What is a project?

What is a Project?
1. A piece of work planned to achieve a
particular aim.
2. A temporary endeavour to achieve some
specific objectives in a defined time at
budgeted cost.
3. An investment made on a package of time-
bound activities.
4. Needs Resources or Inputs
5. Converts inputs to outputs by a process of
implementation.
 Examples of projects.

1. Construction of a house, road, bridge

2. Performing a marriage.
3. Overhauling a machine.
4. Maintenance of equipment.
5. Commissioning of a factory.
6. Research on new technology.
7. Conducting a war.
8. Planning for preventing a riot.
9. Constructing a power plant.
What do each of the above involve?
Why do organisations
execute Projects?
To meet business objectives
, that is, add business value
What are the Objectives
of a Business?
 Business Objectives
1.Business Growth.
2.Profitability through Cost Reduction.
3.Speed & Efficiency.
4.Maintaining Operations.
 Bottom line
• The bottom line is that whatever the
business objectives may be, companies
execute things called “projects”, to meet the
objectives.
• Projects can be formal or informal, but are
put together for the sole purpose of meeting
a goal aligned to bring value to the business.,
whether growth, cost reduction, speed and
efficiency or maintaining operations.
• Delivering this value is what Project
Management is all about.
 Bottom line(contd.)

• Without satisfying business needs i.e adding

business value, the effort spent, even if a
project is completed on time and within the
budget, is for nothing-wasted effort.
 Mumbai Pune Expressway
Features
• India’s first six lane high speed access
controlled tolled espressway.
• Spanning 93 KM it connects Mumbai, the
financial capital and Pune, the neighbouring
industrial hub city.
• Cost of Rs. 1500 crores and completed in 24
months
• Four lane wide tunnels at 5 locations, totaling
5700m,with modern facilities for ventilation,
lighting and fire fighting vehicles.
 Mumbai Pune Expressway-Benefits
Many aspects of the Expressway make it an
engineering marvel.
• No signals along the 93km route and no blind
curves.
• Reduction in accidents.
• Reduction in travel time.
• Saving in fuel consumption.
• Faster crossing of Khandala Ghat
• Reduction in pollution.
 Mumbai Pune Expressway-Issues
• Mountainous terrain.
• Hard rock on the mountains made drilling of
tunnels extremely difficult.
• 500 trees to be uprooted and replanted.
• Rich, fertile land had to be cleared , into
farmland in interior areas.
• Difficulty in accessing work areas to supply
raw materials.
• Nature of soil, forced concrete roads.
• Environmental Concerns
 Reasons for success of Expressway
• Manpower from PWD and CIDCO, who had
experience in development of large-scale
projects. Revenue Dept. for land Acquisition.
• Appointment of Project Management
Consultants for technical requirements, cost
estimates, tender documents and supervision
of construction work.
• Various facilities given by MSRDC to consultants
and contractors.(next slide)
• Proactive stand towards litigation. Experts
appointed.
 Facilities given by MSRDC to consultants and
contractors.
• PMC had their own site offices with
equipment like xerox, telephone ,printers
provided by MSRDC.
• Increase in the price of steel, bitumen, cement
will be absorbed by MSRDC.
• Customs duty reimbursed for import of new
machinery.
• Land provided for site facilities was given to
contractors free of cost.
Facilities given by MSRDC to consultants and contractors .

• As the stretch of construction was 93km long

MSRDC prompted oil companies to set up
petrol pumps.
• MSRDC took the responsibility to divert all
utility services like telephone cables, water
pipelines and electrical lines coming in the
construction stretch.
As a result of above facilities, cost of the project
was reduced by 8-10% , due to speedy
completion of work.
 Litigation
• MSRDC adopted a very proactive stand
towards litigation right from the start and
appointed a panel of exerts for handling cases.
They also made sure they responded to court
orders promptly which helped reduce delays.
 Special features of the contract.
• Payment of price variation as per a
predetermined formula linked to price indices.
• Forex fluctuations for purchase of construction
equipment by contractors would be borne by
MSRDC
• Provision for payment of bonus to contractors for
early completion at the rate of 20 lakh per week /
penalty or delay 30 lakhs per week.
• Timely payment of bills guaranteed.For delay
beyond 10 days, 15% interest to be paid.
• Mobilization advance and machinary advance
paid.
Section Length Est. Cost(CR) Actual PMC Contractor
(KM) cost(Cr)

Kon To 13.23 127.33 136.82 Stup Consultants IJM/SCL JV

Chowk

Chowk 16.63 195.05 194.00 Intercontinental Hindustan

to Consultants Construction.
Adoshi
Kusgaon 23.00 177.46 163.56 Frishmann Prabhu Larsen & Toubro
to
Ozarde
Ozarde 16.15 132.70 133.47 Owen Williams Jog Engineering.
to Dehu
road.
Ghat
Section
Adoshi 7.13 86.46 93.15 Consulting Engg. Shapoorji Palonji
to long Services
tunnel
Section Length Est. Cost(CR) Actual PMC Contractor
(KM) cost(Cr)
Long 8.28 108.96 104.35 Consulting Engg. Larsen & Toubro
Tunnel Services Ltd.
to
Lonavla
bypass
Panvel 8.20 108.00 88.89 Technogram PBAC-PCEC JV.
Bypass, Consultants
part 1
Panvel 1.55 64.50 49.99 Technogram M.Venkat Rao
Bypass, Consultants
part 2
Tunnel 5.724 200.00 200.00 Konkan Railway
work 5 Corporation
twin
tunnels
Total 1200.46 1164.23

Others 324.00
 Project Management
• A project is a collection of complex non-
routine activities, that must be completed
with a set amount of resources and within a
set time limit.

• Project management deals with planning,

scheduling, controlling and monitoring
complex non-routine activities that must be
completed to achieve predetermined
objectives.
 Project Management
• A dynamic process that utilises appropriate
resources in a controlled and structured
manner to achieve some clearly defined
objectives identified as strategic needs. It is
always conducted within a defined set of
constraints.
Tactics Vs Strategy
 Tactical Vs. Strategic Objectives
• Tactical-being on time and on budget and
within scope of execution.
• Strategic – delivering value to the business.
 Stakeholder.
Stakeholders are people who are affected by/or can
influence the outcome of a project. Anyone
associated with a project can have a positive or
negative influence on the project. Stakeholders
include:
• External.Customers,suppliers/contractors,trade
unions, government agencies, consultants.
• Groups: Executive/steering committee,Directors
• Individuals: CEO, project sponsors, project manager,
team members, process owners, system users.
 Business Case.
• A project justification document, that outlines
a project proposal for authorized funding,
resources and implementation.(Never lose
sight of the Business case when implementing
the project)
 Objective of a project Business Case
• What benefit and cost the project brings.
• Why the project is important and should be
funded.
• Where the project needs to be implemented.
• When the project can be implemented.
• Who is required to implement the project.
• How the project can be implemented with
success.
 Building a house
• What type of house is it?( Flat/Bungalow)
• Why does it cost so much?
• Where is the location?(Place/direction)
• When will it be completed?
• Who is building it?
• How will the house serve me and my family
for the future to come?
 Key performance indicator(KPI)
KPIs are used to measure the performance
related to a project or a business objective. By
assigning KPIs to people(stakeholders),
accountability can be established within the
organization so that project goals can be
achieved. KPIs are measurable and obtainable
and should be aligned with specific business
objectives.
 Risk & Stakeholder Management
• Risks are inherent in all projects and the
management of risk is very important to
project success. Risk Management demands
constant attention.
• Management of stakeholders is equally
important . Stakeholders are often powerful
sources of influence, and failure to manage
them effectively can lead to disaster.
Fundamental Project Management Process
1. Project Conception.
2. Project Definition.
3. Project Planning.
4. Project launch and execution.
5. Project Closure.
6. Post Project Evaluation.

Each stage must be closed before starting the

next stage. This ensures that decisions are taken
at the right time.
 Project Management Process

R BUSINESS CONCEPTION S
I CASE T
S A
K DEFINITION K
E
H
M PLANNING O
A L
N LAUNCH/ D
A EXECUTION E
G R
E
M CLOSURE M
E G
M POST PROJECT M
T EVALUATION T
 Project Conception
Basically means selecting the project out of several
ideas. Following are the steps involved.
• Will it maximise profits?
• Will it maintain and improve market share?
• Will it maximise utilisation of existing resources?
• Will it maximise utilisation of existing capacity?
• Will it boost company image?
• Will it increase risk?
• Is it within the company’s current skills and
experience?
 Project definition.
We must express briefly in realistic terms, what the
project is about and what it has to achieve.
• What are the project origins(need/opportunity)
• Why is it neccessary now?
• What are the benefits to customers and the
organisation?
• What is the expected cost?(Budget)
• Current timescale and expected deadlines.
Subject to detailed planning later.
 Project Planning

The most important part of project management. It

is the heart of the matter. It is about creating order
out of chaos and asking questions.
• What needs to be done?
• Who is going to do it?
• When is it to be done?
• What equipment and resources are required?
• What is not going to be done?
Planning converts contents of the project definition
document into a time based detailed action plan.
 Where does Planning start?
• Successful planning is a process of identifying
sufficient detail to maximise concurrency and
derive the shortest time to complete the
project.

• We identify the key stages of the project.

These outputs may be deliverables or interim
deliverables.
 Definitions

• Task-a relatively small piece of work carried

out by one person
• Activity-a part of the project comprising
several tasks, each of which may be carried
out by different people.
• Key stage-a collection of activities with
measurable output, often confined to a
functional area.
• Concurrent activities- activities or tasks that
are designed to be carried out at the same
time ie in parallel.
 Definitions
• Series Activities-activities or tasks that are
designed to be carried out one after another,
each strictly dependent on completion of the
earlier activity.
• Duration-the real time in working hours, days
or weeks that a task or activity will take to
complete.
 PROJECT LOGIC DIAGRAM
H J P

A D K FINISH

START B E L Q

F R

C N

G M
 Project Planning(contd.)
Why do we carry out project planning?
• Identify everything that needs to be done.
• Minimise risks and uncertainty to a minimum.
• Establish standards of performance(KPI).
• Provide a structured basis for executing the
work.
• Establish procedures for effective control.
• Obtain required outcomes in minimum time.
 Project Planning(contd.)
Parts of a project plan.
• Project schedules.
• Work breakdown.
• Resource analysis.
• Project budget.
• Communication plan.
• Quality/performance plan.
• Risk management plan.
• Schedule of milestones.
 Launch & Execution
• Validate all promises of resource availability and
confirm the reporting and communication
process.
• What has been completed.
• What has not been completed and why.
• What is being done about incomplete work.
• What problems remain unsolved and what needs
to be done.
• What difficulties are anticipated.
• Are costs under control.
 Closure & Evaluation.
Review the project and identify what went well.
• Are agreed deliverables completed.
• Are all tasks completed.
• Is testing completed.
• Are training materials ready.
• Is equipment installed and operating.
• Are documentation/manuals ready
• Are process procedures finished and tested.
• Is staff training done.
Project Management Organization Structures

• Organization of project teams and their

leadership structures differ according to the
characteristics of projects.
• Some of the important differences are
-Who is the project leader
-Who has certain responsibilities
-Who makes the decisions.
Project Management Organization Structures

• Three main types of organization structures

used in projects are:
-Functional project organisation(billing)
-Pure project organization
-Matrix project organization
 Functional Project Organization
Key Characteristics
-Project teams formed within functions.
-Leadership occurs within the function.
-Leadership belongs to technical experts
-Nobody responsible for the entire project.
 Functional Project Organization
• Characteristics of projects suitable for this
organization structure:
-Solution of technical problems.
-Integration of different functional units
work is not necessary.
-Success depends on application of narrow
technical know-how
-Usually one functional unit is dominant.
-Stable environment.
 Functional Project Organization
GENERAL
MANAGER

PROJECT
COORDINATOR

FUNCTIONAL FUNCTIONAL FUNCTIONAL

MANAGER MANAGER MANAGER
(OPERATIONS) (FINANCE) (LEGAL)

WORKER WORKER WORKER

WORKER WORKER WORKER

 Pure Project Environment.
• Characteristics
-Project requiring major changes.
-Hence, a small ,self sufficient and full time
team is set up.
-Team leader is like an entrepreneur.
-Leader has full responsibility over the
project.
-Functional units are stable and provide
support to project team.
 Pure Project Environment.
• Projectitis
-a strong divisiveness occurs between the
project team and the parent organization.

-Project team members have difficulty in

going back to their functional units when the
project is over.
 Pure Project Organization

PROJECT GENERAL
COORDINATiON MANAGER

PROJECT PROJECT HUMAN

MANAGER MANAGER RESOURCES

WORKER WORKER FINANCE

WORKER WORKER MARKETING
 Matrix Project Organization
• A hybrid form that combines some
characteristics of functional and pure project
organization forms.
• Project Managers and functional managers
share responsibility
-Project manager decides what task will be
and when they will be done.
-Functional manager decides who will
work in the project and which
technologies will be used.
-Project team has two bosses
 Matrix Project Organization

Characteristics of projects suitable for this

organization structure:
1. Integration of work done by different
functional units is very important.
2. Changes(instability) both inside and outside
the company.
3. Success does not depend on application of a
narrow expertise
 Matrix Project Organization
• Matrix structures differ according to the
“weight” of the project manager(relative to
functional managers)
1. “Lightweight”
2. “Middleweight”-Normal
3. “Heavyweight”
 Lightweight Matrix Organization
• Functional managers have real power and
provide functional input.
• There are representatives from each function,
who perform coordination and support.
• Project Coordinator is responsible for the for
coordination and integration of inputs from
different functional units. He does not have
direct authority over the workers.
 Lightweight Matrix Organization

GENERAL
MANAGER

FUNCTIONAL FUNCTIONAL FUNCTIONAL

MANAGER MANAGER MANAGER
(OPERATIONS) (FINANCE) (LEGAL)

WORKER WORKER WORKER

WORKER WORKER WORKER

PROJECT
COORDINATOR
 Heavyweight Matrix Structure
• Integration is vey important and the key
responsibility of the project leader.
• Objective is to provide a perfect system
solution(Highway construction) , not technical
excellence within a narrow functional area.
(Billing system/Debtors Management)
• Project leader works with a core team of
functional leaders who have power to get
things done within their area.
 Heavyweight Matrix Structure
Characteristics of the project leader:
• An effective manager who is experienced in
more than one functional area.
• Works like a general manager(CEO) within the
project. Can influence the details.
• Works like the conductor of an orchestra.
Keeps track of how certain critical tasks are
done and coordinated as a whole.
 Heavyweight Matrix Organization

GENERAL
MANAGER

FUNCTIONAL FUNCTIONAL
MANAGER MANAGER CHIEF PROJECT
(OPERATIONS) (FINANCE) MANAGER

WORKER WORKER PROJECT MGR 1

WORKER WORKER PROJECT MGR 2

PROJECT
COORDINATOR
 Role of Project Management Consultant
Need for PMC:
• Project Management is an increasingly vital
function to businesses in all industries.
• A specialized field , covering numerous
functions. Difficult for organizations to have
such vast expertise in-house.
• PMCs bring specialized skills and knowledge to
assist companies in making sound business
decisions.
• PMCs help firms succeed by streamlining
projects to meet goals/improve profits.
 Role of Project Management Consultant
Need for PMC(contd.)
• PMC makes available the latest developments
in technical , engineering , management and
information fields
 Role of Project Management Consultant

Duties of PMC:
• Provide oversight and leadership in executing
projects from planning to completion.
• Manage budgets, resources and relationships to
achieve objectives.
• Planning, developing and executing schedules to
ensure timely completion of projects.
• Identify and manage project risks and develop
solutions to problems.
• Prevent problems before they occur , by
identifying inefficiencies.
 Role of Project Management Consultant
Duties of PMC:
• Assist in appropriate site investigation and
sourcing of materials.
• Assist in selecting the appropriate contractor.
• Checking the quality of work, supervision of
quality control, testing , monitoring and progress
reporting , checking measurements and passing
of bills.
 Role of Project Management Consultant
What a PMC should be?(Qualities of a PMC)
A PMC has to be an expert in all aspects of general
management practices applicable to construction.
He must be able to advise on the process and
techniques of planning , site execution and and
monitoring, man management, procurement and
materials management, risk management and
insurance, financial management, contract law, use
of computer, international contracting and
environmental care.
Section Length Est. Cost(CR) Actual PMC Contractor
(KM) cost(Cr)

Kon To 13.23 127.33 136.82 Stup Consultants IJM/SCL JV

Chowk

Chowk 16.63 195.05 194.00 Intercontinental Hindustan

to Consultants Construction.
Adoshi
Kusgaon 23.00 177.46 163.56 Frishmann Prabhu Larsen & Toubro
to
Ozarde
Ozarde 16.15 132.70 133.47 Owen Williams Jog Engineering.
to Dehu
road.
Ghat
Section
Adoshi 7.13 86.46 93.15 Consulting Engg. Shapoorji Palonji
to long Services
tunnel
Section Length Est. Cost(CR) Actual PMC Contractor
(KM) cost(Cr)
Long 8.28 108.96 104.35 Consulting Engg. Larsen & Toubro
Tunnel Services Ltd.
to
Lonavla
bypass
Panvel 8.20 108.00 88.89 Technogram PBAC-PCEC JV.
Bypass, Consultants
part 1
Panvel 1.55 64.50 49.99 Technogram M.Venkat Rao
Bypass, Consultants
part 2
Tunnel 5.724 200.00 200.00 Konkan Railway
work 5 Corporation
twin
tunnels
Total 1200.46 1164.23

Others 324.00
 Speed2Value(pg 146)
• Once KPIs have been developed as well as linked
to stakeholders with appropriate action plans,the
next critical step is to secure buy-in from top
managers to support actions taken by stakeholder.
Buy-in started from original business case.

• This is the point in the entire Speed2Value Road

Map process that establishes the full circle effect
of linking the business case to the accountability
within the organization. It is at this point that you
ask the top managers to make the final
commitment to your project and to its objectives
that they originally approved. This final
commitment involves putting in place a reward or
incentive program tied to KPI
1. Develop a sound Business Case.
2. Determine Project Value Drivers.
3. Develop Key Performance Indicators(KPIs).
4. Link KPIs to key stakeholders.