Project Management

Introduction

What is Project Management?

Project management is the discipline of managing all the different resources and aspects of a project in
such a way that the resources will deliver all the output required to complete the project within the
defined scope, time, and cost constraints. A project is a temporary and one-time exercise with a definite
start and end, undertaken to address a specific need in an organization.

Key Elements of Project Management:

 Senior level sponsorship from within the organization

 Strong leadership, accountability, and governance arrangements
 A dedicated project manager with appropriate skills
 A project plan and adequate resources to implement the plan
 Clear processes for managing risks, issues, stakeholders, communications, and benefits

Effective project assurance arrangements:

 Well defined reporting structures and a clearly understood project scope

 Project Management Methodology

Projects are typically split into three main phases:

 Initiation - Defining the project scope, objectives, and deliverables

 Implementation - Executing the project plan and managing the work
 Closure - Finalizing all activities and obtaining stakeholder acceptance

The degree of structure and number of steps in each phase depends on the size and complexity of the
project.

Benefits of Project Management

 Delivering projects on time, within budget, and meeting goals

 Providing a structured approach to managing projects
 Enhancing career profiles and learning opportunities for team members
 Enabling organizations to address specific needs and take advantage of opportunities
Chapter 1

Project Management in Today's Time

 What is a Project
 A project is defined as a temporary endeavor undertaken to create a unique product,
service, or result, characterized by a specific set of objectives and a defined timeline.

For example, constructing a new office building is a project that involves planning, resource
allocation, and execution within a specified timeframe to achieve the goal of completing the
structure.

 Classification of a Project
 Projects can be classified based on various criteria, including their objectives, funding
sources, and methodologies.

For example, a construction project aims to build a physical structure, such as a bridge,
while a software development project focuses on creating a new application, highlighting
the diversity in project types and their specific goals.

 Project Life Cycle

 The project life cycle consists of five key phases: initiation, planning, execution, monitoring
and controlling, and closure.

For example, in a software development project, the initiation phase would involve defining
the project goals and feasibility, while the execution phase would focus on developing the
software according to the established plan

 Project Attributes
 Project attributes are characteristics that distinguish projects from routine operations. Key
attributes include being temporary, having a unique purpose, and involving interdependent
tasks.

For example, the refurbishment of a primary school is a project with a defined objective
(completion within four weeks at a budget of P200,000) and a specific timeframe, making it
distinct from ongoing organizational operations.

 Primary Goals of a Project

 Project goals are statements that define the desired outcomes of a project, guiding its
direction and success.
For example, a project goal could be to "increase website traffic by 30% over the next six
months," with specific objectives like implementing SEO strategies and launching a social
media campaign to achieve this goal.

 Why Project Management

  Project management is the process of planning, organizing, and overseeing resources to
achieve specific goals within a defined timeframe.

For example, a project manager might lead a team to develop a new software application,
coordinating tasks among developers, designers, and testers to ensure the project is
completed on schedule and within budget.

 Limitations of a Project Management

 Project management is inherently limited by constraints such as time, cost, and scope, often
referred to as the "triple constraint."

For example, if a project has a strict deadline (time constraint), it may require reducing the
scope of work or increasing the budget to ensure timely delivery, illustrating how these
constraints are interrelated and impact project outcomes

Chapter 2

Strategic Management and Project Selection

 Project Management Maturity

 A Project Management Maturity - refers to the progressive development of an enterprise-
wide project management approach, methodology, strategy, and decision-making process.
 Project Selection and Models
 Project selection is the process of evaluating and prioritizing potential projects based on
their alignment with organizational goals and resource availability. For example, a company
might use a cost-benefit analysis model to compare two projects: one that aims to develop a
new product line versus another focused on upgrading existing technology, ultimately
selecting the one that promises greater financial return and strategic fit.

 Project Portfolio Management (PPM)

 Project Portfolio Management (PPM) is a strategic approach that organizations use to
analyze and optimize their collection of projects to ensure they align with overall business
objectives and maximize resource efficiency.

For example, a technology company may use PPM to evaluate multiple software
development projects, prioritizing those that support its goal of enhancing customer
experience while reallocating resources from lower-priority initiatives to ensure successful
project outcomes.

Project Selection Criteria

When selecting projects, organizations typically consider several criteria:

Alignment with Strategic Goals: Projects should directly support the organization's strategic
objectives.
Cost-Benefit Analysis: An evaluation of the expected costs versus the potential benefits of
each project is crucial. This includes financial metrics such as return on investment (ROI),
payback period, and net present value (NPV) .

Risk Assessment: Understanding the risks associated with each project helps in making
informed decisions. Projects that carry excessive risk relative to their potential benefits may
be deprioritized .

Resource Availability: Consideration of the organization’s capacity to undertake a project,

including human, financial, and technological resources, is vital. Projects should be realistic
in terms of the resources required for successful completion .

Flexibility and Adaptability: The ability to adapt to changing circumstances or strategic shifts
is important. Projects should be selected based on their potential for flexibility in execution
and alignment with evolving organizational strategies

Types of Project Selection Models

Organizations utilize various models to aid in project selection, which can be broadly
categorized into:

Non numeric Models: These models do not rely on quantifiable metrics but instead consider
qualitative factors such as regulatory requirements or strategic fit. Examples include the
Sacred Cow model and the Competitive Necessity model .

Numeric Models: These models use quantitative data to evaluate projects. Common
approaches include:
Profitability Models: Focus on financial returns, using metrics like ROI and NPV.

Scoring Models: Evaluate multiple criteria by assigning scores to projects based on various
factors, allowing for a more holistic decision-making process .

Real Options Models: These models consider the value of future opportunities that a project
may create, allowing organizations to defer decisions until more information is available
 A Business Project Proposal
 A business project proposal is a formal document that outlines a specific project, detailing its
objectives, scope, and benefits to persuade potential clients or investors to engage in the
project.

For example, a proposal for a new marketing strategy might include an analysis of current
market trends, a plan for targeted advertising, and a projected increase in sales,
demonstrating how the investment will yield a positive return.

 Components of a Business Proposal

Title Page
Include the title of the proposal, your name, business contact information, the client's name,
and the submission date.

Table of Contents
This section helps navigate longer proposals. Hyperlinks can enhance usability.

Executive Summary
A brief overview of the proposal, highlighting the problem, proposed solution, and benefits.

Problem Statement
Clearly articulate the issue that your proposal aims to address.

Proposed Solution
Detail the solution you are offering, including how it addresses the client's needs.

Qualifications
Showcase your team's expertise and experience relevant to the project.

Timeline
Provide a realistic schedule for project completion, including key milestones.

Pricing
Outline the costs associated with the project, emphasizing the return on investment for the
client.

Terms and Conditions

 Specify the terms of the engagement, including payment terms and any legal considerations.
Summarize the proposal and suggest the next steps for moving forward.

Chapter 3

The Career of a Project Manager

 Key Skills of a Project Manager

 Key skills of a project manager include communication and leadership. Effective
communication is crucial for conveying project goals and updates to team members and
stakeholders, as demonstrated when a project manager holds regular meetings to ensure
everyone is aligned with the project's objectives.

Leadership skills enable a project manager to motivate and guide their team, such as when
they delegate tasks based on individual strengths, fostering a collaborative environment that
enhances productivity.

 Functional Manager vs Project Manager

 A functional manager oversees a specific department or function within an organization,
focusing on managing resources and personnel to achieve departmental goals, such as a
Sales manager leading a sales team.
 In contrast, a project manager coordinates all aspects of a project across various
departments, ensuring that the project is completed on time and within budget, like a
Project Manager overseeing a software development project that involves multiple teams

 Important Characteristics in Selection of a Project Manager

 A successful project manager must exhibit strong communication skills and strategic
thinking. For instance, a project manager who effectively communicates with team members
and stakeholders can navigate conflicts and ensure alignment on project goals, while
strategic thinking allows them to connect project tasks to broader business outcomes,
enhancing overall project impact and success
 Responsibilities of a Project Manager
 A project manager is responsible for overseeing the planning, execution, and completion of a
project, ensuring that it meets its objectives within the agreed-upon timeline and budget.
For example, in a software development project, the project manager would coordinate
between the development team and stakeholders, manage resources, and address any
issues that arise to keep the project on track.

 Important Characteristics of an Effective Project Team Member

 One important characteristic is open communication, which allows team members to
express their ideas and concerns freely, fostering a collaborative environment. For example,
 a team member who actively shares their insights during meetings can help identify
potential issues early on, leading to more effective problem-solving and decision-making.

 Another crucial trait is clearly defined roles, ensuring that each member understands their
responsibilities and how they contribute to the team's objectives. For instance, in a software
development project, having a designated developer, designer, and project manager helps
streamline tasks and enhances accountability, ultimately leading to a more efficient
workflow.

Chapter 4

Management Conflicts and Negotiations

 Types of Conflicts
 Conflict can be categorized into two main types: internal and external. Internal conflict
occurs within an individual, such as a character struggling with their own beliefs or desires,
exemplified by a lawyer torn between defending a guilty client and their moral principles.

 External conflict, on the other hand, involves a character facing opposition from outside
forces, like in The Hunger Games, were Katniss Everdeen battles other contestants for
survival, representing a classic "person vs. person" scenario

 Fundamental Issues for Potential Conflicts

 Potential conflicts often arise when individuals or groups have differing interests or goals that
may lead to disagreements.

For example, in a workplace setting, a manager may face a potential conflict when a team
member's personal ambition to lead a project clash with the manager's decision to assign the
project to another employee, creating tension and possible resentment among team members

 Conflicts and the Project Life Cycle

 Conflicts in the project life cycle can arise at various stages due to differing stakeholder
expectations, resource constraints, or changes in project scope.

For example, during the implementation phase, a conflict may occur if team members disagree
on the best approach to integrate new technology, potentially impacting project timelines and
deliverables
Chapter 5

Project Management Organizational Structure

 Program Manager vs Project Manager

 A program manager oversees multiple interconnected projects to achieve strategic business
objectives, such as managing a marketing program that includes various campaigns, while a
project manager focuses on the execution of a specific project, like launching a new product
within that program

 The Project Organizational Structure

 A project organizational structure defines the roles, responsibilities, and reporting relationships
among team members involved in a project, ensuring efficient coordination and
communication throughout the project lifecycle.

For example, in a functional organizational structure, team members are grouped by their
departmental roles, such as marketing or engineering, with a functional manager overseeing the
project coordination, while in a projectized structure, dedicated project managers lead teams
focused solely on project objectives

 Organizing Project Within a Functional Organization

 In a functional organization, projects are managed within the existing departmental structure,
where team members are assigned based on their functional expertise. For example, in a
manufacturing company launching a new product, the design team may handle specifications,
the production department manages manufacturing processes, and the marketing team
conducts market analysis, all while reporting to their respective functional managers.

 Organizing Project Within a Projectized Organization

 In a projectized organization, all activities are structured around projects, with project managers
holding full authority over their teams and resources.

For example, in a video game development company, a project manager might oversee two sub-
projects—coding and graphics development—where team members report directly to them,
ensuring streamlined communication and focused efforts towards the successful completion of
the game.

 Organizing Project Within a Matrix Organization

 A matrix organization structure allows for flexibility in project management by combining
functional and project-based hierarchies, enabling employees to work across multiple projects
while reporting to both functional and project managers.
 For example, in a company developing a new product, a marketing employee might
simultaneously report to their marketing manager for departmental tasks and to the project
manager overseeing the product development, facilitating collaboration and resource sharing
across different areas of expertise.

 Forms of Matrix Organization

 Matrix Organization - A matrix organization is a company structure where teams report to
multiple leaders.

The matrix design keeps open communication between teams and can help companies create
more innovative products and services. Using this structure prevents teams from needing to
realign every time a new project begins.

Types of Matrix Organizations

Weak Matrix Organization: In this structure, the functional manager holds most of the authority,
and the project manager has limited decision-making power. This arrangement resembles a
traditional hierarchical structure, where project managers primarily serve as coordinators rather
than leaders.
Balanced Matrix Organization: Here, authority is shared equally between the project manager
and the functional manager. This setup encourages collaboration and ensures that both
managerial perspectives are considered in decision-making processes, fostering a more
integrated approach to project management.
 Strong Matrix Organization: In this model, project managers have greater authority than
functional managers. This empowers project managers to make decisions independently, which
can lead to faster project execution and enhanced accountability. However, it may also create
tension if functional managers feel sidelined.

 Organizing Project Within a Virtual Organization

 A virtual organization is a flexible business model where employees work remotely from various
geographical locations, leveraging technology to coordinate tasks and achieve common goals.

For example, Automattic, the company behind WordPress, operates without a central office,
with over 1,200 employees collaborating online from more than 70 countries, utilizing various
digital tools for project management and communication

 Selecting the Optional Organizational Structure

 An optional organizational structure allows a company to adopt a flexible approach to its
hierarchy, often facilitating collaboration across different teams and departments.

For example, a matrix organizational structure combines functional and divisional elements,
where employees report to multiple managers, such as a project manager and a department
head, allowing for enhanced communication and resource sharing across projects and functions

Chapter 6

Project Activity Planning

 Project Planning in Action
Project planning involves creating a comprehensive roadmap that outlines the objectives, scope,
deliverables, timelines, resources, and activities necessary to successfully complete a project.

For example, in planning a corporate event, the project plan would detail the event's goals,
budget, venue selection, and a timeline for tasks such as sending invitations and arranging
catering, ensuring all aspects are coordinated efficiently.

 The Project Charter

A project charter is a formal document that authorizes the existence of a project, outlining its
objectives, scope, and the roles of participants, thereby providing a shared understanding
among stakeholders.

For example, a project charter for implementing a new customer relationship management
(CRM) system would detail the project's goals, such as improving customer engagement, the
timeline for implementation, and the team members responsible for various tasks

 Project Overview Section

 The project overview section should provide a concise summary of the project, including its
objectives and expected outcomes.

For example: The [Project Name] aims to develop a mobile app that helps users track their daily
calorie intake and exercise routines. The app will provide personalized recommendations based
on the user's health goals and fitness level, and will integrate with popular fitness trackers to
provide a comprehensive view of the user's health data.

 Project Approach Selection

 Project approach selection is the process of choosing the most suitable methodology for
executing a project based on its specific requirements, constraints, and objectives.

For example, an agile approach may be selected for a software development project that
requires flexibility and rapid iterations, while a waterfall approach may be chosen for a
construction project with well-defined phases and deliverables.

 Project Approval Selection

 Project selection is the process of evaluating potential projects to determine which ones an
organization should pursue based on their potential value and strategic fit.

It involves choosing projects that align with the organization's goals and have the highest chance
of success.

 The key steps in the project selection process are:

Identify potential projects

 Compare the projects

Analyze the findings

Select the project

 Writing the Project Scope

 The project scope defines the boundaries of a project, specifying what will and will not be
included. It outlines the project's objectives, deliverables, tasks, costs, and timeline, ensuring
everyone is aligned on the project's goals.

For example, the scope of a website redesign project might include transferring the backend to a
CMS platform, training content writers, and launching the new site by a specific date, while
excluding developing a new digital asset management system.

 Developing the Work Breakdown Structure (WBS)

 A Work Breakdown Structure (WBS) is a hierarchical decomposition of a project into smaller,
more manageable components, typically organized by deliverables or phases.

For example, in a construction project, the WBS might start with the overall goal of "Build a
House" at the top level, followed by major components like "Foundation," "Framing," and
"Roofing" at the next level, each further broken down into specific tasks such as "Excavate Site"
or "Install Roof Shingles" at lower levels.

Chapter 7

Project Budgeting and Estimation

 Cost Estimation
 Cost estimation is the process of forecasting the financial resources required to
complete a project within a defined scope, considering both direct and indirect costs
such as materials, labor, and overhead.

For example, in a construction project, a cost estimate might project a total expense of
P500,000 based on detailed calculations of labor, materials, and equipment needed,
which can then be compared against actual costs incurred during the project.

 Types of Project Costs

 Fixed cost: These are costs that do not change based on the number of items produced.
For example, the depreciating value of a building or the price of a piece of equipment.

 Variable cost: These costs are tied to a company’s level of production. For example, a
bakery spends $10 on labor and $5 on raw materials to produce each cake. The variable
cost changes based on the number of cakes the company bakes.
  Operating costs: These are those expenses incurred by an organisation to maintain the
product on a day to day basis. Traveling cost, telephone expenses, office supplies are
some of things that come under operating costs.

 Direct costs: These costs can be directly associated with production. For example, if a
furniture manufacturing company takes five days to produce a couch, then the direct
cost of the finished product includes the raw material cost and labor charges for five
days.

For example, in a construction project, direct costs include materials and labor directly
tied to the project, while fixed costs might involve rental fees for equipment that remain
constant throughout the project duration.

 Methods of Estimating Costs

 Cost estimation methods are essential for predicting the financial resources required to
complete a project.
 Common methods include the analogous estimate, which uses historical data from
similar projects to forecast costs, and the bottom-up estimate, where costs are
calculated for individual tasks and summed to determine the total project cost; for
example, estimating the cost of a new advertising campaign by analyzing past campaigns
and adjusting for current conditions
Analogous estimating is a project management technique used to estimate the
duration, cost, and resources for a current project by referencing historical data from
similar past projects.

Bottom-up estimating is a technique that helps determine the overall cost and timeline
of a project.

 Sample Project Estimate

 Project estimation is the process of forecasting the total costs, resources, and time required to
complete a project, utilizing various methods such as analogous, bottom-up, or parametric
estimating.

For example, if a digital agency wants to revamp a client's website, they might look at a similar
past project to estimate costs based on previous labor hours and expenses, adjusting for any
changes in scope or resources needed.

 Sample Parametric Computation

 Parametric computation is a method used to estimate costs, durations, or resources in project
management by utilizing historical data and mathematical relationships.

For example, if a construction company knows from past projects that it costs P200 per square
foot to build and plans a new building of P3,000 square feet, the estimated construction cost
would be calculated as P200 × P3,000 = P6,000,000
  Creating a Project Budget
 Creating a project budget involves estimating all costs associated with a project to ensure that
resources are allocated effectively and the project remains financially viable.

For example, if a company is developing a mobile app, the budget would include expenses for
labor (like salaries for developers and designers), materials (such as software licenses), and other
costs (like marketing and travel expenses) to create a comprehensive financial plan that guides
the project's execution

 Ways to Improve the Process of Cost Estimation and Budgeting

 Improving the process of cost estimation and budgeting can be achieved through methods such
as creating a Work Breakdown Structure (WBS) and involving team members in the estimation
process.

For example, a project manager named John utilized a WBS to break down a network system
replacement project, allowing his team to provide detailed estimates for each task, which led to
a more accurate overall project cost of P120,000, compared to an initial estimate of P125,000

Chapter 8

Project Scheduling

 A Background on Project Scheduling

Project scheduling is a crucial aspect of project management that involves organizing tasks,
milestones, and deliverables within a defined timeline, ensuring that all activities are planned
with specific start and end dates, durations, and resource allocations.

For example, in a software development project, a project schedule might include milestones
such as "completion of requirements gathering" and "final product deployment," alongside
detailed tasks like "design interface" and "conduct user testing," each with assigned team
members and deadlines to track progress effectively

 The Ghantt Chart

 A Gantt chart is a visual project management tool that displays the timeline of a project,
illustrating the start and finish dates of various tasks and their dependencies. It typically consists
of horizontal bars representing tasks, with the length of each bar indicating the duration of the
task, allowing for effective scheduling, tracking, and management of project progress.
 Deterministic Time Estimate
 A deterministic time estimate is a single duration value assigned to an activity or project, without
considering uncertainty or risk. It provides a definitive start and end date, assuming everything
goes as planned.

For example, if a project has 100 activities and each activity has one duration estimate, then it is
considered a deterministic schedule. The overall project duration is a sum of these single activity
estimates.

 A Computing Algorithm
 A computing algorithm is a step-by-step procedure for solving a problem or performing a task
using a computer. It consists of a finite sequence of well-defined instructions that, when
executed, produce a desired output from a given input.

Example: To find the maximum of two numbers, the algorithm would be:

Compare the two numbers

If the first number is greater, return the first number, else return the second number.
  Computing ES and EF Times
 Earliest Start (ES) and Earliest Finish (EF) times are crucial components in project scheduling,
particularly within the Critical Path Method (CPM). The ES is determined by the earliest time an
activity can start, which is the highest EF of its predecessor activities, while the EF is calculated
by adding the activity's duration to its ES (EF = ES + Duration) .

For example, if an activity has an ES of 5 days and a duration of 3 days, its EF would be 8 days (5
+ 3 = 8). This means the activity can be completed by day 8 at the earliest, allowing subsequent
tasks to be scheduled accordingly

Chapter 9

Project Resource Allocation

 Project Evaluation Review Technique, or PERT - is used to identify the time it takes to finish a
particular task or activity. It is a system that helps in the proper scheduling and coordination of
all tasks throughout a project.
 Critical Path Method (CPM)
 The critical path method (CPM) is a project management technique used to identify the
sequence of activities that determine the duration of a project.

It involves mapping out key tasks necessary for project completion, determining their durations
and dependencies, and identifying the critical path - the longest sequence of activities that must
be finished on time for the entire project to be completed as scheduled.

For example, in building a house, the critical path may include tasks such as laying the
foundation, framing the walls, and installing the roof, which must be completed in a specific
order and on time for the project to be finished as planned
 Crashing a Project
 Project crashing is a project management technique used to reduce the overall duration of a
project by allocating additional resources, often resulting in increased costs.

For example, if a magazine launch is delayed due to late approvals, the project manager might
opt to pay a rush fee to the printer to ensure the magazine is ready in time for the company's
anniversary celebration, thereby accelerating the project timeline at an added expense.

 Fast Tracking a Project

 Fast tracking in project management is a technique used to accelerate project timelines by
performing tasks concurrently rather than sequentially.

For example, in a project to launch a new car model, the design team could start ordering
materials for parts that are already finalized while still working on other design aspects, thereby
reducing the overall time needed for production

 The Resource Allocation Problem

 Resource allocation refers to the process of assigning available resources—such as time, money,
and personnel—to various tasks or projects to achieve specific objectives efficiently.

For example, in a software development project, a project manager might allocate more
developers to a critical feature that is behind schedule while assigning fewer resources to less
urgent tasks, ensuring that the project meets its deadlines without overburdening any individual
team member.

 Resource Loading
 Resource loading is the process of assigning workloads to team members based on their total
available working hours, calculated as the total assigned hours divided by the number of hours
available for work.

For example, if a project manager assigns a team member 30 hours of work in a week where the
member has 40 hours of capacity, the resource loading would be 75%, allowing for additional
tasks or unforeseen responsibilities.

 Resource Leveling
 Resource leveling is a project management technique used to resolve overallocation or
scheduling conflicts by adjusting project timelines and resource allocations to ensure that
projects are completed with the available resources.

For example, if a graphic designer is double-booked, the project manager might delay the start
date of one project to ensure the designer can focus on delivering quality work without being
overwhelmed, while still meeting the overall project deadline.

 Constrained Resource Scheduling

 Resource-constrained scheduling is a project management technique that optimizes the
allocation of limited resources, such as manpower and materials, to ensure that project activities
are completed within a specified timeframe.

For example, if a construction project requires two workers to paint a room in 8 hours but one
worker is unavailable due to illness, the remaining worker will take 16 hours to complete the
task, illustrating the impact of resource constraints on project timelines.

 Heuristic Method
 A heuristic is a mental shortcut or rule of thumb that allows people to make quick decisions and
solve problems efficiently, even if the solution is not optimal.

For example, when deciding whether to take an unfamiliar route to avoid traffic, you might rely
on a heuristic based on your past experience to make a quick judgment call.

 Optimizing Methods
 Optimization methods involve identifying the best solution from a set of alternatives by
maximizing or minimizing an objective function, subject to constraints.

For example, in a crop planning scenario, a farmer might use optimization to determine the
optimal amounts of different crops to plant in order to maximize profits while considering factors
like available land and resources.

 Multi Project Scheduling and Resource Allocation

 Multi-project scheduling and resource allocation involve managing multiple projects
simultaneously while efficiently distributing limited resources among them.

For example, a construction company may have several projects underway, such as building a school,
a hospital, and a shopping center; the project manager must allocate labor and materials based on
project priorities and deadlines to ensure timely completion without exceeding budget constraints.

 Manufacturing Process Models

 Manufacturing process models are systematic frameworks that outline the methods used to
convert raw materials into finished products.

An example of this is batch process manufacturing, commonly employed in the food industry,
where ingredients are mixed and processed in specific quantities to create products like sauces
or baked goods, following a predetermined recipe and sequence of operations

 Mathematical Programming
 Mathematical programming plays a crucial role in project management by providing systematic
approaches to optimize various project-related decisions. This encompasses techniques for
 resource allocation, scheduling, and cost management, all aimed at achieving project objectives
efficiently.

For example, in a linear programming problem, one might aim to maximize profit from producing
goods, represented by the objective function, while ensuring that production does not exceed
available resources, which are the constraints of the model.

Chapter 10

Project Monitoring and Information System

 The Planning - Monitoring - Controlling Cycle

 The Planning-Monitoring-Controlling Cycle is a continuous process in project management that
involves three key phases: planning, monitoring, and controlling.

For example, in an IT project, the planning phase might involve setting a timeline and resource
allocation to complete software development in six months, while the monitoring phase
assesses actual progress against this plan, and the controlling phase implements corrective
actions if the project falls behind schedule, such as increasing team resources to meet deadlines.

 Designing the Monitoring System

 To design an effective monitoring system, it is crucial to clearly define the purpose and scope,
agree on outcomes and objectives, and plan data collection, analysis, and reporting processes.

For example, a monitoring system for a development project should track key indicators, assign
responsibilities, and integrate with overall project management to support decision-making,
learning, and accountability.

 How To Collect Data

 Data collection is the systematic process of gathering observations or measurements to gain
insights into a research problem, which can be qualitative (e.g., interviews) or quantitative (e.g.,
surveys) in nature.

For example, a business might conduct a survey to collect quantitative data on customer
satisfaction levels, while a researcher might use interviews to gather qualitative insights into
customer experiences.

 Information Needs and the Reporting Process

 Information needs refer to the specific requirements for data and insights that individuals or
organizations seek to make informed decisions. The reporting process involves systematically
collecting, processing, and presenting this information in a way that is accessible and
comprehensible to the intended audience, such as through financial reports or marketing
analyses that highlight key performance indicators.
 For example, a marketing department may require information on customer engagement
metrics to assess the effectiveness of a recent campaign; this need can be addressed through a
report that compiles data from social media interactions and website traffic, allowing the team
to evaluate their strategies effectively.

 Types of Report in Project Management

There are several types of project management reports that provide valuable insights into
different aspects of a project:

 Project Status Reports give a general snapshot of how well the project is progressing towards its
goals, including work completed, costs, schedules, and any issues or risks.

 Project Health Reports provide an overview of the overall health of the project, indicating
whether it is on track, in danger of stagnating, or completely stagnated, helping identify issues
and get the project back on track.

 Time Tracking Reports show what projects team members are spending time on, providing
useful data to improve scheduling, resource management, and revenue, especially in
professional services agencies.

 Risk Reports identify and categorize project risks based on severity and likelihood, helping
prioritize issues and eliminate harmful risks before they cause damage or project failure.

 Variance Reports compare actual project performance to the baseline plan, identifying areas
where the project is deviating from the plan so corrective action can be taken.

 Resource Reports help effectively plan project resources and ensure the team has the resources
needed to complete the project successfully.

 Common Reporting Problems

 Some common reporting problems include inconsistent formatting, lack of balance between
quantitative and qualitative data, and overly detailed reports that overwhelm the reader.

For example, if two objectives have different formats (one missing the objective description and
the other missing the analysis of why the target was not met), reviewing the objectives becomes
frustrating and time-consuming.

 Earned Value Analysis

 Earned Value Analysis (EVA) is a project management technique that integrates cost and
schedule data to assess project performance by comparing the planned progress against the
actual progress.
 For example, if a project has a Planned Value (PV) of P100,000 after six months, but the Earned
Value (EV) is only P80,000, this indicates that the project is behind schedule, as it has not
achieved the expected level of completion.

 Computerized Project Management Information System (PMIS)

 A Computerized Project Management Information System (PMIS) is a software application
designed to collect, organize, and manage project data, enabling project managers to plan,
execute, and monitor projects effectively.

For example, a construction company might use a PMIS to track project timelines, budgets, and
resource allocation, ensuring that all stakeholders have access to real-time information and can
make informed decisions throughout the project's lifecycle.

 Current Software
 Software is a collection of instructions and data that enables a computer to perform specific
tasks, functioning as the variable component of a computer system. It is broadly categorized
into system software, which manages hardware and provides a platform for application software
(e.g., operating systems like Windows or macOS), and application software, which performs
specific user-oriented tasks (e.g., word processors like Microsoft Word or web browsers like
Chrome)

 Choosing Software
 When choosing software, consider factors such as cost, customizability, security, and the level of
support offered by the vendor.

For example, when selecting a word processor, you might prioritize ease of use, compatibility
with common file formats, and the availability of templates and collaboration features

Chapter 11

Project Control

 Physical Asset Control

 A physical asset is a tangible item owned by a company that has economic value and is used to
generate revenue.

Examples include machinery in a manufacturing facility or vehicles in a transportation company,

both of which are essential for operational efficiency and are subject to management practices
to maximize their value and longevity.

 Human Resource Control

 Human resource controls are mechanisms that organizations implement to manage employee
behavior and performance, ensuring alignment with company policies and objectives.
 For example, a performance appraisal system evaluates an employee’s work against set
standards, providing feedback that can guide future performance improvements, such as using
rating scales for task-oriented roles like bank tellers and janitors.

 Financial Resource Control

 Financial resource control refers to the policies and procedures implemented by an organization
to manage and monitor the allocation and usage of its financial resources effectively.

For example, a company may conduct regular account reconciliations to ensure that its financial
records accurately reflect its cash inflows and outflows, thereby preventing errors and potential
fraud. .

 Three Types of Control Process

 The control process in management consists of three main types: feedback control, proactive
control, and concurrent control.

Feedback control evaluates outcomes after a process is completed, such as assessing a sales
team's performance against set goals at the end of a quarter to determine if adjustments are
needed.

Proactive control anticipates potential issues before they arise, exemplified by engineers testing
vehicle braking systems prior to mass production to prevent future failures.

Concurrent control involves real-time monitoring during an activity, like using GPS fleet tracking
to optimize delivery routes and ensure timely arrivals.

 Go / No-Go Controls
 Go/No-Go controls are decision-making processes used to determine whether a project or task
should proceed based on specific preconditions being met.

For example, in a project management context, a Go/No-Go decision might occur at the end of a
project phase where a checklist evaluates whether all criteria have been satisfied to move
forward; if they are met, the project continues ("go"), but if not, it is halted or revised ("no-go")
to address the issues identified

 Post Control
 Post control refers to managerial analysis of works in a project after the fact, focusing on the
outputs of the organization after the transformation process is complete.

It involves identifying underlying causes of problems, preparing corrective action plans, and
conducting lessons-learned reviews at the close of a project to avoid similar issues in the future.

For example, if a project member announces a significant variance from the project baseline, the
project manager should require that individual to prepare a corrective action plan and also
identify what caused the problem in the first place. Post control is also appropriate when
 developing a software for construction project management, where the project manager can use
it to analyze the outputs after the software development is complete and make improvements
for future projects.

 Critical Ratio Control Charts

 Critical Ratio Control Charts are tools used in project management to visualize the performance
of a project by combining cost and schedule metrics into a single indicator known as the Critical
Ratio (CR). The CR is calculated as the product of the Cost Performance Index (CPI) and the
Schedule Performance Index (SPI), where a CR of less than 1 indicates poor performance, a CR of
1 indicates on-target performance, and a CR greater than 1 signifies good performance.

For example, in a software development project, a control chart might plot the CR across
different phases such as design and testing. If the chart shows all data points within control
limits, it indicates stable project performance, while points outside these limits suggest
variations that may require investigation to identify best practices or inefficiencies.
 Benchmarking
 Benchmarking is the process of comparing a company's performance metrics, processes, or
practices against those of industry leaders or competitors to identify areas for improvement.

For example, a retail chain may benchmark its sales per square foot against top-performing
stores in the industry to determine strategies for enhancing its own sales performance.

 Control of Creative Activities

 Creative activities can be effectively controlled by providing children with a supportive
environment that encourages exploration and experimentation while allowing them the freedom
to express their creativity. For example, a teacher might set up a space with various art materials
and invite students to create whatever they like, while also offering guidance by asking open-
ended questions about their process, thus fostering both creativity and critical thinking skills.

 Control of Input Resources

 Input resources in operations management are categorized into two types: transformed
resources, which are altered during the production process (such as raw materials), and
transforming resources, which facilitate the transformation (like labor and machinery).

For example, in a restaurant, the transformed resources include food ingredients, while the
transforming resources encompass the chefs and cooking equipment used to prepare the meals.
  Control of Change and Scope Creep
 Control of change and scope creep involves managing alterations to a project's scope to prevent
unplanned expansions that can lead to delays and budget overruns.

For example, if a software development project initially includes three features but stakeholders
request the addition of five more features after the project has started, this constitutes scope
creep, which can disrupt timelines and resource allocation if not properly managed

Chapter 12

Project Auditing

 The Nature of Project Evaluation

 Project evaluation is a systematic process that assesses the success and effectiveness of a
project by analyzing its performance against predefined objectives and criteria.

For example, a nonprofit organization might evaluate a community health initiative by measuring
its impact on local health outcomes, budget adherence, and stakeholder satisfaction to
determine whether to continue, modify, or discontinue the program.

There are three main types of project evaluation:

Pre-project evaluation: Evaluating the project plan, scope, objectives, resources and budget
before the project begins.

Ongoing evaluation: Constantly monitoring and reporting on the project in real-time to ensure it
is meeting scheduling and budget milestones.

Post-project evaluation: Analyzing the project data, paperwork and team feedback after
completion to understand what worked and what went wrong.

 Purposes of Evaluation Goals of the System

 Evaluation serves multiple purposes, primarily to assess the effectiveness and efficiency of a
system in achieving its goals and objectives.

For example, in a healthcare program, evaluation can determine how well the program improves
patient outcomes by analyzing data on treatment success rates and patient satisfaction, thereby
informing future program enhancements.
 Purposes of Evaluation:

Assessing Effectiveness: Evaluation critically examines a program's activities, characteristics, and

outcomes to determine its effectiveness. This process helps in making informed judgments
about the program and identifying areas for improvement.

Demonstrating Impact: Through evaluation, organizations can showcase their program's success
and progress, which is vital for public relations and securing support from stakeholders, including
funders.

Improving Design and Implementation: Regular evaluations allow organizations to adapt their
activities, ensuring they meet their goals effectively. This ongoing assessment helps refine
objectives and enhance overall program productivity.

Enhancing Transparency and Accountability: Evaluation processes promote transparency by

documenting project progress and outcomes, which fosters accountability among stakeholders.

Learning from Experience: Evaluations provide insights into both successes and failures, allowing

organizations to learn from their experiences and apply these lessons to future projects .

 Goals of the System

Efficiency Measurement: One of the primary goals is to assess the efficiency of the system in
achieving its intended outcomes. This involves analyzing data on user interactions and system
performance to ensure that resources are utilized effectively.

Identifying Areas for Improvement: System evaluation aims to pinpoint specific areas where the
program or system can be enhanced. This includes refining processes, improving user
experiences, and addressing any shortcomings.

Establishing Cause-Effect Relationships: Evaluations help in understanding the relationships

between various program components and their impacts on overall goals, facilitating better
decision-making.

Supporting Strategic Planning: By integrating evaluation into strategic planning, organizations

can set measurable objectives and continuously monitor progress, ensuring alignment with long-
term goals.

Encouraging Innovation: The evaluation process can stimulate innovative approaches and
methods for data collection and analysis, enhancing the program's adaptability and
effectiveness.

 The Project Audit

 A project audit is an independent assessment that evaluates various aspects of a project,
including its scope, timeline, budget, and adherence to project management methodologies. The
primary goals of conducting a project audit include:
 Enhancing Project Outcomes: By identifying best practices and areas for improvement, audits
can lead to better project results. For instance, audits may reveal communication gaps that,
when addressed, can improve stakeholder engagement and reduce delays.

Early Detection of Issues: Audits help in recognizing potential problems early in the project
lifecycle, allowing teams to implement corrective actions promptly. This proactive approach can
prevent minor issues from escalating into significant setbacks.

Ensuring Compliance: Project audits verify that projects comply with relevant regulations and
standards, such as safety and environmental requirements. Recommendations from audits can
guide teams in establishing necessary controls.

Building Stakeholder Trust: By demonstrating effective project management practices through

audits, organizations can foster trust among stakeholders, assuring them of the project's viability
and management integrity.

 Audit Process
 The project audit process typically involves several key steps:

Planning the Audit: This initial phase involves informing all stakeholders about the audit's
purpose and scope, emphasizing its role in improvement rather than blame.

Conducting the Audit: This step includes gathering data through interviews, document reviews,
and observations. It aims to assess the project's adherence to its defined objectives and
management practices.

Summarizing Findings: After data collection, auditors compile their findings into an executive
summary that highlights successes, areas needing improvement, and recommendations for
future actions.

Presenting Results: The audit results are shared with stakeholders, including project teams and
management, to ensure transparency and facilitate discussions on improvements.

Developing an Action Plan: Based on the audit findings, an action plan is created to address
identified issues, with specific assignments and deadlines for implementation.

Follow-Up: Regular follow-ups on the action plan ensure that improvements are being made and
that the project remains on track.

Continuous Improvement: The audit process is cyclical, encouraging ongoing evaluations to

foster continuous improvement in project management practices.

 Depth of Audit
 The depth of an audit refers to the thoroughness with which the auditor examines the relevant
documents, processes, and controls. This depth can vary significantly based on the type of audit,
the objectives set, and the inherent risks associated with the area being audited.
 Factors Influencing Audit Depth

Type of Audit: Different audits, such as financial, compliance, or operational audits, require varying
levels of depth.

For example, a full audit engagement involves a comprehensive review of financial statements, while
a review engagement is less intensive, focusing on plausibility rather than accuracy.

Risk Assessment: Auditors often conduct a risk assessment to determine which areas require more
scrutiny. High-risk areas typically receive a more in-depth examination to mitigate potential issues.

Stakeholder Expectations: The depth of the audit may also be influenced by the expectations of
stakeholders, including management, investors, and regulators. A thorough audit can provide greater
assurance to these parties regarding the integrity of financial reporting and operational
effectiveness.

 Practical Considerations

Preparation Time: Auditors often spend significant time preparing for audits, which can range from 3
to 10 hours just to study documentation before the actual audit begins. This preparation is crucial for
determining the depth of the audit.

Documentation vs. Practice: There is often a disparity between the time spent on documentation
review and actual fieldwork. For instance, in some cases, auditors may spend 66% of their time on
documentation and only 34% on practical verification, which can affect the overall quality of the
audit.

Internal vs. External Audits: Internal audits may focus more on operational aspects and compliance,
while external audits are typically more rigorous in validating financial statements. The depth of
investigation in external audits is often greater due to regulatory requirements and the need for
public confidence.

 Timing of the Audit

 The timing of audit procedures refers to when they are performed during the audit process.

For example, tests of controls over the entity's physical inventory counting are typically
performed at the period end, while tests of the entity's monitoring of controls are conducted
over a period of time to provide evidence that the control operated effectively at relevant times
during that period.

 Construction and Use of Audit Report

 Audit reports are essential tools in the construction industry, providing stakeholders with
insights into project performance, compliance, and financial integrity. The construction and use
of these reports involve several key components and best practices.
 Construction of Audit Reports

Key Elements:

Scope and Objectives: Audit reports should clearly define the scope of the audit and its
objectives. This includes specifying the areas being audited, such as financial records,
compliance with regulations, and project management practices.

Methodology: The report should outline the methodology used during the audit, detailing the
processes and techniques employed to gather and analyze data. This transparency helps
stakeholders understand the basis of the findings.

Findings and Evidence: A critical part of the audit report is the presentation of findings. Each
finding should be supported by evidence, such as data, documents, and observations, to validate
the conclusions drawn.

Recommendations: Effective audit reports include actionable recommendations based on the

findings. These should be prioritized according to urgency and importance, providing
stakeholders with clear guidance on how to address identified issues.

Conclusion and Audit Opinion: The conclusion section allows auditors to summarize their
observations and provide an overall opinion on the audited areas. This section may also highlight
positive aspects of the project or management practices, encouraging continuous improvement.

 Challenges in Report Construction

The construction of audit reports, especially in public sector organizations, can face challenges
such as identifying the appropriate audience and determining the content and format that best
communicates findings. These challenges can affect the report's communicative value, making it
crucial for auditors to tailor their reports to meet stakeholder needs effectively.

 Use of Audit Reports

Stakeholder Engagement: Audit reports serve various stakeholders, including management,
investors, and regulatory bodies. Engaging these stakeholders early in the audit process helps
ensure that their concerns and expectations are addressed, enhancing the report's relevance
and impact.

 Reporting Best Practices

Clarity and Conciseness: Reports should be clear and concise, avoiding jargon that might
confuse the audience. This ensures that key messages are easily understood.

Contextualization: Providing context around findings, such as how they relate to the overall
project or organizational goals, adds value and helps stakeholders make informed decisions.

Quality Assurance: Prior to finalizing the report, conducting multiple reviews and incorporating
feedback from various stakeholders can enhance its quality and reliability.
 Presentation Formats: Audit results can be communicated through various formats, including
verbal presentations, written summaries, or detailed reports, depending on the audience's
needs and preferences.

 Responsibilities of the Project Auditor / Evaluator

 The responsibilities of a Project Auditor/Evaluator include conducting comprehensive
assessments of project processes and outcomes to ensure compliance with established
standards and regulations, as well as reporting findings to stakeholders.

For example, an auditor may evaluate a construction project to ensure that safety protocols are
followed and that the project stays within budget, providing recommendations for improvement
based on their findings

 The Project Audit Life Cycle

 The project audit life cycle is a structured process that evaluates a project's performance,
compliance, and effectiveness throughout its duration. It consists of six distinct phases, each
essential for ensuring that the project meets its objectives and adheres to established standards.

Phases of the Project Audit Life Cycle

 Audit Initiation: This phase involves defining the scope and objectives of the audit. It includes
identifying the business need, problem, or opportunity that the project addresses, and
determining the feasibility and major deliverables of the project.

Project Baseline Definition: In this stage, the project’s baseline is established, which serves as a
reference point for measuring performance. This includes defining key metrics such as scope,
schedule, budget, and quality standards.

 Establishing an Audit Database: This phase involves creating a comprehensive database that
includes all relevant project documentation, performance metrics, and historical data. This
database is crucial for conducting a thorough analysis.

 Preliminary Project Analysis: Here, the audit team conducts an initial review of the project’s
performance against the established baseline. This may involve interviews, document reviews,
and data analysis to identify any discrepancies or areas for improvement.

 Preparing Final Report: After the analysis, the audit team compiles the findings into a final
report. This report summarizes the audit results, highlighting strengths, weaknesses, and
recommendations for improvement.

 Project Audit Termination: The final phase involves concluding the audit process, which includes
presenting the findings to stakeholders, discussing the implications, and outlining the next steps
 for implementing recommendations. This phase ensures that all parties are informed and that
any necessary corrective actions are taken.

 The Audit / Evaluation Team

 The Audit/Evaluation Team conducts systematic assessments of an organization's processes,
controls, and compliance to ensure efficiency and effectiveness.

For example, during an operational audit, the team may evaluate whether a department's
resources are being utilized effectively to meet the organization's objectives, potentially leading
to recommendations for process improvements.

 Access to Project Personnel and Others

 Access to project personnel and others refers to the ability of stakeholders, including project
managers and team members, to engage with and utilize the resources and expertise of
individuals involved in a project.

For example, during a software development project, the project manager may need to
collaborate with developers, quality assurance testers, and technical writers to ensure that all
aspects of the project are aligned and progressing towards the final goal.

 Measurement
 Measurement is a critical aspect of project management that enables organizations to track
progress, identify issues, and make informed decisions. Here are some key points about
measurement in project management.

 Importance of Measurement

Measurement provides project visibility and delivers the data to strengthen the future of
projects.

Relevant metrics enable you to improve your understanding of project management by

removing uncertainty so that all involved parties can make well-informed decisions

Metrics prove the value of a project management team and improve performance.

 Types of Metrics

Some common project management metrics include:

Financial Measures: Return on Investment (ROI), Return on Capital Employed, Economic Value-
Added, Sales Growth, Productivity, Cost Savings.

Customer Measures: Customer Satisfaction, Customer Retention, Customer Acquisition,

Customer Profitability, Market Share.
 Project/Process Measures: Project Budget Performance, Project Schedule Performance,
Requirements Performance, Process Errors, Defects, Rework, Resource Utilization, Time to
Market.

Learning and Growth Measures: Employee Satisfaction, Employee Turnover, Training Time,
Employee Productivity, Employee Motivation.

 Choosing Metrics

Understand the purpose or goal of the project

Determine the critical success factors that need to be fulfilled

Identify how to measure the fulfillment of each critical success factor

Measuring Project Success

 Successful projects typically:

Deliver on time.
Stay within budget.
Achieve their objectives.
Receive positive feedback from stakeholders and clients.

 Tips for Effective Measurement

Focus on the metrics that significantly impact your project's outcome.

Use straightforward, informative language when communicating metrics and learnings.

Be transparent about project progress and issues.

Chapter 13

Project Termination

 When to Terminate a Project

 A project should be terminated when it no longer aligns with organizational goals, incurs
excessive costs, or fails to deliver expected outcomes. For example, a software development
project may be halted if a competitor releases a superior product, rendering the current project
obsolete and unprofitable.

 The Varieties of Project Termination

 Extinction: The project ends because it has achieved its goals or failed to achieve them. For
example, a project to develop a new product may be terminated after successfully launching the
product or if the project is no longer viable.
 Addition: A successful project becomes part of the parent organization. For example, a project to
implement a new software system may be terminated by incorporating the system into the
organization's IT infrastructure.

 Integration: The completed project is incorporated into the client's operations. For example, a
construction project may be terminated by handing over the completed building to the client.

 Starvation: The project is terminated by removing funding. For example, a research project may
be terminated if funding is cut.

 The Termination Process

 The termination process refers to the formal procedure through which an employee's
employment is ended, which can occur due to various reasons such as poor performance,
misconduct, or company restructuring.

For example, if an employee consistently fails to meet performance expectations despite being
placed on a performance improvement plan, the employer may initiate the termination process
by documenting the issues, notifying the employee, and conducting a final meeting to
communicate the decision and next steps.

 The Decision Process

 The decision-making process is a systematic approach that involves identifying a need, gathering
relevant information, evaluating alternatives, and selecting the best course of action.

For example, when deciding to buy a new car, an individual might first recognize the need for a
vehicle, then research different models and prices, evaluate their options based on budget and
features, and finally choose the car that best fits their criteria.

 The Implementation Process

 The implementation process involves executing a plan to adopt new procedures or business
processes in an organization. It typically includes defining goals, creating an implementation
plan, onboarding the team, and monitoring progress to ensure the new processes are
successfully integrated into the company's operations.

For example, a company implementing a new customer relationship management (CRM) system
would first define objectives like improving sales efficiency and customer satisfaction. They
would then develop an implementation plan outlining the required resources, tasks, and
timeline. The team would be trained on using the CRM, and progress would be tracked to
optimize the system and achieve the desired business outcomes.
  Final Report - The Project History
 The final report in project management serves as a comprehensive summary of a project's
performance, detailing its history, successes, challenges, and overall execution. It is a crucial
document that encapsulates the project's journey from inception to completion, providing
valuable insights for future projects.

 Purpose of the Final Report

The primary aim of the final report is to evaluate how the project was executed, offering an
honest assessment of its outcomes. This report is not merely a formality; it signifies the official
conclusion of the project, indicating that resources and funding are no longer required.

 Key Components

A well-structured final report typically includes the following elements:

Project Approval Process: A description of how the project was approved and the reasons for its
initiation.

Project Execution Summary: An overview of whether the project met its objectives, including
evidence of scope verification and stakeholder acceptance.

Budget Performance: A comparison of actual costs versus budgeted amounts, along with
explanations for any variances.

Factors Influencing Results: Identification of external and internal factors that affected project
outcomes.

Lessons Learned: A critical evaluation section that highlights what went well, what did not, and
how future projects can benefit from these insights.

Annexes: Supporting documents such as the project plan, scope documents, and final approval
records.

Lee Kabigting, MBA, MPA

Instructor