Project Management

By
S. Vijayalalitha
Project
A project is a combination of human and non-human
resources pulled together in a temporary organization
to achieve a specific purpose.
A project is a specific task that has a beginning and an
end.
According to ISO 8402, a project is defined as a
unique process, consisting of a set of coordinated and
controlled activities with start and finish dates,
undertaken to achieve an objective conforming to
specific requirement including constraints of time,
cost and resources. Therefore, it can be seen as a
complex, non-routine, one-time effort to complete a
particular task.
WHAT IS PROJECT MANAGEMENT?
 Project management is a set of principles, methods, and
techniques that people use to effectively plan and control
project work.
 It establishes a sound basis for effective planning, scheduling,
resourcing, decision-making, controlling, and re-planning.
 Project management principles and techniques help complete
projects on schedule, within budget, and in full accordance
with project specifications.
 At the same time, they help achieve the other goals of the
organization, such as productivity, quality, and cost
effectiveness.
 The objective of project management is to optimize project
cost, time, and quality.
PROJECT MANAGEMENT
According to the Project Management Institute,
USA, “a project is a one-set, time-limited,
goal-directed, major undertaking requiring
the commitment of varied skills and
resources”.
It also describes a project as “a combination
of human and non-human resources pooled
together in a temporary organisation to
achieve a specific purpose”.The purpose and
the set of activities which can achieve that
purpose distinguish one project from another.
EXAMPLES OF PROJECT

Construction of a house.
Writing a book.
Building a dam.
Introducing a new product in the market.
 Construction of a new bridge over a river.
A Politician contesting an election.
Organizing a seminar.
FUNCTIONAL WORK VERSUS PROJECT WORK

Project work and traditional functional work differ in significant

ways, and it is important to understand these differences.

Functional Work
 Functional work is routine, ongoing work. Each day, secretaries,
financial analysts, and car salesmen perform functional work that is
routine, even if their activities vary somewhat from day to day.
 A manager assigned to the specific function gives them training
and supervision and manages them according to standards of
productivity in terms of typing speed or sales quotas.
 Functional departments are responsible for the approved objectives
of the function, such as technical competency, standards of
performance and quality, and efficient use of resources.
FUNCTIONAL WORK VERSUS PROJECT WORK
Project Work:
Projects are temporary because they have a definite
beginning and a definite end.
They are unique because the product or service they
create is different in some distinguishing way from
similar products or services.
The construction of a headquarters building for ABC
Industries is an example of a project.
The unique work is defined by the building plans and has
a specific beginning and end.
A project manager is responsible for the project,
overseeing the contractors and managing the schedule
and budget.
PROJECT ATTRIBUTES
 Target
A project works towards a specific goal or target. Cost
considerations and time management are some of the important
issues associated with setting up of a project and achievement of
target.

 Uniqueness (Non-routine activity)

Every project has certain unique charecteristics that set it apart
from similar initiatives. This unique nature, most of the time, is
the driving force behind the conception and completion of a
project.

 A start and an end

Since a project means accomplishing of a certain task, it has to
have a beginning and an end.
PROJECT ATTRIBUTES(contd.)
 Complicated
A project involves coordination, integration, and management of several
complex processes. These processes may have various technical,
environmental, socio-economic, and political implications.

 Time, Cost and resource requirements

The three core factors that define a project include time, budget and
resources. Proper utilization of these three interdependent components
determines the value of the final product. i.e the success of the project.

 Uncertainty and risks

In the planning stage of a project, the time schedule for completion, cost,
and resource requirements are planned based on prediction, anticipation,
and earlier experience . However, actual conditions are likely to be
different. Hence, uncertainty or risk is an integral part of project
management
CAUSES OF PROJECT FAILURE (DISTRESSED
PROJECTS)
• The wrong business requirements have been
addressed
• It's not possible to deliver on the original
business case
• Poor project governance and management
• Project managers don't usually have any
influence over who their project sponsor is
• Poor project execution/implementation
• People lose focus on the project's benefits
• The environment changes
WHY DO PROJECTS FAIL?

Bad communication between the stake

holders (57%)
Failing or non existing documents (28%)
Decision-making errors because of failing
information (20%)
Un-efficient Planning (37%)
Quality control procedures lack efficiency
(37%)
Bad person at the wrong place (18%)
Categories of PROJECT

THE THREE MAJOR PROJECT TYPES

Civil Engineering, Construction,
Petrochemical, Mining, and Quarrying
Manufacturing Projects
Management Projects
Research Projects
Categories of PROJECT (Conti..)
Civil Engineering, Construction, Petrochemical,
Mining, and Quarrying
 Projects in this category are those which spring to mind most readily
whenever industrial projects are mentioned. Once common feature is
that the fulfillment phase must be conducted on a site that is exposed
to the elements, and usually remote from the contractor's main office.
 These projects incur special risks and problems of organization. They
often require massive capital investment, and they deserve (but do not
always get) rigorous management of progress, finance, and quality.
 For very large industrial projects the funding and resources needed
are often too great for one contractor to risk or even find. The
organization and communications are therefore likely to be
complicated by the participation of many different specialists and
contractors, with the main players possibly acting together as a
consortium or joint venture company.
Categories of PROJECT (Cont…)
Manufacturing Projects
 Manufacturing projects aim to produce a piece of equipment or machinery,
ship, aircraft, land vehicle or some other item of specially designed hardware.
The finished product might be purpose-built for a single customer, or the
project could be generated and funded from within a company for the design
and development of a new product intended for subsequent manufacture and
sale in quantity.
 Manufacturing projects are usually conducted in a factory or other home-
based environment, where the company should be able to exercise on-the-
spot management and provide an optimum environment.
 Of course, these ideal conditions do not always apply. Some manufacturing
projects can involve work away from the home base, for example in
installation, commissioning and start-up, initial customer training and
subsequent service and maintenance. More difficult is the case of a complex
product (such as an aircraft) that is developed and manufactured by a
consortium of companies, very possibly overlapping international borders,
with all the consequent problems of risk, contractual difficulties,
communication, coordination, and control.
Categories of PROJECT (Cont…)
Management Projects
 This class of projects proves the point that every company, whatever its size, can
expect to need project management expertise at least once in its lifetime. These
are the projects that arise when companies relocate their headquarters, develop
and introduce a new computer system, launch a marketing campaign, prepare for a
trade exhibition, produce feasibility or other study report, restructure the
organisation, mount a stage show, or generally engage in any operation that
involves the management and co-ordination of activities to produce an end result
that is not identifiable principally as an item of hardware or construction.

 Although management projects might not result in a visible, tangible creation,

much often depends on their successful outcome. There are well-known cases, for
instance, where failure to implement a new computer system correctly has caused
serious operational breakdown and has exposed the managers responsible to
public discredit. Effective project management is at least as important for these
projects as it is for the largest construction or manufacturing project.
Categories of PROJECT (Cont..)

Research Projects

In which the objectives may be difficult to

establish, and where the results are
unpredictable.
Responsibilities of a Project Manager:
Project managers are responsible for completion of a
specified project within allocated time, budget, and
resources.
They direct, integrate and co-ordinate the project team.
They are responsible for the management and
performance of the team members.
They must involve the most suitable candidates for a
given task to ensure the best possible output.
While operating within the guideline of the project, they
must foster cordial relationship with the customers and
ensure their satisfaction.
Project manager is common link between various
organizations working on a project.
Skills required for Project Manager
Leadership
Negotiation
Scheduling
Cost Control
Risk Management
Critical Thinking
Communication
Project Recovery
Coaching
Task Management
Quality Management
Meetings Management
A Sense of Humour
A Project Life Cycle

 A project life cycle is the sequence of phases that a project

goes through from its initiation to its closure
 The phases have a definite start, end, and control point and
are constrained by time.
 The project lifecycle can be defined and modified as per the
needs and aspects of the organization.
 The lifecycle provides the basic foundation of the actions
that has to be performed in the project, irrespective of the
specific work involved.
Characteristics of the Project Life Cycle

The Initiation Phase: Starting of the

project
The Planning Phase: Organizing and
Preparing
The Execution Phase: Carrying out the
project
The Termination Phase: Closing the project
Characteristics of the Project Life Cycle
The Initiation Phase: Starting of the project

The Initiation Phase:

The initiation phase aims to define and authorize
the project. The project manager takes the given
information and creates a Project Charter. The
Project Charter authorizes the project and
documents the primary requirements for the project.
It includes information such as:
 Project’s purpose, vision, and mission
 Measurable objectives and success criteria
 Elaborated project description, conditions, and risks
 Name and authority of the project sponsor
 Concerned stakeholders
Characteristics of the Project Life Cycle
The Planning Phase: Organizing and Preparing

The Planning Phase:

The purpose of this phase is to lay down a
detailed strategy of how the project has to be
performed and how to make it a success.
Project Planning consists of two parts:
Strategic Planning
Implementation Planning

In strategic planning, the overall approach to

the project is developed. In implementation
planning, the ways to apply those decisions are
sought.
Characteristics of the Project Life Cycle
The Execution Phase: Carrying out the project

The Execution Phase: In this phase, the

decisions and activities defined during the
planning phase are implemented. During this
phase, the project manager has to supervise
the project and prevent any errors from
taking place. This process is also termed
as monitoring and controlling. After
satisfaction from the customer, sponsor, and
stakeholder’s end, he takes the process to the
next step.
Characteristics of the Project Life Cycle
The Termination Phase: Closing the project

The Termination Phase: This is the last

phase of any project, and it marks the official
closure of the project.
Work breakdown
structure
Work breakdown structure
Work breakdown structure. A hierarchical
diagram of activities and end products that
organizes and defines all work to be
completed in a project.
CREATING A WORK BREAKDOWN
STRUCTURE
A work breakdown structure defines the work to be
completed in the project.
It is a graphical representation (diagram) of the
project showing its component parts.
It provides definition to the project scope by showing
the hierarchical breakdown of activities and end
products that must be completed to finish the project.
The work breakdown structure is the basis for time
estimating, resource allocation, and cost estimating
and collection.
If the work breakdown structure is faulty, all further
planning will also be faulty.
In preparing a work breakdown structure, keep
the following in mind:
 Use any category that makes sense for your project. This might include
components of the product, functions, organizational units, geographical
areas, cost accounts, time phases, or activities
 Don’t be constrained by sequence. The diagram does not need to
represent a logical or time sequence of events.
 The diagram does not have to be symmetrical. The number of levels
might vary from one branch to the next. Break each branch down to the
number of levels necessary to adequately define the project.
 Each box is a summary of the boxes in the levels below it.
 The final box in each branch must end in a product or deliverable
 The boxes in the lowest level are called work packages
 The sum total of boxes must represent the complete project
 The entire project team should be involved in developing the work
breakdown structure.
 When completed, you should review the work breakdown with the client
and customers
Noah Ark: Work Breakdown structure

Level 0 Noah Ark

Animal People Boat

Level 1
Gather Food House Design Build
Level 2 Food

Get
Get Lion Interior Exterior
Elephant
Level 3 1F, 1M
1M, !F Design Design
Gantt Chart for Wedding Plan
Gantt Chart
Project Rollup
Provides an overall glimpse of the current
status of a multitude of individual projects

https://www.youtube.com/watch?v=inenFNAn
X2w
Responsibility Matrix
A responsibility assignment matrix (RAM)
describes the participation of various
organizations, people and their roles in
completing tasks or deliverables for a project.
Responsibility Matrix
Responsibility Matrix
Responsible Who is responsible for doing the actual work for the project task.
Who is accountable for the success of the task and is the decision-maker.
Accountable
Typically the project manager.*
Who needs to be consulted for details and additional info on requirements.
Consulted
Typically the person (or team) to be consulted will be the subject matter expert.
Informed Who needs to be kept informed of major updates. Typically senior leadership.
Imagine an office manager has contracted a painter to paint his office. His goal
or objective is to have the office painted a pleasing blue colour.
Projects are filled with misunderstandings between customers and
project staff.
 Project Delay
External Causes of delay
and
internal constraints
Internal Constrains:
 Cause 1: Ineffective communication
 Lack of information
 Misunderstanding
• Cause 2: Late reaction to deviation
• Cause 3: Ineffective Decisions
 The Overhasty decision
 The Perfectionist decision

• Cause 4: Interpretation of requirement

• Cause 5: Changes of requirements
• Cause 6: Over-compliance
• Cause 7: Over-Ambitious Schedule
• Design to schedule
• Underestimation of effort.
External Delays
Subcontractors
Customers
Suppliers
Project Evaluation
Methodologies
Project Evaluation Methodologies
Project appraisal methodologies are methods
used to access a proposed project’s potential
success and viability.
These methods check the appropriateness of
a project considering things such as available
funds and the economic climate.
A good project will service debt and
maximize shareholders’ wealth.
Types of Project Evaluation Methodologies.
Net Present Value (NPV)
Payback Method
Internal Rate of Return.(IRR)
Profitability Index. (PI)
Net Present Value (NPV)
Also Known as discounted cash flow method
NPV method is a popular capital budgeting
technique that takes into account the time
value of money.
It uses net present value of the investment
project as the base to accept or reject a
proposed investment in project like purchase
of new equipment, purchase of inventory,
expansion or addition of existing plant assets
and the installation of new plants etc.
NPV conti……
A project’s net present values is determined by
summing that net annual cash flow, discounted at the
project’s cost of capital and deducting the initial
outlay.
 Positive NPV: If PV of cash inflow is greater than the PV
of the cash outflow, the NPV is said to be positive and
the investment proposal is considered to be acceptable.
 Zero NPV: If PV of cash inflow is equal to PV of the cash
outflow, the NPV is said to be zero and the investment
proposal is considered to be acceptable.
 Negative NPV: If PV of cash inflow is less than the PV of
the cash outflow, the NPV is said to be negative and the
investment proposal is rejected.
Profitability Index
The proposal with the highest present value
index is considered the best.

Profitability index= Present value of cash

inflow/ investment
required.
Internal rate of return method(IRR)
Internal rate of return is a metric used in
capital budgeting measuring the profitability
of potential investment.

IRR= Net annual cash inflow/ investment

required
Pay-back period
A company chooses the expected number of
years required to recover an original
investment.
Pay-back period (even)
Pay-back period = initial investment/ cash
inflow per period
Example
Earned Value
Performance
Measurement
Earned Value Analysis
Earned value analysis (also known as
variance analysis) is a way to measure and
evaluate project performance.
It compares the amount of work planned with
what is actually accomplished to determine
whether the project is on track.
It uses various calculations and ratios to
measure and report on the status and
effectiveness of project work.
The first step in earned value analysis is to determine the
following three key values:
Planned Value (PV) is the planned cost of work scheduled to be done in a
given time period. The amount of PV is determined by totaling the cost
estimates for the activities scheduled to be completed in the time period.
Planned Value is also called the Budgeted Cost of Work Scheduled (BCWS).

Earned Value (EV) is the planned cost of work actually performed in a given
time period. This is a measure of the dollar value of the work actually
performed. The amount of EV is determined by totaling the cost estimates
for the activities that were actually completed in the time period. Earned
Value is also called the Budgeted Cost of Work Performed (BCWP).

Actual Cost (AC) is the cost incurred to complete the work that was actually
performed in a given time period. The amount of AC is determined by
totaling the expenditures for the work performed in the given time period.
It should include only the types of costs included in the budget. For
example, if indirect costs were not included in the budget, they should not
be included in AC calculations. Actual Cost is also called the Actual Cost of
Work Performed (ACWP).
Earned Value

Definition
Planned Value (PV) or Budgeted Cost of Work Scheduled
(BCWS)
Planned expenditure cash flows based on the completion
of tasks in accordance with the project’s budget and
schedule
Actual Cost (AC) or Actual Cost of Work Performed (ACWP)
Actual Project Expense based on completed tasks
Earned Value (EV) or Budgeted Cost of Work Performed
(BCWP)
The amount of the budget that we should have spent for a
given amount of work completed
Cost Metrics

Cost Variance (CV) - difference between a task’s

estimated cost and its actual cost
CV = EV – AC or BCWP - ACWP
Negative Value = over budget
Positive Value = under budget

Cost Performance Index (CPI) - percentage of

work completed per unit (Rs. Or Dollar) spent
CPI = EV /AC or BCWP / ACWP
ratio > 1 = under budget
ratio < 1 = over budget
Schedule Metrics

Schedule Variance (SV) – the difference in

terms of cost between the current progress
and our originally scheduled progress
SV = EV – PV or BCWP – BCWS

Schedule Performance Index (SPI) – a ratio

of the work performed to the work scheduled
SPI = EV / PL or BCWP / BCWS
ratio > 1 = ahead of schedule
ratio < 1 = behind schedule
Project Management Body of Knowledge
PMBOK
 Project Management Process
Process Groups:
 Initiating processes – recognize when project or phase should begin
 Planning processes – designing and maintaining a scheme which
leads to successful accomplishment of a project
 Executing processes – coordinating people and resources to carry out
the plan
 Controlling processes – monitoring and measuring progress and
taking corrective actions when necessary
 Closing processes – analyzing acceptance of the project or phase and
bringing it to an end

Links between process groups =>

The Project Management Knowledge
Areas
 The Project Management Knowledge
Areas
Project Integration Management
 Ensure that various elements of the project are properly coordinated
and integrated
 This area also includes the directing and managing of the project work.
 Processes: Project Plan Development, Project Plan Execution, Overall
Change Control

Project Scope Management

 Ensure that the project includes all the work required, and only work
required, to complete the project successfully
 Processes: Initiation, Scope Planning, Scope Definition,
Scope Verification, Scope Change Control

Project Time Management

 Ensure timely completion of the project
 Processes: Activity Definition, Activity Sequencing,
Activity Duration Estimating, Schedule Development, Schedule Control
 The Project Management Knowledge
Areas (Conti…)
Project Cost Management
 Ensure that the project is complete within the approved budget
 Each task will have to be estimated for cost.
 This is performed regularly throughout the project to make
sure the estimation cost are in line with actual expenditure.
 Processes: Resource Planning,
Cost Estimating, Cost Budgeting, Cost Control

Project Quality Management

 Ensure that the project will satisfy the requirements
 Processes: Quality Planning, Quality Assurance,
Quality Control
 The Project Management Knowledge
Areas (Conti…)
Project Communication Management
 Ensure timely and appropriate generation, collection, storage
 And ultimate disposition of project information
 Processes:
Communications Planning, Information Distribution,
Performance Reporting, Administrative Closure

 Project Risk Management

 Concerned with identifying, analyzing, and responding to project risk.
 Maximizing the results of positive events
 Minimizing the consequences of negative events
 Processes: Risk Identification, Risk Quantification,
Risk Response Development, Risk Response Control
 The Project Management Knowledge
Areas (Conti…)
Project Procurement Management
 Acquire goods and services from outside the performing
organization
 Processes: Procurement Planning, Solicitation Planning,
Solicitation, Source Selection, Contract Administration,
Contract Close-out

Project Human Resources Management

 Make the most effective use of people involved with the project
 Processes: Organizational Planning,
Staff Acquisition, Team Development
Project Feasibility Studies
Feasibility Studies:
Feasibility studies report is the primary
report for the formulation of investment
proposal.
Feasibility studies report is prepared only for
formulation and investment decision making
What is Feasibility Study?
A feasibility analysis is used to determine the
viability of an idea, such as ensuring a project
is legally and technically feasible as well as
economically justifiable.

It tells whether a project is worth the

investment- in some cases, a project may not
be doable.

A feasibility analysis evaluates the project’s

potential for success.
Importance of Feasibility Study:
The importance of a feasibility study is based
on organizational desire to “get it right’
before committing resources, time or budget.
A feasibility study might uncover new ideas
that could completely change a project’s
scope.
Benefits of conducting feasibility study:
Improves projects teams’ focus
Identifies new opportunities
Provides valuable information for a “go/no-go”
decision
Narrow the business alternatives
Identifies a valid reason to undertake the project
Enhances the success rate by evaluating
multiple parameters
Aids decision-making on the project
Identifies reason not to proceed
Types of feasibility study:
Technical Feasibility
Economic Feasibility
Legal Feasibility
Operational Feasibility
Scheduling Feasibility
 Old saying:
“To break the rules, first you have to know the rules. ”

Thank
You