Professional Documents
Culture Documents
MANAGEMENT
MANAGEMENT
Notes by
1- SEQUENCE OF ACTIVITIES
• An activity is a defined piece of work.
• A project comprises a number of activities that
must be completed in some specified order.
• The sequencing is based on technical or best
practice requirements, not on management
privileges.
• It is better to think in terms of inputs and outputs.
• The output of one activity or a number of
activities become the input to another activity or
activities.
2- UNIQUE ACTIVITIES
It means that the project has never happened before and
will never happen again under the same conditions.
Something will always be different each time whenever
the activities that comprise the project are repeated.
Usually, this variation from time to time will be random in
nature e.g., a part is delayed, someone is sick, a power
failure occurs, and so on.
These are random events that we know will happen - but
when, how, and with what impact on the schedule, we are
not exactly sure.
It is these random variations that give rise to the
challenge for the project manager.
3- COMPLEX ACTIVITIES
4- CONNECTED ACTIVITIES
5- ONE GOAL
Projects must have a single goal as compared to a
program, which can have many goals. Programs are
therefore a collection of projects that may have to be
completed in a specific order for the program to be
completed.
There will be situations where a project may be divided
into several subprojects, which are each projects in their
own right.
This may happen in very large or complex projects for
better management control.
The subprojects may be defined at the department,
division or geographic levels.
6- SPECIFIED TIME
7- WITHIN BUDGET
8- ACCORDING TO SPECIFICATIONS
1- DEFINNG
One of the first tasks of managers is to define the work to be
done in their area of responsibility.
The following five questions are to be answered by any good
definition of a project:
1- What is the problem or opportunity being addressed ?
2- What is the goal of the project ?
3- What objects are necessary in order to accomplish the
goal ?
4- How will we determine if the project has been successful ?
5- Are there any assumptions, risks, or obstacles that may
affect success ?
2- PLANNING
It is fact that project plan is indispensable. Not only is it a roadmap
to how the work will be done, but it is also a tool for decision
making.
A complete plan will clearly state that what is to be done, why it is
being done, who will do it, when it will be done, what resources will
be needed, and what criteria must be met in order for the project to
be declared complete and successful.
Planning reduces uncertainty. While we would never expect the
project work to occur exactly as planned, having planned the work
allows us to consider the likely outcome and to put the necessary
corrective actions in place.
Planning improves efficiency. The mere act of planning gives us a
better understanding of the goals and objectives of the project.
3- EXECUTING
Executing the project plan involves a number of steps.
In addition to organizing people, it includes the
identification of the specific resources (manpower,
materials, and money etc) for carrying out the work
defined in the plan.
It also involves scheduling workers to activities, and
scheduling activities to start and end dates.
The final specification of the project schedule brings
together all of the variables associated with the
project.
Dr. Liaqat Ali Qureshi
PHASES OF PROJECT MANAGEMENT
4- CONTROLLING
As part of the planning process, an initial schedule is
built.
No matter how attentive the team is to creating the plan,
the project work will not go according to plan. Schedule
will slip. That is the reality of the project management.
In any case, the project manager must have a system in
place to constantly monitor the project progress or lack
thereof.
This monitoring system will not only summarize
completed work measured against the plan, but will also
look ahead to forewarn of potential problems.
5- CLOSING
The closing phase is very important but it tends to be the part that is
most often neglected by the management. There is always the
pressure to get on with the next project.
There are several questions that should be answered as part of any
closing:
1- Did the project do what the client said it would do ?
2- Did the project do what the project manager said it would do ?
3- Did the project team complete the project according to plan ?
4- What information was collected that will help with latter projects?
5- How well did the project management methodology work and how
well did the project team follow it ?
6- Closing therefore evaluates what was done and provides historical
information for latter projects.
Dr. Liaqat Ali Qureshi
PROJECT PARAMETERS
COST TIME
SCOPE
AND
QUALITY
RESOURCES
The project plan will have identified the time, cost, and
resources needed to deliver the scope and quality.
In other words, the project is in equilibrium at the completion
of the project-planning session and approval of the
commitment of resources and funds to the project.
That will not last too longer however. Changes may come
across at any stage.
The scope triangle offers a number of insights into changes
that can occur in the life of the project.
For example, before any project work has been done, the
triangle represents a system in balance. The sides are long
enough to encompass the area generated by the scope and
quality statements.
visible
SKILLS
COMPETENCIES
Hidden
SCOPE CREEP
Changes occur for several reasons and those have
no relation with the ability or skill of the requestor
or the provider.
Market conditions are very dynamic.
Competition may demand a new version of their
product to be announced and introduced in the
market. So that market may be occupied.
The job of the project manager is to find out that
how it can be accomplished.
Dr. Liaqat Ali Qureshi
CHALLENGES FOR PROJECT MANAGER
HOPE CREEP
This one is a major problem for the project manager.
There will be several activity managers within the project. These
are team members who manage different pieces of work.
They do not give the project manager any bad news, so they are
prone to tell him that their work is proceeding according to
schedule, when in fact it is not.
It is their hope that they will catch up by the next report period,
so they mislead him into thinking that they are on schedule.
Project manager should check the accuracy of their status
report.
However, in any case, they hope that they will catch up by
completing some work ahead of schedule to make up the
slippage.
Dr. Liaqat Ali Qureshi
CHALLENGES FOR PROJECT MANAGER
EFFORT CREEP
Everyone works on a project that always
seems to be only 95% complete, no
matter, how much effort seems to be
expended to complete it.
Every week’s status report records
progress but the amount remaining
doesn’t seem to decrease proportionately.
FEATURE CREEP
This is the same as scope creep except it is
initiated by the provider (contractor /manufacturer)
not by the customer (client).
It occurs most frequently in systems development
projects.
Here, the programmer or analyst decides to include
a little extra because it will add sizzle to steak.
The customer did not asked for it, but they got it
anyway.
(FEATURE CREEP)
However, it may create some inconvenience.
First, since the feature was not in the system requirements
documents, it is also not in the acceptance test procedure, the
systems documentation, the user documentation, and the user
training program.
What will happen, if something goes wrong with the new
option ? How will some other programmer know what to do?
what will happen, when the user discovers the option and asks
for some modification of it ?
So, it is recommended that a formal change request must be
filed and if approved, the project plan and all related activities
will be approximately modified.
PROJECT VALUE
Low High
Low
1 2
PROJECT
RISK
High
3 4
Correspondence file
Subcontractors’ file
Supplier’s file
Method statements
Site layout plan
Organization structure
Master construction program
Labor resource schedule
Material schedule
Plant Schedule
Health and safety plan.
Dr. Liaqat Ali Qureshi
(c) CONTRACT PLANNING
4- PLANT
The type of plant and equipment to be used for the operation will be
listed here. Careful consideration will be given to the size, capacity
and usefulness of the plant for the operation.
5- LABOUR
The amount of labor required would be listed and the particular
trades identified for example, blacksmiths, plumbers, carpenter,
electrician and general laborer. This will help the production of the
labor schedules and histograms used later on in the planning
process.
6- SAFETY FEATURES
If specialist equipment or temporary works are needed they can be
noted here. The inclusion of this heading in the method statement will
focus the contractor’s mind on the safety aspect of each operation.
Even small items of safety equipment should be included, such as
personal protective equipment, as well as more specialist items like
breathing apparatus or temporary works that give protection to the
operatives.
Dr. Liaqat Ali Qureshi
METHOD STATEMENT
7- OUTPUT
An estimate of the rate of output, that is, the time
taken to carry out the activity, should be included
here. This estimate will help the estimator to build up
the tender figure as well as help the planner to carry
out detailed programming later on.
8- COMMENTS
Here the contractor will include any comments that
are pertinent to the operation. Comments may
identify which operations are subcontracted or if
certain materials or plant need to be ordered early
owing to their specialist nature. These comments will
be of particular use to the planner and site manager
later on in the contract.
Dr. Liaqat Ali Qureshi
DEPRECIATION
1- Physical depreciation:
The everyday wear and tear of operation
gradually lessens the physical ability of an asset
to perform its intended function.
A good maintenance program retards the rate of
decline but seldom maintains the precision
expected from a new machine.
In addition to normal wear, accidental physical
damage can impair ability.
Wear and tear is an obvious cost of output.
2- Functional depreciation:
Demands made on an asset may increase
beyond its capacity to produce.
A central heating plant unable to meet the
increased heat demands of a new building
extension, no longer serves its intended
function.
On the other extreme, the demand for services
may cease to exist, such as with a machine that
produces a product no longer in demand.
Dr. Liaqat Ali Qureshi
TYPES OF DEPRECIATION
3- Technological depreciation:
4- Sudden failure
This refers to sudden or catastrophic loss in
value due to technological characteristics
inherent in the asset. However, this does include
loss due to accident or misuse.
Light bulbs burn out as a natural consequence of
use and with little loss in operating efficiency up
to the point of failure.
Generally this category of asset includes items
used in large numbers with a relatively small
cast per item.
Dr. Liaqat Ali Qureshi
TYPES OF DEPRECIATION
5- Depletion:
Consumption of an exhaustible natural resource to produce products or
services is termed depletion.
Removal of oil, timber, rock, or minerals from a site decreases the value of the
source.
This decrease is compensated by a proportionate reduction in earnings
derived from the resource.
Theoretically, the depletion charge per unit of the resource removed is:
Where the adjusted basis is generally the first cost minus the capital recovered
from depreciation charges.
6- Monetary depreciation:
A change in price levels is a subtle but troublesome cause of
decreases in the value of owned assets.
Customary, accounting practices relate depreciation to the
original price of an asset, not to its replacement.
If prices rise during the life of an asset, as in the case of high
inflation rates during the early 1980s, then a comparable
replacement becomes more expensive.
This means that the capital recovered will be insufficient to
provide an adequate substitute for the worn out asset.
It also suggests that the selling price of the product being
produced by the asset does not accurately reflect the cost of
production.
1 - Market value
This is what will be paid by a willing buyer to a willing seller
for a property, where each has equal advantage and is under
no compulsion to buy or sell. In most matters relating to
depreciation, it is market value that is used. For new
properties, the cost in the open market is used as the original
value.
2 - Use value
This is what the property is worth to the owner as an
operating unit.
3 - Fair value
This usually is determined by a disinterested party in order to
establish a price that is fair to both seller and buyer.
4- Book value
Book value is the worth of a property as shown on the
accounting records of a company. It is ordinarily taken to
mean the original cost of the property less the amount that
have been charged as depreciation expense.
6- Scrap value
Scrap value ordinarily is considered to be the amount that
the property would bring if sold for junk. The utility of the
article is assumed to be zero.
Dr. Liaqat Ali Qureshi
Purposes of Depreciation
The straight line method of computing depreciation assumes that the loss in value
is directly proportional to the age of the structure. This straight line relationship
gives rise to the name of the method. Thus with this formula if :
d = C – CL / L
Dn = n (C – CL) / L
Cn = C - n (C – CL) / L
-
Dr. Liaqat Ali Qureshi
BASIC DEPRECIATION METHODS
Rate of depreciation:
n Cn L CL
k =1 - = 1 -
C C
(A/F, i %, n) = i / [( 1 + i )n - 1]
Cn = C - Dn
dn = Dn - Dn-1