IT8075 SOFTWARE PROJECT MANAGEMENT

UNIT I PROJECT EVALUATION AND PROJECT PLANNING

Importance of Software Project Management – Activities Methodologies – Categorization
of Software Projects – Setting objectives – Management Principles – Management Control
– Project portfolio Management – Cost-benefit evaluation technology – Risk evaluation –
Strategic program Management – Stepwise Project Planning.
UNIT II PROJECT LIFE CYCLE AND EFFORT ESTIMATION
Software process and Process Models – Choice of Process models – Rapid Application
development – Agile methods – Dynamic System Development Method - Extreme
Programming –Managing interactive processes – Basics of Software estimation – Effort and
Cost estimation techniques – COSMIC Full function points - COCOMO II - A Parametric
Productivity Model
UNIT III ACTIVITY PLANNING AND RISK MANAGEMENT
Objectives of Activity planning – Project schedules – Activities – Sequencing and
scheduling – Network Planning models – Formulating Network Model - Forward Pass &
Backward Pass techniques – Critical path (CRM) method– Risk identification – Assessment
– Risk Planning - Risk Management – PERT technique – Monte Carlo simulation -
Resource Allocation – Creation of critical paths – Cost schedules.

UNIT IV PROJECT MANAGEMENT AND CONTROL

Framework for Management and control – Collection of data – Visualizing progress – Cost
monitoring – Earned Value Analysis- Prioritizing Monitoring - Project tracking – Change
control- Software Configuration Management – Managing contracts – Contract
Management.
UNIT V STAFFING IN SOFTWARE PROJECTS
Managing people – Organizational behavior – Best methods of staff selection – Motivation
– The Oldham-Hackman job characteristic model –Stress – Health and Safety - Ethical and
Professional concerns – Working in teams – Decision making – Organizational structures –
Dispersed and Virtual teams – Communications genres – Communication plans –
Leadership
 UNIT I

PROJECT EVALUATION AND PROJECT PLANNING

Importance of Software Project Management – Activities Methodologies –
Categorization of Software Projects – Setting objectives – Management
Principles – Management Control – Project portfolio Management – Cost-
benefit evaluation technology – Risk evaluation – Strategic program
Management – Stepwise Project Planning.

Importance of Software Project Management:

Project:

A project is defined as a specific plan, transfer of ideas from one domain into
another, activities planned to achieve a particular aim.
Eg:
 A project to build a new hospital
 A research work undertaken by a college student

Project Characteristics:

 Planning is required

 Non-routine tasks are involved

 Work is carried out by the customers

 specific goal or objective should be created

 Project has a predetermined time span

 Work involving many people in the team

 Requirement of people with different skill sets

  The resources are limited (most of the time)

 Uncertainty regarding time, cost, quality and performance.

 Project may be small or complex
Software:
 Software is a set of instructions, data or programs used to operate computers
and execute specific tasks. Opposite of hardware, which describes the
physical aspects of a computer, software is a generic term used to refer to
applications, scripts and programs that run on a device.
Management:

 Management can be defined as all activities and tasks undertaken by one or

more persons for the purpose of planning and controlling the activities of
others in order to achieve objectives or complete an activity that could not be
achieved by others acting independently.

Software Project Management

 The software project management is the art and science of planning and
leading software projects. It is a sub discipline of project management in
which software project are planned monitored and controlled.

Types of project:

1. Software project
Follows set of software development phases that produce the output in terms
of code, which is embedded to run in other system
2. Project
Follows set of activities and implements physically
 Software projects versus other types of project:

 Invisibility When a physical artifact such as a bridge or road is being

constructed the progress being made can actually be seen. With software,
progress is not immediately visible.
 Complexity Per dollar, pound or euro spent, software products contain more
complexity than other engineered artifacts.
 Conformity The ‘traditional’ engineer is usually working with physical
systems and physical materials like cement and steel. These physical
systems can have some complexity, but are governed by physical laws that
are consistent. Software developers have to conform to the requirements of
human clients. It is not just that individuals can be inconsistent.
Organizations, because of lapses in collective memory, in internal
communication or in effective decision-making can exhibit remarkable
‘organizational stupidity’ that developers have to cater for.
 Flexibility The ease with which software can be changed is usually seen as
one of its strengths. However, this means that where the software system
interfaces with a physical or organizational system, it is expected that, where
necessary, the software will change to accommodate the other components
rather than vice versa. This means the software systems are likely to be
subject to a high degree of change.

Activities Methodologies

Writing of the software ,correcting any anomalies by testing and making it work
are not the only activities covered under software project.
There are two types of activities covered by Software Project Management
1. Framework activities

2. Umbrella activities

While initiation, execution & closing can be considered as framework

activities, the planning, monitoring and control are considered as umbrella
activities. Umbrella activities happen throughout the entire process of framework
activities.

1. Framework Activities :

Fig:The feasibility study/plan/execution

Feasibility study :
Information is gathered about the requirements of the proposed application.
Planning:
Based on the feasibility study, to create an outline plan for the whole project and a
detailed one for the first stage.
Execution:
The execution of a project often contains design and implementation sub-phases.

Requirement Analysis:
Requirements Analysis starts with a Requirements Elicitation or
requirements gathering which establishes what the potential users and their
managers require of the system.Analysis is converting ‘customer-facing’
requirements into equivalents that developers can understand

Architecture Design:
The components of the new system that fulfill each requirement have to
be identified. Existing components may be able to satisfy some requirements. The
design of the system architecture is thus an input to the software requirements.

Detailed Design:
Each software component is made up of a number of software units that
can be separately coded and tested. The detailed design of these units is carried out
separately.

Code and Test:

This is the part of the process where software engineers actually program
the code for the project.

Testing software is an integral and important part of the software development

process. This part of the process ensures that bugs are recognized as early as
possible. Complex system involves many software modules. They go through
many levels of testing like unit testing, module testing, integration testing, system
testing & acceptance level testing.

Integration:
It could involve combining different software components or combining
and testing the software element of the system in conjunction with the hardware
platforms and user interactions.
Qualification Test:
The system including the software components has to be tested carefully
to ensure all the requirements to be fulfilled.

Installation:
After the code is appropriately tested, it is approved for release and sold
or otherwise distributed in to a production environment. At this stage, the software
is installable, and users can work on it by entering data and getting reports.

Acceptance Support:
This is the resolving problems with the newly installed system including
the correction of any errors implementing agreed extensions and improvement.

2.Umbrella Activities
The umbrella activities occur throughout the process, they focus on project
management, tracking and control. The list of umbrella activities are:
 Project planning
 Project tracking and control
 Risk Management
 Configuration Management
 Quality assurance
 Formal reviews to ensure process errors are detected early and corrected.
 Work product preparation and documentation.
 Reusable components preparation and management
 Measurement
 Categorization of Software Projects
Category of the software projects can be defined based on Development
methodology Or Projects Characteristics.
Information system versus Embedded system:
Information system interfaces with the organization. Embedded system
interfaces with a machine. Any data in/data out systems like Stock control, Library
management system, Document management system are called Information system
.Whereas, systems which automatically controls the temperature in buildings,
sequencing in a washing machine, windows/Linux like operating system in a
computer are called Embedded system.
Objective driven or Product driven:
Projects may be distinguished by whether their aim is to produce a product
or to meet certain objectives .A project might be to create a product the details of
which have been specified by the client. On the other hand, the project may be
required to meet certain objectives.

Objective driven projects are taken up to satisfy a specific goal. E.g to make
20% profit, a patient registration system in a hospital to avoid long queues at the
receptions etc.Whereas projects taken up, to produce a software product meant for
multiple users at multiple geographic locations around the world are called Product
driven projects. Every project is unique. This uniqueness reveals its characteristics.

Example:
 “A Health Information System‟ is characterized by saving human life.

 A GSLV type project involves a nation‟s prestige and huge investment.

 STAKEHOLDERS

These are people who have a interest in the project. In general, they could be
users/clients or developers/implementers
They could be:
• Within the project team
• Outside the project team, but within the same organization
• Outside both the project team and the organization

Stakeholders are the people involved in or affected by project activities.

Stakeholders include:
 Project sponsor
 Project manager
 Project team
 Support staff
 Customers
 Users
 Suppliers

SETTING OBJECTIVES

Project objectives should be clearly defined and the people involved in the
project must know about it. This only will make them work with single focus and
concentration towards achieving the objectives
It is always advisable to set sub objectives (or goals) suitable for every
individual or a group of individuals (team) in line with the main objectives. Sub
objectives are more meaningful to a team so that it is under their control and
achievable by them.
A workable goal setting must always be done using SMART approach.
SMART means
 Specific
 Measurable
 Achievable
 Relevant
 Time bound

Specific
o The specific objectives are concrete and well defined. The goal should
state exactly what the project is to accomplish. It should be limited to
those essential elements of the project that communicate the purpose
of the project and the outcome expected.
Measurable
o If you can't measure it, you can't manage it. In the sense, the entire

goal statement is a measure for the project; if the goal is

accomplished, the project is a success. However, there are usually
several short-term or small measurements that can be built into the
goal.
Achievable
o It must be within the power of the individual or group to
achieve the objectives. Does everyone in the organization agree
that the project is necessary and desirable? No. Then: who?
Obviously, those who must do the project need to agree that it
is necessary. Realistically, those individuals who control the
resources necessary to get the project done need to agree that it
 is important. In addition, those who will be impacted by the
project should agree that it needs to be done.
Relevant
o The objective must be relevant to the true purpose of the project.A
relevant project may push the skills and knowledge of the people
working on it but it should not break them.
Time-Span

o One of the easiest parts of the goal to establish the project within the
time. This is particularly true of work that is in addition to everything
else that you need to do in your day. Building the delivery deadline into
the project goal keeps it in front of the team and lets the organization
know when they can expect to see the results.
Example of a project goal

Develop a "web based appointment management system for poly clinics"

deliverable in March, 2020 as per ISO 9000 standards within the budget
of Rs.50 Lakhs,
Specific – web based,
Appointment
Management system,
for poly clinics
Measurable – as per ISO 9000
standards, Below
Rs.50 lakhs
Achievable – It is a normal do able

Relevant _
appointment system
using available Web
Technology (Not
something very great
or not something
never done by anyone
 before)
Time span – Deliverable in March,
2020
Management Principles

Management can be defined as all activities and tasks undertaken by

one or more Persons for the purpose of planning and controlling the
activities of others in order to achieve objectives or complete an activity
that could not be achieved by others acting independently.

Management involves following activities:

 Planning : Deciding and documenting what are to be executed in the project.

 Organizing :Mobilizing and arranging various resources required for the

project.

 Staffing :Select and group the right people for the job.

 Directing :Motivating people, making every individual‟s goal the same as

project‟s goal.

 Monitoring :Collecting data on the progress of the project and tracking -

-
 Controlling :Any deviation from planning to actual, needs remedial actions.
They are called controlling.

 Innovating: Thinking and implementing creative new solutions. -

-
 Representing: Communicating with all stakeholders of the project
periodically e.g., reports to clients, suppliers, top management, users and
project team members
 Management Control

The management,in general,involves setting objectives for a system and

then monitoring the performance of the system.
Step 1: Understanding the problem of real world
Step 2: Data collection
Since each location must be processing multiple documents, minimum
necessary details must be taken to the database e.g., patient number, name, sex,
age, other demographic details, medical details like allergy and medical history.
Collection and entering data into the system is called „Data Collection‟ stage.
Step 3: Data Processing
Raw data may not be useful to the doctors, it needs to converted into useful
information. E.g., relating medical history of individuals to his allergic details and
linking to family medical history. Such activities are called „Data Processing‟.
Data processing involves programming.
Step 4: Making Decision /plans
Every location will have different volumes of data. Planning involves setting
time targets for completing data, manpower requirements etc., Planning is required
to achieve the set objective. In this case- to complete accurate data entry and start
operations on a central database.
In every project, things will not move as planned due to various reasons.
Then to bring the project back to planned level, some decisions need to be taken.
For example, moving people from one location to other or transferring people from
one department to data entry department etc. Every decision made is called an
„Implementation model‟. Every model will have consequences. If a model does
not work for some reason, different model must be decided to implement. So,
modeling and decision making is an iterative process. Any plan/decision must keep
the objective of the project in mind.
Step 5: Implementation
The decision taken in the previous step is to be implemented.

Project portfolio Management

A Project portfolio‟ can be defined as a group of projects carried out under a
management. It provides an overview of all the projects that an organization is
undertaking.
It prioritizing the allocation of resources to projects and decide which new projects
should be accepted and which existing ones should be dropped.
The Concern at Project Portfolio Management:

1. Identifying which project proposals are worth implementation

2. Assess the amount of risk of failure
3. Decide how to share limited resources.
4. Ensure the projects are duplicate work.
5. Ensure the necessary development has not been accidentally been missed.

Key aspects of Portfolio Management

1. Portfolio definition

2. Portfolio Management

3. Portfolio Optimization
Portfolio Definition
The list of projects taken under a` single management is called project
portfolio. These projects can belong to a single domain.An organization should
record in a single repository details of all current projects.A decision will be
needed about whether projects of all types are to be included.One problem for
many organizations is that projects can be divided into New Product
Development(NPD).Mostly the project deliverable is a product such as a computer
game,that is sold to customers.The renewal projects improve the way an
organization operates,mostly information system projects are often like this.It is
difficult to distinguish between NPD projects and renewal projects.
Portfolio Management
Once the portfolio (i.e. the list of projects) has been established, more details
costing of each project within that portfolio can be recorded. The various
milestones to be achieved by each of these project may be planned and tracked. In
a portfolio of projects, it is desirable that the final product or intermediate products
of one project compliments the progress of other projects. Actual performance of
project on these performance indicators can be tracked.

Portfolio Optimization
Each project within the portfolios to be planned, tracked and executed completion.
However, optimization can be achieved if one projects deliverable (final or
intermediate) become a part of or input to another project within the portfolio.
Project plans of these projects are to be planned and synchronized accordingly.
Another important aspect of optimization is managing and sharing its resources
between projects.The performance of the portpolio can be tracked by high level
managers on a regular basis.

Cost-benefit evaluation technology

Cost-benefit analysis is the process of comparing predicted costs to predicted

benefits.

 Cost-benefit analysis produces reliable information for making decisions

 A standard way to assess the economic benefits
Two steps:
1. Identify and estimate all the costs and benefits of carrying out the project
2. Express the costs and benefits in a common unit for easy comparison (e.g. $)

Cost-benefit analysis is performed to

1. Conducting a preliminary investigation

2. Evaluating a project
3. Making recommendations to management

Cost classifications
1. Tangible and intangible costs
2. Direct and indirect costs
3. Fixed and variable costs
4. Developmental and operational costs

1.Tangible and intangible costs

Tangible costs are the costs that are associated with an actual product or service.
Intangible costs are usually prone to subjective values depending on the situation.
Both of these are common of costs in accounting.

2.Direct and indirect costs

Direct costs are those that can be associated with the development of a specific
system.Examples: project team salaries, new hardware or software needed for the
system.Indirect costs, or overhead expenses, cannot be attributed to a particular
system .Examples: marketing, accounting, copy machine rental costs

3.Fixed and variable costs

Fixed costs are relatively constant and do not depend on a level of activity or
effort .Examples: salaries, rental charges, business licenses.Variable costs depend
on the level of activity.Examples: printer paper, supplies, telephone line charges,
shipping

4.Developmental and operational costs

Development cost are incurred only once,at the time the system is
developed.Eg system development team salaries, user training, hardware purchase.
Operational costs are incurred after the system is implemented and continue while
the system is in use.Eg: system maintenance, ongoing training, annual license fees

Evaluation of Individual Projects:

1. Technical Assessment
2. Cost benefit Analysis
3. Cash flow Forecasting

Technical Assessment:

Technical Assessment of a proposed system consists of evaluating whether the

required functionality can be achieved with current affordable
technologies.Organisation policy, aimed at providing a consistent hardware
software infrastructure is likely to limit the technical solutions considered. The cost
of the technology adopted must be taken into account in the cost benefit analysis

Cost benefit Analysis:

The estimate benefits will exceed the estimated cost, if it necessary to decide if the
proposed project is the best of several options. The project manager should ensure
that the most valuable projects should get most resources. It can be done in 2 steps.

 Identifying all the costs and benefits

 Expressing these costs and benefits in common units

Cash flow Forecasting:

A cash flow forecast is a prediction of the money likely to come into and go out
of a business over a period of time

Importance of Cash Flow

  Ensures business survival
 Ensures there is money coming in
 Ensures money is available to pay bills at the right time so that shortages
do not occur
 Identifies times when the business may need to find a source of finance

Cost Benefit Evaluation Techniques:

1) Net profit
2) Payback period
3) Return on investment (ROI)
4) Net present value (NPV)
5) Internal rate of return (IRR)

Net profit: Net profit of a project is the difference between the total costs and the
total income .
At the end of year 5, project 1 gives a total cash inflow of Rs.150,000 and the total
cash outflow of Rs.100,000. So,
Net profit (Project 1) = cash inflow – cash outflow
= Rs.1,50,000 – Rs.1,00,000 = = Rs.50,000

If the resulting figure is positive, then the project is in „profit‟. If the answer is
negative, then the project is in „loss‟. Please note that the answer will be negative,
if the cash inflow is lesser than cash outflow.
By the same calculations, the net profit of project 2 is
Net Profit (Project 2) = cash inflow – cash outflow
= Rs.1,55,000 – Rs.1,00,000
= Rs.55,000
By comparison, we say that the project 2 gives more profit than project 1.
Advantage and disadvantage of „Net Profit‟ technique
The advantage of „net profit‟ calculation is that it is a simple subtraction between
cash inflow and cash inflow and cash outflow. The disadvantage of this technique
is that it does not take care of the timing of the cash inflow.
If we look at project 1, it gives steady income of Rs.30,000 every year where as in
project 2. The bulk of the income comes in year 5. This means, we have to wait for
5 years to realize the said profit. Please not that we are analyzing 2 project
proposals and our estimate of a profit of Rs.55,000 in a distance future (5 years) is
less reliable than short term estimates.
2.Payback period
Payback period is the time taken to breakeven i.e. in other words, getback the
initial investment.
Generally, a project with the shortest payback period is more desirable.
In the example given above, the initial investment is Rs.100,000. Project 1 breaks
even (crossing Rs 1,00,000) at the 4th year with the cash inflow of Rs.120,000.
Whereas project 2 breakeven is the 5th year with the cash inflow of Rs.155,000.
Payback period can be expressed as
Payback period= cost of investment / Average annual cash inflow

Advantage and disadvantage of Payback Period technique

The advantage of Payback Period technique for project evaluation is that it is
very simple to calculate and not very much affected by small estimation errors.
The advantage of this technique is that it totally ignores the profitability of the
project.
For example, the fact that the project 2 yields a high net profit, is totally not taken
care. Only fact considered is the number of years it takes to break even.
3. Return of investment (ROI)

Return on investment is the percentage of the ratio of average annual profit to total
investment.
ROI=(Average annualprofit /Total investment )*100%
Advantages and disadvantages of ROI technique
Advantages
Simple and easy to calculate

Disadvantages
It does not take care of the timing of the cash flow. For example, if the same
money is invested in bank, then for the number of years, Bank provides cumulative
rate of interest. This aspect is not considered in the above formula for ROI.
4. Net Present Value (NPV)
NPV takes care of both profitability and the timing of the cash flow. This method
is also is called „discounted cash flow‟ method (DCF).
To understand NPV, let us assume that we have Rs.100 now and we put that in a
bank which gives an interest of 10% a year. So, next year the amount accrued will
be Rs.110.
In different words, Rs.110 received next year, would have a present value of
Rs.100.
The future cash inflow reduced to their present value by a „discount factor‟ is
called „discounted cash flow‟ (DCF).
So, net present value of any future cash flow is defined as
Present Value= Value in Year ‘t’ /(1+r)t

where r is the rate (also called discount rate) expressed in decimal value (0.1 here)
and t is the number of years into the future the cash flow occurs.
Advantage of NPV technique
NPV take care of both profitability and the timing of the cash flow.
Disadvantage of NPV technique
To choose the most appropriate „discount rate‟ is the main disadvantage of this
technique.
The parameters which would affect the discount factor are
 Financial risk

 Market risk
5.Internal Rate of Return (IRR)

An investor will invest in a software project only after analysing other investment
avenues and gets convinced that software project will yield a better return. NPV as
a cost benefit analysis technique does not provide such a comparison. Like NPV
method, this IRR method also comes under „Discounted cash flow‟ method.
IRR attempts to provide a profitability measure as a percentage return that is
directly comparable with other investment avenues (E.g. bank interest rate on fixed
deposit).
Explained in simple terms, if a software project yields a return of 15%, then, we
can invest in it if
 The investment for the project is borrowable from a source at a rate less than
15%.

 Our money cannot yield 15% income in any other investment.

 The internal rate of return (IRR) attempts to provide profitability measure as

a % return that is directly comparable with other interest rates.
Advantage of IRR technique
 It is a simple percentage value, so it is easy to compare the IRR of a software
project with that of other investments (E.g. Bank interest)
 Spreadsheets like MS Excel has a function to calculate IRR

Disadvantage of IRR technique

 The IRR is only a percentage and not an absolute value. Absolute value of
profit or return must be calculated using IRR

RISK EVALUATION

Risks are future uncertain events in a software project with a probability of

occurrence and a potential for loss. Some form of risk is associated with every
project .So it is very important to assess the possible risks and their probability of
occurrence right from the project selection stage.
The risk evaluation process involves the following steps

1. Risk identification & Risk Ranking

2. Risk and net present value
3. Cost-benefit analysis
4. Risk Profile Analysis
 5. Using Decision trees

1. Risk identification & Risk Ranking :

 In any project evaluation we should attempt to identify the risks and quantify
their potential effects.
 One common approach to risk analysis is to construct a project risk matrix
utilizing a checklist of possible risks and to classify each risk according to
its relative importance and likelihood.
Example of a project risk matrix

Risk Ranking means each risk is to assess its likelihood of occurrence. One can
give a number in a scale of zero to 5 or it could be assessed as
low/medium/high/unlikely etc.

2. Risk and net present value:

If the project is relatively risky, it is common practice to use a higher discount rate
to calculate NPV.

Projects may be categorized as high, medium or low risk using a scoring method
and risk premiums designated for each category.
 3. Cost-benefit analysis

 A sophisticated approach to the evaluation of risk is to consider each

possible outcome and estimate the probability of its occurring and the
corresponding value of the outcome.

 Rather than a single cash flow forecast for a project, we will have then a set
of cash flow forecasts, each with an associated probability of occurring.

 The value of the project is then obtained by summing the cost or benefit for
each possible outcome weighted by its corresponding probability.
4. Risk Profile Analysis

 An approach which attempts to overcome some of the objections to cost

benefit averaging.

 This makes use of risk profiles using sensitivity analysis.

 This sensitivity analysis compares the sensitivity of each factor of project’s

profile by varying the parameters that affect projects cost or benefits.
5. Using Decision trees

The analysis of decision tree consists of evaluating the expected benefit of

taking each path from a decision point. The expected value of each path is the sum
of the value of each possible outcome multiplied by its probability of occurrence.
Risk analysis helps us to
 Identify over risky projects.

 Choose best from risk

  Take suitable course of action.
Strategic Program Management
A group of projects that are managed in a coordinated way to gain benefits
that would not be possible were the projects to be managed independently.
The different types of programmes are:
1. Business Cycle Programmes
2. Strategic Programmes
3. Infrastucture programmes
4. Research and development programmes
5. Innovative partnerships
Every project carries a certain amount of RISK with it. So companies, especially
IT companies, take up multiple projects so that the risk is minimized. If one project
fails, there could be another which succeeds and compensates the loss of the first
project.
A successful project portfolio will have a mixture of projects, some of which can
be termed as safe with definite success with low returns and some others which are
risky with possibility of failures, but when succeeds gives enormous profits.
IT companies employ project managers to manage a single project and program
managers to manage multiple projects in a coordinated way.
Project managers, with multiple years of project management experience, promote
themselves to program managers.
1. Business Cycle Programmes:
The collection of projects that an organisation undertaking within a
particular cycle.Decisions have to be made about which projects to
implement within that budget within a accounting period which often
coincides with the financial year.
 2. Strategic Programmes:
Several projects together can implement a single stratergy.For
example the merging of 2 organizations computer systems could require
several projects each dealing with the particular application area.Each
activity could be treated as a distinct project but would be coordinated as
a programme
3. Infrastucture programmes:
Organizations can have various department which carry about
distinct activities.These distinct activities with probably require distinct
databases and information systems. An infrastructure programme could refer
to the activities of identifying a common resources and its implementation
and maintenance.
4. Research and development programmes:
Some development projects will be relatively safe but the final product
might not be radically different from existing ones on the market. Other
projects may be externally risky but the end result if successful will be a
revolutionary technological breakthrough that meets some previously
unsatisfied need. Hence a successful portfolio would need to be a mixture
of safe projects and some risky projects and that would generate more
profits.
The roles and responsibilities of both are different as seen in the following table.
S.NO Project Manager Program Manager
1 Handles one project at a time Handles multiple projects

2 Co-ordinates time, budget and Co-ordinates time, budget and

resources & delegates tasks within resources & delegates tasks within a
the team portfolio of projects

3 Need to be a task master to Need to be a visionary who sets

 complete project within given time goals and Objectives which will
and budget improve overall business of the
organization.
4 Need to minimize demand for Need to maximize resource
resources utilization across multiple project

5 Handles projects, one after another, Handles programs which are similar
which are not similar

6 A Project manager’s role A program manager’s role extends

completes on completion of a beyond individual projects and looks
project at long term business benefits to the
organization

The following benefits of Strategic Program Management:

 Improves Quality of Service.
 Reduction of cost due to consolidation of purchases.

 Revenue enhancement – sooner the projects get over, sooner the tax
collection begins. No rework is necessary

 Risk reduction

Stepwise Project Planning

The important aspect of project planning is to
 Plan the outline first and

 Plan the details, when more details are available.

Whenever we start planning for a project, only a few information is available.

Outline of the project is planned first with the available details, and with some
valid and reasonable assumptions. So it is clear now that the initial planning is
never accurate. Please note that it is never expected to be accurate also.
As and when we start the project, more and more information and details become
available. These would enable detailed planning and it is expected to be as accurate
as possible.

The step wise Project Planning involves two stages.

Stage 1: Outline Planning (Macro Level)
Stage 2: Detailed Planning (Micro Level)
MACRO Level Planning

Step 1: Select Project

Every business organization is looking forward to take up projects, execute and
earn revenue. What projects, the organization must take up? Selection of the right
project is the key business process for the economic well being of the company.
Who decides whether a project can be taken up or not? A group of people, stake
holders, sit together, discuss pros & cons and take the decision whether to take up
the project or not. The stake holders involved are :
 Business organization represented by its management and employees

 Suppliers

 Customers

 Competition and

 Investors
Step 2: Identification of Project scope and Objectives
It is extremely important to set the scope and objectives of the project and
broadcasting it to all stakeholders. In project management, the scope of a project is
the sum total of all of its products and their requirements or features.
Sometimes the term Scope is used to mean the totality of work needed to complete
a project. However, objective means the desired destination or endpoint.
 Delivering the agreed functionality to the required level of quality
 On time

 Within budget

The basic steps are:

 Identify and Set Objectives

 Establish Project Authority
 Identify all stakeholders
 Identify stakeholder’s need
 Modify objectives
  Establish communication channels amongst stake holders
Step 3: Identify project infrastructure

 Mapping the project to organization’s strategic planning

 Freezing procedures and standards
 Project team organization
 Analyse Project characteristics
MICRO Level Planning

Step 1: Identify the products and activities

 Identification of Deliverables
 Document the product flow
 Identify product instances
 Draw activity network diagram
 Identify parallel activities and milestones
Step 2: Estimate effort

At this stage, an estimate of effort, cost and resources needed are to be arrived at.
The resources needed are human and non human resources.
The cost estimate could be arrived at by calculating the
 Cost of all non human resources.

 Cost of human resources(including hiring and training cost)

 Cost of various activities.

Step 3: Identify and Estimate risks

A project, by nature, involves many people and very much interdependent. Due to
this very nature, many risks are possible. A project manager’s duty is to identify all
possible risks and document the risks and mitigation plans, in the event of such a
risk becomes a reality. A risk may have the effect of „time over run‟ which would
result in cost over run.

Step 4: Prepare the project plan, Allocate Resources

A project plan consists of various activities, time required for these activities
(including start and end dates), relationship between these activities, resources
required to carry out these activities, possible parallel activities etc. All these can
be represented pictorially in the form of a bar chart called „Gantt chart‟.
Step 5: Broadcast/Review/Freeze plan

A project plan is normally prepared by the project manager with a few

assumptions. It is required to publisize this to all stakeholders so that they also
review the plan with respect to their area of interest and suggest any modifications.
The plan can then be modified and frozen. This frozen initial plan is called the
Base plan.

Step 6: Execute Plan

Various activities can be started and monitored as per the project base plan.

Step 7: Low Level planning

As the project progresses, more details will become available. Based on detai

QUESTIONS AND ANSWERS

Part – A

1. Define – Project.

A project is defined as a specific plan, transfer of ideas from one domain

into another, activities planned to achieve a particular aim.
2.What are the common characteristics of a project?
 Planning is required

 Non-routine tasks are involved

 Work is carried out by the customers

 specific goal or objective should be created

 Project has a predetermined time span

 Work involving many people in the team

 Requirement of people with different skill sets

3. List a few goals of a software project

Software projects may involve one or more of the following goals.

 Profit (money).
 To make a product for use by multiple customers.
 To improve existing product’s quality.
 To improve existing product
 Simply to satisfy a customer

4. How IT projects are different from other projects?

 The progress is not visible immediately

 Customer would keep changing his requirements
 High degree of flexibility is expected
 Limited knowledge on application domain
 Lack of quality standards and measures
5. Define – Software Project Management.

The software project management is the art and science of planning and
leading software projects. It is a sub discipline of project management in
which software project are planned monitored and controlled.

6. Define - Process and Software Process.

A structured set of activities required to develop a system is called 'process'.
A software process provides the framework from which a comprehensive plan for
software development can be established.

7. List the activities covered by software process?

 Initiation
 Planning
 Execution
 Monitoring and control and
 Closing

8. What are the activities covered by Software Project Management?

There are two types of activities covered by Software Project Management.

1. Frame Work activity

2. Umbrella activity

9. Differentiate between 'project' and 'program'.

'Project' is a temporary endeavour undertaken to accomplish an unique purpose.

'Program' is a group of projects managed in a coordinated way.

10. Define „Project Portfolio‟

A Project Portfolio can be defined as a group of projects carried out under a
management.

11.What are the benefits of „Strategic Program Management‟?

Strategic program management, being a more coordinated execution of work,

brings the following benefits.
 Improves Quality of Service.

 Reduction of cost due to consolidation of purchases.

 Revenue enhancement – sooner the projects get over, sooner the tax
collection begins. No rework is necessary

 Risk reduction
12. Who are the stake holders in a project?
A person / group of persons / organization who are directly or indirectly affected
by the project are called Stake holder.
For example :
 Business organization (Management and employees)

 Suppliers

 Customers

 Competition

 Investors

13. Write short notes about contract management?

Contract administration is the management of contracts made with customers,
vendors, partners, or employees. The client organization will often appoint a
project manager to supervise the contract
 14. What are the activities covered by SPM?
 Feasibility study
 Planning
 Project execution
 List some problems with software projects.
 People-related problems
 Process-related problems
 Product-related problems
 Technology-related problems
 Mention some of the major activities covered by software project
management.
Major activities covered by software project management are
 Project Planning
 Scope Management
 Project Estimation
17. What is software project planning?

Software project management process begins with project planning.

Objective of software project planning - to provide a framework for manager
to make reasonable estimates of resources, costs and schedules
18. Define software quality metrics.
Software Quality Metrics means measurement of attributes, pertaining to
software quality along with its process of development. The term "software
quality metrics" illustrate the picture of measuring the software qualities by
recording the number of defects or security loopholes present in the software.
19. What is cost benefit analysis?

Cost-Benefit Analysis in Project Initiation. Cost-benefit analysis is a simple

 technique for comparing the business value a project will produce with the cost
of producing it. Project managers use cost- benefit analysis in the project
initiation phase to show the value of doing a project.

20. Define the term Management Control?

The management function of implementation of strategies is termed as

Management Control‘. It is defined as the process by which managers
influence the members of the organization to implement the organization
stratergies.

21.What is management?
Management can be defined as all activities and tasks undertaken by one or
more Persons for the purpose of planning and controlling the activities of others in
order to achieve objectives or complete an activity that could not be achieved by

others acting independently.

22. What are the steps involved in step wise planning?

 Identify project scope and objectives.
 Identify project infrastructure.3.Analyze project characteristics.
 Identify project products and activities.
 Estimate effort for each activity.
 Identify activity risks.
 Allocate resources.

 Review / Execute plan/ lower levels of planning.

23. What is feasibility study?

Feasibility study in short is termed as ―Learned Lessons. With the help of
collected information, investigation to decide whether a prospective project is
worth starting is the feasibility study.
24. What are the steps involved in Risk evaluation process?
Risk evaluation is predicting the possibility of a risk and its impact on the project.
It involves.
o Risk identification

o Risk ranking

o Risk quantification
25. What is Internal Rate of Return? How is it calculated?
IRR attempts to provide a profitability measure as a percentage return that is
directly comparable with other investment avenues
If a software project yields a return of 15%, then, we can invest in it if
 The investment is borrowable at a rate lower than 15%.

 Our money cannot yield 15% income in any other investment.

IRR is calculated as that % discount rate that would produce an NPV of zero.
26. What are the advantages and disadvantages of IRR?
Advantages
 It is a simple percentage value, so it is easy to compare the IRR of a software
project with that of other investments (E.g. Bank interest)
 Spreadsheets like MS Excel has a function to calculate IRR

Disadvantages
 IRR is only a percentage and not absolute value. Absolute value of profit
must be calculated using IRR.
27. Define NPV.
Net Present Value (NPV) can be defined as
NPV =Value in year ' t ' /(1+r)t
where
r = the rate expressed in decimal value (also called discount rate) and
t = number of years into the future the cash flow occurs.
28. What are the advantages and disadvantages of a ROI technique?
Advantages
Simple and easy to calculate
Disadvantages
Does not take care of the timing of the cash flow
29. Define “Payback period‟.
Payback period is the time taken to breakeven i.e. in other words, getback the
initial investment.
30. Define “Net Profit‟.
Net profit of a project is the difference between the total costs (cash outflow) and
the total income (cash inflow)

PART – B
1. List and Explain in detail the various activities covered by software Project
Management.
Or
Explain the various SDLC activities as outlined by ISO 12207 with a neat diagram.

2. Explain in detail the various categories of software projects?

3. Explain in detail, with an example of a case study and a suitable project control
diagram, the management of a software project.

4. Describe the various financial techniques used by an investor to evaluate a

project. List their advantages and disadvantages?

5. A case study involving calculation of all financial parameters between 2 or more

project cash flows and to make an evaluation of these projects.
6. Describe using an example, the Decision tree method of risk quantification?

7. A case study with various decision scenarios and to make business decision
based on decision tree structure.

8. Evaluate the risk involved in a project and suggest appropriate strategies for
minimizing the potential cost.

9. Draw the stepwise planning flowchart and Explain all its activities in detail.

10. In each stage of an IS development project, list the personnel who are likely to
be involved.