Project Planning and Management

Module Number: MAPM6103

Part II
 Contents
 Project Risk Management

Chapter Five: Project Implementation:

 Project organization

 contract administration

 Project implementation tools

 team building

Chapter Six: Project Monitoring & Evaluation, and Project Closure

 Course Assessment (for the remaining chapters)

1. Article Review-Individual Assignment:…….(20%)

 As much as possible comply with the contents and

instructions given in the next two slides.

2. Final exam………………………………………40%

4
 Course Assessment
 Individual Term Paper: Article Review (a maximum of 10 pages): This
requires critically reviewing a journal article on topics related Project
Management. The following sections could be included in the review:
 Research Problem/Research Questions and/hypotheses
 Conceptual Framework Used
 Research Methods
 Results/Findings and Discussions
 Contributions of the article
 General Critique
 In this section you should state your opinions of how well (or
poorly) the authors did their research, and presented the
research results in the article.
 Your critique can contain both positive and negative
comments.
 Justify and explain in detail each of your critique points in a
separate paragraph. 5
 Course Assessment-Cont’d

Writing format!

 A4 format, 1.5 spacing, font style & size: Times New

Roman, 12; APA referencing style.

Submission deadline: on the class end date (only in a hard copy)

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 Risk?
 An uncertain event or condition that, if
it occurs, has a negative or positive effect
on the project objectives.
 Examples on threats: bad weather, inflation,
high project team turnover.

 Example on Opportunity, a sales campaign which

generates unexpectedly high demand for a new product
&(if that demand cannot be met), this stimulates a
competitor to enter the market
 Risk?...cont’d
 Risk encompasses any uncertainty that matters, not just uncertain
future events (Hillson, 2014), including:
Variability.
 where some aspect of a planned task or situation is uncertain.
 Example variability risks include:
 Productivity may be above or below the target.
 Unseasonal weather conditions may occur during the construction phase.
 a supplier may deliver late (by one day, one week, one month)
 Exchange rates could vary beyond the range used to build our quotation.
 amount of rework
Ambiguity.
 uncertainties arising from a lack of knowledge or understanding.
 Certain future events where some key aspects remain unclear and/or
unknown.
 This includes client or competitor behavior, developing technology, changes in
regulatory requirements, etc.
Emergence.
 Future events which are currently unknowable and which appear without
warning.
 Risk?...cont’d
Not all risk is bad.

 It’s common to think that all risks are threats, but the term

“uncertainty that matters” also includes opportunities.

 These are uncertainties that, if they occurred, would help us

achieve our objectives.

 The modern concept is double-sided, covering both

downside threat and upside opportunity, both of which need

to be identified and managed proactively

What is a risk?
 A Risk is characterised by the combination of the
probability that a program or project will
experience:
1. Unknown event
2. impact, or severity of the undesired event

Risk exposure =probability of occurrence × impact

value
 Risk versus uncertainty
Risks
. (Known unknowns)
Risk
Subject to analysis
management

Inherent
Uncertainty

Not Subject to Latent uncertainty

analysis (Unknown unknowns)
Uncertainty
management
 Project Risk Management Process
Risk Management Steps

Figure from “Project Management” by Gray and Larson

 Risk Identification
 Identifying risks is the process of understanding what
potential events might hurt or enhance a particular project
 Another consideration is the likelihood of advanced discovery.
 Broad Categories of Risk
 Market risk

 Financial risk

 Technology risk

 People risk

 Structure/process risk

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Risk Assessment/Analysis
2. 1. Performing Qualitative Risk Analysis
2.2. Performing Quantitative Risk Analysis
 (probability/impact matrix )
Evaluation of Impact
Scale of Probability

Example

Now translate this into the Risk Severity Matrix …

 Risk Severity Matrix or probability/impact matrix

 Rank risks from those that can

be neglected to those that
require elevated vigilance
 A Risk Severity Matrix can be
helpful in prioritizing risks
 Plot of event probability versus
impact
 Red zone (major risk)
 Yellow zone (moderate risk)
 Green zone (minor risk)

• Note that the zones are not symmetrical across the matrix
– High impact low probability events much more important than likely low
impact events
 Performing Quantitative Risk Analysis

 Often follows qualitative risk analysis, but both can be

done together

Expected Monetary Value (EMV)

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Expected Monetary Value (EMV)..Cont’d

The expected monetary value (EMV) of a project or event is based on

the probability of outcomes that are uncertain.

Steps to Calculate Expected Monetary Value (EMV)

1. Assign a probability of occurrence for the risk.
2. Assign monetary value of the impact of the risk when it
occurs.
3. Multiply Step 1 and Step 2.
Expected Monetary Value (EMV)

For example, one risk may cost the

project an additional $10,000 if it
occurs, but there’s only a 20 percent
chance of the event occurring.
In its simplest form, the expected
monetary value of this individual
risk impact is, thus, $2,000.
 Expected Monetary Value (EMV)_Cont’d
 Example: As a project management consultant, you have been
asked by one IT Company to calculate EMV and the
contingency reserve to the risks. The Company provided you
with information about the following risks and the
corresponding probability & impact.

Risk event Probability Impact

Data loss .40 -$12,000
New regulation .80 -$34,000
Vendor discount .30 +$10,000
Hardware failure .45 -$65,000
 Expected Monetary Value (EMV)_Cont’d
Feedback

Risk event Probability Impact EMV

Data loss .40 -$12,000 -$4,800

New regulation .80 -$34,000 -$27,200

Vendor discount .30 +$10,000 +$3,000

Hardware failure .45 -$65,000 -$29,250

Contingency reserve= $58,250

 Exercise:
Expected Monetary Value (EMV)..Cont’d
 Suppose you are leading a construction project. Weather, cost of
construction material, and labor turmoil are key project risks found
in most construction projects:
 Project Risks 1 - Weather: There is a 25 percent chance of
excessive snow fall that’ll delay the construction for two weeks
which will, in turn, cost the project $80,000.
 Project Risks 2 - Cost of Construction Material: There is a 10
percent probability of the price of construction material dropping,
which will save the project $100,000.
 Project Risks 3 - Labor Turmoil: There is a 5 percent probability of
construction coming to a halt if the workers go on strike. The impact
would lead to a loss of $150,000.
Question: What is the EMV of a project and the contingency
reserve to mitigate the risks
 Planning for Risk Responses
Now you have your risks
identified &
assessed/classified, what can
you do about each one?
 Planning for & creating Risk Responses
 Risk response planning is all about options and actions.
 It focuses on how to decrease the possibility of risks from adversely
affecting the project’s objectives and
 also on how to increase the likelihood of positive risks that can aid
the project.
 Risk response planning assigns responsibilities to people and groups close
to the risk event.
 The individuals who are assigned to the risk must have the authority to
react to the project risk as planned.
 Risks will increase or decrease based on the effectiveness of risk response
planning.
 The cost and time invested in a risk must be met with the gains from
reducing the risk’s impact and probability.
 Example: a million-dollar solution for a hundred-dollar problem is
unacceptable.
 The best choice for the identified risk must be documented, &
agreed upon.
 Planning for & creating Risk Responses
Think about solutions or alternative ways of
approaching risks:

Can you avoid risk by shifting the sequence of

activities?

Would more resource help?

Is the current methodology inherently risky?

Are there alternative options in use outside your

company/industry?
Planning for & Creating Risk Responses…..(Risk management Strategies)
Avoiding Negative Risks..Risk avoidance/prevention
 eliminating a specific threat or risk, usually by eliminating
its causes.
 Examples of avoidance include the following:
 Changing the project plan to eliminate the risk (extending the
schedule, changing the strategy, and reducing scope)

 Hiring additional project team members who have experience

with the technology that the project deals with

 Use a different vendor/service provider….. If the cause of the

situation (Vendor not meeting deadline).
 Planning for & Creating Risk Responses…..
(Risk management Strategies)_Cont’d
Transferring Negative Risks
 Transference is the process of transferring the risk (and the
ownership of the risk) to a third party.
 The risk doesn’t disappear—it just becomes someone else’s problem.

 Common examples of risk transference include:

 Insurance……..implies transferring the project risk to an insurance company
 Fixed-priced contracts……….to contractors
 Performance bonds
 Warrantees
 Guarantees
 Planning for & Creating Risk Responses…..
(Risk management Strategies)_Cont’d
Risk mitigation
 Actions are taken during the project to reduce the
probability and/or impact of an identified risk

Examples include:
 Completing more tests on the project work before
implementation
 Developing prototypes, simulations, and limited
releases
 Managing the Positive Risk and Opportunities

Enhancing Positive Risks

 Enhancing is about increasing the probability of the
occurrence of positive risks.

 Here, you take measures to increase the chance of the

event happening, but there will be no assurance of
realizing this opportunity.
 Managing the Positive Risk and Opportunities__ Cont’d

Enhancing: Example 1
 Suppose you’re constructing a school building, and suddenly
the client tells you that if you complete the job two months
earlier than planned, the client will give a monetary reward.
 Therefore, you take several measures to realize the opportunity.
You utilize crashing.
 You’re only trying to complete the project early to gain the
opportunity; i.e. you are only increasing the
probability of completing the project early;
 There is no guarantee you will realize the
opportunity.
 Managing the Positive Risk and Opportunities__ Cont’d

Enhancing: Example 2
 For example, let’s say your project will be completed in three
months. You find out that the government is about to float a
similar type of project in two months. Therefore, if you are able
to complete your project in two months, you can bid for a new
project.

 Therefore, you try to compress the schedule with fast-tracking

so the project can be completed ahead of time and you can have
a chance to bid for the new project.
 Managing the Positive Risk and Opportunities

Exploiting Positive Risks or Opportunities

 Is about doing everything to make sure the
event happens.

 You make sure the opportunity is realized.

 Here, you take the opportunity very seriously
and develop a strategy to realize it.
 Simply put, in exploit risk response strategy, you
increase the chance of the event happening
to 100%.
 Managing the Positive Risk and Opportunities
Exploiting Positive Risks or Opportunities
Example
 Suppose you are constructing a building, and suddenly the client
tells you that if you complete the project two months before the actual
completion date, the client will give you some extra money.
 This is an opportunity for you and you must realize it.

do everything to complete the

 Therefore, you

project ahead of time.

 You give overtime to your team members,
 bring some more manpower,
 motivate team members by announcing rewards if they help you
complete the project ahead of time, etc.
 using new technology or upgrading technology to reduce the cost and
duration required to realize the project’s objectives. [Planning]
 You are doing everything to make sure the opportunity is realized.
 Managing the Positive Risk and Opportunities

 Positive risk exploitation can be realized by:

 adding resources to finish faster than was originally
planned,
 increasing quality to recognize sales and customer
satisfaction,

 utilizing a better way of completing the project work, or

any other method that creates the positive outcomes of the
identified risk.
 using new technology or upgrading technology to reduce the
cost and duration required to realize the project’s objectives.
[Planning]
 Managing the Positive Risk and Opportunities__ Cont’d

Sharing Positive Risks

 The idea of sharing a positive risk really means
sharing a mutually beneficial opportunity
between two organizations or projects, or
creating a risk-sharing partnership.

 A teaming agreement is an example of the

share risk response strategy.
 you team up with another company that is
capable of doing this task and jointly bid for the
project.
 Managing the Positive Risk and Opportunities__ Cont’d

Accepting the Risks

 Risk acceptance is the process of simply accepting

the risks because:

 no other action is feasible or

 the risks are deemed to be of small probability,

impact, or both and that a formal response is not

warranted.
Monitoring and Controlling Project Risks

 Confirm that risk responses are implemented as

planned

 Determine if risk responses are effective or if new

responses are needed

 Determine if risk exposure has changed, evolved,

or declined due to trends in the project progression
 Some Remarks!
 Risk monitoring and control happens throughout the

project.

 It is a recurring activity that requires input from all

project participants.

 Project risk should be on the agenda at every project

team meeting.
 Group exercise
 Identify one viable project idea (give a name for this
project)
 Generate a list of possible risks (about 5 risk events)
through brainstorming
 Prioritize these risks by “probability*impact” index
 By using your own hypothetical figures
 Prepare a project risk severity matrix, and
 Compute EMV

 Develop a strategy/strategies for responding to

each of the identified risks
 Indicate ways of monitoring and controlling
the project risks
 Project Implementation
 This stage involves transforming the
project proposal into the actual project or
reality.
 By following the already laid down time table
or work plan.
 It leads to the realization of project
outputs and immediate objectives.

44
The responsibility for implementing
the project is usually entrusted with
an implementation team.

The team comprises of a number of

experts in various fields such as
finance, technology, law and
engineering, etc.
45
 Project implementation
 Rigor and discipline is needed to apply the
management skills proactively to implement the
project activities as planned and achieve the objectives.
 Key elements of project implementation:
– Manage the work plan: consult and update regularly
– Monitor the time schedule
if project outputs are not completed within the time
frame, the critical path must be revisited and ways must be
found to get the project back on track
– Monitor the budget
– Manage Risk
events identified as high-risk should have specific plans
put into place to mitigate them to ensure that they do not,
in fact, occur
– Manage the scope
 Guard against scope creep: project failure often due to
working on deliverables that were not part of the original
project definition or requirements
 Only the sponsor can give approval for a change of scope
– etc
Successful Project Implementation
Project implementation success has
been defined in many ways to include a
large variety of criteria.
However, in its simplest terms, project
success can be thought of as
incorporating four basic facets.
 A project is generally considered to be successfully
implemented if it:
 Comes in on-schedule (time criterion).
 Comes in on-budget (monetary criterion).
 Achieves basically all the goals originally set
for it (effectiveness criterion….SCOPE).
 Is accepted and used by the clients for whom
the project is intended (client satisfaction
criterion…..Quality).
 project success criteria-Cont’d
 Quality
 A generic definition of quality: “Meeting and exceeding the
expectations of customers.”
 Must understand customer’s expectations.
 Must translate them to technical attributes of the project.
 Customer’s expectations and requirements might change
during the life-cycle of the project.
 The ability of the project system to handle such changes is
referred to as flexibility.

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 PROJECTS – PITFALLS AND LESSONS OF
EXPERIENCE
 Why Projects Fail
 Projects particularly construction Projects, in many
instances, face problems owing to:
 cost overruns or schedule slippages; and
 ended with below their standards in terms of quality &
performance.

Question for reflection

 What do you think are the major problems in project
management practices that cause project failure?
Major problems in project Management_ Cont’d

 Projects ordinarily take longer than they have to owing

to some combination of the following problems:
 Lack of team direction (accidental project manager,
unclear goal)
 Lack of continuity (When project team members come and go,
handing off work or receiving handed-off work, it adds to project
duration)
 Lack of focus (multi-tasking versus single tasking)
 Lack of team spirit
 Lack of upper-management support & commitment
Best Project Management Practices _ Cont’d

 practices that are influential in decreasing the total

duration of a project while increasing quality and most
likely decreasing total costs:
 Have one well-trained project manager.
 Establish a core team for the duration of the project.
 Have project team members work full time on one
project.
 Co-Locate Team Members (the placement of project team
members in a single location)
 Develop Upper-Management Support
Aspects/issues of project implementation

 Project Organization

 Project Contract Administration

 Project Implementation tools

 Team Building and Conflict Management

Project organization
 Project management does not happen in a vacuum;
 many different factors can affect the success of a project.
 Among the most important factors is project
Organizational structure.
 The way in which:
 the organization functions,
 who has authority, and
 how decisions are made will all influence a project.
Project organization…cont’d
 The purpose of designing a project organization is to
set those elements of governance associated with
defining the roles and responsibilities, relationships,
and rights of (internal) project stakeholders.
 the roles, and responsibilities,
 so people know who is responsible for delivering which elements
of the project’s results.
 lines of authority and communication, so people know to whom
they are reporting/responding, where they will receive
information from, and where they need to send it to.
 relationships,
 ‘Relationships’ is related to communication, so people know
with whom they are interacting and what the basis of those
interactions is.
 rights of (internal) project stakeholders
 Types of Project Organizations
 There are three ways of organizing projects
within the parent organization
 The project as part of the Functional
Organization
 The project as a free-standing part of the parent
organization… Projectized organization
 A third type, called a Matrix Organization is a
hybrid of the two main types
 Each has advantages and disadvantages
Functional Organizations
 Functional Organization
Characteristics of projects suitable for this organization
structure:
 Solution of technical problems is important.
 Integration of different functional units’ work is
not necessary.
 Stable environment.

 Success depends on application of narrow

technical know-how.
 Usually one functional unit is dominant (due to
technical reasons).
 Functional Organization of Projects

Advantages Disadvantages
1. No Structural Change 1. Lack of Focus
2. Flexibility (for 2. Poor Integration
utilization of experts
and resources) 3. Slow decision
3. In-Depth Expertise
making

4. Less duplication 4. Lack of Ownership

5. Easy Post-Project
Transition
Pure Project Organization/projectized organization

 Characteristics
 is a specialized organization for executing projects.
 with a strong focus on the project.
 The organization’s lifespan is equal to the lifespan of the
project.
 a small, self-sufficient and full-time team is set up.
 The team leader is like an entrepreneur.
 Leader has full responsibility over the project.
 Functional units are stable, provide support to
project teams.
 One functional unit (transport, finance, HRM…) for all
projects or one functional unit for each of the projects.
The Project Organization
 Advantages of pure project
 Clear authority & responsibility: PM with full project
authority

 Improved communication: Shorter communication

lines
 Higher project commitment of team
 Faster decision making
 Unity of command makes life easier for staff
 Organization is structurally simple and
flexible
 Problems with pure project organization

 Experts develop too much depth --- not enough breadth

 Project isolation:
 each project may be thought of as a self-contained unit
 Inconsistency in carrying out policies and procedures
 little opportunity to share ideas and experiences.. Hindering learning
throughout the organization
 Projectitis:
 the project manager and project team develop a strong
attachment to the project and to each other.
 the project begins to take on a life of its own with no real end in
sight
 a strong divisiveness occurs between the project team and the
parent organization.
 Team worries of “life after the project ends”
Matrix Project Organization

 A hybrid form that combines both some characteristics

of functional and pure project organization forms.
 is a combination of the vertical functional structure and the horizontal
project structure
 Project manager and functional managers share
responsibility.
 Project manager decides what tasks will be done, and when they
will be done.
 Functional manager decides who will work in the
project and which technologies will be used.
 Members of the project team have two “bosses” that
they report to.
 Team members could be working on multiple projects
The matrix organization
Matrix Project Organization
 Characteristics of projects suitable for this
organization structure :
 Integration of work done by different functional units
is very important.
 Changes (instability) both inside and outside the
company.
 Success does not depend on application of a narrow
expertise.
Matrix Structure
Advantages
 Flexibility of the structure and membership
 Minimum of direct hierarchical control
 Maximizes use of employees’ skills
 Motivates employees;

Disadvantages
 High bureaucratic costs
 High costs (time and money) for building relationships
 Higher potential for conflict :Two-boss employee’s role
conflict
Different Matrix Forms
 Weak Form
 The authority of the functional manager predominates
and the project manager has indirect authority.
 Strong Form
 The project manager has broader control and
functional departments act as subcontractors to the
project.
 Balanced Form
 The project manager sets the overall plan and the
functional manager determines how work to be done.
 Exercise
Group 1: Identify the strengths & weaknesses of functional form of project
organization

Group 2: Identify the advantages and disadvantages of projectized-form of project

organization

Group 3: Identify the advantages and disadvantages of Matrix-form of project

organization

GROUP 4:
 Share your experiences about the ‘dominant form of a project organization’ in the
work place
 Show by organogram (organizational chart)
 Mention some considerations in choosing the appropriate project structure.

GROUP 5:
 Share your experiences about the ‘dominant form of a project organization’ in the
work place
 Show by organogram (organizational chart)
 Mention some considerations in choosing the appropriate project structure.
Project Implementation Plans
 Project plans are considered to consist of three
fundamental “dimensions”:
 scope: what is to be done
 time: how long it will take to execute
work—individually and as a total project
 cost: how much money that will be spent
and how it’s budgeted over time
Project Planning and Scheduling

Three Basic Steps to a Project Plan

Effective Techniques for Managing Implementation

 Work-breakdown structure
 What activities do we need to do?

 Gantt chart
 Network Techniques
 When will we do each activity?
 Identifying How Long It Will Take to Do
Everything (Time Management)
Work breakdown structure (WBS)
 Each project is complex:
 many gradual steps and its objective is achieved by means
of a number of outputs delivered by the project team.
 The WBS tool is used to decompose the whole into
smaller parts that will be easier for the team to plan and
manage.
 A Work Breakdown Structure (WBS) is a simple, tool used
to quickly and concisely define the activities required to
complete a project.
 A visual depiction of work to be performed.
Work breakdown structure (WBS)-
Cont’d
 A work breakdown structure describes the components
and subcomponents of the project’s various work
products as a “family tree.”
 It represents a systematic and logical breakdown of the
project into its component parts.

 It is constructed by dividing the project in to its major

parts, with each of these being further divided in to sub
parts.
 This is continued till a breakdown is done in terms of
manageable units of work for which responsibility can
be defined.
 Work breakdown structure (WBS)-Cont’d
 Example: A work breakdown structure for “House project”:

House
project

Primary Electrical Inside wall

Plumbing
structure structure development

Foundation Exterior wall Roof

development development development

Layout Concrete
Excavation
topography pour
 Establishing Project Implementation Schedule
 Implementing even the simplest project requires
completing a number of tasks that have to be
undertaken in a particular sequence and with a
particular set of inter-relations.

 Preparation of an implementation schedule is one

of the means to overcome the problem.
 A schedule is a list of things to do usually with times
when they should be done.
 Establishing Project Implementation Schedule
 Features of Good Schedule:
 All work items included
 Sequence of work clearly shown
 Easy to understand
 Easy to revise
 Important work items highlighted
 Constraints easily detected
Types of Project Scheduling Techniques:

 Milestones

 GANTT (Bar) Chart

 Net Work Scheduling

 MILESTONES
 Tabular format

 Below is a simple example of a schedule using milestones

in a house construction project.
Work Item Start Finish
A. Clear Site 1-Mar 7-Mar
B. Level Site 7-Mar 22-Mar
C. Excavate Foundation 22-Mar 29-Mar
D. Lay Reinforcement 29-Mar 1-Apr
E. Pour Concrete 1-Apr 2-Apr
F. Order Re-Bars 1-Mar 26-Mar
G. Cut & Bend Re-Bars 26-Mar 28-Mar
H. Order Cement 15-Mar 30-Mar
I. Order Aggregates 15-Mar 30-Mar
 Gantt Chart
 is a graphic display of schedule-related information.
 activities are listed down the left side of the chart,
 dates are shown across the top or bottom, and
 planned activity durations are shown as horizontal bars, placed
according to the dates.
XYZ House Construction Project

Work Item March March March April

(1-10) (11-29) (21-30) (1-8)

A. Clear Site
B. Level Site
C. Excavate Foundation
D. Lay Reinforcement
E. Pour Concrete
F. Order Re-Bars
G. Cut & Bend Re-Bars
H. Order Cement
I. Order Aggregates
The advantages of the a Gantt chart are:
 It is simple to understand

 It can be used to show progress

 It can be used for manpower planning

 A Gantt chart is a useful tool for

planning, scheduling and monitoring
projects.
The disadvantages of A Gantt chart are:
 It cannot show interrelationship
among activities on large , complex
projects;
 There may be a physical limit to the
size of the bar chart, which may limit
the size of the project; and
 It cannot easily cope with frequent
changes or updating.
Developing a Project
Network Techniques
In this technique, the
– activity, A task or a certain amount of work required in the project
– Requires time to complete

 event, a point in time where one or more

activities start and/or finish.
 and
 their relationships (activities
relationships)
are presented by a network diagram, also
called an arrow diagram.
 Network Analysis
 Once the logical sequence has been completed it is possible to
construct a network diagram to represent the sequence of
activities.

 Critical Path Method (CPM)

 E I Du Pont de Nemours & Co. (1957) for construction of
new chemical plant and maintenance
 Deterministic task times: It assumes that both the time to
complete each activity and the cost of doing so are known
with certainty.
 Repetitive nature of jobs

 Project Evaluation and Review Technique (PERT)

 U S Navy (1958) for the POLARIS missile program
 Multiple task time estimates (probabilistic nature): three
time estimates: O, ML, P
 Non-repetitive jobs (R & D work)
Importance of PERT/CPM
Project managers rely on Program Evaluation & Review
Technique [PERT]/ Critical Path Method [CPM] to help
them answer questions such as:

 What is the total time to complete the project?

 What are the scheduled start and finish dates for each
specific activity?
 Which activities are critical and must be completed exactly
as scheduled to keep the project on schedule?
 How long can noncritical activities be delayed before they
cause an increase in the project completion time?
 Basic steps in CPM—Cont’d

The weighted average activity time is computed by the following formula:

PERT
 So what is PERT?
 What is PERT (Program Evaluation and Review
Technique) and how can we use it to help us on projects?
PERT is a three point activity estimating technique that
considers estimation uncertainty and risk by using three
estimates to define an approximate probability for an
activity’s cost or duration. The three estimates used are:
 Most likely (M) - The cost/duration of the activity, based
on a realistic effort assessment for the required work and
any predicted expenses.
 Optimistic(O) - The activity cost/duration based on an
analysis of the best-case scenario for the activity.
 Pessimistic(P) - The activity cost/duration based on an
analysis of the worst-case scenario for the activity.
Project network diagram
 Project network diagrams are also based on the WBS,
but also show more info on task sequence or
dependencies
 They also show:

 when tasks must start or

 stop in order not to affect project
completion date.
Activity On Node (Activity in the box) Network Technique
Activity-on-Node (AON)
This is the form of Network diagrams most commonly
used
 An activity is represented by a node , [a rectangular
box/ a circular]
 The activities are connected by arrows between these
boxes.
 The arrows represent the dependencies between the
different activities and the specific sequence in which the
estimated tasks must be accomplished.
 The length and the slope of these arrows do not provide
any information about operational hours, workload etc.,
Activity Identification
 Short description: example, Lay
foundation, erect frame, etc.
 Alphabetic or numeric code: example, A,
B, C, etc., or 100, 101, 108 etc.
 Using tail and head event numbers:
example, 1-2, 2-3, 3-4, 3-6, etc------this is for
‘Activity on arrow’
Activity On Node Network Technique
 define the relationships of each activity in the project
context.
 Which activities must be finished before starting this one?
 Which activities can directly start after finishing this one?
 Which activities can be done in parallel to this one?

 predecessor, successor and parallel relationships for each

task
Activity On Node Network Technique
 Examples

 Task A is the predecessor activity for task B and activity A and B

are the predecessor tasks for activity C

 activities Y and Z have to wait until the task X is ready. In this case
activity Y and activity Z can be done in parallel (to save time).
 The activity X is called burst activity because more than one arrow
bursts from its node.
Activity On Node Network Techniques

 Task J, K and L can be done in parallel if enough

resources are available and no other constraints are
existing.
 Activity M has to wait for task J, K and L to be done until
it can be started.
 In this case, activity M is called a merge activity
because more than one task must be completed
before it can start.
Example
 Four activities/tasks: A, B, K, L
 Activity K is dependent on activity A
 Activity L is dependent on activities A and B

Task A Task K

Task B Task L
Errors in Logic
 Looping
 Due to a mistake in drawing or to errors in
identifying dependent activities

P Q

R
Errors in Logic
 Dangling
 Usually occur when activities are added as an
afterthought
 Can be avoided by using a single finish node

K
K LL Finish

M M
Dummy activity: an activity that
does not consume time or
resources.
It shows merely the dependencies
or proper relationship between
activities.
A dotted arrow represents
dummy.
 Upper left….

AON Network Activity Data Boxes

Suggested display of key data

Importance of Network diagram

 To answer:
 What is the total time to complete the project?
 What are the scheduled start and finish dates for
each specific activity?
 Which activities are critical and must be completed
exactly as scheduled to keep the project on
schedule?
 How long can noncritical activities be delayed
before they cause an increase in the project
completion time?
 Basic steps in Network diagram----CPM
Step 1: Define activities
 The project & all of its significant activities or tasks
 Efficient tool: WBS
 The WBS represents a logical decomposition of the work to be
performed
(Example: What are the activities that are needed to
build a house? to conduct a research?)
 Finding these activities is a brainstorming activity

Step 2: Define Activity interdependencies

 The relationship among activities
 Decide which activities must precede and follow others
 It demands the understanding of the whole project and the
knowledge of applied technologies.
Result: preceding or succeeding activity list
 Basic steps in CPM—Cont’d
Step 3: Draw the Network
• Network connecting all of the activities

Result: the network itself

Step 4: Assign time and /or resource
•Activity by activity
Time estimation methods:
 CPM: the use of normal duration: only one
activity duration

 steps 1 to 4 are also known as the planning

phase
 Basic steps in CPM—Cont’d
Step 5: compute the longest time path through the
network
• this is called the critical path

Key questions:
 what is the expected duration of the project?
What are the earliest start and finish dates for each activity?
What are the latest start and finish dates for each activity that does
not interfere with the project completion time?

 Analyzing these times in order to find the critical activities &

the amount of float in the non-critical ones.
This step is scheduling
Step 6: use the network to help plan, schedule, monitor, and control
the project.
Critical path analysis
 The path with the longest duration is the
critical path (and the project duration)
 If any tasks on the critical path are delayed, the
overall project completion will be delayed

 Tasks not on the critical path may have a non-zero

amount of slack or float, which is the amount
of duration they can slip without affecting the
project
 Critical Path

 Critical Path –
– The series of activities all of which must
finish on time for the whole project to finish
on time
– Sometimes described as the longest path
through a network, hence the shortest
project time
 Computing Critical Path
 Calculate the Forward Pass by adding the
durations along each path in your network:
 to establish the earliest start (ES) and finish (EF) dates
for each activity

• A backward pass is made through the network to

compute the latest start and latest finish times for each activity
in the network.
• To do this, we must decide how late the project can finish.
• to stretch it out longer would be inefficient.
 Computing Critical path-Cont’d
 If you examine the values of (ES-LS) and (EF-LF) you will
note that

– The sequence of activities where these values are

zero is the longest path through the network

–This is known as the Critical Path

– the shortest time in which the whole project can be
completed;

– Where the values are positive indicates that there is

Float/slack for those activities.
 Example: A House construction project
Activity Duration (in weeks) Preceding
activities
A: Design house and obtain 12 -----
financing
B: Order materials 4 A
C: Lay foundation 8 A
D: Select paint 4 B
E: Build house 12 C
F: Finish work 4 D&E
Required:
1. Draw a project network diagram for this project using Activity on Node (AON)
technique
2. Find all the paths and path lengths through this project network. Which of these
paths is a critical path?
3. Find the shortest completion time for the project?
Feedback

 The critical path is the longest path in the network

diagram and this runs through tasks A, C, E, &F.
Therefore, the minimum project completion time (the
sum of the critical task durations) is 36 weeks.
AON-Exercise 1: simplified activities that have to be done to install a new
suspension bridge
Activity Description Preceding Duration (in
activity days)
A To apply for approval none 5
B Installation of fundaments A 10
C Fabricate steel elements A 10
D Fabricate tower elements A 20
E Fabricate steel ropes A 15
F Fabricate supporting elements A 10
G Transport “all together” from plants to C,D,E,F 5
building site
H Erection of the suspension bridge B,G 10
I Fine tuning H 5
J Testing I 5
Construct the network and determine project completion time using AON.
ANO-CONT’D
The advantages of network technique:
 It can effectively handle inter relationships
among project activities
 It identify the activities which are critical to the
completion of the project on time ad indicate the
float (spare time ) for other activities
 It can handle very large and complex projects
and
 It can be easily computerized and updated
Drawbacks of network technique
Being more complicated than the
traditional bar chart it is not easily
understood by the project personnel,
and
It does not define an operational
schedule which tells who does what
and when.
Managing Your Projects with Software
 The best project management tool in the world can
never replace your good judgment.
 However, the tool can help you accomplish the following:
 Track all the information you gather about the work,
duration, costs, and resource requirements for your project.
 Visualize and present your project plan in standard, well-
defined formats.
 Schedule tasks and resources consistently and effectively.

Examples of project management software are:

(ProjectLibre), OpenProj, Microsoft project
 Example 1: AON Network Diagrams: Installation of air-
pollution control equipment @ M Company
Consider the following table of activities; immediate predecessor(s)
121
(I.P.); and duration (week) for each activity
Duration
Immediate (week)
Activity Description Predecessor
2
A build internal components ___
B modify roof and floor ___ 3
C construct collection stack A 2
D pour concrete and install frame B 4
E build hi-temp burner C 4
F install control system C 3
G install air-pollution control device D,E
5
H inspect and test F,G
2

Find the project completion time

 18
Feedback
• E(arly) S(tarts)/ F(inishes) and L(ate) S(tarts)/F(inishes) for the project.

4 F 7
0 A 2 2 C 4 10 3 13 EF
0 2 2 2 2 4
ES

13 H 15
4 E 8
B 13 2 15
0 3 3 D 7 4 4 8
1 LS
3 4 4 4 8
LF
8 G 13

critical path
8 5 13
122
 Exercise 2: Cables By M company is bringing a new product on line to be manufactured in
their current facility in some existing space. The owners have identified 11 activities and
their precedence relationships. Develop an AON for the project & determine project
123
completion time

Immediate Duration
Activity Description
Predecessor (weeks)
A Develop product specifications None 4
B Design manufacturing process A 6
C Source & purchase materials A 3
D Source & purchase tooling & equipment B 6
E Receive & install tooling & equipment D 14
F Receive materials C 5
G Pilot production run E&F 2
H Evaluate product design G 2
I Evaluate process performance G 3
J Write documentation report H&I 4
K Transition to manufacturing J 2
 Feedback
124
Calculate the Path Completion Times

Paths Path duration

ABDEGHJK 40
ABDEGIJK 41
ACFGHJK 22
ACFGIJK 23
 The longest path (ABDEGIJK) limits the project’s
duration (project cannot finish in less time than its
longest path)
 ABDEGIJK is the project’s critical path
125
 Project Crashing
• Project duration can be reduced by assigning more resources to
project activities.
• Doing this however increases project cost.
• Decision is based on analysis of trade-off between time and
cost.
• Project crashing is a method for shortening project duration
by reducing one or more critical activities to a time less than
normal activity time.
• Crashing achieved by devoting more resources to crashed
activities.

….Reading Assignment…
Managing Your Projects with Software
 The best project management tool in the world can
never replace your good judgment.
 However, the tool can and should help you accomplish
the following:
 Track all the information you gather about the work,
duration, costs, and resource requirements for your project.
 Visualize and present your project plan in standard, well-
defined formats.
 Schedule tasks and resources consistently and effectively.

Examples of project management software

(ProjectLibre), OpenProj, Microsoft project
Contract Administration
 A contract is an agreement
enforceable by law, and is made
between two or more parties.
 Contracting is the process of
establishing a relation between the owner
and the contractors to execute the
project work

128
 Contents of a contract
 Name and address of both the parties,
 Subject of the agreement,
 Deadlines for the different stages of fulfillment of
the agreement,
 Financial aspects and other necessary conditions
such as violation of contract etc.

129
Approaches to contracting:
 Contracting total responsibility for one
contractor
 Dividing the project and contracting it to suitable
suppliers and contractors.

 Accomplish a portion of the work yourself and

contract out the balance to one or more agencies.
 EPC: (Engineering, Procurement and
Construction)
 This entails an agreement between a company
(employers) and a contractor, in which the contractor
agrees to provide engineering, procurement, and
constriction services to the company.

130
 Contracting procedures:
Governments and different institiutions have
their own procedures with clear
objectives to acheive:
 To elicit competitive bids
 To provide equal opportunity and
equal treatment to all eligible
tenderers
 To accept the tender at the lowest
cost
131
Steps in contracting :
1. Work packaging and scheduling
 Specialized Activity Packages like
construction, civil engineering works,
painting etc.
 Unit packages like administration building,
by - product plant, steel melting shop etc.
 The starting and finishing time of each
individual package

132
2. Preparation of Tender Documents
 Instruction to tenderers
 Model Form of tender
 Drawings and specifications
 Schedule of Rates
 General conditions of contract
 Special conditions of contract
 Specimen of Bank guarantee

133
3. Determination of Contractor's Qualifications
World Bank's criteria :
Factors Points
Organization and Planning 10
 Management Structure
 General Implementation programme
 Plans for subcontracting
 History of Default

134
Personnel 15
 Experience/ qualification of key personnel
 Adequacy of specialized staffing

Major plant and equipment

15
 Adequacy
 Age/condition
 Source of availability

135
Experience
30
 Technical references
 Value of completed contracts of similar type
 Average percent of work under subcontractor

Financial Condition 30
 Bank reference
 Average annual turnover
 Working capital
 Quick Ratio
 Value of contracts completed in last 5 years
136
4.Tender Invitation
 Sending equerry letters for short lists or
 Advertising openly
5.Tender submission
 Tender is usually submitted in sealed
envelops
 The required number of copies together with
documents will be submitted by tenderers on or
before the last date for submission

137
6.Tender Opening
 Tenders should be opened in the
presence of tenderers or their
authorized representatives unless
required
7. Evaluation and recommendation
 Costs, quality, quantity and other
technical specification

138
8. Award of contract
 Technical capacity
 Lowest price
 Negotation

9. Signing of Agreement with

detailed contract conditions.

139
Team Building and Conflict Management

(Conflict management_ as a reading assignment!)

 Team building
 The process of helping a group of
individuals (bound by a common sense of
purpose) to work interdependently with
each other, the leader, external
stakeholders, & the organization.
Team building is the process of improving
the competencies, team interaction, & the
overall team environment to enhance
performance.
Team building techniques/ actvities

 Goal-setting
 Role-clarification/definition
 Interpersonal processes
 Problem solving
 Team building techniques _ cont’d
 Goal-setting
 clarifying for the team members the general goals and
specific objectives of the project,
 establishing timetables.

 Involves project team in action planning to identify ways to

achieve those goals.
 Usually combined with performance measurement and
feedback
 Team building techniques _ cont’d
Role-clarification/definition
 entails
clarifying individual role expectations, group
norms, and shared responsibilities of team members
 emphasizes increased communication among team
members regarding their respective roles within the
team.

 Entails establishing a set of mutual expectations

between project manager and the individual team
members
 Team building techniques _ cont’d
Interpersonal processes

 involves an increase in team work skills, such as mutual

supportiveness, communication, and sharing of feelings;
 it attempts to build group cohesion.
 Team building techniques _ cont’d
Problem solving
 emphasizes the identification of major problems in the
team’s tasks in order to enhance task-related skills.
 It is an intervention in which team members:
 identify
major project-problems,
 generate relevant information,
 engage in action planning, and
 implement and evaluate action plans

***********************************
 The result of good leadership & good team building is
teamwork.
Team building-Cont’d: Conclusion
 The result of good leadership & good team
building is teamwork.
Question for reflection

 To what extent have team building

techniques been practiced by a
project organization? (from your
experience)
 Areas that need improvement and
your recommendations.
Project Monitoring, Evaluation, and Project
Closure
Thursday &
Friday
MONITORING
• Continuous internal management activity
• Ensures that project is on track
• Measures progress towards objectives
• Identifies problems
MONITORING
• It involves collecting and analyzing
information about the project’s
performance.
• Monitoring alerts project staff to any
changes that should be made.
 What is Monitoring?...Cont’d
 Monitoring is an ongoing management task:
 have we achieved today what we set out to do?
 Where do we have to make adjustments in our
plans?

 For example:
 was equipment available as planned, are activities on time (as
mapped in the work plan),
 are the outputs produced on schedule?

 The reports can follow the logframe and the work-plan.

Project monitoring..Cont’d

 This kind of careful watching makes it

possible:
 to catch problems before they become
unmanageable, and
 to take corrective action before it is too late.

153
EVALUATION
• Assessing whether a project is achieving
its intended objectives
• Conducted periodically
• Internal or external
• Focuses on outcomes and impacts
• It makes comparison of the outcomes
of the project with planned ones.
 What’s the difference?
Monitoring Evaluation
Timing Continuous, throughout Periodically at significant points
the project in the project: mid-term or end
of project are most common
Scope Day to day activities Assess overall delivery of
activities and progress towards
achieving aim and objectives
Main participants Project staff and project External evaluators/facilitators,
users project users, project staff,
donors
Reporting formats Regular reports and Written report with
updates to project users, recommendations for changes to
management and donors project

Evaluation relies heavily on information collected in the monitoring systems

for assessment and analysis of progress towards agreed aims and objectives
The communities life
 Discussion questions
1. Referring to the project that you are familiar with it,
– Identify the problems and challenges in the project procurement process
(Contract Administration)
– What to be done for successful project procurement management (project
contract administration)?
2. Identify the common tools and techniques of
project monitoring.
3. Describe the main reasons why an organization
conducts formal project evaluations?
4. Identify the common tools and techniques of
project evaluation. What evaluation techniques
does your organization currently use, and how
frequently?
5. What is project closure? Mention some
activities in project closure.
159
 Project closure
closing a project is as important as initiating it!

160
 Project close-out
 What is close out?

 The process of preparing for the end of your project’s period of

performance and funding.

 The purpose is to assess the project, ensure completion, and

derive any lessons learned and best practices to be applied to

future projects

 Project close-out should be anticipated and planned as early

as possible in the project lifecycle

161
 Closing the Project
 Project closure refers to a set of tasks that are required to
formally end the project.
 Closing the Project
 Project closure refers to a set of tasks that are required to
formally end the project.
 There are two kinds of projects that you need to close formally:
 Completed projects. A project that has met its completion criteria
falls into this category.
 Terminated projects. A project that was terminated before its
completion. A project can be terminated at various stages for various
reasons. Following are some examples:
 The project management plan is not approved for whatever
reason.
 The project has been executing, but you have run out of resources,
and no more resources are available.
 The project has been cancelled because it was going nowhere.

 The project has been indefinitely postponed because there is not a

large enough market for the product it would produce.
Types of Project Termination

 There are four fundamentally different ways to close

out a project:
 Extinction
 Addition
 Integration
 Starvation
Four Varieties of Project
Termination
1. “Termination by extinction”
 project activity suddenly stops
 either successfully completed or high expectation for
failure
 Four Varieties of Termination
(cont’d)
2. “Termination by addition”
 If a project is a major success, it may be terminated by
institutionalizing it as a formal part of the parent
organization
 Project personnel, property, and equipment are often
simply transferred from the dying project to the newly
born division

 The project becomes a formal part of the parent organization

 New functionality
 Transfer of assets, People, Equipment
 Addition of responsibilities
 Budgets
 Practices and procedures
Four Varieties of Termination
(cont’d)
3. “Termination by integration”

 The property, equipment, material, personnel, and

functions of the project are distributed among the
existing elements of the parent organization.

 This method of terminating projects is the most

common way of dealing with successful projects.
Four Varieties of Termination
(cont’d)
4. “Termination by starvation”
 a project in name only
 Budget Decrement
 Reallocation of Resources Away from Project
 Business Conditions
 “Political” Considerations
 Active w/o Activity
 Key Elements in a Project Closure

Verify acceptance of final project deliverables.

 Conduct post-project assessment and lessons learned
Conduct post-project review and evaluation
Recognize and celebrate outstanding project work
Disburse project resources-staff, facilities & automated
systems
Complete and archive final project records
Ensure transfer of knowledge

169
 Key Elements in a Project Closure-Cont’d
Verify acceptance of final project deliverables
 This means that the project product or output has been delivered and
transitioned (handed over) to the appropriate party.
 this step signifies that the customer agrees that the scope
of the project and its deliverables are complete and were
delivered as agreed upon by all parties (customer, the
project sponsor, the project steering committee, etc.).
 Acceptance is based upon the success criteria defined in
the initiating and planning phases of the project.
 should be formal:
 physical sign-offs should be obtained by the customer, the
project sponsor, the project steering committee, as appropriate.

170
 Key Elements in a Project Closure-Cont’d
Conduct post-project assessment and lessons
learned
 Lessons learned should draw on both positive experiences
& negative experiences
 The lessons learned session is typically a meeting that
includes:
 Project team
 Stakeholders representation including external oversight,
auditors,..
 Executive management
 Project support staff

171
 Key Elements in a Project Closure-Cont’d
 Conduct post-project assessment and lessons learned-Cont’d
 discussion questions in the lessons learned session should include:
 Did the delivered product meet the specified requirements and goals of
the project?
 Was the customer satisfied with the end product(s)? If not, why not?
 Was budget pan meet? If not, why not?
 Was the schedule meet? If not, why not?
 Were risks identified and mitigated? If not, why not?
 Did the project management methodology work? If not, why not?
 What bottlenecks or challenges were experienced?
 What can be done in future projects to facilitate success?
 Lessons learned and comments regarding project assessment
should be documented, presented, and openly discussed with
the intent of eliminating the occurrence of avoidable issues on
future projects.
172
 Key Elements in a Project Closure-Cont’d
 Conduct post-project assessment and lessons learned-
Cont’d
 In summary:
 what aspects of the project went right,
 What went wrong and ,

 what needs improvement, so that future projects are run

better.

“Those who cannot remember the past are

condemned to repeat it.”

173
 Key Elements in a Project Closure-Cont’d
 Conduct post-project review and evaluation
 this provides a record of the history of a project
 provides a written documentation of the planned and actual
budget, the baseline and actual schedule, documents
recommendations for other projects of similar size and scope.
 Should include the following items:
 project organization including staffing and skills
 WBS, schedules
 Successful risk assessment and mitigation techniques, e.g. what risks
occurred and what techniques were used to mitigate these risks.
 General techniques for project communication
 General techniques for managing customer expectations
 Financial data
 Project environment/culture
 Lessons learned
 Recommendations to future project managers
 Final project report
174
 Key Elements in a Project Closure-Cont’d
Recognize and celebrate outstanding project work
 provide some positive reinforcement to the teams and
individuals when a project is completed successfully.
 EX. By praising the team at a key meeting or a large
gathering of staff.
 Such recognition is a motivation to other projects to be
successful.

175
 Key Elements in a Project Closure-Cont’d
 Disburse project resources-staff, facilities & automated
systems
 Staffing decisions
 Retain and reassign to different projects
 Terminate – benefits, severance
Return borrowed equipments

176
 Key Elements in a Project Closure-Cont’d
Complete and archive final project records
 Historic project data is an important sources of information to
help improve future projects.
 All records (both soft copy and hard copies) should be stored.

 At a minimum, the following project data is archived:

 Project charter
 Project plan
 Project management control documents (correspondence,
meeting notes, status reports, contract files).
 Technical documents
 Lessons learned
 Post-review and evaluation report

177
 Key Elements in a Project Closure-Cont’d

Ensure transfer of knowledge

 Plan for knowledge transfer to those who will
be responsible for continued operations.

178
Key Points _ Summary
Thank you