COURSE DESCRIPTION

Project Management module is intended to help students understand the nature of Projects and the
technicalities involved in handling projects and managing the various phases of the project life
cycle. The module explores the project management functions that are carried out at the different
stages of a project’s life cycle and the analytical tools applied thereof.

This course will provide an opportunity for students with greater understanding of analytical skills
for solving problems in project management. This course will help them learn mathematical
models which aid in the decision-making process and to develop critical thinking and knowledge
in project management's theory and practices.

LEARNING OUTCOMES
Having successfully completed the module, students will be able to:

- Design a project and appraise a project

- Implement a project
- Prepare a project budget
- Monitor and review a project
- Design Feasibility and a project.
- Conduct Appraisal of a project
- Oversee and actualize Implementation of a project
- Evaluate and monitor a project.

COURSE CONTENTS
Chapter 1: Introduction to Project Management
Chapter 2: Project Analysis and Selection
Chapter 3: Project Planning
Chapter 4: Project Budgeting
Chapter 5: Project Scheduling
Chapter 6: Monitoring and Controlling
Chapter 7: Evaluation and Termination
Chapter 8: Managing E-Business Projects
Chapter 9: Closing the Project

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CHAPTER ONE: PROJECT

1.0. INTRODUCTION TO PROJECTS

A project is a group of unique, inter-related activities that are planned and executed in a certain
sequence to create a unique product or service, within a specific timeframe, budget and the client’s
specifications. Some of the characteristics of the tasks that qualify to be a project are: uniqueness,
specificity of goal, sequence of activities, specified time and inter-relatedness. Projects are carried
out under many resource constraints and their success depends on the ability of the manager to
manage these constraints effectively. Project management is the application of the knowledge,
skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and
expectations.
Every project has a set of activities that are unique, which means it is the first time that an
organization handles that type of activity. These activities do not repeat in the project under similar
circumstances i.e., there will be something different in every activity or even if the activity is
repeated, the variables influencing it change every time.
Projects are the specific schemes or action units designated for the investment of given resources
and skills with an aim of attaining some predetermined objectives. A project starts from the scratch.
It has a specific objective. It has a well-defined life span divided into a life cycle. It involves a set
of activities within a schedule and budget. It integrates human and non-human resources.
According to Harold Kerzner: A project is any series of activities and tasks that:

 have a specific objective to be completed within certain specifications

 have defined start and end dates
 have funding limits, and
 consume resources.
A project is one-time job that has defined starting and ending dates, a clearly specified objective,
or scope of work to be performed, a pre-defined budget, and usually a temporary organization that
is dismantled once the project is complete (The project Manager’s desk Reference, James Lewis)
A group of multiple interdependent activities that require people and resources is the Project.
Projects generally originate from plans. They serve as the building blocks for development
planning. A Plan, Programme and Project are different concepts yet complementary to one another.

1.0.1. Project Terminology

Goal: Goal is what exactly needs to be accomplished after completion of the project.

Project Scope: Documented set of standards and criteria that the customer defines as successful
completion.
Objective: A combination of tasks that concern specific functional groups or structural areas.

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Tasks: A combination of activities that lead to the achievement of a definable result.
Activity: A time consuming piece of work with a definite beginning and end.
Duration: The elapsed time from the beginning to the end of an activity, task or objective.

1.0.2. Characteristics of Project

Despite the different types and natures of projects we observe in different sectors and in different
levels, all of those necessarily reflect a set of common characteristics. A project has the following
characteristics:

Objective: Each and every project needs to be guided to achieve an objective or a set of objectives.
It ceases to exist when the objective is achieved.

Life Span: A project has beginning and end. It cannot continue forever.

Constraints: A project has a schedule. It operates within the constraints oftime, cost and quality.
Every project requires certain investment of resources.

Unique: Every project is unique. No two projects are exactly similar.

System: All projects need to undergo a system of inputs-process - Outputs.

Life Cycle: Every project will have its own phase-based cycle.

Teamwork: A project has many participants. It requires teamwork under the leadership of the
Project Manager.

Organization Structure: A project is a temporary organization. A project usually has its own
budget and management.

Planning and Control System: A project requires information, planning and control system. The
actual performance is compared with the planned targets.

Collection of Activities: A project is a collection of activities that are linked together to constitute
a system.

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 Time
Model of a Project:

Environment

Objectives

Cost Quality

Project Environment

Environment consists of forces that influence the project’s ability to achieve its objective. Projects
operate in a dynamic environment. Project environment can be classified into:

Internal Environment

Internal environment is located within the project. It is Controllable by the project. It provides
strengths and weaknesses to the project. The forces in the internal environment consists of:

- Project Objective
- Constraints
- Structure
- Resources

Task Environment

The task environment of a project is made up of stakeholders. They are either involved in the
project or their interests are affected by the project. The elements of task environment are:

- Customer
- Contractor
- Consultants
- Suppliers
- Government
- Financiers
- Competitors
- Labor Unions

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External Environment

It is located outside the project. It cannot be controlled by the project. The project can indirectly
influence it. It provides opportunities and threats to the project. The forces in the external
environment are:

- Economic
- Technological
- Political-Legal
- Socio-cultural

1.0.3. Projects Life Cycle and Project Phases

A project is time bound. It has beginning and end. The life of a project is divided into several
phases to provide better management control and appropriate links to the ongoing operation of the
performing organization. Each phase defines the work outcomes or deliverables of the project. The
phases are arranged in a sequence.

Collectively, the project phases are known as Project Life Cycle. Project life cycle generally
defines:

o What technical work should be done in each phase?

o Who should be involved in each phase?

Cost and staffing levels are low at the start, higher towards the end, and drop rapidly as the project
draws to the Conclusion. The probability of successfully completing the project is Lowest, and
hence risk and uncertainty are highest at the start of the project. The probability of successful
completion generally gets progressively higher as the project continues.

The ability of the stakeholders to influence the final characteristics of the project product and the
final cost of the project is highest at the start and gets progressively lower as the project continues

Project life cycle:

The breakdown and terminology of project phases differ; depending upon whether we are
discussing products or projects. The life cycle phases of a product are:

o Research & Development

o Market Introduction
o Growth
o Maturity
o Deterioration
o Death

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Today, there is no general agreement about the life cycle phases of a project. This is understandable
because of the complex nature and diversity of projects.

Project life cycle according to Cleland and King:

1. Conceptual
 Preliminary Evaluation of project idea
 Identification of needs
 Determination of initial technical, environmental and economic feasibility and
practicability of the system.
 Preliminary identification of human and non-human resources

2. Definition
 Firm identification of resources required
 Preparation of the detailed plans required to support the system
 Establishment of time, cost and performance parameters

3. Production
 Standardization of efforts and completion of documents for operations
 Identification and management of the resources required facilitating the production
process such as inventory, supplies, labor, funds etc.
 Project implementation

4. Operational
 Use of the system results by the intended customer
 Evaluation of the project and its integration into another organizations

5. Divestment
 System phase down
 Reallocation of resources to other projects

The Life cycle of a Construction Project:

The various phases in the life cycle of a project are:

 Formulation Phase
 Planning Phase
 Implementation
 Termination Phase

I Formulation Phase
The main tasks in the formulation phase are:
1. Project Identification
2. Project Formulation

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Project identification
 A situation survey is done.
 The project idea is born.
 The project is conceptualized.
 The sources of project ideas are internal (Strategies, Plans, Programmes, Quality Circle) or
external (Customer needs, Donors, Experts, Politicians, Legal Provisions, Technological
Development).

Project Formulation
 Defines the parameters of the identified project.
 Broad statement defining the objective and outputs
 Preliminary statement of schedule and resources required.
 Preparation of Project Proposal based on prefeasibility study and preliminary design.

II Planning Phase
The basic tasks in the planning phase of the project are:
1. Feasibility study
2. Appraisal
3. Detailed design

Feasibility Study
It determines the implement ability of the projects.

The areas for which analysis is done are:

o Technical analysis: Studies the feasibility of meeting technical specifications and examines
the availability of alternative technical solutions.

o Financial analysis: Studies the financial sustainability of the project in terms of capital
requirements and capacity for meeting of financial obligations.

o Management analysis: Studies the adequacy of management system to direct and control
the project.
o Marketing analysis: Studies project capacity, market demand and sales forecast.

o Economic analysis: Studies net contribution of the project to the economy and to the
society. Benefit/Cost analysis is done for this purpose.

o Environmental analysis: Studies the impact of the project on the environment. Feasibility
study should be based on accurate information.

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Appraisal
It is the Evaluation of the project’s ability to succeed. Appraisal is based on the findings of the
feasibility analysis. It addresses:

1. Ability of the project to achieve its objectives

2. Comparability of the project with other projects (in terms of investment, cost/benefits, job
creation, profit etc.)

The competent authorities appraise the project against a list of criteria (policy, technical, economic,
financial, social, etc.) before giving approval and formally approve the project selected through
appraisal. Approval involves finalization of funding proposals and agreements and allocation of
resources to the project.

Detailed design
It is concerned with:
- Preparation of blueprints of engineering design and specifications for construction,
facilities, equipment, etc.
- Preparation of detail implementation plans and work schedules.
The design task establishes:

- Operating plans and performance standards

- Allocates responsibilities
- Determines activities and resources
- Sets down work schedules

III Implementation Phase

The basic tasks in this phase are:
1. Implementation
2. Control

Implementation
Implementation is concerned with mobilization. It involves:

 Setting up of project organization,

 Allocation of tasks and responsibilities,
 Getting together project team
 Preparation of tender documents.
 Other pre-construction activities like land acquisition and coordination with other
infrastructure,

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  Tendering, Construction and/or installation of equipment
 Project management, quality assurance, progress reporting and the participation of target
groups and project affected groups

Control
It involves supervision and control of project performance to provide feedback. Monitoring of
project performance is done. It is a means to improve implementation through the identification of
problems and the possible corrective actions. Various techniques like CPM, PERT and other
network analysis techniques are used for control purpose. The Control comprises the following
activities:

 Setting of standards
 Measuring outputs
 Verifying the output with preset standards
 Finding deviations, if any.
 Correcting the process/output to the preset standards if required.

CPM is a statistical technique of project management in which planning, scheduling, organizing,

coordination and control of well-defined activities take place

PERT is a project management technique, whereby planning, scheduling, organizing,

coordinating and controlling uncertain activities are done

IV Termination Phase
The basic tasks in this phase are:

 Project Evaluation
 Project Handover

Project Evaluation
Evaluation measures the effects and impacts of the project. It can be carried out during the project
implementation to improve implementation or can also be carried out after project completion to
improve future project planning and management.

Project Handover
Handover begins when the project work is finished. Resources are then reallocated to other
projects.

Other ways of breaking project phases in the Project Cycle

Concept and Feasibility Study
Engineering and Design

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 Procurement
Construction
Start Up and Implementation
Operation and utilization

Project management life cycle

The project management life cycle describes high-level processes for delivering a successful
project. The project management life cycle is usually broken down into four phases: initiation,
planning, execution, and closure. These phases make up the path that takes your project from the
beginning to the end.

In the phases of the project management life cycle, you come up with the idea for a project, define
its goals, plan for its execution, and guide it to completion.

1. Initiation
First, you need to identify a business need, problem, or opportunity and brainstorm ways that your
team can meet this need, solve this problem, or seize this opportunity. During this step, you figure
out an objective for your project, determine whether the project is feasible, and identify the major
deliverables for the project.
The stages of the project launch phase may include the following stages:

a) Undertaking a feasibility study: Identify the primary problem your project will solve
and whether your project will deliver a solution to that problem

b) Identifying scope: Define the depth and breadth of the project

c) Identifying deliverables: Define the product or service to provide

d) Identifying project stakeholders: Figure out whom the project affects and what their
needs may be

e) Developing a business case: Use the above criteria to compare the potential costs and
benefits for the project to determine if it moves forward

f) Developing a statement of work: Document the project’s objectives, scope, and

deliverables that you have identified previously as a working agreement between the
project owner and those working on the project.

2. Planning
Once the project is approved to move forward based on your business case, statement of work, or
project initiation document, you move into the planning phase.

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During this phase of the project management life cycle, you break down the larger project into
smaller tasks, build your team, and prepare a schedule for the completion of assignments. Create
smaller goals within the larger project, making sure each is achievable within the time frame.
Smaller goals should have a high potential for success.

Project management steps for the planning phase

a) Creating a project plan: Identify the project timeline, including the phases of the
project, the tasks to be performed, and possible constraints

b) Creating workflow diagrams: Visualize your processes using swim-lanes to make sure
team members clearly understand their role in a project

c) Estimating budget and creating a financial plan: Use cost estimates to determine how
much to spend on the project to get the maximum return on investment

d) Gathering resources: Build your functional team from internal and external talent
pools while making sure everyone has the necessary tools (software, hardware, etc.) to
complete their tasks

e) Anticipating risks and potential quality roadblocks: Identify issues that may cause
your project to stall while planning to mitigate those risks and maintain the project’s
quality and timeline

f) Holding a project kickoff meeting: Bring your team on board and outline the project
so they can quickly get to work

3. Execution
You’ve received business approval, developed a plan, and built your team. Now it’s time to get to
work. The execution phase turns your plan into action. The project manager’s job in this phase of
the project management life cycle is to keep work on track, organize team members, manage
timelines, and make sure the work is done according to the original plan.

Project management steps for the execution phase

a) Creating tasks and organizing workflows: Assign granular aspects of the projects to the
appropriate team members, making sure team members are not overworked
b) Briefing team members on tasks: Explain tasks to team members, providing necessary
guidance on how they should be completed, and organizing process-related training if
necessary

c) Communicating with team members, clients, and upper management: Provide updates
to project stakeholders at all levels

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 d) Monitoring quality of work: Ensure that team members are meeting their time and quality
goals for tasks

e) Managing budget: Monitor spending and keeping the project on track in terms of assets
and resource

4. Closure
Once your team has completed work on a project, you enter the closure phase. In the closure phase,
you provide final deliverables, release project resources, and determine the success of the project.
Just because the major project work is over, that doesn’t mean the project manager’s job is done—
there are still important things to do, including evaluating what did and did not work with the
project.

Project management steps for the closure phase

a) Analyzing project performance: Determine whether the project's goals were met (tasks
completed, on time and on budget) and the initial problem solved using a prepared
checklist.

b) Analyzing team performance: Evaluate how team members performed, including

whether they met their goals along with timeliness and quality of work
c) Documenting project closure: Make sure that all aspects of the project are completed
with no loose ends remaining and providing reports to key stakeholders

d) Conducting post-implementation reviews: Conduct a final analysis of the project, taking

into account lessons learned for similar projects in the future

e) Accounting for used and unused budget: Allocate remaining resources for future
projects

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1.1. PROJECT MANAGEMENT

The successful project management is all about structure, control, sufficient attention to detail and
continuously driving action. The role of the project manager is to understand enough project
management to apply its structure and ensure that project is successfully completed within the time
and cost required. The things you must do as a project manager are:

1. Ensure there is a clear understanding why a project is being done, and what it will produce?
2. Plan the project – to understand how long it will take and how much it will cost?
3. Manage the project – to ensure that as the project progresses, it achieves the objectives you
have defined within the time and cost specified.
4. Complete the project properly – to make sure everything produced by the project is of the
quality expected and works as required.
Project management has emerged because the characteristics of our turn-of-the-century society
demand the development of the new methods of management. Of the many forces involved, three
are paramount:

1. the exponential expansion of the human knowledge;

2. the growing demand for a broad range of complex, sophistical, customized goods and
services;
3. the evolution of worldwide competitive markets for the production and consumption of

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 goods and services.

All three forces combine to mandate the use of terms to solve problems that used to be solvable
by individuals. These three forces combine to increase greatly the complexity of goods and
services produced plus the complexity of the process used to produced them and all this in turn
leads to the need for more sophisticated systems to control both outcomes and processes.

As the techniques of project management were developed, the use of project organization began
to spread. Private construction firms found that project organization was helpful on smaller
projects, such as the building of a warehouse or an apartment complex. Automotive companies
used project organization to develop new automobile models. Both General Electric and Pratt &
Whitney used project organization to develop new jet aircraft engines for airlines, as well as the
Air Force. Project management has even been used to develop new models of shoes and ships.

More recently, the use of project management by international organizations, and especially
organizations producing services rather than products, has grown rapidly. Advertising campaigns,
global mergers, and capital acquisitions are often handled as projects, and the methods have spread
to the non-profit sector. Functions, weddings, fund drives, election campaigns, parties, recitals etc.,
all make use of the principles of project management. Most striking has been the widespread
adoption of project management techniques for the development of computer software.
Note: Ensure there is a clear understanding why a project is being done, and what it will produce.

1.2. PROJECT MANAGER AND HIS RESPONSIBILITIES

1.2.1. Definition
According to Project Management Institute (PMI), “Project Management is the application of
knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder
needs and expectations”.
Project management is quite often the province and responsibility of an individual project
manager. This individual seldom participates directly in the activities that produce the end result,
but rather strives to maintain the progress and productive mutual interaction of various parties in
such a way that overall risk of failure is reduced.
A project manager is often a client representative and has to determine and implement the exact
needs of the client based on knowledge of the firm he/she is representing. The ability to adapt to
the various internal procedures of the contracting party, and to form close links with the nominated
representatives, is essential in ensuring that the key issues of cost, time, quality and above all client
satisfaction, can be realized. Any type of product or service – buildings, vehicles, electronics,
computer software, financial services, etc. – may have its implementation overseen by a project
manager and its operations by a product manager.
The project manager needs to be an HRD expert who can motivate the workforce by training and

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promoting leadership among them, and boost their morale by incentives and promotions. He has
to be conversant with the principles of organization, and be a good judge of people who has the
ability to place the right man in the right job at the right time.
Social issues: A project can only be successful when there is no conflict between the management
and the local populace. Right from the acquisition of the project land to recruitment to organization
to infrastructural facilities, the management has to interact with the social fabric of the locale. It
can only ensure a smooth functioning at the project site if there is a ‘co-operational’, and not a
‘confrontational’ environment. The management can display its cordiality to the locals by, for
instance, recruiting ‘the sons of the soil’ in the workforce, which will not only be conducive to
reciprocal cordiality of the populace, but might actually make good business sense in employing
labor that is familiar with the locale and the conditions prevalent at the project site.

1.2.2. Functions of Project Manager

1) Developing a unique product or process and manage change.

2) Identification of the need for project.
3) Finding different alternatives of the project.
4) Developing a plan of action.
5) Training operators.
6) Establishment of quality assurance cell to control quality.
7) Incorporation of changes as and when needed while implementing project.
8) Selection of suitable equipment.
9) Finding suitable financial resources.
10) Assessment of alternatives and obtaining approval to proceed.
11) Measuring performance of the project.
12) Transfer of material, funds and settling all accounts after completion of project
13) Monitoring progress and reporting to higher authorities.
14) Closing all records, submission of final report and transfer of responsibility after
completion of specified project
Notes: A project can only be successful when there is no conflict between the management and the
local populace.

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1.2.3. Selection of a Project Manager

The selection of project manager depends on following:

Problem Solving Skills

o Does this person have a history of being able to solve complex problems?
o Does this person have the attitude that a problem is an opportunity to learn?

Personal Leadership Style

o Does this person have the communications and people skills appropriate for the mix of
people who will be required on this project?
o Will this person encourage project team members to bring up problems rather than play the
blame game?
o Does this person have excellent time management skills?

Organizational Experience
o Does this person know how work gets done in this organization?
o Is this person experienced in working in similar organizations and is that experience
transferable to this project?
o Does this person know the politics of our organization and have the savvy to navigate these
situations?

Skills and Knowledge

o Does this person have adequate knowledge about the subject of this project?
o If some of these skills are weak is there support available in the organization to offset the
problem?
o Does this person have adequate technical skills for this project?
o Does this person have the skills understand the root causes of potential problems and keep
them from reoccurring?

Project Management Experience

o Has this person led projects of similar scope, size, length, and priority?
o Is this person on a growth track to lead more complex projects?

1.2.4. Project Management Team

Effective team members have some characteristics in common. Only the first of these is usually
taken into account:

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They must be technically competent. This is so obvious that it is often the only criterion applied.
While the functional departments will always remain the ultimate source of technological problem-
solving for the project, it requires a technically competent person to know exactly when additional
technical knowledge may be required by the project.

Senior members of the project team must be politically sensitive. It is rarely possible to complete
a project of reasonable size and complexity without incurring problems that require aid from the
upper echelons of executive row; that is, from a project champion (Pinto and Slevin, 1989). Getting
such aid depends on the PM’s ability to proceed without threatening, insulting, or bullying
important people in the functional groups. To ensure co-operation and assistance, there is a delicate
balance of power that must be maintained between the project and the functional departments, and
between one project and others

Members of the project team need a strong problem orientation. This characteristic will be
explained in more detail shortly. For now, take the phrase to mean that the team’s members should
be concerned about solving any problems posed by the project, not merely about those sub-
problems that concern their individual academic or technical training.

Team members need a strong goal orientation. Projects are uncomfortable environments for people
with a 9-to-5 view of work. In particular, neither project teams nor PMs can succeed if their focus
is on activity rather than results. On the other hand, the project will not be successful if the project
team dies from overwork. One project team member of our acquaintance was bemoaning a series
of 60+ hour weeks. “They told me that I would work about 50 hours in an average week. I’ve been
on this project almost 18 months, and we haven’t had an average week yet.”

Project workers need high self-esteem. Project members who hide mistakes and failure are
disasters waiting to happen. Team members must be sufficiently self-confident and have sufficient
trust in their fellow team members (Lencioni, 2002) that they can immediately acknowledge their
own errors and point out problems caused by the errors of others. PMs should note that “shooting
the messenger” who brings bad news will instantly stop the flow of negative information. The
result is that the golden rule we stated above, “Never let the boss be surprised,” will be violated,
too.

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