximum Limit

A 25 Rs.25 lakh

B 15 Rs.15 lakh
C 10 Rs.10 lakh
Case Study- Feasibility Study of a bulk water
distribution project
• Company: Global Partners water LLC
• Project: Bringing water from Iceland to Haiti
• Challenges:
– Massive cultural difference
– Complex logistics system
– Highly unstable political environment and large displaced citizens
– Earthquake prone
• Feasibility study:
– Consultants at Burns & Hammond developed a feasibility study and implementation plan for the project
– Environmental, social and economic impacts were studied
– A distribution strategy was developed to make to the 2010 reconstruction efforts free from any impact from the
project
– Feasibility study on Haiti’s readiness to serve as a test market.
– Stakeholder engagement across multiple government, citizen, business, and NGO.
– Socio-cultural, economic, political, technological and environmental analysis provided a framework to the
client to assess the opportunities and risks.