Project Management for Managers:

10 areas 47 processes, ie. 10 by 47 courses

Project when over, is no more called a project, its then called a process.

Conduction of election in India, is also a project, but we don’t call it an election project.

Temporary Organization means, people from di erent organizations who come to make a
project, and form an organization within themselves, this organisation is temporary in nature.

How to say, that the project is successful?

It depends on the Iron Triangle: Cost -> Time -> Performance

But some think, that 3 things don’t determine that, so here is the quadruple approach.

Budget -> Schedule -> Performance -> Client Acceptance

Determinants of Project Success:

Scope -> Performance -> Time -> Budget -> Client Acceptance

But what are the success determinants for IT projects?

System Quality -> Information Quality -> Use -> User Satisfaction -> Individual Impact ->
Organisational Impact

Bene ts of the organization are:

1. Improved E ciency
2. Improved E ectiveness
3. Increased Pro t
4. Strategic Goals
5. Organizational Learning
6. Reduced Waste

Bene ts of the Stakeholders:

1. Satis ed Users/Clients
2. Social and Environmental Impact
3. Personal Development
4. Professional Learning
5. Capital Supplier
6. Project Team
7. Impact on surrounding community

CMM MODEL:


CMM Stands for Capability Maturity Model.

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CMM is also called Project Management Maturity Model -> PMMM.

PMMM allows an organisation to benchmark the best practices of successful Project

Management.

CMM in short is comparing your processes with that of the industry leader in your area.
Moving your procurement processes towards the industry leader.

PMMM has 4 models

Project Management Knowledge Areas -> 10 areas:

PIRTHSSQCC

Success of project depends on these 3 things:

1. Strategy
2. Structure
3. Organization’s culture -> how o ce people are representing themselves to the outside
and to each other.

3 broad phases of a project life cycle:

1. Initiation
2. Implementation Stage
3. Finishing Stage

Market Share(Relative) = SBU Sales this year / Leading competitors sales this year.

Market Growth Rate = Industry sales this year / Industry Sales Last Year

This is a BCG Matrix

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Cash Cows are good
Dogs are worst





Non dominance / Pareto optimal Set
Based on NPV(Net Present Value) and IRR(Return)

Dominance of projects:

Alpha, Beta, Gamma and Delta

Parameters: Cost, Pro t Potential, Time to Market, Development Risk

An improved version of the above is Simpli ed Scoring Model:

Along with above parameters we have Weight:

Low - 1, Med - 2, High - 3

Multiplication and add up, the more the result, the more the dominance

Optimization Technique:
Linear Programming : Constraints -> Inequalities & Equalities



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Integer Programming:

Value of project is measured in terms of NPV



Goal Programming

S1, s2 is slack
variables



 AHP, matrix
format

TOPSIS method
Market and Demand Analysis:

1. Situational Analysis and Speci cation of Objectives

2. Collection of Secondary Information(then its evaluation)
3. Conduct of Market Survey(Primary Information - if secondary info doesn’t serve your
purpose)
4. Characterisation of Market
5. Demand Forecasting
6. Market Planning

Normalization stands for Average

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TOPSIS method example:

Here, 7/15.17 (style = 7)

= 0.46

0.46 x 0.1 = 0.046 (here, 0.1 -> weight)



Market and Demand Analysis

Methods of Demand Forecasting:

1. Qualitative Methods -> method depend on judgement of experts -> opinion of experts
-> Delphi method -> opinion is known thru mail, survey:
-> You continue the survey until the opinions get converged

2. Quantitative Methods -> based on analysis of historical time series.

-> Trend method -> +ve trend or -ve trend(linear relation, expo, etc.)

3. Causal Methods -> basis of cause-e ect relationships

Moving Average Method

Moving average by 4 units:

(32+36+40+35)/4 = 35.75

Then excluding 32: (36+40+35+32)/4 = 35.75

Then excluding 36: (40+35+32+35)/4 = 35.5

Then excluding 40, and so on….

In exponential smoothing, equal weightage isn’t

given to all the data points, unlike above(where
we gave 25% weightage to all the data points)

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Here, 32 in forecast for year 2011, is 32 + 0 = 32,

where 0 is from c*a of 2010.

Similarly, for 2012, 32 + 2.4, where 2.4 is from c*a

of 2011.
 174.5 x 0.835 = 145.7

Ex. Of causal method:

 


End Use Method:

Used for intermediate

Leading Indicator Method:

Single Equation Method:

Leading -> Independent variable

Explanatory variable -> Independent variable

Lagging -> Dependent Variable Explained variable -> Dependent variable

Simultaneous Equation
Method:

3 variables
 


Financial Analysis:

Money you invest in something is called cash

PBP = PayBack Period out ow.
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Average Rate of Return is better than the

previous method.

As this method considers the cash ow even

after the PBP.

ARR = Avg Return / Avg Investment

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 Capital Budgeting Techniques:
Annnuity Payment

Discounting:
Discount Factor

1. Discounted PBP
Future Value

2. Pro tability Index

Present Value


 Pro tability Index(PI) = (sum of cash in ows)/(sum of cash out ows)

3. NPV = di b/w present Net Pro tability Index = PI-1

value of car in ow and
present value of cash
out ow

4. Internal rate of return -> If IRR > cost of capital, then accept the project,
IRR, a discounting rate or else reject it.
which delivers a NPV = 0
or rate which discounted
cash in ow is equal to
discounted cash out ow.

For feasible project, PI

should be more than 1
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Equity Funds and Debt Funds

Key factors for determining Debt - Equity Ratio:

1. Cost

2. Nature of assets -> mostly intangible -> then equity

3. Business risk -> if more risk, then equity



 9 phases of PRAM:

Sensitivity Analysis:

Making changes in the input, how will it a ect

the future output.

Break Even Analysis:

No pro t no loss

Break even Point -> Cost = Revenue

Any technique applied to measure the risk

involved should necessarily measure the
probability of outcomes.
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Decision Tree Analysis:


Objective Type:

Key steps:
When we try to
predict data on basis
1. Identifying prob and alternatives
of historical data
2. Delineating decisions

3. Specifying probabilities and monetary outcomes

4. Evaluating various decision alternatives

 


EMV -> Expected Monetary Value

Technology Transfer:

Adoption

Abandonment Analysis -> When you complete Adaption

the project, before its actual completion(going Absorption

into loss), it is called Abandonment of a project. Di usion

Product Mix:

How many units of

laptop or mobile are
being produced

Plant capacity:

1.Techno req

2. I/P constraints

3. Market Conditions

4. Resources of the
rm.

5. Govt. Policy
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When you increase quantity, the investment
would increase in a decreasing rate.