© Oxford University Press 2013. All Rights Reserved. © Oxford University Press 2013. All Rights Reserved

© Oxford University Press 2013. All rights reserved.
Definitions
• ‘A project can be considered to be the achievement
of a specific objective which involves a series of
activities and tasks which consume resources.’
• Project management is defined as ‘The planning,
monitoring and control of all aspects of a project and
the motivation of all those involved in it to achieve
the project objectives on time and to the specified
cost, quality, and performance.’

Types of Projects
Projects by size
1. Major Projects
2. Large Projects
3. Medium Projects
4. Small Projects

Projects by Resource Type
Turner & Cochrane’s Goals & Methods Matrix
Type 2 Type 4 Greater

No Projects Projects chance of
failure
Product Research &
Development Organizational
Change
Methods (Water) (Air)
Well Type 1 Type 3
Defined Projects Projects
Engineering Systems
Development
Yes (Earth) (Fire)

Greater
chance of
success
Yes Goals Well Defined No

Projects by Resource Type
• Construction of the warehouse (a Type 1 building project)
• Creation of the establishment to run the warehouse (a
Type 2 logistics project)
• Writing of the computer systems to operate the warehouse (a
Type 3 IS project)
• Redeployment & training of people (a Type 4 personnel project)
• Changing the buying function from hospital to region (a
Type 4 organizational change project)
• Changing the budget from hospital based to region based (Type 3,
systems project)
• Implementing in 15 hospitals (Type 4 organizational change project)
• Commissioning the warehouse (Type 2 logistics project)

Role of Project Management in Other Functional Areas of
Management
Financial Management Marketing Management
• A project of designing a new • A project of launching a new
financial instrument. product in a region.
 A project of launching a new • A project of designing the
financial instrument in a region. promotion campaign of a product.
 A project of reviving an old • A marketing research project.
financial instrument in a region.
Project
Management
Information Systems Management

Human Resources Management
• A project of recruiting more • A project of designing new software.
• A project of creating a computer
employees in a department.
• A project of training a group of network in an organization.
• A project of implementing software
employees in a particular skill.
 A project of designing a new salary in
an organization.
structure of employees

CPM and PERT
• The projects in which the time duration of various
activities can be determined up to great accuracy are the
ones which can be planned with the help of a technique
called the Critical Path Method (CPM).
• Programme Evaluation & Review Technique (PERT)

is applied in projects where the time durations of various
activities are not known. This is especially suitable
for Research and Development (R&D) projects.

2
A18[0,18]
[0,18] J22[18,40]
I5[18,23]
[18,40]
[19,24]
K7[23,30]
[24,31]
B3[0,3]
1 3 D4[7,11] 5 7 8
[17,20] 9
[20,24]
L9[30,39] M5[40,45]
C1[0,1] E6[1,7] F8[1,9] [31,40] [40,45]
[13,14] [14,20] [16,24] H11[7,18]
[20,31]
4 G6[1,7] 6
[14,20]

Programme Evaluation & Review Technique (PERT)
• Optimistic Time (a) – This time estimate is the shortest

possible time estimated to be taken by an activity.
• Pessimistic Time (b) - This time estimate is the longest

possible time estimated to be taken by an activity.
• Most Likely Time (m) – This time estimate has the

highest chance of occurrence according to the past
experiences of the project manager.

Maximum Probability Beta Curve
P
R
O
B
A
B
I
L
I
T
Y
0 a m te b
Time Duration of an activity

Crashing of a Project
100
90
Crash Cost
Linear Approximation
80
D
I 70 o
R Actual Curve
60
E
C 50
T
40 o
C 30
O o
S 20
T
10
(Rs) Normal Cost
0 1 2 3 4 5 6 7 8 9 10
Crash Time Normal Time
Time duration of an
activity (days)

Earned Value Management (EVM) for Tracking of
Projects
• Budgeted Cost of Work Scheduled (BCWS) It is the
sum of the cost budget for all the activities in the
baseline (original) plan of the project at any specific
future point in time. Thus, this is the budgeted
(planned) cost as per the project plan for a part of the
project to be completed in a given time frame.
• Budgeted Cost of Work Performed (BCWP) When a
project is under implementation, a certain part of the
project is completed at a given point in time. The
budgeted (planned) cost of all the activities performed
till that point in time is called BCWP.

Earned Value Management (EVM) for Tracking
of Projects
• Actual Cost of Work Performed (ACWP) It is the actual
cost incurred in implementing a part of the project till a
given point in time.
• Cost variance (CV) = BCWP − ACWP

• A negative value of CV indicates being over budget and is
obviously undesirable.
• Schedule variance (SV) = BCWP − BCWS

• A negative value of SV indicates that less work has been
performed compared to what was scheduled to be performed
till a given point in time.

A Simple Earned Value Management Chart

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