BCOM Project Management 2

Bachelor of Commerce Degree
Project Management 2
Study Guide
Copyright © 2015
REGENT Business School
All rights reserved; no part of this book may be reproduced in any form or by any means, including
photocopying machines, without the written permission of the publisher.
Bachelor of Commerce Project Management 2
WELCOME
Welcome to the PROJECT MANAGEMENT module for the BCom Supply Chain
Management degree. May your commitment to learning expand your knowledge on this
module and take you on a successful journey.
This is a 300 hour, 30 credit module that incorporates a basic level of understanding Project
Management. This requires that you dedicate time to read the study guide, prescribed
textbook and recommended reading/s. Further to this, you are encouraged to complete the
activities, answer the questions at the end of the chapter readings in your prescribed textbook,
and complete the case study activities.
Plan your study times according to a timetable schedule and stick to it so that you can easily
pass all tests and examinations. Apply your time well and enjoy learning about Project
Management!
Regent Business School 2

TABLE OF CONTENTS
PAGE
Introduction to project management study guide………………………………………4
How to use the study guide……………………………………………………………….9
PART ONE
UNIT ONE: PROJECT MANAGEMENT CONCEPTS…………………………………11
UNIT TWO: INITIATING A PROJECT………………………………………………..36
UNIT THREE: DEVELOPING PROJECT PROPOSALS………………………………47
PART TWO
UNIT FOUR: DEFINING SCOPE, QUALITY, RESPONSIBILITY AND ACTIVITY
SEQUENCE……………………………………………………………….64
UNIT FIVE: DEVELOPING THE SCHEDULE………………………………………...77
UNIT SIX: RESOURCE UTILISATION………………………………………………..90
UNIT SEVEN: DETERMINING COSTS, BUDGET, AND EARNED VALUE……….96

UNIT EIGHT: MANAGING RISK…………………………………………………….108
UNIT NINE: CLOSING THE PROJECT………………………………………………116
PART THREE
UNIT TEN: THE PROJECT MANAGER………………………………………….…..126
UNIT ELEVEN: THE PROJECT TEAM…………………………………………………...144
UNIT TWELVE: PROJECT COMMUNICATION AND DOCUMENTATION……..167
UNIT THIRTEEN: PROJECT MANAGEMENT ORGANISATIONAL STRUC-
TURES………………………………………………………….…186
ANSWERS TO ACTIVITY QUESTIONS…………………………………………...195
BIBLIOGRAPHY………………………………………………………………….…..214
APPENDICES A-I (CASE STUDIES)…………………………………..……………215

INTRODUCTION TO PROJECT MANAGEMENT STUDY GUIDE

The purpose of this study guide is to introduce you to the concept of Project Management
and to familiarise yourself with the different context in which Project Management occurs.
In so doing, you will discover the various paths that you can take in your journey to ensure
that effective Project Management is implemented and achieved.
This module gives an in-depth analysis of the concepts which are essential to the
understanding of Project Management and its practices. You are encouraged to study Unit
One to Unit Thirteen of the study guide in conjunction with Chapter One to Chapter Thirteen
of the prescribed textbook. Each unit will cover the various section of Project Management
as follows:
Part One - Unit One
 Definition of a project and its attributes.

 Key constraints within which a project must be managed.
 Life cycle of a project.
 Definition of project management.
 Elements of the project management process.
 Identification and engagement of stakeholders.
 Implications of global project management.
 Project Management Institute.
 Benefits of project management
Part One - Unit Two
 How projects are identified and selected.

 A project charter.
 Outsourcing projects using a request for proposal.
 The proposal solicitation process

Part One - Unit Three
 Building relationships with customers and partners.

 Proposal marketing strategies.
 Decision making to develop a proposal.
 Pricing considerations.
 Customer evaluation of proposals.
 Types of contracts between the customer and the contractor.
 Measuring success of proposal efforts
Part Two - Unit Four
 Clearly defining the project objective.

 Preparing a project scope document.
 Understanding the importance of planning for quality.
 Creating a work breakdown structure.
 Assigning responsibility for work items.
 Defining specific activities.
 Creating a network diagram.
 Utilising a project management methodology called the systems development
life cycle for information systems development projects
Part Two - Unit Five
 Estimating the resources required for each activity.

 Estimating the duration for each activity.
 Establishing the estimated start time and required completion time for the
overall project.
 Calculating the earliest time at which each activity can start and finish, based
on the project estimated start time.
 Calculating the latest times by which each activity must start and finish
completing the project by its required completion time.
 Determining the amount of positive or negative slack between the time each
activity can start or finish and the time it must start or finish.

 Identifying the critical (longest) path of activities.

 Performing the steps in the project control process.
 Determining the effect of actual schedule performance on the project
schedule.
 Incorporating changes into the schedule.
 Developing an updated project schedule.
 Determining approaches to controlling the project schedule.
 Implementing agile project management
Part Two - Unit Six
 Taking resource constraints into account when developing a network diagram.

 Determining the resource requirements plan for a project.
 Levelling the use of resources within the required time frame of the project.
 Determining the shortest project schedule with the limited resources available
Part Two - Unit Seven
 Estimating the costs of activities.

 Determining a time-phased baseline budget.
 Determining the earned value for the work performed.
 Analysing cost performance.
 Forecasting project cost at completion.
 Controlling project costs.
 Managing cash flow
Part Two - Unit Eight
 Identifying risks and their potential impact.

 Assessing the likelihood of occurrence and degree of impact of risks.
 Risk response planning.
 Controlling risks

Part Two - Unit Nine
 Actions that should be taken when closing a project.

 Conducting a post project evaluation.
 The importance of documenting lessons learnt.
 The need to organise and archive project documents.
 Obtaining feedback from the customer about the project.
 Early termination of projects
Part Three – Unit Ten
 The responsibilities of the Project Manager.

 The skills needed to successfully manage projects and the ways to develop
Project Manager competence.
 Approaches to effective delegation.
 How the Project Manager can manage and control changes to the project
Part Three - Unit Eleven
 How teams are acquired and assigned.

 The development and growth of teams.
 The project kick-off meeting.
 Characteristics of effective project teams and barriers to effectiveness.
 Being an effective team member.
 Team building.
 Valuing team diversity.
 Ethical behaviour.
 Sources of conflict during the project and approaches to handling conflict.
 Problem solving and brainstorming.
 Effective time management

Part Three - Unit Twelve
 Suggestions for enhancing personal communication, such as face-to-face

discussions and written communication.
 Effective listening.
 Various types of project meetings and suggestions for effective meetings.
 Formal project presentations and suggestions for effective presentations.
 Project reports and suggestions for preparing useful reports.
 Controlling changes to project documents.
 A project communication plan.
 Communicating with stakeholders.
 Collaborative communication tools
Part Three - Unit Thirteen
 The characteristics of the three types of organisational structures.

 The advantages and disadvantages of each.
 The role of a project management office

HOW TO USE THE STUDY GUIDE
This study guide should be used in conjunction with the prescribed text book. The study
guide and the prescribed text book comprehensively explain important Project Management
concepts, practices, principles and techniques.
The prescribed text book comprises of 13 chapters that include case studies, end of chapter
questions and internet exercises that covers Project Management. The Project Management
study guide consists of 13 units and includes activities at the end of each unit. Case studies
are also included in some of the units and these are extracted from the prescribed textbook.
You are encouraged to complete the end of unit activities and the case studies mentioned in
this study guide. The answers to the activities can be found at the end of this study guide.
There are no answers to the case questions in the study guide.
This study guide consists of three parts. Part one incorporates Units One, Two and Three
which relate to Chapters One – Three in the prescribed textbook. Part Two is made up of
Units Four, Five, Six, Seven, Eight and Nine which is in relation to Chapters Four – Nine in
your prescribed textbook. Part Three is made up of Units Ten, Eleven, Twelve and Thirteen
and relates to Chapters Ten to Thirteen in your prescribed textbook.
To ensure that you derive maximum value from studying the Project Management module
please do the following:
 Read the study guide in conjunction with your prescribed textbook and recommended
readings.
 Check that you understand each study unit and each chapter of the prescribed book by
self-checking your learning outcomes.
 Familiarise yourself with the abbreviated words used in the prescribed text book and
in the study guide.
 Read the recommended case studies added to the end of this study guide as appendix:
A to I and answer the questions. Refer to your prescribed textbook for more case
studies at the end of each chapter reading.
 Do the activities after studying each unit to test your knowledge.
 Enhance your knowledge by referring to and reading some of the recommended

materials given in the study guide.
PRESCRIBED TEXT
The prescribed textbook for Project Management for 2nd year BCom students is:
Gido, J and Clements, JP. (2015). Successful Project Management. (6th Edition). Cengage
Learning, USA.
Additional Recommended Reading:
1. van der Waldt, G and William, F. (2015). A Guide to Project Management. (2nd Edition).
Shumani Mills Communications, Juta and Company (Pty) Ltd, SA.
2. Bricknell., Fraser., Goldman., Kara., Labuschagne., Maritz., McGregor., Radford., (2014).

Project Management in Perspective. (4th Edition). Oxford University Press, South Africa.

PART ONE
UNIT ONE
PROJECT MANAGEMENT CONCEPTS

PART ONE – UNIT ONE
1.1 PROJECT MANAGEMENT CONCEPTS
1.1.1 Introduction
In this unit, the student will learn about project definition, project attributes, project
constraints and how to balance project constraints. This unit also covers the project life cycle
stages, the project management process, stakeholder engagement and global project
management. The student will also learn about Project Management Associations and the
benefits of Project Management. The Unit ends with a brief summary, activities and a case
study. After studying Unit One of the study guide and Chapter One of the prescribed
textbook, the student should be able to complete the learning outcomes below.
Learning outcomes:
 Define what a project is

 List and discuss the attributes of a project
 Explain what is meant by project objective
 Define what is meant by project deliverable
 Provide examples of projects
 Discuss project constraints
 Describe the phases of the project life cycle
 Define and apply project management
 Discuss the steps for the planning process
 Identify the three elements of the executing process
 Create a stakeholder register
 Explain Stakeholder engagement
 Discuss some implications of global project management
 Discuss the Project Management Institute
 List benefits of project management techniques (Gido and Clements, 2015:4)

1.2 DEFINING A PROJECT

According to Gido and Clements, “A project is an endeavour to accomplish a specific
objective through a unique set of interrelated activities and the effective utilisation of
resources” (Gido & Clement, 2015:4).
Another definition of project management is: “the application of knowledge, skills, tools and
techniques to project activities by the process of defining, planning controlling and closing
project activities and motivating the people within the parameters of scope, time, cost and
quality” (van der Waldt & Fox, 2015:4).
1.2.1 Project Objective and Deliverable

What is meant by a project objective? “A project objective is to establish what is to be
accomplished in terms of the end product or deliverable, schedule and budget. A project
comprises of interdependent activities that uses various resources, has a specific time frame,
is a unique or one time endeavour, has a sponsor or a customer, involves a degree of
uncertainty and can be constrained by many factors, such as scope, quality, schedule,
budget, resources, risks, customer satisfaction and stakeholder support” (Gido & Clement,
2015:27).
What is meant by project deliverable? - It is the end product on completion of the project
objectives. Consider the example of a school building project. The school can only be
utilised once the project is completed to a satisfactory standard.
Consider another project deliverable such as a wedding. The wedding planner together with
his/her team execute the various tasks to achieve the project deliverables and project
objectives. The success of the wedding day is the project deliverable once the scope of the
project is completed.
1.2.2 Project Attributes

What are project attributes? “A project has a clear objective that establishes what is to be
accomplished. It is the tangible end product that the project team must produce and deliver.
The project objective is usually defined in terms of end product or deliverable, schedule, and

budget. It requires completing the project work scope and producing all the deliverables
within a certain time and budget” (Gido & Clement, 2015:4-5). Project attributes are
explained as follows:
 Expected benefits and outcomes

The objective of a project has to be clear on what is to be accomplished so that the
end product or deliverable is achieved. The project work is to be completed within
a specific time period and budget.
A statement of expected benefits and outcomes may be included in the project

objectives. Think about a project that involves building a school in a specific area.
What is the purpose of building the school? The reason could be based on the
expected outcome: that the school is required to uplift the community. There is a
need for the school.
 Interdependent activities (tasks)
Tasks are executed in a certain sequence to achieve the project objective. Think
about the school building project and the many tasks that are undertaken to
complete the project, such as having architect drawings or plans then the foundation
has to be prepared and completed, then the walls are built followed by the roof that
goes onto the building and so on. The school project will only be complete once all
the tasks are carried out and the building is passed by the local municipal inspector
of that specific area.
 Resources
Resources include different people, organisations, equipment, materials and
facilities that are required to complete a project.
Consider again the school building project that will require human resources such
as: architects, bricklayers, foreman, builder/Project Manager, roof installer, window
installers, and specific labour, (to plaster the walls and do the ceilings) tilers,

plumbers, electricians and so on. Organisations could be the government, or a

company that is the sponsor of a project.
In constructing a building, equipment and tools are required such as forklifts,

spades, scaffolds, ladders, etc. Materials can be bricks, sand, stone, ceiling boards,
cement, tiles, roofing, window panes, and door frames and so on to complete the
building project. Specific projects require specific materials and resources. This
now gives you an idea of the various resources that are utilised to complete a
project.
 Specific time frame or finite lifespan

A project has a start date and a completion date. Using the example of the school
building project, there must be a time for the project to begin and for the project
objective to be accomplished.
 Unique or a one-time endeavour

A project can be unique or a one-time endeavour. The Moses Mabida stadium built
in Durban for hosting the 2010 soccer world cup is a one-time endeavour. A unique
endeavour could be the building of a space station. I am sure you get the idea of a
unique or a one-time endeavour.
 Project sponsor or customer

A project sponsor or customer is the entity or person that will provide the funds
required to accomplish the project. With reference to the school building project
this could be funded by government or a group of people or a company that have set
aside funds to complete the project. Another example is when a homeowner wants
to extend his/her home he/she will fund the project to accomplish this. Therefore,
the homeowner is the customer who funds the project.
 Degree of uncertainty
A project has to have a prepared plan that is based on certain assumptions and
estimates. A degree of uncertainty occurs on assumptions and on estimates.

Using the school building project, consider what would be the effect on the project
if the bricklayers did not turn up for a few weeks. This would constrain the project
completion time.
Bad weather such as heavy rains will also prevent the work from going ahead.
Material prices could increase and therefore, more funds will be required than was
initially estimated. Projects can come to a standstill due to degree of uncertainty
factors.
1.2.3 Examples of Projects
Some examples of projects are:
 Construction of bridges, railways, homes etc.
 A wedding
 A conference
 Sports events
 Hosting a dinner party
 Customised information systems technology
 School fete.
These are only a few examples of projects. There are many more projects that can be given
as examples.
1.3 BALANCING PROJECT CONSTRAINTS

Project constraints can arise from: resources, scope, quality, schedule, budget, risks,
customer satisfaction and stakeholder support.

Van der Waldt & Fox (2015:7) simplify project constraints by referring to this as scope, time
and cost. This combination of constraints is referred to as the Project Management Triangle.
Each side of the triangle represents a particular constraint. These authors go on to mention
that a particular characteristic of the triple constraint is that they are interdependent, whereby
one side of the triangle cannot be changed without affecting the other two sides. See the
illustration below:
Schedule/time Resource/budget/cost
Scope/Quality
(Adapted from van der Waldt & Fox, (2015:7))
Constraints have to be managed well enough so that it does not affect the success of the
project.
1.3.1 Explanation of Project Constraints
 Resources
Resources include: people, materials, equipment, facilities, funding etc. that
are necessary to accomplish the project deliverables and objectives. Non-
performance from the team or from suppliers can be detrimental to the project
objective. The lack of materials, equipment and facilities including funding
can also negatively affect the project deliverable and project objective.
 Scope
The scope of a project is all the work that has to be undertaken to produce the
project deliverables. It is the end result where the customer is satisfied that
the deliverables meet the requirements and acceptance criteria and the project

objectives are accomplished. If problems arise in how the work is carried out
the project objective will be affected.
 Quality
The work undertaken in every step of the project must be of quality.
Expectations on quality is defined from the onset of a project. The quality of
the work must meet specifications.
Consider the school building project, if doors or windows do not open easily
or if the roof has leaks, the quality has been compromised and does not meet
with the expectations. The sponsor or customer will not be satisfied.
 Schedule
A project schedule is a timetable that specifies the start and finish of each
activity of the project. Problems will arise if the work is not timeously carried
out. Sometimes it is not possible to continue with a specific task as it may
depend on the completion of other tasks before it can be done.
A project schedule will be affected if one or more factors slow down or stop
the workflow. This will in turn affect the completion time of the project. In
such a situation the customer will not be satisfied.
 Budget
Project budget refers to the amount of money based on estimate costs of a
project that a sponsor or customer agrees to pay for the acceptable project
deliverable. The budget could be allocated to pay salaries of people that are
employed to undertake the work of a project.
The budget is also used for materials, supplies, rental, and equipment and so
on. The project contract specifies what the budget will be spent on. The
budget of a project is extremely important. If the budget estimation is too low
the project will be stopped. The project objective and deadline date cannot be
met.

 Risk
Risks can adversely affect the accomplishment of a project objective. Think
about the 2010 world cup on what level of planning went into ensuring that
the event would be a success for South Africa? There were many risks
identified and there had to be strategies on how to minimalise risks. For
example one of the risks that was identified was road safety which required
meticulous planning on how to overcome this risk.
(https://arrivealive.co.za/2010-World-Cup-Road-Safety).
Another risk was the completion of all stadiums around the country that had to
be constructed and some upgraded to host the event. These were massive
projects that cost millions of rands. If the stadiums could not be completed by
a certain time period the event could not have been held in SA. The risks in
this case would have been lost opportunities and benefits of hosting such a
major event in South Africa. This is what was said on an internet site
regarding the benefits for South Africa to host the 2010 world cup: “It has
been estimated that the 2010 FIFA World Cup will sustain an estimated 695
000 jobs and have a gross impact of R93-billion on South Africa's economy.
A projected 373 000 foreign tourists will visit South Africa during the World
Cup, each spending an estimated R30 200 on average per trip. However, the
indirect spin-offs from improved perceptions abroad could have an even
greater, longer-lasting impact, not only on South Africa and its development
but on the continent as a whole. A successful World Cup will help change the
perceptions that a large number of foreign investors hold of Africa.”
(http://www.southafrica.info/2010/worldcup-overview.htm).
 Customer satisfaction
Customer satisfaction – the Project Manager has to ensure that there is a high
level of communication from the beginning to the end of a project.
Communication is vital in understanding customer needs.

Customer satisfaction may change during the project therefore, the Project
Manager must be aware of this. Regular engagement with the customer can
be done by providing progress reports on the project or by communicating via
emails or via telephone or it can be done face-to-face.
 Stakeholders
Stakeholders are people that have an influence or are affected by the project.
Stakeholders need to be kept informed on progress and on changes to the
project. The Project Manager and his/her team must build good relationships
with the various stakeholders to gain their support over the project.
1.4 THE PROJECT LIFE CYCLE
“The project life cycle defines the phases that connect the beginning of a project to the end of
the project. Within each project life cycle phase, is a process standard which can be applied
to most projects, most of the time. It is built upon the principle that projects are unique
endeavours, and therefore how you accomplish the processes and define the life cycle
depends on the requirements and conditions of the project.”
(http://www.pmdocuments.com/pmbok-project-management-framework-reference/).
There are four phases of a generic project life cycle and these are known as the initiating
phase, the planning phase, the performing phase and the closing phase. Each of the phases is
explained below:
a) Initiating phase
There has to be a need, problem or opportunity for a project. The sponsor or

customer will fund the project to satisfy their need. In the initiating phase
projects are identified and selected and the document is authorised. The
authorised document is referred to as a project charter.
b) The planning phase
In the planning phase the scope of the project is defined and resources are
identified. A schedule and budget is developed. Risks are identified and all

of these make up the baseline plan on how the project work will be
undertaken. The Project Manager and his/her team must spend sufficient time
to properly plan the project and lay out the road map, or game plan in how the
scope of the project is to be accomplished on budget and on schedule.
The planning phase encompasses the following:
 What needs to be done?

 How it will be done?
 Who will do specific tasks?
 How long will it take to complete the project?
 How much will the project cost?
 What are the risks?
The baseline plan is made up of a set of integrated documents that show how the project
scope is to be accomplished within budget and on schedule.
c) The performing phase
The performing phase is the third phase of the project life cycle. Work can
now take place. The Project Manager leads his/her team to perform the
planned activities to produce the deliverables so that the project objective is
accomplished. Various resources are used at each stage of the performing
phase and the progress is monitored and controlled to ensure that things go
according to plan and the project objective will be accomplished. Actual
progress is measured and compared to planned progress according to the
baseline plan.

THINK POINT
Think about a project and what would happen if things do not go according to plan? What
would be the outcome of such a project?
d) The closing phase
This is the final stage of the project life cycle and it involves various actions,
such as making final payments, evaluations, documenting lessons learnt and
archiving project documents.
An important task in the closing phase is to evaluate the performance of the

project. Lessons are identified and recommendations are made to improve
performance on future projects. Feedback from the sponsor or customer
should be obtained to determine the level of customer satisfaction on the
project deliverable and objective. The diagram below illustrates the initiating,
planning, performing and closing phases of the project life cycle.
See the diagram below that illustrates the four phases as explained in this section:

THINK POINT
Think about the project management process on planning, coordinating, leading

and controlling resources. Would the project be accomplished if the planning
was poorly done?
1.4.1 When Things Do Not Go According To Plan
Corrective action is required if the actual progress of the project is behind schedule, or is
over the budget or is not meeting technical specifications. Prior to implementing corrective
action it may be necessary to evaluate several alternative actions. This is to ensure that the
corrective action will bring the project back within the scope, schedule, and budget
constraints of the project objectives (Gido and Clements, 2015:12).

Changes do occur during the performing phase and it is important to manage and control
these changes. This is done to ensure that there is minimal or no negative impact to
accomplishing the project objective. Some changes are trivial and will not impact on the
project objective. Major changes can significantly affect the project objective. If there are
major changes the baseline plan will need to be updated.
Changes could mean that there must be a trade-off involving time, cost, scope and quality.
For example to reduce project costs, this could mean that materials of a lower quality than
originally planned for, may be used. This compromises the quality of the project. Changes
can be initiated by the customer/sponsor or the Project Manager and his/her team (Gido and
Clements, 2015:13).
1.5 THE PROJECT MANAGEMENT PROCESS
“Project management is planning, organising, coordinating, leading, and controlling

resources to accomplish the project objective. The project management process involves
planning the work and then working the plan” (Gido and Clements, 2015:14).
The two major functions of the project management process are:
2. Execute the
1. Establish a plan to
plan. accomplish
the objective.

1.5.1 The Steps For The Planning Process
 Establish project objective

The project objective must be agreed upon by the two parties, that is the
customer or sponsor and the organisation or person/s that will undertake the
project.
 Define the scope

It is important that a project scope document is prepared. Why? Because,
such a document includes: the customer requirements, statement of the work,
a list of deliverables and the associated acceptance criteria in validation of the
work and deliverables that should meet specifications.
 Create a work breakdown structure

The project scope should be subdivided or broken down into work packages
(WBS) so that the project is achievable and does not seem overwhelming.
 Assign responsibility
Who is responsible and accountable for each work package and associated
deliverable? The correct persons are identified and assigned to specific duties
on the WBS. This is communicated to the team so everyone is on the same
page so to speak. There is clarity on what must be done by each person and
by when this must be done.
 Define specific activities

Each task or work package in the WBS should be reviewed so that a detailed
list of activities is developed to perform each work package in order to
produce the required deliverable.
 Sequence activities
A network diagram indicates the necessary sequence and dependent
relationships of the detailed activities that should be carried out so that the
project objective is achieved.

 Estimate activity resources

The types of resources have to be determined. This means that the correct
people with the required skills will be required to be assigned to a specific
project activity and funds are required to pay these people. Funds will be
estimated on the purchase of materials, labour, people with specific skills,
equipment, and facility and so on as required for the project activity to be
completed successfully.
 Estimate activity durations

There must be an estimate of how much time it will take to complete each
activity. This depends on the resources that is available for the project.
Remember that estimations are just that estimations as degree of uncertainty is
still present. Think about a building project and bad weather such as heavy
rains. This will stop the project as no work can be done under these
conditions. Activity time will be affected in this case.
 Develop a project schedule

The overall project schedule is developed at this stage and will include when
each activity is expected to start and finish.
 Estimate activity costs

This is based on the types and quantities of resources that is estimated for each
activity.
 Determine budget
The total budget for the project must be determined. This can be done by
aggregating the cost estimates for each activity.
Please study the detailed work breakdown structure, figure 1.3, in the prescribed textbook
on page: 16 and take a look at figure 1.4 on page: 18 on the network diagram.

1.6 ELEMENTS OF THE EXECUTING PROCESS
Upon completion of the baseline plan the work can now begin. The work must be performed
according to the plan. The work must be monitored, controlled and managed for changes so
that the project scope is achieved within budged and schedule to the customer’s satisfaction.
1.6.1 Execution Process Steps
The execution process steps are:
a) Perform the work
The work should be performed according to the activities within the baseline plan
and in the network diagram. The deliverables must be produced as per the
acceptance criteria. The Project Manager accomplishes this by coordinating the
project team, including external resources and by regular communication with all
stakeholders and the customer or sponsor to be certain that expectations are met.
b) Monitor and control progress
This is an important step because it is necessary that the progress of the work being
performed is monitored. How else would the Project Manager know that
everything is going according to plan? Actual progress must also be measured and
be compared to the planned progress. Why do you think this should take place?
Actual progress is compared to planned progress to determine if the project is
behind schedule. The project could be overrunning the budget or have some related
problem that cause constraints to the project objective and only if this is identified
as a problem, it can be controlled.
Such problems have to be controlled at an early stage so that the problems do not get
out of hand or escalate to bigger problems.

THINK POINT
What do you think will happen if the problem is too far out of control?
What aspects of the project will be affected in this case?
c) Control changes
It is not uncommon for changes to occur during the performance of the project work
and this can happen for a variety of unexpected reasons. It may be that some
activities take longer than expected to be completed.
Think about the school building project we spoke about earlier on where the labours
may not turn up to work for a period of two weeks. This would slow the project
work down quite significantly if not altogether until the workers do arrive to work.
This delay will affect the project completion time.
Small insignificant changes do not seriously affect the project objective but major
changes do have an impact on the project. A change control system should be
established for the process and procedures that define how the changes are to be
documented, approved and communicated. The customer or sponsor must agree to
the change control system and it must be communicated to all the participants on
the project (Gido and Clements, 2015:21).
1.7 STAKEHOLDER ENGAGEMENT

Who are the stakeholders? See below:
 They are individuals or entities.
 Stakeholders may be involved in the project in some way.
 Stakeholders can influence the project.

 Stakeholders may be affected by the project.
According to Gido and Clements, (2015), stakeholders can be the customer/sponsor, project
team, Project Manager, subcontractors, consultants, end users or consumers and advocacy
groups (Gido and Clements, 2015:21).
1.7.1 Creating a Stakeholder Register
Stakeholders should be identified as early as possible in the project life cycle. A list should
be created on all stakeholders that have an influence or direct interest over the project. The
list should comprise the key contact information of each stakeholder. This may include the
stakeholder specific topics of interest, expectations, known issues, and areas of potential
influence for each stakeholder. This type of document is known as a stakeholder register
(Gido and Clements, 2015:22).
It is best for the Project Manager and the team to approach stakeholders and learn about their
interest, needs, expectations and concerns in the first instance and not wait for the
stakeholders to make this first move. It is necessary to foster good relationships with the
stakeholders to build trust and honesty.
1.7.2 Engaging With The Project Stakeholders

The Project Manager can do the following:
 Build a relationship with each stakeholder tailored to the stakeholder’s
specific interest in the project.
 Ensure that the project team is proactive and take the initiative to contact and
engage each stakeholder by listening to the stakeholder interests, needs,
expectations and concerns.
 Stakeholder interest, input, debate and discussions should be welcomed. This

builds support for the project.
 Address stakeholders concerns early into the project. Do this positively and
timeously.

 Ensure that there is opportunity for a two-way communication with each

stakeholder.
 Behave professionally. Be open minded. Be thoughtful.
 Do not dominate discussions, overact or become defensive.
 Do not lose control of emotions.
 Keep an issue log of specific issues or concerns or questions from each

stakeholder and address these accordingly (Gido and Clements, 2015:22-23)
1.8 GLOBAL PROJECT MANAGEMENT

There are challenges to managing projects globally. Some of these challenges occur due to
language barriers, policy differences and cultural differences and so on. Globalisation affects
project management in the following ways:
 Adds a unique dimension to managing projects.

 Changes the dynamics to projects.
 It adds a layer of complexity that can adversely affect the outcome of a project
(due to cultural differences and multinational economic transactions)
 External factors to a project may create a dynamic and sometimes unstable
environment of the life of the project (Gido and Clements, 2015:23).
Factors that can influence a project or introduce risk and affect the success of the project are
as follows:
 Currency fluctuations and exchange rates.

 Country-specific codes and regulations work hours per day, holidays and
Religious observances.
 Corporate join ventures and partnerships creating entities with a presence and
Facilities in multiple countries.
 Political relations between countries.
 Availability of high-demand workforce skills (Gido and Clements, 2015:23).

Barriers to global project management can be created in communication, team development

and project performance. This is due to participants that are located in various countries who
speak different languages. Large international events require multilingual project teams.
A Project Manager and team that possess foreign language skills, is knowledgeable and
understands the cultures of other countries geography, world history and international
economics is most suitable to manage global projects. Modern technology enables project
participants to communicate on the click of a button!
1.9 PROJECT MANAGEMENT INSTITUTE (PMI)
“The Project Management Institute (PMI) is a premier worldwide not-for-profit association

for practitioners in the project management profession and individuals who want to learn
more about the profession. Founded in 1969, PMI is approaching 500,000 members in
nearly 200 countries and has about 270 chapters worldwide. Additionally, the association
has over 30 online communities of practice where peers can collaborate on specific topics of
interest” (Gido and Clements, 2015:24).
1.9.1 PMI Membership
“PMI membership signifies that you’re serious about your project management career and
your professional development. It highlights this dedication to employers, colleagues and
stakeholders, giving you an edge in the job market. It also provides you with access to
valuable knowledge, networks and resources that help you improve and advance”
(http://www.pmi.org/membership.aspx).
1.9.2 Certification that Employers Demand
PMI credentials distinguish a person’s qualifications in project management, and thus the
same in the job market. This helps such a person to move ahead in the person’s career. The
Project Management Institute validates a range of education and experience levels in project
management. By joining PMI people gain unlimited access to a world of content and
community. They also get an opportunity to meet peers locally (http://www.pmi.org/).

Have a look at some videos on you-tube using this site:
https://www.youtube.com/watch?v=mNE9_YcvR0g
Here you will gain information on how PMI has helped and added value to many project
management volunteers!
1.10 BENEFITS OF PROJECT MANAGEMENT TECHNIQUES
Applying project management techniques is necessary in order to satisfy the customer. A

project that is completed on time within budget without compromising quality is a successful
project. Some of the benefits of project management techniques are as follows:
 Satisfied customers.
 Project completion without compromising quality.
 Project can be done on time.
 Project can be accomplished within budget.
 Contractors that successfully complete a project to customer satisfaction can
gain more business from such a customer in the future.
 The Project Manager has the satisfaction that he/she has led a successful team.
 The Project Manager can build a good reputation or enhance his/her
reputation.
 Knowledge and skills are enhanced for the Project Manager and the team.
By successfully applying techniques to complete a project on time and on budget in a quality

manner will earn the Project Manager a good reputation and he/she may be called upon for
future projects and may also gain new customers by referral.
1.10.1 Ten Knowledge Areas of Project Management Techniques

The ten knowledge areas are:
a) Project Integration Management
b) Project Scope Management
c) Project Time Management
d) Project Cost Management

e) Project Quality Management

f) Project Human Resource Management
g) Project Communications Management
h) Project Risk Management
i) Project Procurement Management
j) Stakeholder management
1.11 SUMMARY
Project Management is an endeavour to accomplish a specific objective through a unique set

of interrelated activities, by effective utilisation of specific resources. A project has to have
clear objectives on what is to be accomplished. Projects have a specific time frame to begin
the project and a date for the project to be completed by.
Projects can be unique, and have sponsors or customers who provide the funding. Projects
do involve a degree of uncertainty. Project objectives can be constrained by factors such as
scope, quality, schedule, budget resources, risks, customer satisfaction and stakeholder
support.
The four phases of the project life cycle is known as the initiating, planning, performing and
closing phases. Project Management involves, planning, organising, coordinating, leading
and controlling resources to achieve the project objective. The two major functions of
project management is planning and execution. The first function is to establish a plan and
the second function is to execute that plan to accomplish the project objective.
This Unit covered project stakeholders, globalisation and the Project Management Institute.
Stakeholders are people or entities that have influence over a project or may be affected by it.
It is essential for the Project Manager and project team to establish good working
relationships with all stakeholders as stakeholder engagement and support are important to
the success and accomplishment of project objectives.
Globalisation is viewed as being complex and that it could have an adverse effect on the
project outcome due to cultural differences, language barriers and multinational economic
transactions and so on. Project Management Institute was mentioned as a not-for-profit
association for project management practitioners worldwide. There are many benefits for

volunteers and certified project managers that are provided by the Project Management
Institute.
You have now come to the end of Part One, Unit One of this study guide and I hope that
you have enjoyed the module thus far! You should now have a good understanding of
what project management is and what it aims to accomplish. Please do the activities and
case study mentioned at the end of Unit One.
ACTIVITY: 1.1
Why is it important to evaluate the performance of a project upon completion?
ACTIVITY: 1.2
What are some of the factors that constrain a project?

ACTIVITY: 1.3
Why is it important for the Project Manager and his/her team to communicate
regularly and effectively with a project’s stakeholders? Explain.
ACTIVITY: 1.4
Think of a project that you were involved in as a team and list the resources that
were required. What was your role in the project? Was it a successful project?
Appendix: A
Case study 1: A Not-for-Profit Organisation (Gido and Clements, 2015:30).
Read this case study, answer the questions.

PART ONE
UNIT TWO
INITIATING A PROJECT
IDENTIFYING AND SELECTING PROJECTS

PART ONE - UNIT TWO
2.1 IDENTIFYING AND SELECTING PROJECTS

2.1.1 Introduction
Unit Two focuses on: project identification, project selection, project charter, preparing a
request for proposal and soliciting proposals. The Unit ends with a summary, activities and a
case study exercise. After studying Unit Two of the study guide and Chapter Two of the
prescribed textbook, the student should be able to complete the learning outcomes.
Learning outcomes:
 Discuss how projects are identified

 Explain how projects are prioritiseed and selected
 Identify and describe at least eight elements of a project charter
 Prepare a project charter
 Prepare a request for a proposal
2.2 PROJECT IDENTIFICATION

How is this done? - There has to be need, problem or opportunity where a project is
identified to address the need. Identifying a problem can result from an organisation’s
strategic planning, or result from the organisation’s normal business operations. A problem
can also be identified from an unexpected event or it can result from a group of individuals
with a particular need (Gido and Clements, 2015:38). Below are some examples of how
needs arise and how projects are identified:
 A homeowner’s family is growing and an additional bedroom is required. The

homeowner has a need for another bedroom to be added to the existing home.
Therefore, the project identification is to build this extra bedroom to the house
for the need to be satisfied.
 A business or organisation may wish to expand and would need more space to
do so. This is a need that is to be satisfied. The project identification could be
to build more offices to the existing building or move to new premises. Both

options would require preparation for the expansion. This is a project that is
identified to satisfy the need.
2.2.1 Projects Arise From Unexpected Events
Projects can also result from unexpected events such as a fire or earthquake that may have
caused a church to collapse. The church would need to be re-built. This is a need that has
arisen and is identified. To satisfy this need the project is to re-build the church.
There are various ways that projects are identified. The need has to be clearly defined. This
may require that data is gathered and analysed to determine if the need is worth pursuing. It
may be costly for a business to pursue a need that is not beneficial.
2.3 PROJECT SELECTION
How is this done? - Potential projects should be evaluated and then the customer/company/
organisation or stakeholder should decide which project should be implemented. Each
project should be considered and evaluated to determine the following:
 Benefits
 Consequences
 Advantages
 Disadvantages
 Pros and cons
The benefits of a project can be, quantitative, qualitative, tangible or intangible.
See figure 2.1 on page: 42 of the prescribed textbook and take note of the comments.

2.3.1 Steps That Make Up The Project Selection Process
The following steps make up the project selection process:
 Develop a set of criteria against which the project will be evaluated.

 List assumptions.
 Gather data and information for each project.
 Evaluate each project against the criteria.
After deciding on which project to select, the sponsor can now prepare a project charter to
move the project forward.
Please read pages: 38-41 of the prescribed textbook on this section for detailed information
on project identification and project selection.
2.4 PROJECT CHARTER
A project charter is a document that formally authorises the project that has been selected.
In this document, the sponsor has provided his/her approval to go ahead with the project and
funding is also granted. A project charter includes:
 The Project title

A concise title will be given to the project.
 The Purpose
This is a justification of the need for the project.
 Description
A high level description of the project is given. It could describe the major
tasks or phases of the project. It could also give a preliminary work
breakdown structure from the major tasks.
 Objective
This states what is expected to be accomplished and can include the funds
authorised for the project, expected completion time and so on.
 Success criteria or expected benefits
This gives the expected outcomes or benefits that will result on
implementation of the project.

 Funding
This indicates the amount of money that has been authorised for the project by
the sponsor. Funds can also be released in stages. This would depend on the
progress of the project.
 Major deliverables
This is the end product that is tangible and is expected to be produced during
and at completion of the performance of the project.
 Acceptance criteria
This describes the quantitative criteria for each major deliverable. The
sponsor will use this to validate that each deliverable meets certain
performance specification as expected.
 Milestone schedule
This is a list of target dates or times when each key event will occur. To give
you an idea, let us use a simple example, where a homeowner wishes to add a
new bedroom to the house.
The following key milestones and target times for the new bedroom project could be as
indicated below:
Milestone Schedule
1. Baseline plan month 1

2. Architect drawings or plans month 2
3. Final design month 3
4. Plans to be passed at the local municipality month 4
5. Work will begin and be completed on the foundation month 5
6. Steel and concrete work (walls for the building up to roof level) month 6
7. Roof completion month 7
8. Windows, doors and plaster of walls month 8
9. Installing electricity wired month 9
10. Ceilings and plumbing month 10
11. Paint and install cupboard then move in month 10

As you can see this is how the project for the new bedroom is expected to progress over the
target months. Of course, such a project can be done in half the time as it is an additional
bedroom and not a complete house that requires to be built.
Note: that some projects can be segmented into phases. See page: 44 of the prescribed
textbook for an example of how the segmenting of a project could be done.
 Key assumptions
Assumptions can be on some aspect of the project. An example of an
assumption is based on funding is that the funding can be sourced from a
specific bank at a specific interest rate.
 Constraints
Constraints can be in any form that can disrupt the workflow of the project.
Constraints that are identified on a specific project will be noted under this
section.
 Major risks
Major risks that are identified or that the sponsor believes will have a high
likelihood of occurring will affect the project completion. If a risk proves to
be too costly a project can be terminated.
 Approval requirements
The Project Manager will have authority over some matters but this would be
limited. For example, the Project Manager may have the authority to purchase
materials for a set amount of money that should not be exceeded and if this
does happen then the amount that is over and above the limit may require the
sponsor or board of director’s approval.
The approval requirement can also be based on phases of the project,
therefore, the Project Manager, cannot on his/her own move onto the next
phase of the project without the customer approving the previous phase.
 The Project Manager
This is the person that is identified to be the manager over the project. The
Project Manager leads the project team and is the person that is responsible to
ensure that the project deliverable is carried out in a quality manner, on time
and within budget, to the customer’s satisfaction.

 Reporting requirements
This states how frequently a report or review is required on the project status.
 Sponsor designee
This is a person that the key sponsor may designate to act on his/her behalf.
Therefore the sponsor would communicate with and be accountable to the
designated person.
 Approval signature and date
This signature and date indicates that the sponsor has officially authorised the
project.
Please see figure 2.2 on project charter on pages: 45 - 46 of the prescribed textbook.
2.5 PREPARING A REQUEST FOR A PROPOSAL
What is a proposal? “A request for proposal (RFP) is a document, prepared by the

sponsor/customer, which defines the project requirements and is used to solicit a proposal
from potential contractors to do the project. A proposal is a document that includes a
proposed approach, schedule and budget for meeting the project requirements and
accomplishing the project scope” (Gido & Clement, 2015:47). A request for proposal should
be clear on what the customer expects so that the contractor/s can prepare a thorough
proposal that will satisfy the customer’s requirement and more importantly the costs will be
realistic.
Think back to the school building project. What would be the response of the contractor if
he/she was approached to provide a proposal for the school project without being given a
solid request that specifies the requirements of the project? The contractor will not be able to
provide a proposal under such circumstances. The contractor will need comprehensive and
detailed information on the project to be able to produce an intelligent proposal that can meet
the customer’s needs.

2.5.1 Guidelines for Preparing a Request For Proposal
The guidelines on preparing a request for proposal are as follows:
 Project objective
The project objective must be clearly stated on the RFP and should include
any background information that may be helpful to the contractor to prepare a
suitable proposal.
 Statement of work
The RFP must provide a statement of work which outlines the major tasks the
customer requires from the contractor and his/her team.
 Customer requirements
This must define the functional, operational and performance specifications
that must be met.
 Deliverables
The deliverables of what the customer expects from the project and the
contractor is stated.
 Acceptance criteria
The customer’s acceptance criteria are stated.
 Customer supplied-items
Any items that the customer will supply for the project are stated.
 Approvals required by the customer
All approvals that are required by the customer are mentioned.
 Type of contract
The type of contract a customer wishes to use may be mentioned in the RFP
 Payment terms
The payment terms stipulated by the customer may be included.
 Required schedule
The schedule will give an indication of when the project will be completed
and may include the key milestones.
 Format and content of the contractor proposals
Instructions are provided on the format and content of contractor proposals.
 Due date
This is the date the customer expects the proposal back from potential
contractors.

 Evaluation criteria
The evaluation criteria are a set of criteria that the customer will use to
evaluate proposals from potential contractors. Thereafter, the customer will
decide which contractor to choose. The criteria could be based on the
contractor’s experience in a similar project, cost of the project, technology
that will be used by the contractor and on the schedule.
 Funds that the customer has available to spend on the project
The budget or funds that the customer has for a specific project could be
mentioned. This will be helpful to the contractor as he/she can immediately
alert the customer on whether or not the project accomplishment is possible on
the customer’s budget.
Please have a look at the sample RFP as shown in figure 3.3 on page 50 – 53 of the
prescribed text book.
2.6 SOLICITING PROPOSALS
At this stage the RFP is prepared and the customer is now ready to source potential
contractors. Each contractor will receive a copy of the RFP. The customer could send the
copies of the RFP to well-known contractors who possess good ethics and have good
reputation.
The customer could use another approach to solicit potential contractors from websites,
business newspapers or by word of mouth, where someone recommends a contractor that
they have used and was satisfied with the work. Some contractors consider the RFP/proposal
process a competitive situation. Therefore, care should be taken by the customer not to
provide one or more of the contractors with information that is not provided to all of the
interested contractors.
Note: not all projects require the preparation of a written RFP by the customer!

2.7 SUMMARY
The initiating stage of a project life cycle begins when a need, problem or opportunity is
recognised and a project is identified to meet this need. Projects are evaluated on which will
result in the greatest overall benefit to satisfy the customer need and then the one that best
fits the need is selected. The selected project is then authorised by a document known as a
project charter.
The project charter summarises key conditions and parameters and establishes the framework
for the development of a detailed baseline plan to perform the project. The customer or
sponsor’s authorisation for the project to move ahead and a commitment to fund the project
are contained in the project charter.
A request for proposal is prepared by the customer for projects that are to be outsourced. The
prepared request for proposal is then used by the sponsor or customer to solicit proposals
from potential contractors. The request for proposal document defines the project
requirements. Request for proposals do not apply to all project life cycles as there are some
projects that are identified, selected, planned and performed without this.
You have now come to the end of Unit Two of your study! Please do the activities and the
case study at the end of this Unit.
ACTIVITY: 2.1
What document is prepared by the customer or sponsor and used to solicit proposals
from potential contractors?

ACTIVITY: 2.2
State whether the following statement is true or false: The Project Charter
document contains the sponsor’s or the customer’s commitment to fund the project.
Appendix: B
Case Study 1 – A Midsize Pharmaceutical Company (Gido and Clements, 2015:58).
Read the case study, answer the questions.

PART ONE
UNIT THREE
DEVELOPING PROJECT PROPOSALS

PART ONE – UNIT THREE

3.1 DEVELOPING PROJECT PROPOSALS
3.1.1 Introduction
Unit Three focuses on the development of proposals. The topics discussed in this Unit are:
building relationships with customers and partners, pre-request for proposal marketing, how
to create a winning proposal, proposal preparation, contents, and pricing considerations,
simplified project proposal, proposal submission and follow-up, customer evaluation of
proposals and measuring proposal success. The Unit ends with a summary, activities and a
case study. After studying Unit Three of the study guide and Chapter Three of the prescribed
textbook the student should be able to complete the learning outcomes.
Learning outcomes:
 Develop relationships with customers and partners

 Decide whether to prepare a proposal in response to a customer’s RFP
 Create a credible proposal
 Determine a fair and reasonable price for a proposal
 Discuss how customers evaluate proposals
 Explain types of contracts and various terms and conditions
 Measure the success for the proposal efforts
3.2 BUILDING RELATIONSHIPS WITH CUSTOMERS AND PARTNERS

Why do you think that building relationships with customers and partners is important? The
customer and/ or organisation will want to work with people they know and trust, therefore,
the contractor should make every effort to earn the trust of the customer or organisation.
“Relationships establish the foundation for successful funding and contract opportunities.
Relationship building requires being proactive and engaged. In many ways it is a contract
sport” (Gido & Clement, 2015:66).
It is good practice for the contractor or Project Manager to have face-to-face interaction with
the sponsors or customers. The contractor must employ effective listening skills and be a
good learner. The contractor should ask questions and listen so that he/she learns more about

his/her client. The personal touch is effective in relationship building. The contractor should
be in frequent contact with his/her clients.
3.2.1 Building Better Relationships with Clients
What can the contractor do to build better relationships with clients?

Here are some points:
 Keep in mind that the first impression is a lasting impression.

 Be a good listener and learn more about the client.
 Give the personal touch.
 Know how to guide the conversation between self and the client.
 The contractor must indicate a can-do-attitude.
 Be ethical, credible based on performance.
 Go the extra mile and exceed expectations, put the client first.
 A satisfied client will bring in more business!
3.3 PRE-RFP/PROPOSAL MARKETING

Proposals can be prepared in advance, prior to the customer’s request for proposal.
Contractors should be proactive and not wait until formal RFP solicitations are announced by
customers before they begin to develop proposals (Gido & Clement, 2015:69).
A contractor’s pre-RFP/proposal efforts are crucial to securing a contract from the customer.
Contractors should:
 Maintain frequent contacts with past and current customers.
 Develop contact with potential customers and help these customers to identify
areas whey they can benefit from the implementation of the projects. Make
the customer aware and highlight his/her need/problem or opportunity that
will be addressed by implementation of a particular project.
 The contractor must learn as much as he/she can about the customer’s
needs/problems and the decision-making process.

 The contractor should obtain information to learn more on the customer’s

needs by requesting for this information.
 The contractor can also invite the customer to speak to one of the contractor’s
other clients’ who had a similar need or problem that the contractor was able
to satisfy by implementation of the project. This visit could enhance the
contractor’s reputation with the potential client.
 The contractor may in some cases, prepare an unsolicited proposal and present
this to the customer. The customer will accept this proposal if he/she believes
that his/her need or problem will be resolved at a reasonable cost. It may be
that a good pre-RFP/proposal marketing prepared by the contractor will result
in a contract without competing with other contractors.
3.4 DECISION TO DEVELOP A PROPOSAL

To develop and prepare a proposal takes time and it can be costly therefore contractors that
are interested in submitting a proposal must be realistic about the probability of being
selected as the winning contractor (Gido & Clement, 2015:70). These are some factors that
are considered by contractors in deciding to develop a proposal:
 Bid/no-bid decision
A bid/no bid is referred to as a decision that is taken by a contractor on

whether to go forward with the preparation of the proposal or not. The
contractor will consider the following factors before he/she decides to prepare
a proposal:
 Competition
Consider which other contractors are going to submit a proposal in response to
the RFP. Do the competitors have a competitive advantage?
 Risk
What are the risks? Will the project be unsuccessful technically or financially?
 Mission
The contractor must know if the proposed project is consistent with his/her
business mission. In other words can the contractor take on the project, is it in
his line of work. For example, a construction company (contractor) may not

compete for a logistics contract. The contractor may consider if there are
extension of capabilities. Is there an opportunity for the contractor to extend
or enhance its capabilities based on the proposed project?
 Reputation
Is there an existing working relationship with the customer? Did the
contractor complete a project for the customer in the past and was it
successful or were there problems? A dis-satisfied customer would not want
to use the same contractor that was the cause of the dissatisfaction.
 Customer funds
The contractor may wish to know if the customer does have the funds
available for the project. If the customer is on a ‘fishing expedition’ this will
waste the contractor’s time and effort.
 Proposal resources
Does the contractor have appropriate resources to prepare a quality proposal?
The quality of the proposal is important if the contactor wants to have a
chance of winning the proposal. A quality proposal will require appropriate
people to work on it.
 Project resources
Does the contractor have the appropriate resources available to perform the
project if selected as the winner? The contractor’s organisation must have the
appropriate resources to undertake and complete the project.
THINK POINT
What will happen if the contractor secures the contract but does not have the appropriate
resources to complete the project?
See figure 3.1 on page: 72 of the prescribed textbook for an example of bid/no-bid
checklist that a contractor might use in deciding to submit a proposal in response to an
RFP.

3.5 CREATING A WINNING PROPOSAL
How is this done? The contractor should bear in mind that the proposal process is
competitive. The customer will use an RFP to obtain proposal from many contractors for the
same project and will select the one that it expects which will provide the best value. The
proposal is a selling document. The contractor must convince the customer of the following:
 Understands what the customer is looking for.

 Can carry out the proposed project.
 Will provide the greatest value to the customer.
 Is the best contractor to address the need or solve the problem.
 Will capitalise on it successful experience with previous, related projects.
 Will do the work professionally.
 Will achieve the intended results.
 Will complete the project within budget and on schedule.
 Will satisfy the customer (Gido & Clement, 2015:73).
In the proposal the contractor should also highlight the following:
 The unique factors that differentiate it from competitors.

 The benefits that the customer will derive if the contractor is selected for the
project.
 Any key partners and subcontractors that will be doing specific work on the
project (Gido & Clement, 2015:73).
The proposal should be specific to the customer requirements. It should be written in a

simple and concise manner. Use terminology that the customer is familiar with.
Abbreviations, acronyms, jargons and other words that the customer may not understand
must be avoided. Illustrations and graphics should be simple. Avoid complex illustrations
and support any point that is made with logic, rational data. Proposals must also be realistic
on the proposed scope, cost and schedule in the eye of the customer (Gido & Clement,
2015:73).

3.6 PROPOSAL PREPARATION
This can be a straightforward task performed by one person. It can also be a resource-
intensive effort that will require a team of organisations and individuals with the appropriate
expertise and skills to prepare the proposal. A comprehensive proposal should be treated as a
project in itself.
Proposals for very large technical projects can be multivolume documents. These will
include engineering drawings and the text can go into hundreds of pages. These proposals
are often due within 30 calendar days of the RFP’s issuance. Contractors that bid on large
projects usually do pre-RFP marketing by using a draft proposal that is prepared prior to the
customer even issuing a formal RFP.
Contractors are not paid by the customer to prepare the proposals and therefore, absorb such
costs as normal marketing costs. A proposal is a selling document and should convince the
customer that the contractor will provide the best value to the customer. The proposal
content will therefore, have to be prepared meticulously.
3.6.1 Proposal Content
Usually proposals are organised in three sections that consist of the technical section,
management section, and the cost section. The proposal preparation by the contractor will
depend on the type of project which could be straightforward or complex. Basically each
section of the proposal includes specific information pertaining to the project. Lets have a
look at these sections:
a) The Technical Section
The technical section indicates that the contractor:
 Understands the customer.

Here, the contractor indicates that he/she fully understand the customer’s need
or problem.
 Proposed approach or solution.
The contractor will describe the approach that will be used to solve the
problem.

 Benefits to the customer.

The contractor will indicate clearly how the proposed approach or solution
will benefit the customer and how the projects outcome will be achieved.
b) The Management Section
The management section of the proposal contains the following:
 Description of the major tasks

The contractor indicates how the major tasks will be performed. The
description of each major task is also included.
 Deliverables
A list of deliverables must be included by the contractor on the tangible
products or items that will be provided during the project. These tangible
products can be in the form of reports drawings, manuals and equipment.
 Project schedule
Under project schedule, the contractor describes the major tasks that are
required to complete the project and shows how this will be scheduled. The
customer must feel confident that the contractor can complete the project
within the set time frame in the RFP.
The schedule can be in one of several formats such as; a list of tasks that have
estimated start and completion dates, a bar chart which is often referred to as
Gantt chart, or a network diagram which graphically illustrates the sequence
of the tasks and the dependent relationships of any of the tasks. Dates for
other key milestone events can also be included under this section.
 Project Organisation
The contractor should indicate in detail how the work and the resources will
be organised to accomplish the project objectives. Bear in mind that large
projects would require other people and subcontractors of partners; therefore;
an organisation chart must be drawn up.
The organisational chart will show the major project functions and the name
of the specific individual assigned the responsibility for each function. The
resumes of these key people can be included in the proposal to convince the
customer of the calibre of people that will be performing the project.

 Related Experience
If the contractor has some or extensive experience in similar projects this
should be made known to the customer by briefly describing those past
projects
 Equipment and Facilities
A project may require the use of unique equipment or materials, such as
manufacturing equipment or testing facilities. A contractor who is in
possession of such unique equipment or material would want to specify this to
the customer. A kitchen and bedroom manufacturing company based in
KwaZulu-Natal pointed their unique machinery that they had imported that
could cut the boards in specific angles and since it was appealing to me, I gave
the contract of getting my kitchen cupboards done by this particular company
although they were slightly more expensive than other manufacturers. The
uniqueness and the quality at a price of course, satisfied my need.
c) The Cost Section
“The objective of the cost section is to convince the customer that the contract’s price for the
proposal is realistic and reasonable” (Gido and Clements, 2015:77). The cost section will
consist of estimated costs on the following:
 Labour
The estimated costs of people that are assigned to the project to accomplish
the objective will be listed under this section such as engineer, painters,
electrician, plumber etc.
 Materials
The cost of materials will be indicated under this section and will include all
materials required for accomplishing the project.
 Equipment
Some projects will require some type of equipment as part of the project.
Think about a dental clinic, here special equipment will be required for the
clinic project. Without the specialised dental equipment the project of setting
up a dental clinic will be incomplete.

 Facilities
A project may need additional space, for example to store materials or to test
the project depending on what the project is. This will therefore, be specified
to the customer.
 Subcontractors and consultants
Some of the project work could be outsourced to subcontractors and
consultants. The customer must be aware of this as this is an added cost to the
project.
 Travel
All travel costs must be stipulated if it is other than local travel.
 Documentation
The cost of all the documentation associated to the project must be mentioned
in detail such as costs to print manuals, drawings reports, videos etc.
 Overhead
Overhead which are indirect costs of doing business such as insurance,
depreciation accounting and general management, marketing and human
resources costs are stated under this section.
 Escalation
Large projects can take several years to complete therefore, the cost of
escalation in wage rates and material costs are estimated.
 Reserve
A reserve amount is set aside for any emergencies that may crop up during the
project. This is the amount the contractor determines to be set aside as a
reserve amount for the project.
 Profit
All the above items relate to costs and the contractor must aggregate the cost
elements and add an amount for desired profit. The costs plus the profit will
be the price for the proposed project.

3.7 PRICING CONSIDERATIONS
Contractors compete with other contactors to win a contract. Contractors should bear this in
mind and be careful not to over-price a proposed project. An over-priced project may not be
selected by the customer. At the same time contractors should also not be under-priced in
order to win the contract. Under-pricing could jeopardise the quality of the project. This
would make the customer dissatisfied and unhappy. The contractor may also lose money and
not make a profit on the project. In such a situation the contractor will harm’s his/her own
reputation. The following should be considered by a contractor when quoting on the pricing
of a project:
 Reliability of the Cost Estimates

Is the total cost of the project complete and accurate?
 Risk
What are the risks to the project and what will this cost? Is the reserve or
contingency fund sufficient to overcome the risk/s?
 Value of the Project to the Contractor
Can the contractor live with a tight or low price that is quoted on the project
because he/she needs to win the contract?
 Customer’s Budget
Does the project cost exceed the customer’s budget?
 Competition
If the contractor is desperate to win the contract he/she may quote a lower
price to the customer and include a small profit to increase the chance of
gaining the contract.
3.8 SIMPLIFIED PROJECT PROPOSAL
In the case of larger complex mega-dollar projects, the proposal is extensive and therefore,
complex. Proposals on smaller or straightforward projects should include the following
elements:
 Statement of Customer’s need

 Assumptions
 Project scope

 Deliverables
 Resources
 Schedule
 Price
 Risks
 Expected Benefits.
The proposal should be based on quality of the content that is clear, concise and convincing.
A simplified proposal can be between 4 to 8 pages and is usually less than 20 pages. The
resume of key people assigned to the project, back-up details of cost estimates or lists of
similar past projects and associated references should be included as appendices.
3.9 PROPOSAL SUBMISSION AND FOLLOW-UP
Proposals must be submitted on time to the correct contact person as per the information of
the customer’s RFP. The contractor may be required to make the necessary copies of the
proposal.
Proposals can be submitted electronically or can be hand-delivered to the customer. The

contractor must be proactive after the proposal is submitted and call the customer to confirm
that the proposal was received.
After a few days, the contractor should follow up with the customer in case the customer has
any questions or needs clarification on any part of the proposal. Follow up by the contractor
must be conducted in a professional manner.
3.10 CUSTOMER EVALUATION OF PROPOSALS
Proposals can be evaluated in various ways by different customers. Price may be the number
one priority for a customer to select a proposal. Customers of larger projects may elect a
project review team. A scorecard may be used to determine whether each submitted proposal
meets the requirement of the project. This way the proposal is rated accordingly.

Costs are not always the main criteria that a customer will use to select a project. Selection
of a proposal may be based on a proposal that offers and can best meet the technical and
management aspects required by the customer. The following criteria may be used by the
customer in evaluating the contractor’s proposal:
 Compliance with the customer’s statement of work and requirements in the

RFP.
 Soundness and practicality of the contractor’s proposed approach to solving

the problem.
 Contractor’s experience and success with similar projects.
 The experience of key individuals who will be assigned to the project.
 Management capability, including the contractor’s ability to plan and control

the project to ensure that the work scope is completed within budget and on
schedule.
 Realism of the contractor’s schedule.
 Price (Gido and Clements, 2015:85-86).
In some cases the customer may require that the contractor does an oral presentation of its
proposal. This is a final opportunity for the contractor to convince the customer that the
proposal offers the best value over and above that of the competitors. The customer can also
request a best and final offer from each contractor.
Negotiation takes place between the contractors and the customer until the final contractor is
chosen that best satisfies the customer’s need. When the contractor is chosen he/she or the
organisation will be informed by the customer.

3.11 CONTRACTS
The chosen contractor and the customer signs a contract before the work can begin.
“A contract is an agreement between the contractor, who agrees to perform the project and to
provide a product or service (deliverables), and the customer who agrees to pay the
contractor a certain amount in return. The contract must clearly spell out the deliverables the
contractor is expected to provide. There are basically two types of contracts: fixed-price and
cost-reimbursement” (Gido and Clements, 2015:86).
3.11.1 Fixed-Priced Contracts
Here the customer and the contractor are in agreement on the price that is proposed for the
project work. The price will be fixed. The price can only change by agreement of both the
customer and contractor. This is a low risk contract for the customer who will not pay more
than the fixed price no matter what the actual project eventually costs.
This type of contract is high risk for the contractor who may make a lower profit if the
project costs more than was initially estimated. Fixed-priced contracts should be based on
accurate and complete cost estimates and includes sufficient reserves (Gido and Clements,
2015:87).
3.11.2 Cost-Reimbursement Contracts
In this type of contract the customer will also pay the profit amount to the contractor. The
cost-reimbursement contract is high risk for the contractor as estimated prices can be overrun
by the contractor. This type of contract is low risk to the contractor who cannot lose any
money for costs that increase over and above the estimated price.
The contractor’s reputation can be hurt if costs are highly overrun and if the reduction was
based on winning the proposal. This type of contract is suitable to projects with high risks.

3.11.3 The Contract Terms and Conditions
Project contracts can include the following miscellaneous terms and conditions:
 Misrepresentation of Costs.
 Notice of Cost Overruns or Schedule Delays.
 Approval of Subcontractor.
 Customer-Furnished Equipment or Information.
 Patents
 Disclosure of Proprietary Information.
 International Considerations.
 Termination.
 Terms of Payment.
 Bonus/Penalty Payments.
 Changes.
Basically under each term and condition the customer is protected.
The terms and conditions are stated below:
 The contract stipulates that the contractor should not overrun costs.
 That approval is sought from the customer if there is going to be a

subcontractor.
 That items furnished by the contractor will be made known to the customer.
 That patents cover ownership.
 That certain information is confidential so that technologies or processes

utilised is not disclosed to anyone else by either the contractor or the
customer.
 That accommodation of an international customer must be specified.
 That the customer will terminate a contract and this can be due to non-
performance.

 The conditions for the terms of payment are mentioned for example monthly,
quarterly or by single payment upon completion of the project.
 That any bonus/penalty payments clauses are made known as in some cases a
contractor may receive a bonus payment if the project is completed ahead of
schedule or if it exceeds expectations. The penalty clause may apply if the
project is not completed on schedule or the final project performance
requirements are not met.
 That any changes to the project scope, schedule or budget that are proposed
are carried out in a certain way as stipulated in the contract (Gido and
Clements, 2015:87-89).
As you can see a contract is important for both parties: That of the contractor and the
customer, as it is a legally binding document.
3.12 MEASURING PROPOSAL SUCCESS
How do contractors measure their proposal success? - They do so by counting the

number of times their proposals are selected by customers. They also do this by the total
monetary value of the proposal selected. Contractors also use a measure known as the WIN
RATIO which is the percentage of contracts in monetary value that results in contractual
agreements.
There are some contractors that employ a strategy to submit proposals in response to as many
RFPs as they can in the hope of eventually securing a contract, while other more selective
contractors respond only to the RFPs that they feel that they have a chance to win.
3.13 SUMMARY
This Unit has broadly covered how proposals are developed by the contractor in response to
the customer’s request for proposal. The proposal preparation involves time and money. The
contractor takes into account many factors before he/she decides to prepare a proposal. The

proposal process is also very competitive where there are many contractors that prepare
proposals for the same project.
Proposals have to be prepared professionally in the format that the customer’s request for
proposal stipulates. The customer will select the most suitable proposal and contractor that
meet the criteria determined by the customer or organisation. A contract is signed between
the customer/organisation and the contractor prior to commencement of the project.
A contract agreement stipulates terms and conditions of how the project should be carried
out. A contract can also include miscellaneous terms and conditions. This may cover
misrepresentation of costs, notice of cost overruns or schedule delays. The contract
conditions can also cover approvals for any subcontractors, equipment international
considerations and so on.
You have now come to the end of Unit Three!
Complete the activities at the end of this section and do the case study.
ACTIVITY: 3.1
Name the TWO types of contracts to be signed between the contractor and the
customer.
Appendix: C
Case study 1- Medical Information Systems (Gido and Clements, 2015:94-96).
Read the case study, answer the questions.

PART TWO
PLANNING, PERFORMING,
AND
CONTROLLING THE PROJECT

PART TWO
UNIT FOUR
DEFINING SCOPE, QUALITY,

RESPONSIBILITY AND ACTIVITY SEQUENCE

PART TWO – UNIT FOUR
4.1 DEFINING SCOPE, QUALITY, RESPONSIBILITY AND

ACTIVITY SEQUENCE
4.1.1 Introduction
This Unit discusses how to establish project objectives, how to define project scope, plan for
quality, create work breakdown structure, assign responsibility, define activities and
sequence activities. Planning for information systems development and project management
information system are also discussed in this Unit. The Unit ends with a summary, activities,
and a case study. After studying Unit Four of the study guide and Chapter Four of the
prescribed textbook, the student should be able to do the learning outcomes.
Learning Outcomes:
 Establish a clear project objective.

 Prepare a project scope document.
 Discuss the importance and elements of a project quality plan.
 Develop a work break-down structure.
 Prepare a responsibility assignment matrix.
 Describe how to define specific activities.
 Create a network diagram
4.2 ESTABLISHING THE PROJECT OBJECTIVE
The project objective establishes what is to be accomplished and is part of the planning
process. Usually, the project objective is found in the Project Charter or Request for
Proposal (RFP).
A project objective is a tangible end product. The Project Manager and his/her team or the
contractor must produce and deliver the end product to the customer. The customer receives
the expected benefits when the project is implemented and successfully completed.
The project work scope has to be completed to produce the deliverables or end product by a
deadline date and within a specific budget. Both the customer and the project team or
contractor must understand and agree on what the project objective is and what is to be
delivered. The objectives of the project must be clear, attainable, specific and measurable.

The following elements should be included in the project objectives:
 Expected benefits
The expected benefits are what the customer expects from the completed
project. This is the reason for the project.
 Primary project end product or deliverable

Examples of end products: Construction of a shopping complex, low cost
housing, elite residential flats, business complexes, marketing campaign etc..
 Date of completion
This is the date the project must be completed by.
THINK POINT
Think about how South Africa went into planning and preparing for hosting the 2010 soccer
world-cup in this country…What would have been the outcome if any one of the 10 stadiums
were not built or upgraded on time?
 Budget
This is the estimated amount within which the project should be completed.
A project objective has to be clear and concise from the onset. There are situations that can
occur that may affect a project objective. It may also be that such a project has to be
modified. In this case both Project Manager and the customer must agree on any such
changes to the project objective. Changes to a project will affect the remaining work scope,
deliverables, completion date and the final costs.

4.3 DEFINING THE PROJECT SCOPE
A project scope addresses what needs to be done. A project scope is all the work that has to
be undertaken to produce the project deliverables.
The project deliverables must satisfy the customer/sponsor’s. The project deliverable must
meet the required acceptance criteria and accomplish the project objective.
A project scope document is prepared by the project team or by the contractor. A project
scope document is detailed and includes many of the items that are contained in the project
charter, RFP, or the contractor’s proposal. The project scope document usually contains the
following:
 Customer Requirements
What does the customer require? This is clearly stated under this section and
can include: shape, color, size, weight, performance parameters etc.
 Statement of Work (SOW)

What are the major tasks that will need to be carried out to accomplish the
work to produce the deliverables? This clearly defines what the contractor has
to do to produce the deliverables.
 Deliverables
These are the products, the end result of the project accomplishment. It is
what the project team or contractor must do to achieve the desired result for
the customer.
 Acceptance Criteria
The project deliverable criteria are described in greater detail within the
project scope than it is in the project charter or in the RFP.
 Work Breakdown Structure (WBS)

The WBS is a hierarchical decomposition of the project work scope that goes
into work packages to produce the project deliverables. The work is
organised and subdivided into manageable components.

Please read pages: 106 – 109 for a detailed description on how the project scope is defined.
4.4 PLANNING FOR QUALITY
In planning for quality, the work should be performed according to specifications and
applicable standards. The quality of the work on a project is of utmost importance and this
can sometimes be overlooked by a contractor or a project team and is often too late to rectify.
What happens when the work is of poor quality?
 It will not meet the acceptance criteria.

 The customer will be dissatisfied.
 To rectify sloppy mistakes or workmanship may result in greater costs.
 The reputation of the contractor is at stake and so on.
To prevent poor quality and avoid quality issue problems there must be a project quality plan
to control the quality of the project.
“The quality plan must include or reference the specifications, industry or government
standards (for design, testing, safety, construction, and so forth), and codes that must be used
and met during the performance of the project work. To help assure quality, the project
quality plan should contain written procedures for using various quality tools and techniques,
such as audits, inspections, testing, and checklists and so on. The plan should also state
which tools and techniques to use and when” (Gido and Clements, 2015:110).
Quality can be controlled with a quality plan in place. The quality plan should include
procedures for application of appropriate quality tools and techniques.
4.5 CREATING THE WORK BREAKDOWN STRUCTURE (WBS)
The next step in the planning phase following the project scope document is to create a
detailed work breakdown structure (WBS). What takes place in the WBS?
WBS is a structured approach for organising the project work and deliverables. Work is put
into logical groupings and subdivided into more manageable components. WBS is a
hierarchical tree of deliverables that will be accomplished by the project team or the

contractor during the project. The project is subdivided into smaller pieces and this is known
as the work items. The lowest-level work item of any one branch on the WBS is called a
work package. Work package contains specific work activities. These work activities have
to be completed to produce work package deliverable.
Please have a look at figure 4.1 on pages: 112 - 113 of the prescribed textbook to view the
WBS for a festival project. Also have a look at figure 4.2 on page: 114 and figure 4.3 on
page 115.
Please also have a look at figure 4.5 on the WBS for consumer market study project on
page 117 of your prescribed textbook.
4.6 ASSIGNING RESPONSIBILITY

Who is responsible for what? A tool known as the responsibility assignment matrix
(RAM) can be used to illustrate who is responsible for the work. Individuals are designated
to accomplish the work items on the WBS. A ‘P’ on the RAM denotes primary
responsibility and an ‘S’ denotes support responsibility for a specific item.
Have a look at figure 4.1 on page: 116 of the prescribed textbook and view the application
of the RAM tool on the Festival Project.
4.7 DEFINING ACTIVITIES
“Using the WBS, the individual or team responsible for each work package must next define
al the specific activities that need to be performed to produce the end product or deliverable
for the work package. Activities define more specifically how the work will get done. An
activity, also referred to as a task is a defined piece of work that consumes time. It does not
necessarily require the expenditure of effort by people – for example, waiting for concrete to
harden can take several days but does not require any human effort” (Gido and Clements,
2015:117).

4.7.1 Sequence Activities
“A network diagram is a tool for arranging the specific activities in the appropriate sequence
and defining their dependent relationships. It defines the sequence of how the activities will
be done” (Gido and Clements, 2015:118).
A generic network diagram can be done by many network planning techniques, such as
Program Evaluation and Review Technique’ (PERT) and “the Critical Path Method” (CPM).
4.7.2 Network Principles
The following principles should be followed in creating a network diagram:
Each activity is represented by a box with the description of the activity written in the box
and each activity is represented by one box only.
Each box is also assigned a unique activity number. See the activity box example below:
Activity box
Activity that must be done Post invites
Activity box number

1
Activities have precedence relationship as they are linked in a logical sequence to show the
activities that have to be completed before other activities may begin. The directions of the
arrows that link the boxes show is an indication of the dependent relationship or precedent
relationship.
Read up on Sequence Activities and Network Principles on pages: 118-120 of the

prescribed textbook and pages: 120-122 on how to create a network diagram.

4.8 HOW TO PLAN FOR INFORMATION SYSTEMS DEVELOPMENT
An information system is a computer-based system that accepts that is used to input data.
The system can process the data and produce useful information for the users. Information
systems include computerised order entry systems, e-commerce systems, automated teller
machines, and billing, payroll, and inventory systems.
The development of an information system is a challenging process. It is a process that

requires extensive planning and control. The system has to meet user requirements and must
be completed on time and within budget.
“A project management planning tool, or methodology, called the systems development life
cycle (SDLC) is often used to help plan, execute, and control information systems
development projects” (Gido and Clements, 2015:122). The SDLC is viewed as a problem
solving approach and consists of the following steps:
 Problem Definition
 System Analysis
 System Design
 System Development
 System Testing
 System Implementation.
You may read up more on the planning for information systems development section on
pages: 124-125 of the prescribed textbook.
THINK POINT
How is the Project Management Information Systems useful to the Project Manager and the
project team?

4.9 PROJECT MANAGEMENT INFORMATION SYSTEMS
There are many project management systems that are available on the market. Project
management systems can be obtained at affordable rates. Project Management Information
systems are designed to be useful to the Project Manager and the project team. Such a
system is used in planning, monitoring and controlling projects. The Project Management
Information system features allow users to do the following:
 Create lists of task with their estimated durations.
 Establish dependencies among tasks.
 Work with a variety of time scales, including hours, days, weeks, months and
years.
 Handle certain constraints - for example, a task cannot start before a certain
date, a task must be started by a certain date, labour unions allow no more
than two people to work on the weekends.
 Track team members, including their pay rates, hours worked thus far on a
project, and upcoming vacation dates.
 Incorporate company holidays, weekends, and team member vacation days

into calendaring systems.
 Handle shift of works (day, evening, night) etc”
There are much more uses of project management systems to benefit the Project Manager.
Please see page: 130 of the prescribed text for more uses of project management systems.

4.10 SUMMARY
Unit Four has highlighted the importance of planning the work and then working the plan.
Planning is an important step prior to performing the project. The project objectives have to
be clear on what is to be accomplished as the end product. The project must be completed on
time and within budget without compromising quality. Quality is to be managed throughout
the life of a project.
Problems should be detected in the early stages of a project. Detecting problems at an early
stage is possible if there is a plan for quality to assure that the work is done according to
specifications and by the applicable standards. The acceptance criteria must be met. The
customer has to be satisfied with the end product. All the work that needs to be done in a
project is contained in the project scope.
The work breakdown structure breaks down the project work scope into work packages.
The work breakdown structure is a framework on how the work will be done. The work is
grouped and subdivided into manageable components to ensure that all the activities that are
required to complete the project are identified and included in the baseline project plan. The
responsibility assignment matrix (RAM) tool is in the work breakdown structure to designate
who is responsible for accomplishing the work items.
A network diagram is a tool that is used to arrange specific activities in sequence. It also
defines each activities dependent relationship. The network diagram is a roadmap and a
communication tool for the project team as it indicates who is responsible for which activity.
This Unit also discussed how to develop an information system using the System
Development Life Cycle tool. There are many types of Project Management Information
Systems that available for Project Managers and their teams to use in planning, monitoring
and controlling projects.
This brings us to the end of Unit Four. By now your knowledge should be increasing on
many aspects of project management. Do the activities and the case study at the end of
this Unit.

ACTIVITY: 4.1
Can you use the RAM tool and assign responsibility for your project team to assist
you to accomplish the work in putting together a High School Reunion party with some of
your friends. Be creative! Think about and write down who will do the invites, book the
venue, order the meals, liaise with the service providers, etc.
ACTIVITY: 4.2
What is the purpose of a Project Management Information Systems?
ACTIVITY: 4.3
Name and explain the four elements that should be included in the project
objectives.

ACTIVITY: 4.4
Define a project scope.
ACTIVITY: 4.5
Explain what a work Breakdown Structure (WBS) is and what takes place within
this structure?
Appendix: D
Case Study 1 – A Not-for-Profit medical Research Centre
(Gido and Clements, 2015:134-136).
Read this case study and answer the questions

PART TWO
UNIT FIVE
DEVELOPING THE SCHEDULE

PART TWO – UNIT FIVE
5.1 DEVELOPING THE SCHEDULE
5.1.1 Introduction
The topics covered under this Unit are: how activity resources and activity durations are
estimated, how to establish project start and completion times, how to develop the project
schedule and understand the project control processes. The effects of actual schedule
performance and how to incorporate schedule changes and update and control the schedule
are also discussed. Further to this this Unit includes scheduling for information systems
development, Project Management Information Systems, Agile Project Management and it
concludes with a brief summary and activities. After studying Unit Five of the study guide
and Chapter Five of the prescribed textbook, the student should be able to complete the
learning outcomes.
Learning outcomes
 Estimate the resources required for activities.

 Estimate the duration for an activity.
 Determine the earliest start and finish times for activities.
 Determine the latest start and finish times for activities.
 Explain and determine total slack.
 Prepare a project schedule.
 Identify and explain the critical path.
 Discuss the project control process.
 Develop updated schedule based on actual progress and changes.
 Discuss and apply approaches to control the project schedule.
 Explain agile project management.

5.2 ESTIMATE ACTIVITY RESOURCES
It is necessary to estimate activity resources according to types and quantities of resources

that would be required for each activity. The availability of the resources is also important to
the project. “The estimated resources required for an activity will influence the estimated
duration to perform the activity and the estimated cost of the activity” (Gido and Clements,
2015:149).
When resources are estimated for a project the following must be considered:
 The types and quantities of resources needed. (This can be human resources,
equipment, materials etc.)
 Are the specific resources readily available?
 What types of resources are available?
 What quantities of resources are available?
 Will the right quantities of resources be available during the project phases?
If the estimated resources for the project activities are not available in the right quantities at
the right time, the duration of the project will not be achieved. This will mean that the work
at specific stages of the project cannot continue.
Estimation of the types and quantity of resources is necessary to the success of the project.
“When estimating the types and quantities of resources required for each specific activity, it
is valuable to involve a person who has expertise or experience with the activity to help make
the estimate” (Gido and Clements, 2015:150).
“When considering the availability of resources, it may also be necessary to make some
assumption, such as the ability to hire additional individuals with appropriate expertise in
time for when they will be required to work on a project” (Gido and Clements, 2015:149).

THINK POINT
Do you think that it is feasible for the Project Manager to have people with specific expertise
(eg. highly technical skills) to be on standby for a particular project?
5.3 ESTIMATION OF ACTIVITY DURATIONS
How long will each activity take? This needs to be determined. First, an estimation is
made on the types and quantities of resources that is required for each activity the time
thereafter, estimation is made on how long it will take to perform each activity. How is the
estimated time done? This is done by taking the estimated duration for each activity plus any
associated waiting time.
Let us go back to our example of building a bedroom to the foundation stage of the project.
Once the concrete is poured onto the foundation the cement has to dry prior to
commencement of any further work to the project. An estimate is given as 1 day to pour the
concrete and 5 days for the cement to dry. This gives a total estimate of 6 days for that
specific activity.
Of course, this can take longer if the resources estimated for the activity was not available.
An example of such a resource could be the builder. If the builder was not available to
oversee the team in carrying out this activity there will be a delay to the schedule. The
estimated duration for the activity, will therefore increase. Another example of a resource
can be on the unavailability of specific materials. If, for example, there was a shortage on the
cement supply, the activity of completing the foundation will not be achieved, until the
cement is available.
Do you remember that each activity box was assigned a unique number? This now changes
to include another little box that denotes the estimated duration of the activity. Pouring the
concrete was activity 4 as displayed in the box below in the left hand corner and 6 is the
number of days estimated for the activity as shown in the little box within the activity box, in
the right hand corner. The number of days shown in the right hand corner includes the
drying time for the concrete.

See the example below:
Pour concrete
4 6
Read up on how to estimate activity durations on pages: 150-151 and have a look at figure
5.1 on page: 150 of the prescribed textbook.
5.4 ESTABLISHING A PROJECT START AND COMPLETION TIMES
This is done by selecting an estimated start time for when the project will begin and by
selecting an estimated completion time for when the project will end. These two times
defines the overall window of time for the project to be completed.
THINK POINT
Can you think about what will be the outcome of any project if the start and completion times
were not established for that project?
5.5 DEVELOPING THE PROJECT SCHEDULE
How is this done? A project time schedule is developed to provide a timetable for each
activity. This shows the estimated earliest start and finish times for each activity associated
to the project. The latest times of when each activity can start and finish is also shown on the
project schedule.

5.5.1 Earliest Start (ES) And Earliest Finish Times (EF)
“Earliest start time is the earliest time at which a specific activity can begin, calculated on the
basis of the project estimated start time and the estimated durations of preceding activities.
Earliest finish time is the earliest time by which a specific activity can be completed,
calculated by adding the activity’s estimated duration to the activity’s earliest start time:
EF = ES + Estimated Duration” (Gido and Clements, 2015:153).
Study pages: 153-156 for a detailed explanation on estimated earliest start times of each
activity of a project.
5.5.2 Latest Start Times (LS) And Finish Times (LF)
“Latest finish time is the latest time by which a specific activity must be completed for the
entire project to be finished by its required completion time. It is calculated on the basis of
the project required completion time and estimated duration of succeeding activities. Latest
start time is the latest time by which a specific activity must be started for the entire project
to be finished by its required completion time. It is calculated by subtracting the activity’s
estimated duration from the activity’s latest finish time: LS = LF – Estimated duration”
(Gido and Clements, 2015:156).
Please study pages: 156-158 for detailed explanation on latest start and finish times.
Study the diagrams on these pages to clearly understand in detail how these times are
calculated.
5.5.3 Total Slack Time (TS)
Total Slack time is difference between the calculated earliest finish time of the very last
activity and the required completion time of the project. Total slack time is also known as
total float.

A negative number indicates a lack of slack over the entire project.
A positive number indicates the amount of time that the activities on a particular path can be
delayed by without affecting the completion time of the project.
A project with negative slack time will require that some activities need to be accelerated so
that the project can be completed timeously.
A zero total slack means the activities are on schedule. In this case there is no need to
accelerate any activity but at the same time no activity can be delayed.
Have a look at this example of a mini project:
Measure, design and

build new bedroom
Remove old bedroom Install new bedroom
cupboards
cupboards cupboards
1 3 2 1 3 1
Activities 1, 2 and 3 as depicted in each of the boxes shows a total time of 3 + 1 + 1 = 5 days
The project entails that the existing cupboards be removed and new cupboards be installed.
The supplier agreed to remove the old cupboards and install the new ones in 7 days.
As you can see the total time that the work can be done within is 5 days and this can be
delayed by up to another 2 days as the required completion time is 7 days. The slack time is
therefore positive by 2 days. Total Slack is calculated by:
Total Slack = Latest finish times – Earliest finish time (7 days –5 days = 2 days)
Or
Total Slack = Latest start time – earliest start time.
5.5.4 Critical Path
The critical path of a project is determined by subtracting the earliest finish time from the
latest finish time for each activity. The activities with the lowest value that are positive or
negative are on the critical path of activities.

Study page: 160-163 of the prescribed textbook, for more on the critical path. Figure 5.9
and figure 5.10 must also be studied to see the effect of the critical path.
5.5.5 Free Slack
Free slack is another type of slack which is the amount of time that a specific activity may be
postponed by without delaying the estimated start time of succeeding activities.
You may read up more on this on pages: 163- 164 of the prescribed textbook.
5.5.6 Bar Chart Format
A bar chart format is also known as a Gantt Chart that shows the project activities along a
time scale.
Have a look at figure 5.12 for an example for a Bar Chart and read more on this on pages:
165 to 166 of the prescribed textbook.
5.6 PROJECT CONTROL PROCESSES
“The project control process involves regularly gathering data on project performances,
comparing actual performance to planned performance, and taking corrective action
immediately if actual performance is behind planned performance. The project control
process should be done regularly, throughout the duration of the project” (Gido and
Clements, 2015:161). The two kinds of data that need to be collected during the reporting
period are:
a) Data on actual performance.

b) Information on any changes to the project schedule, and budget.
The project control process is important in measuring actual progress to planned

progress as corrective action can be taken immediately if there is a need for this.
Please read up on project control process on pages: 166-168 of the prescribed textbook.

5.7 EFFECTS OF ACTUAL SCHEDULE PERFORMANCE
During the life of the project there will be activities that are completed on time, or ahead of
time and others will be completed later than scheduled. Simply put, any delays in the actual
finish times will alter and affect the remaining activities estimated start and estimated finish
times and the total slack. If a preceding activity takes longer to complete than initially
estimated all the other activities will be affected and will finish later than scheduled. The
total slack will be negative.
5.8 INCORPORATING CHANGES INTO SCHEDULE
Changes can occur during the project. This can be initiated by the customer or the project
team. Any changes to the project, requires revisions to the original project scope. Such
changes will have an impact on the schedule and budget. If the changes are identified early
into the project the impact may not be that high on schedule and budget. Major changes to a
project will have a high impact on the schedule and budget. Minor changes may not be so
significant.
5.8.1 Update Project Schedule
Once data has been collected on the AF times of completed activities and the effects of any
project changes, an updated project schedule can be calculated. These calculations are based
on the methodology explained in this chapter:
 The Earliest Start (ES) and Earliest Finish (EF) times for the remaining,
uncompleted activities are calculated by working forward through the
network, but they are based on the actual finish times of completed activities
and estimated durations of the uncompleted activities.
 The Latest Start (LS) and Latest Finish (LF) times for the uncompleted
activities are calculated by working backward through the network (Gido and
Clements, 2015:170).
Note: The project that incorporates changes will be updated and the completion time of
the project will be longer than initially estimated.

5.9 CONTROL SCHEDULE
Schedule control involves four steps:
a) Analysing the schedule to determine which areas may need corrective action.
b) Deciding what specific corrective actions should be taken.
c) Revising the plan to incorporate the chosen corrective actions.
d) Recalculating he schedule to evaluate the effects of the planned corrective
actions (Gido and Clements, 2015:171).
At any point and time when the schedule is recalculated (after actual performance data or
project changes incorporated, or after corrective actions are planned) the newly calculated
schedule has to be analysed to determine whether there needs to be further revision.
Any path including the critical path that shows a negative slack should be given top priority.
A negative slack requires corrective actions to reduce the estimated durations of activities on
the negative-slack path. Some approaches to reduce estimated durations of activities are:
 Apply more resources.

 Assign a person with greater expertise or more experience to the activity.
 Consider reducing the scope or requirements for the activity.
 Use of improved methods or technology.
Any specific corrective that is taken over negative slack will require that the estimated
durations for the relevant activities must be revised on the network plan.
Effective schedule control is crucial to the project. The contractor may receive a bonus if the
project is completed on time and there could be a penalty if the project is not finished on
time.

5.10 SCHEDULING FOR INFORMATION SYSTEMS DEVELOPMENT
In Unit Four you have learnt something on information systems development.
Why is scheduling for information systems a complex process? It becomes so when there is:
 Failure to identify all user requirements.

 Failure to identify user requirements properly.
 Continuing growth of project scope.
 Underestimating learning curves for new software packages.
 Incompatible hardware.
 Logical design flaws.
 Poor selection of software.
 Failure to select the best design strategy.
 Data incompatibility issues.
 Failure to perform all phases of the systems development life cycle (Gido and
“Controlling the schedule for the development of an information system is a challenge.

Numerous unexpected circumstances might arise that can push an information system
development project well beyond its originally required completion date” (Gido and
Please read up on this section on pages: 170 to 180 of the prescribed textbook.
Project Management Information systems allows the user to perform scheduling functions,
activity estimated durations and many such functions. The Project Management Information
Systems is a useful tool for the user as it provides many functions and uses.
Read up on this section on pages: 180 to 182 of the prescribed textbook. You may also
read up on Agile Project Management on pages: 183 to187 of the prescribed textbook.

5.12 SUMMARY
It is necessary to estimate activity resources so that the time that each activity requires can be
determined. If the estimated resources are not available in the right quantities at the right
time the duration of the project will not be not be accomplished. This will mean that the
work at specific stages of the project cannot continue. The project start and completion
times have to be estimated and a project time schedule is developed to provide a timetable for
each activity.
The estimated earliest start and finish times and the latest times of when each activity can
start and finish are shown on the project schedule. When there is a negative slack time at
some point of the project, some project activities will need to be accelerated to ensure that
the project can be completed on time. The project control processes must occur regularly
throughout the project to measure actual progress to planned progress. If there is going to be
any corrective action that must be taken over the project, this has to be done immediately.
Any changes that occur during the life of a project will require that revisions are made to the
original project scope. Schedule control is crucial to the project.
Scheduling for Information Systems Development is complex due to many reasons such as
that the user requirements may not be fully identified, learning curves can be underestimated
over new software packages, hardware may be incompatible and so forth. The Project
Management Information Systems is a useful tool as it provides many functions and uses to
the users.
You have come to the end of Unit Five. Please do the activities at the end of this Unit. No
case study is given in this Unit.
ACTIVITY: 5.1
Why is the project control process important? Discuss.

ACTIVITY: 5.2
What should happen when a project has a negative total slack?
ACTIVITY: 5.3
As a contractor, when estimating the resources for a project that you will be
undertaking, what should be the five core fundamentals that you should consider?
ACTIVITY: 5.4
How can a contractor develop a project schedule?
ACTIVITY: 5.5
What are the effects of actual schedule performance?

PART TWO
UNIT SIX
RESOURCE UTILISATION

PART TWO – UNIT SIX
6.1 RESOURCE UTILISATION
6.1.1 Introduction
This Unit covers: resource-constrained planning, resource requirements plan, resource

leveling, resource-limited scheduling, resource requirements for information systems
development and project management information systems. The Unit ends with a summary
and activities. After studying Unit Six of the study guide and Chapter Six of the prescribed
textbook the student should be able to complete the learning outcomes.
Learning Outcomes
 Create a network diagram that takes resource constraints into account.

 Prepare a resource requirements plan.
 Explain resource levelling.
 Discuss resource-limited scheduling
6.2 RESOURCE-CONSTRAINED PLANNING

“Resource-constrained planning is an approach to creating a network diagram and schedule
in which the sequence and dependent relationships of activities are based on resource
constraints that take into account the availability of a limited quantity of resources” (Gido
and Clements, 2015:216).
Example of a technically constrained activity sequence: some activities in the construction

of a building is done in sequence; first the foundation is built, then the walls are built then the
roof is installed. The walls cannot be built if there is no foundation and likewise the roof
cannot be installed if the walls are not up.
However, there are some activities in the project that can be done concurrently. Take for
example painting of the ceilings, varnishing the doors and painting the walls can be done
concurrently. There may be resource constraints in carrying out these activities. One or two
people cannot do all three activities together therefore, the activities will be done in
sequence. The resource constraint will have to be incorporated into the network plan.

See figure 6.2 on page: 217 of the prescribed textbook for more on this section.
6.3 RESOURCE REQUIREMENTS PLAN
The purpose of a resource requirements plan is to estimate the types and quantities of
resources required to perform each activity.
THINK POINT
Do you think that it would be possible to carry on with a project without having a resource
requirements plan in place?
Read up on this section on pages: 217 to 220 of the prescribed textbook.
6.4 RESOURCE LEVELLING
“Resource levelling is a method for developing a schedule that attempts to minimise the
fluctuations in requirement for resources. This method levels the resources so that they are
applied as uniformly as possible without extending the project schedule beyond its required
completion time.
It is a trial-and-error method in which the start of non-critical activities (those with positive
slack values) are delayed beyond their earliest start times (but not beyond their latest start
times) to maintain a uniform level of required resources.
Activities can be delayed only to the point where all positive slack is used up, as any further
delays would cause the project to extend beyond the project required completion time. The
purpose of resource levelling is to establish a schedule in which resource utilisation is made
as level as possible without extending the project beyond its required completion time (Gido

You should read up on this section on pages: 220-221 of the prescribed textbook.
6.5 RESOURCE-LIMITED SCHEDULING
“Resource-limited scheduling is a method for developing the shortest schedule when the
quantity of available resources is fixed. This method is appropriate when the resources
available for the project are limited and these resource limits cannot be exceeded. This
method will extend the project completion time, if necessary, to keep within the resource
limits. It is an iterative method in which resources are allocated to activities based on the
least slack. When several activities need the same limited resource at the same time, the
activities with the least slack have first priority” (Gido and Clements, 2015:222).
You may read up on this section on pages: 222- 226 of the prescribed textbook.
6.6 RESOURCE REQUIREMENTS FOR INFORMATION SYSTEMS

DEVELOPMENT
Information Systems Development includes the following:
 People (these are the end users and information system specialists)
 Hardware (computer systems, computer peripherals and the media required to
store the information)
 Software (programs)
 Data (pieces of information)
 And network resources (communications media and network support) (Gido
“Each of these resources is assigned to the activities to complete the tasks. The more
accurately the activities are assessed for the needed resources, the more likely it is that the
development projects can be completed on time. The majority of information system
projects assign resources to multiple tasks at the same time without considering the over
allocation and the conflict that the work resources face to complete the project work” (Gido
Read up on this section on pages: 227-228 of the prescribed textbook.
We have dealt with project management information system in Unit Four and Unit Five as
well. Basically this information system does the following:
 Provides excellent features for handling resource considerations within a project.

 Allows one to create and maintain a list of resources that can be accessed by all
of the tasks within the project.
 The system is able to inform the user if any resources have time conflicts or if
resources are over allocated or is among concurrent projects.
 The system can provide tables and graphs (Gido and Clements, 2015:228-230).
You may read up more on this section on pages: 228-230 of the prescribed textbook.
6.8 SUMMARY
A lack of resources will constrain the project schedule. The types and quantities of resources
are estimated for a project according to each activity that is required to be performed.
Quantities and various types of resources are often limited in some projects. Activities may
require the same resources at the same time.
There may be insufficient resources available and therefore demand cannot be satisfied. In
this case some activities will be delayed until resources become available.
Resource leveling is done to level the resources over the activities of the project as uniformly
as possible without extending the completion date of the project.
On the other hand, Resource-limited scheduling extends the project completion time if
necessary keeping within resource limits. Resource-limiting can be used when available
resources for a project are limited.
You have now come to the end of Unit Six. Your knowledge on project management
should be increasing quite rapidly! Please complete the activities at the end of this Unit.
No case study is given for this Unit.

ACTIVITY: 6.1
What are resources? Explain.
ACTIVITY: 6.2
Why is resource levelling used on a project?
ACTIVITY: 6.3
When is it appropriate to use the ‘resource-limited scheduling’ method?

PART TWO
UNIT SEVEN
DETERMINING
COSTS, BUDGET AND EARNED VALUE

PART TWO – UNIT SEVEN
7.1 DETERMINING COSTS, BUDGET, AND EARNED VALUE
7.1.1 Introduction
This Unit consists of the following: estimate activity costs, determine project budget,
determine actual cost, determine value of work performed, analyse cost performance,
estimate cost at completion, control costs, manage cash flow, cost estimation for Information
Systems Development and Project Management Information Systems. The Unit ends with a
brief summary and activities. After studying Unit Seven of the study guide and Chapter
Seven of the prescribed textbook the student should be able to complete the learning
outcomes.
Learning outcomes
 Estimate the cost of activities.

 Aggregate the total budgeted cost.
 Develop a time-phased baseline budget.
 Describe how to accumulate actual costs.
 Determine the earned value of work performed.
 Calculate and analyse key project performance measures.
 Discuss and apply approaches to control the project budget.
 Explain the importance of managing cash flow
7.2 ESTIMATE ACTIVITY COSTS
By now you know that the total project cost is often estimated during a project’s initiating
phase. This can also be done at the project charter or proposal stages. At these stages
detailed plans are not usually prepared. Estimate costs can be determined once the activities
are defined and a network plan is created.

Elements that are considered in estimating cost for each specific activity:
 Labour costs
 Material costs
 Equipment costs
 Facilities costs
 Subcontractors and consultants costs
 Travel costs
 Reserve.
The person responsible for performing the activity can estimate the costs associated to the
activity, however, in major projects, with longer durations (that may take a few years to
complete), it is best if each organisation or subcontractor is responsible for estimating the
costs of specific activities (Gido and Clements, 2015:246).
THINK POINT
Can you think about some factors that affect estimated costs? Some resources such as
materials is estimated for an activity at a specific figure but this cost changes and is usually
higher at the actual time of purchasing the materials. Why is this so?
7.3 DETERMINING PROJECT BUDGET
The two steps involved in the project budget process are:
 Determine the total budgeted cost (aggregate amount of the estimated costs of
all activities of the project).
 Develop a time-phased budget (this is a distribution by time of the total
budgeted cost for a work package over the life of the project).
7.3.1 Aggregate Total Budgeted Cost
“Aggregating the estimated costs of all the specific activities to perform and complete each
work package in the work breakdown structure will establish a total budgeted cost, also

referred to as budget at completion for each work package. The total budgeted cost for each
work package is the sum of the estimated costs for all specific activities that make up the
work package” (Gido and Clements, 2015:247).
Estimated costs of the work packages or activities can exceed a sponsor’s or customer’s
budget for the project. It may take several iterations to revise the estimated costs to arrive at
an acceptable baseline budget. While it is important to manage customer expectations, the
estimated costs should not be reduced too drastically to match the customer’s budget. If this
happens the activity with the reduced estimated costs will be constrained.
7.3.2 Developing Cumulative Budgeted Cost
“Once a total budgeted cost has been established for each work package, the second step in
the project budgeting process is to distribute or spread each total budgeting cost over the
expected time span of its work package. A cost is determined for each period within the time
span, based on when the specific activities that make up the work package are scheduled to
be performed.
When the total budgeted cost for each work package is spread out by time period, a time
phased budget is created. At this stage it can be determined how much of the budget should
have been spent at any point and time of the project.
This amount is calculated by adding up the budgeted costs for each time period, up to that
point in time. This amount, known as the cumulative budgeted costs, is the amount that is
budgeted to accomplish all the work that is scheduled to be performed up to a specific point
in time” (Gido and Clements, 2015:248-249).
It is imperative to control the project and manage costs assigned to each work package so that
the work can be completed within the budget. Large projects with many work packages or
activities can be managed by making use of Project Management Software that can assist
with project budgeting.

7.4 DETERMINE ACTUAL COST
The actual cost is determined by keeping track of the amount of actual cost expended and
committed costs. These are then compared to the cumulative budgeted costs.
7.4.1 Actual Cost
How can the Project Manager keep track of actual cost on a project?
This can be done by:
 Establishing a system to regularly collect data on actual costs expended.

 Forms, processes, and certain procedures may be used to gather the data.
 An accounting structure can be established as per the work break down.
 Weekly time sheets can be used to collect actual labour hours.
7.4.2 Committed Costs
These are funds for items that are ordered or purchased but is not paid for as yet, thus the
committed funds cannot be spent elsewhere on the project. The actual payment of the item/s
purchased will be made at a later date.
7.4.3 Comparing Actual Cost To Budgeted Cost
The data that is collected on actual cost and any committed costs will need to be summed up
by work packages. This is done to compare actual cost to the cumulative budgeted cost for
the work package. This is then known as the cumulative actual cost. This is the actual
amount of costs expended and committed to accomplish the work of the project up to a
specific point and time.
Have a look at figure 7.7 on page: 252 of the prescribed book to get an idea of cumulative
actual costs spent over a period of time in performing specific activities of a project.

7.5 DETERMINE VALUE OF WORK PERFORMED
It is important to keep track of the work that has been done at each stage of the project. Let
us take one example of an activity such as tiling an entire office suite of 10 similar sized
rooms over 10 days at a total budgeted cost of R40 000.
Total Budgeted Cost R40 000 for tiling entire 10 rooms of the office suite
Duration 10 days for the work to be completed
Budget per room R4000
At the end of the 5th day you determine that R20000 has been spent and 6 rooms have been
tiled. This is excellent as half the budget has been spent on 6 out of 10 rooms that have been
tiled. This is the concept of earned value on the work performed.
However, if you found that R20 000 was spent in 5 days and only 2 rooms were tiled, there
would be reason for concern. This means that 50% of the budget has been spent on only 2
rooms over 5 days. This calls for intervention by the Project Manager.
Let us calculate the actual percentage of the work completed at this point.
2 days / 10 days = 20%
After the percentage of work is determined the cumulative earned value can be determined.
This is done by multiplying the total budgeted cost, in this case R40 000, by the percentage
of the work estimated to have been completed, in this case 20%. See the example below:
The cumulative earned value is: 0.20 x R40 000 = R8000
Read up more on this section on pages: 253-255 of the prescribed textbook.

7.6 ANALYSE COST PERFORMANCE
The four cost related measures that are used to analyse project cost performance are:
 Total budgeted cost (TBC)

 Cumulative budgeted cost (CBC)
 Cumulative actual cost (CAC)
 Cumulative earned value (CEV)

These cost-related measures are used to determine whether or not project performance is
within budget and whether the value of the work performed is in line with the actual cost.
See an example of how these cost-related measures are used in figure 7.11 on page: 256 of
the prescribed textbook.
7.7 COST PERFORMANCE INDEX (CPI)
The CPI index is another indicator of cost performance. It measures cost efficiency with
which the project is being performed. The formula to determine CPI is:
Cumulative earned value (CEV)
Cost Performance Index (CPI) = ------------------------------------------
Cumulative actual cost (CAC)
7.7.1 Cost Variance
Cost variance is another indicator of cost performance. This is the difference between
cumulative earned value (CEV) of the work performed and the cumulative actual costs
(CAC). The formula is:
Cost Variance (CV) = Cumulative earned value (CAV) – Cumulative actual cost (CAC).

7.7.2 Estimate Cost At Completion Or Forecasted Cost At Completion (FCAC)
The forecasted or estimate cost at completion can be determined at any point and time during
the project. The total costs will be upon completion of the project or work package and is
based on the following:
 Actual costs expended.

 Earned value of the work performed.
 And on the remaining work to be done.
There are several methods that can be used for calculating forecasted cost at completion.
Read up on these sections on pages: 257-259 of the prescribed text.
THINK POINT
Can you think about a mini project that you may have been involved in and compare the
estimated cost of the project to the actual cost spent on the project? Was the difference in
cost more or less that was actually spent? This could even have been a school project.
7.8 CONTROL COSTS
“The key to effective cost control is to analyse cost performance on a regular and timely
basis. It starts with establishing a baseline time–based budget that shows how the costs are
expected to be expended during the time span of the project. Then it is necessary to monitor
the actual cost expended and the earned value of the work performed.
It is crucial that cost variances and inefficiencies be identified early so that the corrective
action can be taken immediately, before the situation gets worse. Once project costs get out
of control, it may be very difficult, to complete the project within budget” (Gido and

Cost control involves:
 Analysing cost performance. This is done to determine which work packages

would need corrective action.
 Deciding on the corrective action to apply.
 Revising the project plan.
7.9 MANAGE CASH FLOW
It is important to manage the cash flow on a project. This is done to ensure that there is
enough money to cover the costs of performing the project. It is therefore necessary to check
that the funds or payments from the customer are received in time. Gido and Clements (2015)
stated that: “The key to managing cash flow is to ensure that cash comes in faster, than it
goes out” (Gido and Clements, 2015:261).
THINK POINT
What do you think will happen to a project if there are no funds or if the funds are low?
If funds are low or nil, the project can come to a standstill. Money can be borrowed if there
is insufficient cash. Borrowing will increase the cost of the project as the money must be
paid back to the lender on interest. The terms and conditions of the contract stipulate how
the money will be paid to the contractor. The contractor has to manage the money received
so that funds do not run out during the project while waiting for the next payment from the
customer.
7.10 COST ESTIMATING FOR INFORMATION SYSTEMS DEVELOPMENT
Units Four, Five and Six covered cost estimating for information systems development.
Project Management Information systems was covered in Units Four, Five and Six.
Please read page: 264 of the prescribed textbook to learn more on this section.

7.12 SUMMARY
A project’s cost is usually estimated in the initiating phase. This can also be done at the
project charter stage or at the proposal stage. Once a project’s activities are defined and a
network plan is created, the estimate costs are then determined. Cost is estimated for each
activity taking into consideration each specific activity’s costs for labour, materials,
equipment, facilities, subcontractors, travel and reserve and so forth.
The two steps involved in determining the project budget process are: 1. to determine the
total budgeted cost (aggregate amount of the estimated costs of all activities of the project)
and 2. To develop a time-phased budget (this is a distribution by time of the total budgeted
cost for a work package over the life of the project).
The estimated costs of the work packages or activities can be more than what the sponsor or
customer has budgeted for the project. The Project Manager must control the project and
manage costs assigned to each work package so that the work can be completed within the
budget. A Project Management Software can be used to manage large projects with many
work packages or activities.
The Project Manager can determine actual cost by keeping track of the amount of actual cost
expended and committed costs (funds for items that are ordered and not yet paid for)
thereafter, compare to the cumulative budgeted costs. The value of the work performed is
measured so that the Project Manager can keep track that the specific work is being
performed on schedule and on budget. Work that is under performed and overruns the
budget would require the Project Manager’s intervention.
Total budgeted cost (TBC), Cumulative budgeted cost (CBC), Cumulative actual cost (CAC)
and Cumulative earned value (CEV) are four cost related measures that are used to analyse
the cost performance of a project. These cost-related measures are used to determine if the
performance is within budget and whether or not the value of the work performed is in line
with the actual cost. The CPI index and Cost variance are also indicators of cost performance
that are used to measure cost efficiency with which the project is being performed. For
effective cost control, costs performance must be analysed regularly and timeously. It is
crucial that cost variances and inefficiencies be identified at an early stage of the project so
that corrective action can be implemented.

A project’s cash flow has to be managed well to ensure that there is enough money to cover
the costs of performing the project. The Project Manager must ensure that the funds or
payments from the customer are received on time. Low or nil funds can result in the project
coming to a standstill. (Gido and Clements, 2015:255-2561).
You have now come to the end of Unit Seven! Please do the activities at the end of this
Unit. A case study is not included in Unit Seven.
ACTIVITY: 7.1
Why is it important to manage the cash flow of a project? Explain.
ACTIVITY: 7.2
What should the Project Manager do when he/she learns that the project is
overrunning the budget?

ACTIVITY: 7.3
What are the two steps involved in the project budget process?
ACTIVITY: 7.4
Explain how cumulative actual cost is calculated and provide a reason to its need.

PART TWO
UNIT EIGHT
MANAGING RISKS

PART TWO – UNIT EIGHT
8.1 MANAGING RISK

8.1.1 Introduction
This Unit discusses how to identify risks, assess risks, plan risk responses, control risks and
manage risks for Information Systems. The Unit ends with a summary and activities. After
studying Unit Eight of the study guide and Chapter Eight of the prescribed textbook the
student should be able to do the learning outcomes.
Learning Outcomes:
 Discuss what is involved in managing risks.

 Identify and categorise risks.
 Assess and prioritisee risks.
 Prepare a risk response plan.
 Develop a risk assessment matrix.
 Control risks (Gido and Clements, 2015:286).
8.2 IDENTIFY RISK
According to Gido and Clements (2015:286), risk is an uncertain event that can occur and
jeopardise accomplishing the project objective if the risk is not identified immediately and if
corrective action is not taken. Major risks can be identified by a sponsor in the project
charter when the project is authorised.
A contractor may also identify risks in a proposal to the customer. The customer is then
confident that such a contractor has experience and has used a realistic approach to perform
projects. Such a contractor identifies risk at an early stage and thus avoids any surprises.
Identifying risks is also a way of managing customer expectations.
Brainstorming is a common approach to identify the sources of risks. Brainstorming is

covered in more detail in Unit Eleven. The Project Manager involves key members of the
project team to identify potential sources of risks that would negatively impact a project.
Establishing risk categories is another approach that can be used to identify risks.

THINK POINT
What would be the case if a major technical risk to a project was identified and this risk was
ignored by the Project Manager?
8.2.1 Risk Categories
Risk categories with potential types of risks within each category are listed below:
a) Technical
 Failure to meet customer performance requirements.

 New application for technology.
 May not be able to meet quality standards or codes.
b) Schedule
 Vendor delay in delivery of critical equipment.
c) Cost
 Material costs escalate more than anticipated.
d) Human resources
 May not have people available when required to staff the project.
e) External
 Inclement weather.
 Changes in government regulation.
 Change in consumer preferences.
 Local protesters file legal action to delay project.
f) Sponsor/customer
 Delays in approvals (Gido and Clements, 2015:287).

Using historical information from past projects is another source that can be used to identify
possible risks.
8.2.2 Examples of Specific Risks
Additional examples of specific risks are:
 Incorporating advanced technology in new product.
 Performance requirements for taking measurements 10 times faster than can

be done currently.
 Technological advances that could make the originally selected technology

obsolete before the project is completed.
 First-time use of new robotic equipment for a rare and complex surgical
procedure.
 Non-availability of labour force of certain crafts people when required

because of a strong local economy and lower unemployment rate.
 Encountering more than expected rock formations when excavating.
 Excessive number of revisions to a website design before it is acceptable to

the customer and so on (Gido and Clements, 2015:282).
It may not be possible to identify all risks at the beginning of a project. However, at whatever
stage of a project that a risk is identified, the potential impacts of the risk/s must be estimated
as well. Impacts resulting from risk to the project could include schedule delays, substantial
additional expenditure and the acceptance criteria for the project deliverable will not be met.
The customer will not be satisfied and may not accept the new product. The customer can
enforce the penalty terms as stipulated in the project contract signed by the contractor and
customer.

8.3 ASSESS RISKS
“Risk assessment involves determining the possibility that a risk event will occur and the
degree of impact the event will have on the project objective. Each of these factors can be
assigned a rating of high, medium, or low for example or by some other rating scale (1-5, 1–
10 percentages, etc.). The Project Manager, in consultation with appropriate team members
or other experts who are most knowledgeable about the potential risk, should determine
ratings for each risk. Risks can be prioritiseed (Gido and Clements, 2015:288).
8.3.1 Plan Risk Responses
“A risk response plan is a defined set of action to prevent or reduce the likelihood of
occurrence of the impact of a risk, or to implement if the risk event occurs. Risk response
planning involves developing an action plan to reduce the likelihood of occurrence or
potential impact of each risk, establishing a trigger point for when to implement the actions
to address each risk, and assigning responsibility to specific individuals for implementing
each response plan” (Gido and Clements, 2015:289).
A risk response plan is used to:
a) Avoid the risk.

Risk is eliminated by choosing a different course of action.
b) Mitigate the risk.

Action is taken to reduce the likelihood that the risk event will occur.
Mitigating the risk is to reduce the potential impact.
c) Accept the risk.

Accepting a risk is to deal with it when it occurs. No prior action is taken to
reduce or avoid the impact if the risk is likely to occur.
A trigger point or warning flag should be included in the risk response plan. A trigger point
is the point at which action in response to a potential or actual risk is taken.

A risk assessment matrix is a tool that is used for assessing and managing risk and it is also
referred to as a risk register. This assessment matrix or risk register includes potential risks
and their potential impact, the likelihood of the risk occurring and the necessary response
plan that will be implemented towards the risk.
See figure 8.1 on page: 289 of the prescribed textbook on risk assessment matrix.
8.3.2 Control Risks
“Risk control includes implementing risk response plans and monitoring risks. Risk response
plans should be implemented as appropriate when their trigger point is reached.
Implementing risk response plans often requires spending additional funds for additional
sources, working overtime, paying for expedited shipment, purchasing additional materials,
and so forth. Project prices and budgets should include a contingency reserve to pay for
additional costs associated with implementing response plans. Risk monitoring involves
regularly reviewing the risk assessment matrix throughout the project” (Gido and Clements,
2015:290).
Risk monitoring requires a regular review of the risk assessment matrix. This is done to
assess if a risk has diminished or increased. There is a possibility of new risks that arise in a
project that were not previously identified as risks at an earlier stage. Project meetings are an
ideal forum to regularly review, update and address project risks. Actual risks and the impact
of these risks should be documented. This becomes a source of lessons learnt. These lessons
learnt can be avoided on future projects.
8.4 MANAGING RISKS FOR INFORMATION SYSTEMS DEVELOPMENT
All aspects of an Information Systems Development Projects consist of some measure of

risks which can be characterised into seven types of risks as follows:
 Technological
 Human
 Usability
 Project Team
 Project Risk

 Organisational Risk
 Strategic and Political Risk.
Please read page: 291 of the prescribed textbook for more on this section.
8.5 SUMMARY
Risk can occur at any stage of a project. Risk is a threat to meeting the project objective if it
is not managed. Risk management includes, identifying the risk, assessing the risk,
controlling the risk and responding to project risks. These measures are undertaken in
response to reduce adverse events hindering the project objectives.
Regular review and evaluation during the project is important in determining any changes or
impacts that may arise on risks identified earlier in the project. New risks can arise during
the review and evaluation stage of the project.
You have now come to the end of Unit Eight. Please do the activity at the end of this Unit.
No case study is given in Unit Eight.
ACTIVITY: 8.1
There are six major risk categories that can jeopardize the project. Name any FOUR
of these categories.

ACTIVITY: 8.2
State whether the following statement is true or false:

Project meetings are a good forum for regularly reviewing updating and addressing risks.
ACTIVITY: 8.3
Explain what a risk response plan is used for?
Appendix: E
Case study 3 - Student Fund-Raising Project (Gido and Clements, 2015:295-296).
Read the case study and answer the questions.

PART TWO
UNIT NINE
CLOSING THE PROJECT

PART TWO - UNIT NINE

9.1 CLOSING THE PROJECT
9.1.1 Introduction
Unit Nine discusses the project closing actions, customer feedback, early project termination
and the Unit ends with a summary, activities and a case study. After studying Unit Nine of
the study guide and Chapter Nine in the prescribed textbook, the student should be able to
complete the learning outcomes.
Learning outcomes:
 Identify actions that should be taken during the process of closing a project.
 Conduct a post-project evaluation.
 Discuss the value and use of lessons learnt.
 Explain the importance of organising and archiving project documents.
 Obtain customer feed-back about the project.
 Describe situations that could result in early project termination (Gido and
9.2 PROJECT CLOSING ACTIONS
The project closing stage is the fourth and final phase of the project life cycle. The project
closing phase begins after the project work is completed. When the project work is
completed the customer or sponsor receives the deliverables. At the completion stage of a
project the Project Manager or contractor and the project team verify that all the agreed-upon
deliverables have been provided to the customer. “Such deliverables might include training
or procedure manuals, drawings, flowcharts, equipment, software, brochures, a conference,
reports videos, or data” (Gido and Clements, 2015:301).
See figure 9.1 - Project Life Cycle on page: 301 in the prescribed text book.

The process of closing the project involves various actions, including:
 Collecting and making final payments.

 Recognising and evaluating staff.
 Conducting a post-project evaluation.
 Documenting lessons learnt.
 Organising and archiving project documents.
The activities associated with closing the project should be identified and included in the
project baseline plan – they should not be done merely as spontaneous afterthoughts (Gido
9.3 FINAL PAYMENTS
A progress payment clause is included in many contracts. A progress payment clause may
state that the customer will make the final payment upon completion of the project. The final
payment could be a high percentage, for example 25%. The contractor must check that all
payments are collected from the customer. All payments due to suppliers, subcontractors,
vendors etc. must be paid as well. Once all payments are received and payments are made to
the relevant suppliers or subcontractors and so on, the books can be closed off.
The project books or accounting records can be closed once all payments have been received,
and a financial breakdown of the project can be made in which final actual costs are
compared to the project baseline budget. At this stage a financial analysis of the project can
be made. Comparison is made on the final actual costs in relation to the project baseline
budget.
THINK POINT
Why do you think that the final payment clause in the contract due by the sponsor or
customer is usually a high amount? This could be 25% of the total cost of the project.

9.4 STAFF RECOGNITION AND EVALUATION
Staff recognition and evaluation is important at the closing stage of the project. If the project
was successful, it should be celebrated and the team should be acknowledged for their
contribution. This can be done informally or at a formal event. The project manager should
prepare a written performance evaluation on each team member. Lessons learnt and
experiences gained are part of the performance evaluation. This is an opportunity identify
areas for team members to be developed.
9.5 POST-PROJECT EVALUATION
Conducting post-project evaluation meetings within the project team or organisation that
performed the project, is another significant activity during the closing phase. At post project
evaluation meetings, there is a review and evaluation of performance over the project and
there is identification on how to improve performance for future projects.
Gido and Clements (2015:302) recommend that there should be two meetings, one between
the project manager and each member of the team. This allows people to speak more openly
without group constraints.
Another meeting is a group meeting with the entire project team. These meetings allow team
members to give their views on what went well and what did not during the work
performance of the project. Team members can provide recommendations on how the work
of the project could have been improved. Lessons learnt are valuable for future projects.
After meeting with each member of the team the Project Manager is able to build an agenda
for the group meeting to discuss important items.
9.5.1 Agenda Topics
Some topics that may be on the agenda include:
 Technical performance
 Budget performance
 Schedule performance
 Project planning and control
 Risk management

 Customer relationships and stakeholder engagement

 Team relationships
 Communications
 Problem identification and resolution
 Lessons learnt and recommendations
The discussion at the group meeting will be based on any or all of the above topics. The
purpose of the meeting is to discuss and to find out what went well and what problems were
experienced.
Some of the questions arising from the above topic are: How were any project changes
managed? How did the change impact the project? How have the changes impacted on the
project budget and schedule. Was the work scope fully completed? What is the quality of
the deliverables? Was the customer satisfied and if not then why not? What are the problems
experienced during the project and what are the solutions? What are the recommendations?
What was the budget performance like? Was the contract profitable? Which work packages
were over or under-run and why did this happen?
There would be many questions that arise at such a meeting over and above the few given in
the text. The entire project would be evaluated for what went well and what went wrong.
Then only recommendations can be made.
After the meeting, the Project Manager prepares a written report of the project performance,
lessons learnt and any recommendations that are made. This report is made available to key
people in the project organisation. Confidential information on the report does not get
disseminated to everyone. The Project Manager and the project team take cognisance of the
report. Mistakes should not be repeated on future projects. Lessons learnt should be applied.
9.5.2 Lessons Learnt
“The purpose of identifying and documenting lessons learnt is to capitalise on the knowledge
and experience gained on the project to improve performance on future projects the project
organisation should establish a knowledge base system that includes an easily accessible
repository that encourages project managers and teams to retrieve lessons learnt and
information from previous projects. The system should organise information so that it is

easily retrievable by category or subject of lessons learnt or by key words” (Gido and
Lessons learnt should be documented on an ongoing basis throughout the phases of the
project and not left to the end of the project. Lessons learnt can be input onto a compatible
system that is established for this purpose. This should be done so that the lessons are not
forgotten. Lessons learnt should be documented and communicated and should be used by
the Project Manager and team on future projects.
9.5.3 Archive Project Documents
The Project Manager or contractor must ensure that copies of appropriate project
documentation are organised, filed and archived for easy retrieval if need be. Some of the
documents may be required to look up information for future projects. The customer may
come back with a dispute on the particular project at a later stage. Lessons learnt can be
looked up. Key contact details of subcontractors and suppliers can also be retrieved for
future projects and so on.
THINK POINT
Think about this scenario: What would be the case if a customer has a dispute on a particular
project after the project has been completed and that project’s documentation was not
archived? Will the Project Manager and the project team be in a position to solve the
dispute?
9.5.4 Customer Feedback
It is necessary for the project organisation to have a post-project evaluation meeting with the
customer or sponsor. This is done to find out if the project deliverables meet the expected
benefit and satisfaction of the customer. Customer feedback is also obtained from such a
meeting. Such feedback may be useful to the project organisation in a future business
relationship with the customer. The meeting should be scheduled at the convenience of the
customer. The meeting should take place when the customer is ready to give feedback on
whether or not the project deliverable met the customer’s expectations and whether the
anticipated benefits were achieved.
During the meeting with the customer, the contractor or project team should ask open-ended
questions and then listen to the customer with an open mind. This gives the customer the
opportunity to express his/her satisfaction or dissatisfaction on the deliverable. The customer
will also provide details on which aspects of the project deliverable met his/her satisfaction
or dissatisfaction.
The Project Manager or team should continue to maintain a professional relationship without
customer even if the customer is critical of the project deliverable. If the customer becomes
angry with the contractor, then valuable information on the project may be lost. The
customer may not want to continue the discussion. However, if the customer is satisfied with
the project work and deliverable, the Project Manager or contractor can ask if the customer
has other projects to be done. The Project Manager or contractor can also request
permission to use the customer as a reference to other potential customers.
Post-project customer evaluation survey is another method of getting feedback from the
customer regarding satisfaction with the results of the project. Such a survey is provided to
the customer by the Project Manager or contractor. The survey feedback should be
organised, and stored on a system. This information is valuable if other projects came
through from the same customer or other customers.
THINK POINT
Why would a project be terminated at an early stage?
9.6 EARLY PROJECT TERMINATION
A project may be terminated before it is completed due to certain circumstances. After doing
a certain amount of testing on a project and it is determined that the project will be too costly
or take too long to complete, the project may be terminated. If the project organisation
determines that the project will not be profitable, the project can be terminated. Project
termination can occur by the project organisation even if millions of rands were spent on the
project already. The project company would not want to lose more money.

A sponsor or contractor can also terminate a project at any stage of the project if there is
dissatisfaction on quality or if there are schedule delays. The current agreement with the
contractor may be terminated by the customer or sponsor and a new contractor may be hired
to complete the work. In such a case the contractor can suffer financial losses and may have
to lay off some staff. The contractor’s reputation is also damaged. In order to avoid early
termination of a project due to customer dissatisfaction the contractor can regularly monitor
the level of customer satisfaction throughout the project. Corrective action must be taken by
the contractor at the first sign or hint of customer dissatisfaction.
9.7 SUMMARY
Once the project work is completed and the customer has accepted the deliverables the
project has come to an end. The closing stage of the project is the fourth and final stage that
involves various actions. Final payments are collected and made. Meetings are held with
individual team members and with all the members as a group. Staff are recognised and
evaluated. Staff recognition is an important step in the closing stage of the project.
The Project Manager prepares a written performance evaluation on each person on the
project team. A post-project evaluation is conducted; lessons learnt are documented and
stored. Project documents are organised well, filed and archived so that these can be easily
retrieved when required. Information from these source documents can be used on future
projects for example, key suppliers details, and the information or curriculum vitae of useful
people who were used on the project for their skills or expertise as their services may be
required on future projects.
Copies are made of the relevant documents and documents are arranged and archived in a
manner that makes it easy to retrieve and look up information that may be required at a later
stage for other projects. Lessons learnt are documented and stored so that this can be
retrieved and used.
Each staff meets with the Project Manager and thereafter the entire team meets together at
another meeting. These meetings are held to review and evaluate the project performance
and in so doing seek how to improve performance on future projects.
Another important activity that the Project Manager or project team carries out is to meet
with the customer at the customer’s convenience. This meeting is to find out if the customer

is satisfied with the project deliverable and to receive feedback. If the customer is not and
vents his/her frustration the Project Manager should not retaliate as the customer may not
divulge more information on where the dissatisfaction has occurred. Even if the customer is
satisfied, the Project Manager must know this.
The Project Manager has a good chance of securing more work from the customer in the
future. The Project Manager may also request the customer’s permission to use the customer
as a referee to potential customers. Feedback can also be obtained by a post-project customer
survey that is prepared by the Project Manager.
Projects can be terminated at any stage by either the Project Manager, or contractor or by the
customer. Termination is based on a variety of reasons. Project termination by the
contractor can be done because the project is likely to be unprofitable. Project termination
can be done by the customer who may be dis-satisfied with the project for various reasons,
such as the project being behind schedule or the quality of the workmanship is not up to
standard and so on. Early termination can be avoided by the contractor if customer
dissatisfaction is monitored regularly and action is taken to correct anything that goes wrong
in the project.
You have now come to the end of Unit Nine! Please do the activities and the case study at
the end of this Unit.
ACTIVITY: 9.1
Name TWO potential consequences for a contractor if project is terminated at any

stage by a dis-satisfied customer?

ACTIVITY: 9.2
List TWO reasons for having a post-project evaluation meeting with the customer.
ACTIVITY: 9.3
Name the FIVE actions that are required to close the project?
ACTIVITY: 9.4
Explain the importance for a contractor to archive project documents?
Appendix: F
Case study 1 – Factory Expansion Project (Gido and Clements, 2015:312-314).

PART THREE
PEOPLE: THE KEY TO PROJECT SUCCESS

PART THREE
UNIT TEN
THE PROJECT MANAGER

PART THREE – UNIT TEN

10.1 THE PROJECT MANAGER
10.1.1 Introduction
Unit Ten discusses the Project Manager’s responsibilities, skills, competence, delegation and
managing changes. Unit Ten ends with a summary, activities and a case study. After
studying Unit Ten of this study guide together with Chapter Ten in the prescribed textbook,
the student should be able to do the learning outcomes.
Learning outcomes:
 Discuss three responsibilities of a Project Manager.

 Identify, explain and practice at least five skills and abilities a Project
Manager should have.
 Describe and take actions to develop Project Manager competence.
 Discuss and practice effective delegation.
 Explain how to manage changes
10.2 PROJECT MANAGER RESPONSIBILITIES
The Project Manager is the key person that manages the project. His/her main
responsibilities are to: provide leadership, plan, organise and control the work from the
project start to finish.
a) Leadership
The Project Manager leads the project team to accomplish the project objective. “The
Project Manager coordinates the activities of the various team members to ensure that,
the right people perform the right tasks at the right time, as a cohesive group” (Gido and
b) Planning
In this phase the Project Manager clearly defines the project objective. The Project
Manager and customer have to agree on this objective.

The development of the plan is spearheaded by the Project Manager to achieve the
project objective. The project team is included in developing the plan together with the
Project Manager. The Project Manager reviews the plan with the customer and gains
endorsement.
Once a project is confirmed, a Project Management System is set up. The set up can be
manual or computerised. The Project Manager and project team uses this system to
compare actual project progress to the planned project progress. The project team is
orientated on how the system operates so that they can use it properly to manage the
project.
c) Organising
The Project Manager decides on which tasks are to be performed by internal staff and
which tasks are to be outsourced. Commitment is gained from internal staff on tasks
that are to be done internally. The work scope and deliverables are clearly defined for all
tasks that will be outsourced. The Project Manager negotiates a contract with each
subcontractor. The Project Manager also assigns responsibilities and delegates authority
to specific individuals for the various tasks. These individuals are held accountable by
the Project Manager to accomplish their tasks within the given budget and schedule.
The Project Manager undertakes to create a workplace environment where individuals
are highly motivated to work together as a project team.
THINK POINT
Do you think that a demotivated project team will be able to successfully continue with their
work and remain committed to the project?
When there is unhappiness and demotivation in the workplace environments, which may
occur for a variety of reasons, the project objective will not be accomplished successfully.

THINK POINT
How can a Project Manager control a project?
d) Controlling
“The Project Manager implements a Project Management Information System designed

to track the actual progress in order to control the project and compare it with planned
progress.
Such a system helps the manager to distinguish between busyness and accomplishment.
Project team members monitor the progress of their assigned tasks and regularly provide
data on actual progress, schedule, costs and earned value of the work performed. This
data is supplemented by regular project review meetings”(Gido and Clements,
2015:323).
The Project Manager has to intervene when things do not go according to plan and there
is no guarantee that every project will go off without a hitch. Problems can occur at any
stage of the project and this will call for corrective action. Once a problem is identified,
the best solution will have to be considered and implemented by the Project Manager
and the project team.
The Project Manager is the leader over the project from the beginning to the end. This
requires that the Project Manager should plan, organise and control the project through its
entire duration. This is not done by himself/herself, the project team is involved.

10.3 PROJECT MANAGER SKILLS
A key ingredient in the success of a project is the Project Manager.
The Project Manager’s skills and abilities exceed that of leading, planning, organising and
controlling the project. The Project Manager has to inspire and motivate the project team to
succeed and to win the customer’s confidence.
“Effective Project Managers have strong leadership ability, the ability to develop people,
excellent communication skills, good interpersonal skills, the ability to handle stress,
problem solving skills, negotiating skills, and time management skills” (Gido and Clements,
2015:324).
THINK POINT
Do you think that a Project Manager that is still in the developmental stages of leadership,
will be able to inspire and motivate the project team?
10.3.1 Leadership Ability
Gido and Clements (2015:324) state that leadership is getting things done through others.
The Project Manager achieves project results through the project team.
Leadership goes beyond management. The Project Manager leads the project team without
dictating to them. The Project Manager does the following:
 Inspires people to work as a team to get the project work done.

 Motivates the project team to do the work.
 Creating a vision of the expected results and benefits of the project.
 Engages with the project team regularly.
 Keeps communication lines open. Communicates effectively.
 Uses a participative and consultative leadership style.
 Provides guidance and coaches the project team.

 Provides direction to the project team.

 Establishes parameters and guidelines on what is to be done.
 Does not tell people how to get the work done or how to do their work.
 Empowers the project team.
 Allows individuals to have ownership to control their own work.
 Allows team members to make decisions and take responsibility within their
assigned areas.
 Establishes clear guidelines and sometimes limits. Communicates and shares
information.
 Understands what motivates people.
 Creates a supportive environment and encourages the participation and
involvement of all members of the project team.
 Energises individuals.
 Exercises good facilitation skills during meetings and allows all members to
participate. Makes an extra effort to involve members that may be less
outspoken.
 Solicits members’ ideas. Gives recognition to individuals or the entire team.
 Allows members of the project team to make presentations to customers.
 Allows members of the project team to make presentations to the project
organisation’s upper management.
 Encourages that team members tap into each other’s knowledge and expertise.
This creates mutual respect for each other and teams bond well.
 Is careful to assign work according to the competence and expertise of an
individual.
 Influences the behaviour of the team to accomplish the project objectives etc.
The above are only some of what an effective Project Manager does to successfully lead the
project team. At the same time, the Project Manager has to be careful not to do things that
will demotivate the team.
Teams can be discouraged when expectations are unclear, or when team members have to
endure unnecessary procedures, or duplicate what is verbalised during the weekly project
meetings. Unproductive team meetings can demotivate teams.

“The Project Manager sets the tone for the project team by establishing an environment of
trust, high expectations and enjoyment. To foster an atmosphere of trust the Project Manager
lives up to his work and follow through on commitments. In doing so, the Project Manager
sets an example in demonstrating that the follow-through is expected of everyone in the
project team” (Gido and Clements, 2015:326).
10.3.2 Ability To Develop People
Members on a project team can be trained and developed in areas where they lack certain
skills and expertise. Training and development of the project team is encouraged by an
effective and committed Project Manager. Such a Project Manager establishes a learning
environment and individuals can then learn from the tasks they perform. Individuals can
learn by their experiences, and by observation.
A good Project Manager should communicate the importance of continuous self-

development activities to the project team. All individuals in the team should be regarded as
valuable to the organisation. This makes individuals feel they are part of the project. The
project team’s contribution can become more effective via constant training and learning.
Such individuals are not only good for the project, but their self-concept also develops.
Mistakes are part of a learning experience so long as the mistakes do not become too drastic
and costly on the project. Project Managers understand that mistakes do happen and this is
part of the learning curve.
A project team can also learn from more experienced people on the team. Skilled and
experienced people on the team should coach and mentor other team members. The Project
Manager can inform the skilled and experienced team members that a part of their job is to
coach and mentor other team members. Formal training sessions is another way to develop
people, although this could take time out of the project schedule and it does costs money.
10.3.3 Communication Skills
Communication is absolutely crucial to the success of the project. A Project Manager must
be able to manage communication as follows:

 Communicate regularly with the project team, subcontractors, the customer,

and with the project organisation’s upper management, and other
stakeholders.
 Communication must be clear and the message must be timely, honest and
unambiguous.
 Communicate effectively. Really listen to hear exactly what is being said

when someone speaks and then ask questions.
 Communicate to share information and seek acknowledgement that the person

has received the intended message and understands the contents of the
information that is shared.
 Use good verbal and written communication skills and provide timely
feedback to the project team and to the customer.
 Share good and bad news promptly with the relevant stakeholders including
the project team and the customer or sponsor.
 Communicate with a positive body language. For example do not show a

snarl if you are angry or in disagreement with the customer or a stakeholder,
while your verbal message goes something like “I understand you” the body
language of perhaps a clenched fist may indicate “I want to punch you”.
 Body language, tone, pitch, voice level and pronunciation are important in
communication skills.
Communication is done verbally and in writing. The Project Manager may communicate
regularly with the project team by having weekly meetings. Communication with the upper
management, the customer and stakeholders should take place at their convenience at regular
intervals throughout the duration of a project.

Communication can also be by informal conversations. Communication can be done via

written reports by the Project Manager to the customer and to the project organisation’s
upper management.
A Project Manager should get out of the office on a regular basis, and have a face-to-face
conversation on some specific matter pertaining to the project with individual team members
for instance. Gido and Clements (2015) stated that: “Effective communication establishes
credibility and builds trust. It is the foundation for managing the expectations of
stakeholders, including the sponsor or customer, end user of the project deliverable,
subcontractors, vendors and the project team and the project organisation’s upper
management and with-holding information or delaying communication can mislead
stakeholders into incorrect expectations about performance or result” (Gido and Clements,
2015:329).
10.3.4 Interpersonal Skills
Gido and Clements (2015) stated that: “Interpersonal skills are essential for a Project
Manager and that such skills depend on good verbal and written communication skills” (Gido
The Project Manager should develop a relationship with each individual on the project team
and try to learn more about the personal interest of each team member without being
intrusive. By using open-ended questions and really listening to an individual one can learn
more about the person.
A Project Manager should be genuine and be able to empathise with the project team if a
situation calls for this. The Project Manager must also be able to handle delicate situations
that may arise through misunderstandings and disagreements which can create divisiveness
among team members or the stakeholders.
The Project Manager influences the thinking and actions of the team. Being able to persuade
and negotiate are also skills that the Project Manager must possess. It is necessary for the
Project Manager to possess good interpersonal skills!

10.3.5 Ability to Handle Stress
A Project Manager has to be able to deal with stress. Stress can arise from work situations
and from conflict and disagreements and so on. In such cases the Project Manager must
remain calm and not panic.
An effective Project Manager should be able to cope with stressful situations and constantly
changing situations. The Project Manager is the leader over the project and as such he/she
must take control over a situation that poses as a threat, is stressful, or if there is a conflict
situation.
The Project Manager acts as a buffer between the project team and the customer or
stakeholders or upper management and should take any criticism while protecting the project
team. The Project Manager does this to ensure that the project team does not become
discouraged.
A Project Manager with a good sense of humour can survive stressful situations by breaking
tension and getting his/her team to get past or get through such a situation. A Project
Manager must keep physically fit to be able to handle stress. Regular exercise, good
nutrition and a healthy lifestyle are part of the lifestyle routine for any person that wants to
keep fit.
10.3.6 Problem-Solving Skills
Problem-solving skills are a must for any Project Manager. When problems are identified
early this will allow more time to develop best fit solutions.
The project team should be encouraged to identify problems early in the project and to use
their own problem solving abilities to solve the problems.
Project teams should not wait or depend solely on the Project Manager to identify or solve all
the problems that may occur during the project.
While the project team needs to be self-directed in solving minor project problems, critical
problems that arise within a project should be communicated to the Project Manager before
any action is taken by the project team.

Critical problems may require large sums of money to apply solutions to the problems.
Critical problems may cause a strain on the budget and project schedule.
There is more on problem solving in Unit Eleven of this study guide.
10.3.7 Negotiating Skills
It is essential for Project Managers to have good negotiating skills. Project Managers
encounter many occasions to employ their negotiating skills with relevant stakeholders
during the project life cycle.
Negotiation becomes necessary:
 When contract terms and conditions are an issue.

 When specific resources are to be obtained for the project.
 On subcontractor prices.
 On vendor delivery schedules.
 On payment for damages.
 On changes to the project that may significantly impact the budget and
schedule.
 On specifications, such as approval of designs not initially agreed upon in the
initial contract and so on.
Negotiation becomes necessary when there is disagreement on some matter or issue between
two people or parties. Negotiation takes place so that both parties arrive at a mutually
acceptable agreement on an issue or matter.
The Project Manager and project team must have good listening skills for effective
negotiation. Negotiation should be approached as a ‘win-win’ outcome for both parties.
The Project Manager must be considerate of cultural differences as people from various
backgrounds have different approaches to conducting negotiations.
In a negotiation situation all parties should be heard and neither and one should be resentful
at the conclusion of an agreement (Gido and Clements, 2015: 333-334).

The Project Manager must ensure that he/she maintains integrity and respect for the other
party throughout the negotiation process.
The Project Manager must set a good example. The Project manager should be mindful that
maintaining a good relationship with the customer could result in more work for him/her in
the future.
THINK POINT
Do you think that a Project Manager will be effective in his/her job if he/she lacks
negotiating skills?
10.3.8 Time Management Skills
Projects have a start time for when the project must begin and a finish date by which the
project should be completed. The Project Manager must manage his and the project team’s
time well enough from the beginning to the end of the project so the schedule is adhered to
and the project can be accomplished on time.
Gido and Clements (2015:334), state that the Project Manager should make optimal use of
the time available to complete the project thus, project managers need to have self-discipline,
be able to prioritise, and show a willingness to delegate.
More on time management skills is discussed in Unit Eleven of this study guide.
10.4 DEVELOPING PROJECT MANAGER COMPETENCE
Gido and Clements (2015: 334) stated that “People are not born with the knowledge, skills,
and abilities to be effective Project Managers… rather, people are developed to become
competent. There are various ways to develop the competence necessary to being an
effective Project Manager” (Gido and Clements, 2015:334).

THINK POINT
How can the Project Manager become more effective in his/her job?
To become effective the Project Manager can do the following:
 Gain experience by working on many projects as he/she can. This resents a

learning opportunity.
 Learn from others by observing other project participants employ their
skills.
 Interview Project Managers that have the skills you seek to develop
yourself.
 Conduct a self-evaluation and learn from your mistakes.
 Get a mentor.
 Participate in education and training programs.
 Join organisations.
 Read. Find the materials that can enhance the skills you want to develop and
read these.
 Earn a credential in a specific project management discipline.
 Volunteer. Get involved with a volunteer organisation to develop skills.
10.5 DELEGATION
Delegation is an important and an essential skill that an effective Project Manager should
possess. Delegation is more than assigning a task to an individual or team. Delegation is
about responsibility to accomplish project tasks. It is also about assigning authority to
responsible and accountable individuals to make decisions and take actions.
Delegation is part of the Project Manager’s responsibility to organise the project. The Project
Manager must empower the project team to accomplish the project objective. The Project
Manager must use effective communication skills to delegate to the project team.
The Project Manager delegates duties but is still the custodian over all the tasks of the
project. The project team carries out the work and may have some authority and

responsibility on their assigned tasks but still reports to the Project Manager who oversees
that the work is accomplished at each stage of the project. A project delegation checklist can
be used by the Project Manager as a self-assessment tool.
See figure 10.2 Delegation checklist on page: 340 of the prescribed textbook.
Please read up more on delegation on pages: 336-337 of the prescribed textbook.
10.6 MANAGING CHANGES
Changes in any situation are inevitable. Project changes are certain to occur during the
project life cycle. Changes can be initiated by the customer or sponsor or it can from the
project team, subcontractors, and consultants and so on. Changes may occur due to many
reasons. The Project Manager has to also manage and control changes. This is done to
minimise any negative impact on the successful accomplishment of the project objective.
Changes can be trivial and not affect the project or it can be major and therefore affect the
project work scope, budget, or schedule.
At the beginning of the project, a change control system should be established. This defines
the process and procedures that must be followed when a change occurs. Changes to the
project will affect initial project documents, schedule and budget. The customer and the
Project Manager and team must agree on new changes that occur on the initial project.
The Project Manager sees to it that the project team does not casually agree to changes that
may require additional person-hours of work or increase costs over the budget amount for the
project. Changes may cause delays to the schedule.
THINK POINT
Do you think that minor changes to the project that does affects specific activities should be
communicated to the project team? If yes, why should this be communicated to the project
team?

“Some changes become necessary as a result of previously identified risks or unanticipated

occurrences, such as an early snowstorm that slows down construction of building, failure of
a new product to pass tests, or the untimely resignation of a key member of the project team.
These occurrences will have an impact on the project schedule and/or budget and will require
that the project plan be modified. In some cases, unanticipated events can cause the project
plan be modified” (Gido and Clements, 2015:342). Whatever changes occur, the Project
Manager has to manage such changes and share information about the changes to all people
on the project as soon as possible in an open and honest manner.
10.7 SUMMARY
The Project Manager is responsible for the project. He or she must ensure that the customer
is satisfied with the work scope that it is completed, based on quality, within budget and on
time. The Project Manager plans, organises and controls the work effort so that the project
objective is accomplished. An effective Project Manager must possess the necessary skills
and have the ability to lead the project team so that the project objective is accomplished.
The Project Manager must possess good communication skills, interpersonal skills,
negotiating skills, be a good manager and leader and be able to handle stress. A Project
Manager must also have good problem solving skills and manage his/her time well. The
Project Manager must be a good delegator and must be able to oversee the work, take action
and intervene when necessary.
The Project Manager must keep in regular contact with the sponsor/customer, upper
management, stakeholders and the project team. The Project Manager must also manage
changes that may occur at any stage of the project and communicate the changes to the
project to all concerned.
The Project Manager works closely with the project team. The Project Manager mentors and
coaches individuals of the project team and plays a role in developing the team.
The Project Manager plays many roles and wears many hats!
You have now come to the end of Unit Ten. Please do the activities at the end of this Unit
and complete the case study as well.

ACTIVITY: 10.1
What are the three primary responsibilities of the Project Manager?
ACTIVITY: 10.2
In order to manage and control project changes, what system should be put in place at the
beginning of a project?
ACTIVITY: 10.3
If you were a project manager, how would you control a project that you are
undertaking?

ACTIVITY: 10.4
State if this statement is true or false: A Project Manager leads the project team
without dictating to them.
ACTIVITY: 10.5
Communication is key to the success of any project. Discuss any THREE ways in
which a project manager can manage communication in a project.
Appendix: G
Case study 1 – Codeword (Gido and Clements, 2015:347-349).
Read the case study, answer the question.

PART THREE
UNIT ELEVEN
THE PROJECT TEAM

PART THREE – UNIT ELEVEN
11.1 THE PROJECT TEAM

11.1.1 Introduction
Unit Eleven focuses on the project team. Topics that are discussed are: acquiring the project
team, project team development, project kick-off meetings, and effective project teams.
Topics on ethical behaviour, conflict on projects, problem solving and time management are
also discussed in this Unit. The Unit ends with a summary, activities and a case study. After
studying Unit Eleven of this study guide together with Chapter Eleven in the prescribed
textbook, the student should be able to do the learning outcomes.
Learning outcomes:
 Understand how teams are assigned and formed.
 Identify and describe the stages of team development.
 Plan and conduct a project kick-off meeting.
 Discuss characteristics of effective teams.
 Identify and describe at least five barriers to team effectiveness.
 Be an effective team member.
 Take actions to support team building.
 Identify at least five dimensions of diversity, and discuss the value of team
diversity.
 Behave ethically in a project environment.
 Identify at least four sources of conflict on projects and explain how to handle
conflict.
 Apply the problem-solving process and the brainstorming technique.
 Manage time effectively
11.2 ACQUIRING THE PROJECT TEAM

A Project Manager is appointed at the beginning of a project by the sponsor or contractor.
The Project Manager then needs to acquire and put together a project team. For most
projects the project team members are chosen based on expertise, experience and availability.

People with specific skills and expertise are limited in many projects or contractor
organisations. The Project Manager may need to use his or her negotiating skills to attain
particular people for the team from the managers of organisational units. If the Project
Manager is unsuccessful in acquiring the required human resources from within the project
or contractor organisation then he or she may hire sub-contractors or consultants to make up
for the limited skills or quantities.
A project team should be kept as minimal as possible throughout the project since the more
team members there are, the greater the chances are for inefficiencies. In obtaining a lean
and mean team the Project Manager minimises the number of full-time project team
members and uses part-time people. People can be employed for shorter periods as and when
they are needed on the project.
11.3 PROJECT TEAM DEVELOPMENT

A relationship between two people takes time to develop, similarly teams progress through
various stages of development. According to Gido and Clements (2015:342), the four stages
of team development as defined by B.W. Tuckman are forming, storming, norming and
performing. Although, there are essentially five stages of team development which includes
adjourning, only the four stages mentioned in this text will be discussed.
See below for what each of the four stages entail:
THINK POINT
Can you remember the forming stage of development when you were becoming part of a
team that had to work together on some project or assignment?

a) Forming stage:
 This is the first stage of group development.
 Members meet and start to break the ice.
 Group identity is formed.
 The group begin to determine the tasks to be carried out.
 Individuals may have feelings of anxiety, hesitancy, anticipation, excitement

or suspicion.
 Individuals want to know who the other team members are and what they are
like.
 Individuals are also anxious on whether they will fit in with the team.
 Members may not give their full participation. They may fear how other
team members may react.
 At this stage the Project Manager provides direction and structure.
 The team is orientated.
 The Project Manager gives the team a clear vision of the successful result of
the project that is to be accomplished.
 The project team also learns more on the work scope, quality requirements,
budget, and schedule of the project.
 The Project Manager discusses the makeup of the project team - this is the
reason why team members have been selected for their specific skills and
expertise to accomplish the project objective.
 A structure is established. It defines initial processes and procedures for team

operation.
b) Storming stage:
 This is the second stage of team development.

 The work begins to progress. Members begin to apply their skills to their
assigned pieces of work.
 The project scope is also clearer by now.
 Tasks may be more difficult than anticipated.

 Cost or schedule constraints may be tighter.

 The team may feel frustrated with the direction or authority of the Project
Manager.
 Teams may have a negative reaction to the Project Manager and toward
processes and procedures of operations.
 Conflict may emerge and tension can increase within individuals.
 There should be an agreement on how conflict is handled and resolved.
 Team motivation and morale are low in the storming stage.
 Individuals may resist team formation and may have anger, frustration and
hostility.
 The Project Manager continues to guide the team at this stage and fosters
conflict resolution.
c) Norming stage:
 The team member relationships among themselves begin to settle.

 The relationships between the project team and the Project Manager also start
to settle.
 Conflict is lower at this stage.
 Individuals align with their assigned work.
 The project team accepts the operating environment.
 The project procedures are improved and streamlined.
 The Project Manager gives individuals control over decision making within
their assigned tasks.
 The project team and the Project Manager work more closely together and
develop cohesion.
 Team spirit starts to develop and strengthen as individuals feel accepted and
as they accept others.
 There is appreciation and this grows for each other’s contribution to
accomplishing the project.
 Information is shared, there is give and take on feedback, and individuals are
free to express their emotions and criticism in a constructive manner.
 There is a feeling of camaraderie as the team socialises.
 Friendships may develop that go beyond the project or work environment.

At this stage the Project Manager decreases the level of directing the project team and starts
to take on a more supportive role as the work accelerates and productivity increases. The
Project Manager should appraise the team for the progress that is made on the project.
d) Performing stage:
 This is the fourth stage of team development and growth. The project team is
fully committed, eager to accomplish the work and gives off a high level of
performance.
 There is unity among team members and there is pride in accomplishments.
 The team confidence level is high.
 There is open, frank and timely communication.
 There is collaboration, whereby members are willing to help each other over
and above their own tasks.
 Team empowerment exists. Team individuals may form sub-teams to solve
problems.
 Progress is made and identified and there is a feeling of satisfaction within the
project team.
 At this stage the Project Manager allows the project team full responsibility
and authority over their designated work.
11.4 PROJECT KICK-OFF MEETING
A project kick-off meeting (also called a project orientation meeting) needs to be scheduled
by the Project Manager. This is done as early as possible during the forming stage of team
development. The purpose of the meeting is to inform, reduce anxiety, manage expectations,
and to motivate the project team. The meeting should set the tone for the entire project.
Here are some agenda items for discussion at a project kick-off meeting:

 Welcome and Instructions

 Project overview
 Roles and Responsibilities
 Processes and Procedures
 Expectations
 Closing Comments
Do you think that an agenda is a necessary requirement for any meeting?
Read page: 362-364 of the prescribed textbook for detailed explanation of each agenda.
11.5 EFFECTIVE PROJECT TEAMS
A project team is made up of a group of individuals that work interdependently and

cooperatively to accomplish the project objective. The Project Manager takes on the role to
develop the team. He/she grows the team to become cohesive and effective. An effective
project team and an effective Project Manager are key to the success of a project.
Can you think about what effect an ineffective Project Manager or project team will have on
a project?

11.5.1 Characteristics of Effective Project Teams
The five characteristics of effective project teams:
a) Clear understanding of the project objective.
Team members must have the same vision of the project result and the
benefits it will provide.
b) Clear expectations of roles and responsibilities.
Team members must be clear on their roles and responsibilities on what they
need to do to accomplish a successful project.
c) Results orientation.
Each member of the project team must have a strong commitment to
accomplishing the project objective. The project team should be enthusiastic
and willing to spend time and energy as required to accomplish a successful
project. The project team must be prepared to work extra hours or on
weekends as required to keep the project on track.
d) High degree of cooperation and collaboration.
Members must be open and frank and with each other and the Project
Manager and communication must be timeous. Information, ideas and
feelings are readily shared by each other.
Team members ask each other’s help if this is required. Team members help
each other out over and above their own tasks.
There is a give and take on feedback and constructive criticism. Such teams
are creative in solving problems and timely in making decisions.
e) High level of trust.
An effective team understands interdependency. They accept that each

member of the team is important to the project success. They can count on
each other. They also trust and care for each other.

11.5.2 Barriers To Team Effectiveness
The following are barriers that can hinder a project team’s effectiveness along with
suggestions for overcoming these barriers:
 Unclear Vision and Objective

To overcome this barrier, the Project Manager must ensure that project
objective, scope, quality requirements, budget, schedule as well as a vision for
the project results and the benefits are communicated to the project team at the
first project kick-off meeting.
The information must be clearly understood by the individuals in the team.
The information should then be communicated to each team member in
writing together with any clarifications. The project objective must be
discussed frequently at the status review meetings.
It is important for the Project Manager to frequently discuss the project
objective at the project status review meetings. Mentioning the objectives
only at the beginning of the project is inadequate.
 Unclear Definition of Roles and Responsibilities

Team members may have an unclear definition of their roles and
responsibilities. Team members may also find that some of their
responsibilities overlap with some individuals.
To avoid this barrier, the Project Manager must meet with each team member
individually to explain and describe each individual’s roles and
responsibilities and discuss how these relate to the other team members’ roles
and responsibilities.
 Lack of Project Structure

Team members may feel that there are unestablished procedures for team
operations. This can be avoided if teams partake in the development of the
project plan at the beginning of the project. At this stage of the project
preliminary operating procedures are established. This addresses issues such
as communication channels, approvals and documentation requirements.

The procedures need to be given to the team members in written form. The
Project Manager should also be open to suggestions for eliminating or
streamlining procedures when it no longer contributes to the effective and
efficient performance of the project.
 Lack of Commitment
Team members may not be committed to the project objective or their project
work. To address this issue the Project Manager must explain to each team
member the importance of his or her role on the team.
Team individuals must know how he/she can contribute to the success of the
project. The Project Manager should also determine the personal and
professional interests of each team member and look for ways that the project
assignment might help fulfil these interests.
The Project Manager should determine what motivates each team member and
then create a project environment with these motivators available. Each team
member needs to be recognised, supported and encouraged for his/her
accomplishments.
 Poor Communication
A lack of communication occurs when there is little knowledge of the project

status and when team members do not share information. This barrier is
overcome by regular project status meetings with a published agenda. At
these meetings, each team member should provide the team with a brief on the
status of their work.
Team members must be encouraged to share information, collaborate, and

solve problems. Problems should be solved as soon as possible by team
members and not let the problems lie until the next official project meeting is
due. Project communication can also be enhanced by physically locating team
members in the same office area.

 Poor Leadership
How would a Project Manager know if his/her leadership is poor? The

Project Manager should solicit constant feedback on his leadership from the
team members to ensure that there is effective leadership over the team and
the project.
When such feedback is received, the Project Manager must follow up with
appropriate suggestions for improving his/her leadership. There may be
training that he/she has to undergo or it could be that more regular
engagement with the team is required or that specific information is withheld
and should be shared and so on. In these cases the Project Manager must take
the appropriate action to improve his/her leadership.
 Turnover of Project Team Members
The composition of a team changes when people are added or leave the team.
In this case the group cohesiveness is likely to dissolve. To avoid this
problem or barrier, teams should be made up of a few individuals with long-
term assignments. Such teams will be more efficient than a team that
composes of many individuals that work on short-term assignments.
The Project Manager should ensure he obtains individuals who are sufficiently
versatile in expertise and skills to make up the project team. These individuals
can contribute in many areas of the project and can be assigned to the project
for a longer period of time.
 Dysfunctional Behaviour
A team member may exhibit inappropriate behaviour (bullying, clowning,

making disparaging remarks etc.) that disrupts the development of the team.
When this happens, the Project Manager should meet with the individual and
discuss the behaviour. The individual should be made to understand that
disruptive behaviour is not acceptable and that it has an impact on the rest of
the project team.

The individual can be offered coaching, a training seminar or counselling if

needed.
The manager needs to make it known that if the dysfunctional behaviour

continues, the person will be released from the team.
Do you think that in the case of a team member that displays dysfunctional behaviour, the
necessary cost and time to counsel, train and coach this individual is worth the effort?

11.5.3 Effective Team Members
Effective teams are essential for the success of a project objective and such teams do not
come about without the leadership of an effective Project Manager and the effort and
contribution of each team member. Effective teams do the following for team effectiveness:
 Plan and control their assigned tasks.
 They are responsible for their individual work efforts.
 Their expectations of themselves are high.
 They strive to accomplish their assignments under budget and ahead of

schedule.
 They manager their time well.
 They make things happen.
 They are self-directed and follow through on assignments and action items.
 They take pride in their work.
 They produce quality work.
 They can count on each other to perform their respective assignments
 They participate and communicate openly and freely with each other.
 They feel responsible for identifying problems, or potential problems. They

try to do this as early as possible into the project.
 They do not blame others for causing the problems.
 Effective teams are problem solvers.
 They do not take the approach of “that’s not my problem” or “that’s not my
job”. They do have a “we” attitude and speak in terms of “we, us and our”
rather than “I, me, and my”.

 They help create a positive, constructive project workplace. They do not

gossip, whine or be divisive.
 They do show respect for their diverse team and respect one another
 They do not let pride, stubbornness, or arrogance get in the way of

collaboration, cooperation, and compromise.
 They do put the success of the project above personal gain.
11.5.4 Team Building
Team building is the ongoing process of developing a group of individuals into a team. This
is done to accomplish the project objective. Team building is very much the responsibility of
the Project Manager as it is of the project team. Team Building and what the Project
Manager can do to foster and support the team was discussed in Unit Ten of this study guide.
A project team can do the following to aid the team building process:
 Team members can socialise with each other to get to know each other better.
 Team members can initiate social events to celebrate project

accomplishments.
 They can schedule events to relieve stress.
 They can include everyone on the team when scheduling such events.
 They can call team meetings periodically to update each other.
11.6 VALUING TEAM DIVERSITY
Diversity refers to differences among people. These differences among people should be
understood and acknowledged by all that work together in a diverse group so that differences
are valued.

Understanding and acknowledging diversity in the workplace helps to create a work

environment that respects, recognises and harnesses the differences among each team
member.
This benefits attaining a common goal such as the project objective. By embracing diversity
the project team will allow themselves the opportunity to learn more from others in the team
who have unique ideas and perspectives to projects.
This can lead to more creative methods for problem solving and it can be done in a shorter
period of time.
11.6.1 Dimension of Diversity
Dimensions of diversity include the following:

 Age or generation
 Appearance
 Ethnicity or ancestry
 Gender
 Health
 Job status
 Marital and parental status
 Race
 Religious affiliation etc.
Team members should not stereotype or make assumptions about a team member’s
behaviour or performance based on diversity.
The project organisation may enforce the following two actions to create and sustain a
positive and supportive climate for diversity:
a) Have a written policy regarding diversity

b) Provide training about diversity

Barriers heighten if there is a lack of understanding and tolerance of diversity and diverse
groups. Diversity should be seen and appreciated by the project team as a strength that can
enhance communication, build better relationships, generate an enjoyable workplace and
enrich team performance.
11.7 ETHICAL BEHAVIOUR
Ethical behaviour is critical not only within the project organisation but it is also important in
project business relationships with customers, suppliers and subcontractors.
Stakeholders, customers, suppliers, vendors and other organisations would not want to do
business with a project organisation or contractor that they cannot trust.
The importance of ethical behaviour must be a topic for discussion at a project team meeting
at the very beginning of the project. The importance of ethical behaviour should continue to
be mentioned by the Project Manager at regular meetings all through the duration of the
project.
Two actions a project organisation can take to help prevent unethical behaviour are:
a) Have a written policy on ethical behaviour

b) Training must be provided to all on ethics in the workplace
Personal truthfulness is the foundation for workplace ethics. Gido and Clements (2015:377)
stated that ethical behaviour is everyone’s responsibility.
11.8 CONFLICT ON PROJECTS
Conflicts on projects are unavoidable since differences of opinions are natural, and must be
expected.
Trying to suppress conflict is not the solution to managing the conflict. Conflict can be
beneficial as follows:

 There is an opportunity to gain new information.

 There may be better solutions to problems.
 Team building can improve.
During the team building process, the Project Manager and project team should acknowledge
that conflict is bound to happen during the performance of the project. There must be
consensus on how the conflict should be handled. This discussion should take place at the
project kick-off meeting.
11.8.1 Sources of Conflict
The following are eight sources of potential conflict on projects:
a) Work Scope - Conflict can arise if there are differences of opinions on how
much work is to be done or how the work is to be performed, or on the level
of quality that is required.
b) Resource Assignments - There may be conflict over quantities of resources

assigned to particular tasks or on who is assigned for certain tasks.
c) Schedule - There may be differences on opinion on sequence of work or on

how long the work should take.
d) Cost - There may be conflict on how much the work should cost. If more
people are assigned to the project at a late stage, there may be conflict on how
the over-run costs will be met.
e) Priorities - Conflict may arise when people are assigned to work on several
different projects concurrently. Which project should take priority?
f) Organisational issues - There are many types of organisational issues that

can cause conflict. For example, there may be disagreement over the
procedure that the Project Manager has established for document approval.
There can be conflict on how communication takes place within the project
organisation and so on.

g) Stakeholder Issues - There can be issues with certain stakeholders that cause
conflict. One example is that stakeholders may not be happy because they do
not receive timely or sufficient information from the Project Manager on the
status of the project.
h) Personal Differences - Differences in individuals’ behaviour, values, beliefs,

attitudes or personalities may give in to conflict situations.
11.8.2 Handling Conflict
Conflict can be resolved by both the Project Manager and also between team members. If
handled properly conflict can be beneficial as it causes problems to be addressed. Conflict
can help in team building as individuals come together to discuss the problem and find
solutions. Conflict enhances the problem-solving process.
On the other hand, if conflict is not handled well it can have a negative impact on the project
team because it can destroy communication. Team members may not even be interested in
listening to each other. They may even stop talking to each other and the team can grow
apart. The level of trust and openness within the group may reduce.
The flow of information sharing will be affected and this can have an impact on the project
work. In dealing with conflict, focus must be on the issue and not on the person or people.
Gido and Clements (2015:380) make reference to Blake and Mouton and Kilmann and
Thomas who are researchers that have identified the following five approaches that can be
used to handle disagreements:
 Avoiding or Withdrawing - In this approach the actual potential conflict is

avoided. If person A disagrees with person B, person B may say nothing.
The conflict can manifest itself at a later time because it has not been dealt
with.
 Competing or Forcing - In this approach the value placed on winning is
higher than the value of the relationship between the two people in the conflict
situation. This is a win-lose situation.
 Accommodating or Smoothing - In this approach, the value of the
relationship between the individuals is greater than the value of resolving the
issue.

 Compromising - In the compromising approach, team members focus on

splitting the difference. Team members look for solutions that will bring
some degree of satisfaction to each of them however; this is not the best
solution.
 Collaborating, Confronting, or Problem Solving - In this approach issues

are confronted directly by team members. High value is placed on the
outcome of the issue and the relationship between individuals. Teams try for
a win-win outcome.
To avoid or minimise conflict, the project team must be involved in the planning stage of the
project and there must be clarity on each member’s role and responsibilities.
11.9 PROBLEM SOLVING
Problems do occur at any stage of a project however, the success of the project will depend
on how the problems are resolved. There can be minor and serious problems that arise
during the life cycle of a project. Serious problems can have a negative impact on the project
if solutions are not implemented to solve the problems.
To assist the project team to successfully solve problems, a disciplined, creative and effective
approach to solving problems is required. A nine-step approach of problem-solving can be
used. This approach can be followed through with a discussion of brainstorming.
11.9.1 Steps in Problem-solving
The Nine-Step Approach to Problem Solving is as follows:

a) Develop a problem statement.
b) Identify potential causes of the problem.
c) Gather data and verify the most likely causes.
d) Identify possible solutions.
e) Evaluate the alternative solution.
f) Determine the best solution.
g) Revise the project plan.
h) Implement the solution.
i) Determine whether the problem has been resolved.

11.9.2 Brainstorming
Brainstorming is a method used in problem solving where all members of a group give
impulsive ideas in a relaxed environment. Prior to a solution being chosen team members
must ensure that a wide range of alternatives and ideas have been explored. Brainstorming is
a way to create many ideas while having fun doing it. It generates enhanced solutions,
creativeness, excitement and better assurance.
Brainstorming is most useful in steps ii and iv of the nine step problem solving approach. In
step 2, potential causes of the problem are identified and in step 4 possible solutions to the
problems are identified. In brainstorming, the quantity of ideas generated is of more
importance than the quality of ideas.
11.10 TIME MANAGEMENT
In order for a project team to be high-performing is it essential to have good time

management. The following are a few suggestions to assist in effectively managing time:
 At the end of each week, identify several (two to five) goals that you want to
accomplish the following week.
 At the end of each day, make a to-do list for the next day.
 Read the daily to-do list first thing in the morning, and keep it in sight all day.
 Control interruptions.
 Learn to say no.
 Make effective use of waiting time.
 Try to handle most paperwork and electronic messages.
 Reward yourself at the end of the week if you accomplished all your goals.
(Gido and Clements, 2015:385-386).

11.11 SUMMARY
The project team and Project Manager are key people to accomplish the project objectives.
An effective team and an effective Project Manager will ensure that the project objective is
accomplished successfully. The Project Manager obtains and assembles a project team as
soon as a project is initiated. Team members are sought for their experience and expertise.
Project teams are kept to a minimal throughout the project.
Project teams go through the various developmental stages which are forming, storming,
norming and performing. As team members develop, the start to work more closely and the
team becomes cohesive. They start to respect each other and are willing to help each other
over their assigned tasks. Once team members work through conflict, anger and frustration
they begin to accept the project environment. At the fourth stage known as the performing
stage, the team is highly committed and eager to achieve the project objective.
A kick-off meeting should take place at an early stage so that individuals learn more on the
project objectives and what their tasks entail and to reduce team anxiety and manage
expectations. The Project Manager mentors, encourages, develops and inspires the team.
The characteristics of a project team are one where such a team should clearly understand the
project objectives and have a clear expectation of each person’s role and responsibilities.
The team should be results driven and have a high degree of cooperation and collaboration.
The team must have a high level of trust. There can also be barriers to team effectiveness.
This can occur if the vision and objective of the project is unclear and also if the definition of
roles and responsibilities are unclear. Poor communication, poor leadership, staff turnover
and dysfunctional behaviour are also barriers to team effectiveness.
A diverse team brings unique ideas and perspective to the project. The Project Manager and
project team must conduct themselves in an ethical manner to obtain the trust and good
collaboration of their customers, suppliers, stakeholders etc. Conflicts must be dealt with
immediately so problems do not escalate to a level where the project team becomes
discouraged.

The nine-step problem-solving approach and brainstorming techniques are used for problem
solving. The Project Manager and the project team should exercise good time management
skills to adhere to the project schedule.
You have now come to the end of Unit Eleven. Please do the activities at the end of this
Unit and read the case study and complete the questions.
ACTIVITY: 11.1
Name the FOUR stages of team development
ACTIVITY: 11.2
A project kick-off meeting is usually scheduled by the project manager. What is the purpose
of this meeting?

ACTIVITY: 11.3
There are several barriers that can hinder a project’s effectiveness. How can a
project manager overcome the following barrier:
 Unclear vision and objective
ACTIVITY: 11.4
What are the TWO actions that a project organisation can take to help prevent
unethical behaviour?
Appendix: H
Case study 1 – Team Effectiveness? (Gido and Clements, 2015:392-394).
Read the case study and answer the case questions.

PART THREE
UNIT TWELVE
PROJECT COMMUNICATION
AND DOCUMENTATION

PART THREE – UNIT TWELVE
12.1 PROJECT COMMUNICATION AND DOCUMENTATION
12.1.1 Introduction
The topics covered in this Unit are: personal communication, meetings, presentations,
reports, control document changes, project communication plan, stakeholder communication,
and collaborative communication tools. The Unit ends with a summary, activities and a case
study. After studying Unit Twelve of the study guide together with Chapter Twelve of the
prescribed textbook, the student should be able to do the learning outcomes.
Learning Outcomes:
 Discuss and apply techniques to enhance personal verbal and written

communications.
 Describe four barriers to effective listening and apply techniques to improve
listening and understanding.
 Prepare for and facilitate effective project meetings.
 Prepare for and make informative and interesting presentations.
 Prepare useful, readable, and understandable reports.
 Explain how to control changes to project documents.
 Create a project communication plan.
 Communicate effectively with project stakeholders.
 Describe collaborative tools used o enhance communications on projects
12.2 TYPES OF COMMUNICATION
The root cause of failure to accomplish a project’s scope, schedule, budget or customer
satisfaction objectives is due to poor communication. Effective communication is crucial for
successful project management.
Throughout the life of the project there must be effective and frequent personal
communication among all stakeholders to keep the project moving.

Can you think of ways in which personal communication takes place?
a) Personal Communication
Personal communication occurs as follows:
 Can occur through words or by nonverbal behaviour such as body language.

 Can be face to face via some medium such as by phone, voice mail, email,
texting, letters, video conferencing etc.
 Can be verbal or written.
b) Verbal Communication
“Information can be communicated in a more accurate and timely manner through verbal
communication. Such communication provide a forum for discussion, clarification,
understand, and immediate feedback.
Face- to- face communication also provides an opportunity to observe the body language that
accompanies the communication.
Even phone conversations allow the listener to hear the tone, inflection, speed, volume, and
emotion of the voice.
Body language, and tone are important elements that enrich verbal communication” (Gido
and Clements, 2015:401). Verbal communication can be:
 Face-to-face
 Via phone
 Via computer
 By voice mail
 Or video conferencing.

Body language is used by both the person that is talking and the person that is listening. In
communicating verbally, there must be caution not to use remarks, words or phrases that can
be misconstrued.
Avoid sexist, racial, prejudicial or offensive remarks. Verbal communication must be clear,
concise, honest, unambiguous and done in a timely manner.
12.3 WRITTEN COMMUNICATION
Written communication is usually via email or by hard copy. Project documents, contracts
and so on can be sent as hard copy. Email communication is for efficiency with a group of
people where it may be impractical to have a meeting.
Written communication should be used when it is necessary as project participants are

usually very busy and will not have the time for trivial messages or peruse documentation
that could be discussed at the next project meeting.
Written communication is used to inform, confirm, request and should be clear and concise.
Avoid spelling errors, poor grammar and punctuation and inappropriate language in your
written communication as this will make a poor impression of the writer.
12.4 EFFECTIVE LISTENING
Gido and Clements (2015) stated that: “The purpose of communicating should be to reach
understanding. Communicating is more than talking and hearing and that the heart of
communication is not words, but understanding - not only to be understood, but also to
understand” (Gido and Clements, 2015:403). The following are barriers to listening:
 Pretending to listen
 Distractions
 Bias and Closed-mindedness
 Impatience
 Jumping to conclusions.

What would be the outcome for a student to pretend to listen in class to important
information that was communicated by the tutor or lecturer on a specific module?
Think now about a project. What would be the outcome if the project team or Project
Manager pretended to listen or got distracted while the customer communicated the needs of
a project outcome?
Listening is an active process and it increases understanding and reduces conflict.
12.4.1 Good Listening Skills
See below for some good listening skills:
 Focus on the person that is talking

Look at the speaker and give your full attention.
 Engage in active listening

Acknowledge what the person has said – smile, nod or make a verbal
comment that you understand what is being said.
 Ask questions
By asking questions you seek clarity on some matter so there is no
misunderstanding.
 Do not interrupt
Listen carefully to the speaker without interrupting. Find an appropriate pause
before asking a question.
Good listening skills are important for the project team members to be effective in
communicating with each other, the customer and stakeholders.

12.5 MEETINGS
Meetings are important to foster team building and reinforce team members’ expectations,
roles and commitment to the project. There are various types of meetings that can occur
during the life of a project.
Some common types of project meetings are:
 The project kick-off meeting. (This was covered in Chapter Eleven).

 Status review meetings.
 Problem-solving meetings.
 Design review meetings.
 Post project evaluation meeting. (This was covered in Unit Nine).
a) Status Review Meetings
The primary purpose of a status review meeting is to inform, to identify problems, and to
identify action items and is usually led or called by the Project Manager. These type of
meetings should occur on a regular basis so that problems are discussed and potential
problems are identified early into the project.
Here are some examples of the topics that may be discussed at status meetings:
 Accomplishments since the last meeting.

 Cost, schedule, and work scope – status.
 Cost, schedule, and work scope – trends.
 Cost, schedule, and work scope – forecasts.
 Cost, schedule and work scope – variances.
 Risk assessment update.
 Stakeholder issue update.
 Corrective actions.
 Opportunities for improvement.
 Action item assignment.
A status review is one of the ways that a Project Manager can get a true understanding of the
project status.

b) Problem-Solving Meetings
When a problem or potential problem is identified there should a problem-solving meeting

with the appropriate individuals. It is important to identify and resolve problems as early as
possible into the project. Guidelines should be established at the beginning of the project on
who would initiate problem-solving meetings, when these should take place, who would have
the authority to implement corrective actions.
Problem solving meetings should follow these problem-solving approaches:
 Develop a problem statement.

 Identify potential courses of the problem.
 Gather data and verify the most likely causes.
 Identify possible solutions.
 Evaluate the alternative solutions.
 Determine the best solution.
 Revise the project plan.
 Implement the solution.
 Determine whether the problem has been solved (Gido and Clements,
2015:407).
c) Design Review Meetings
The two design review meetings are:
i) Preliminary design review meeting
This meeting occurs after the initial design, concept drawings, specifications,
or flowcharts are completed by the project team or contractor. The purpose of
this meeting is to get agreement and approval on the design approach from the
customer that it meets the customer’s satisfaction.
i) A final design review meeting
This meeting takes place when the contractor has the completed detailed
specifications, drawings, screen and report formats. These documents are

ready for the customer’s approval and agreement. Once the customer is
satisfied approval is gained then only the project can begin on the necessary
work to produce the project deliverable.
12.6 EFFECTIVE MEETINGS
There are certain steps that can be taken to ensure that meetings are effective.
a) Before a meeting
What takes place before a meeting?
 It must be determined if the meeting is really necessary. Can another

mechanism be used such as conference call?
 What is the purpose of the meeting? Is it to solve a problem? Is it to share

information? Or is it for another purpose?
 Who needs to participate at the meeting given its purpose?
 An agenda is prepared and distributed well in advance of the meeting. The

agenda is distributed to the people that are invited to the meeting.
 The agenda indicates the purpose of the meeting, the topics that will be
discussed at the meeting ad time allocated to each topic. Topics are arranged
from most import to least important.
b) During the Meeting
The following should take place during the meeting:
 Begin on time.
 Designate a note taker.
 Request that participants turn off their cell phones and other electronic devices
so everyone’s full attention is on the meeting.
 Review the purpose of the meeting. Confirm the agenda.

 The Project Manager should facilitate and not dominate the meeting.
 The meeting must be kept moving in the time scheduled for each topic.
 People must be encouraged to participate.
 Limit discussion by people who tend to talk too much.
 Interruptions must be controlled.
 Points made must be clarified.
 Discussions must be summarised before moving on to the next topic on the
agenda.
 Meeting results must be summarised at the end of the meeting.
 The scheduled time for the meeting must not be overrun.
 The meeting process must be evaluated.
c) After the meeting
 The results of the meeting should be published 24 hours after the meeting.
 The summary document should be concise.
 The summary document states decisions made, and contain the action list
items. The responsible person for each action item is listed against the item.
The estimated completion dates and the expected deliverables are also
mentioned.
 The results are then distributed to those who were invited to the meeting even
if they did not attend the meeting.
 There should be no detailed narrative of the meeting discussions when the
meeting notes are written up.
For meetings to be effective there must be good planning, and good performance.
12.7 PREPARING THE PRESENTATION
Presentations are carried out by the Project Manager or members of the project team.
Presentations are made to: representatives of the customer’s organisation, the project
organisation’s upper manager, the project team itself, particular stakeholder groups or the

public. The presentation time can be from 10 minute to one hour or more (Gido and
Clements, 2015:411-412).
a) Presentation Guidelines
The following guidelines go into preparing for a presentation:
 What is the purpose of the presentation?

 Who are the audience?
 Make an outline of the presentation and develop a script then rehearse it.
 Use simple language. Avoid acronyms, jargon and terminology that will not
be understood by the audience.
 Prepare notes that will be used during the presentation.
 Visual aids must be prepared.
 Practice the presentation at least a few times.
 Keep any videos that you use to less than a few minutes (less than 6 minute).
 A trial run of the presentation can be made to peers or friends and solicit
feedback and suggestion on how to improve the presentation.
 Have copies of handout materials ready and test equipment prior to
presentation.
b) Delivery of the Presentation
You may be nervous before a presentation but this is okay as it is not unusual. Steady
yourself and move on with the presentation. Remember that you know more about the
subject that you are presenting than any other person in the audience.
The following are helpful in delivery presentation:
 Try to remain calm and quickly work through any nervousness.

 Turn off cell phone or other technologies that can be distracting.
 Be well versed on your opening lines. Do not fumble.
 Make eye contact when speaking to the audience.
 Speak clearly and be confident.
 Use body language to make a point, such as gestures.

 Avoid reading the slides to the audience and do not stand in front of any
visual aids.
 Ensure that the presentation is interesting.
 Stick to the key points and sum up the key points of a particular item before
moving on.
 Know your closing lines well.
 Ensure there is time allowed for questions from the audience.
 Be sincere and confident in answering questions from the audience. Be
honest if you do not know an answer.
12.8 REPORTS
Both written and verbal reports are important in communicating information about a project.
Reports can be prepared in a format as stipulated in the contract by the customer. Know who
will be receiving copies of the reports. Reports must be written to address what is of interest
to the reader.
12.8.1 Types of Reports
Progress reports and the final report are the two most common types of project reports that
are prepared during the project and on completion of the project.
a) Progress Reports
These are reports include the following:
 All accomplishments of the project since the last report that was prepared.
 The current status of the project performance.
 Progress on problems that were previously identified.
 Problems or potential problems that have arisen since the last report.
 Any planned corrective actions.
 The milestones expected to be reached during the next reporting period.

b) Final Report
The final report is a summary of the project and not an accumulation of the progress reports.
The final report may include:
 The customer’s original need and requirements.

 The original project objective.
 A description of the project.
 Details of how the original project objective was met in terms of scope,
quality requirements, budget and schedule. An explanation will be included if
the project objective was not met accordingly.
 The actual benefits in comparison to the anticipated benefits to the customer.
 Any future considerations. (Example: how, the project could be enhanced or
expanded).
 A list of deliverables provided to the customer. (This could be drawings,
reports, equipment, and so on).
 Test data. This could be from a system or piece of equipment that was tested
to the customer’s satisfaction and is the basis on which the customer accepted
the project results.
c) Useful Reports
For reports to be useful and of value to the recipients the following points should be noted:
 Reports should be concise.

 Reports must be readable and understandable.
 The most important points should be mentioned first.
 Use graphics such as charts, diagrams, tables and pictures to illustrate points.
 Format and content must be at an acceptable level and professionally done.
Written reports can make a positive or negative impression on the recipient. This will
depend on how well the report was prepared and compiled.

12.9 CONTROL DOCUMENT CHANGES
There may be many types of documents that are relative to a project. These documents can
be design sketches, specifications, engineering drawings etc. Any changes initiated by the
customer or by the project team must be documented in writing.
Changes may require that other relevant documents such as the schedule, budgets and so on
are updated or revised. The customer must approve of changes before the work progresses.
Changes can be minor or major.
12.10 PROJECT COMMUNICATION PLAN
Not every stakeholder or project team member would want or need all the project documents
pertaining to a particular project.
“A project communication plan defines the generation and distribution of project documents
among project stakeholders throughout the project. It identifies the various documents, who
is responsible for creating each document, why, when or how frequently each document must
be distributed, to whom each document is to be distributed, and what action each recipient is
expected to take” (Gido and Clements, 2015: 419).
The need for customer approvals and frequency and who in the customer organisation should
receive copies of which documents are often specified in the project carter or contract.
The plan may include:
 Documents
All or specific documents of the project, such as project charter, project scope
document etc.
 Author or originator
This is the name or title of the person/s responsible for creating or preparing
the document.
 Required date or frequency
This specifies the date by which the document must be completed and
distributed to the relevant receipts.

 Recipients
This is the name and title of each person that the document will be distributed
to. (Distribution list)
 Action required
This is the action that is required from each recipient of a document.
 Comments
This can be special notes or conditions related to a specific document.
The project communication plan will need to be updated as required. This update will take
effect when stakeholders or their information needs change and also when new people or new
documents are identified
See page: 420 Figure 12.7 in the prescribed textbook for an example of a generic template
on the project communication plan.
Read up on progress reports and final reports on pages: 416 and 417 of the prescribed
textbook.
12.11 STAKEHOLDER COMMUNICATION
Stakeholder communication should be encouraged and welcomed by the project team as this
will build support for the project. In communicating with the relevant stakeholders, the
project team must use effective verbal and written communication and employ effective
listening skills to achieve understanding.
Discussions with the stakeholders should not be dominated by the project team or the Project
Manager. The project team and the Project Manager must be open-minded, thoughtful, and
behave professionally, should not overreact, become defensive or lose control of their
emotions when interacting with stakeholders.
The project team must address stakeholder concerns early into the project in a positive and
timely manner. There must be opportunities by the Project Manager for regular two-way
communication with each stakeholder. Communication with the project stakeholders should
not only take place when an issue or concern arises.

Stakeholder concerns may be unique; therefore, it is best that the Project Manager address
each of their concerns separately rather than addressing them in a group. Stakeholders must
be given the opportunity for questions, discussions and comments and not just be provided
with information at the stakeholder meetings.
The Project Manager should follow up with a written copy of the responses to stakeholder
questions and concerns. This is done to minimise misunderstandings, misinformation or re-
interpretation of information.
12.12 COLLABORATIVE COMMUNICATION TOOLS
Although, face-to-face meetings are an opportunity for team collaboration it is not always
feasible for this to happen. Travel can be a constraint. Team members (virtual project
teams) could be geographically dispersed. These teams could be located in various buildings
in an office complex across many cities in many different countries.
There are many collaborative communication tools that can be used in these modern times
for effective communication such as:
 Teleconferencing
People can exchange information with each other. They talk to each other, ask
questions and confirm information. This saves travel costs and it helps to
eliminate travel therefore teams can be more productive.
 Web video-conferencing
Web video-conferencing is used to connect live meetings over the internet and
each participant is connected by using their own personal computer ,electronic
tablet or smartphone.
 Conference calls
Conference calls enrich the interaction between people from different
locations. The interaction is by voice and audio.
 Video-conferencing
Video-conferencing takes place in a room that is equipped with cameras and
displays. It makes use of both audio and video. People from multiple

locations can converse and see each other while they communicate verbally.
Data can also be shared via video-conferencing.
 Content management systems
A document management system is used as a central repository for project in
formation. The efforts of team members are captured into a managed content
environment. The purpose of a contents management system is to manage
content on a website, documents or files. The contributors of the information
share, develop, add to, and edit documents related to the project.
 Extranets
“An extranet is a ‘private’ network that uses the internet to securely share a
repository of project information among the project team, subcontractors, and
customer. It can be a restricted part of a website where registered users need
to log in to the access project information and documents” (Gido and
 Collaborative project workspaces on the Web.
This includes Web 2.0 tools and groupware. Groupware is software that
supports team idea generation, brainstorming, problem solving and decision
making. This system can facilitate group decision making. The system
allows participants to contribute anonymously if necessary.
 Emails
In the absence of face-to-face communication emails are used frequently to
transmit and distribute project information. This is a quick and efficient way
to communicate with the project team or sub-groups.
12.13 SUMMARY
There are various forms of project communication such as personal communication,

meetings, presentations, reports and so on. Communication is carried out via phones, voice-
mail, e-mail, text messages, video conferencing, document development systems, or via
shared Web. 2.0 tools. Communication can be face-to-face or done via some medium.
Communication can be written and verbal. In verbal communication, information is

communicated in a more accurate and timely manner. Verbal communication provides a
forum for discussion, clarification and understanding. Feedback is immediate. One must be

careful in how body language is used in verbal communication especially when conversing
with people from diverse cultures.
Written communication is done through correspondence. Written communication should not

be used for trivial matters. Written communication must be clear and concise. Written
communication is usually used to inform, confirm or request. Project reports are written.
Progress reports and final reports are the two most common types of project reports.
Effective communication depends on effective listening. Communication can breakdown if

there is a failure to listen. Barriers to listening are caused by people that pretend to listen or
are easily distracted or by biases. Being closed-minded, impatient or jumping to conclusions
also cause barriers to listening. Communication takes place at project meetings. There are
various types of project meetings such as status review, problem-solving, design review
meeting and so on. Formal meetings follow a process and procedures should be adhered to.
Project teams or the Project Manager may sometimes be called on to make formal
presentations. The purpose for the presentation and who the audience are has to be
determined and then preparation is made to present. There are various steps involved in
preparing a presentation. Presentations should be clear, simple, interesting and done within
the allocated time. There should be a time allowed at the end of the presentation for the
audience to ask questions.
A project communication plan is important to the success of a project. Project documents are
distributed to relevant stakeholders throughout the project. A project communication plan
identifies the various documents and the people responsible for creating each document. A
project communication plan also addresses how frequently documents should go out, to
whom and what actions are required.
In communicating with stakeholders a project team must do so by effective verbal and

written communication. Listening skills must also be effective. Stakeholders are important
to the success of the project and so must be treated with respect. Communication must be
open, honest and regular with all stakeholders.
There are many forms of collaborative communication tools, such as the internet, video-
conferencing, tele-conferencing, e-mails and so on that are available for a project team to use
in communicating with virtual teams or with teams that are in various buildings across

different cities or in overseas countries. Collaborative communication tools are designed for
communication and saves time and money.
You have now come to the end of Unit Twelve! Answer the activities and do the case
questions at the end of this Unit.
ACTIVITY: 12.1
Why is effective listening important in communication?
ACTIVITY: 12.2
List FIVE collaborative communication tools that a project team can use to
communicate used when face-to-face meetings are not feasible.

ACTIVITY: 12.3
How does personal communication occur?
Appendix: I
Case study 1 – Office Communications (Gido and Clements, 2015:428-430).

PART THREE
UNIT THIRTEEN
PROJECT MANAGEMENT ORGANISATIONAL

STRUCTURES

PART THREE – UNIT THIRTEEN
13.1 PROJECT MANAGEMENT ORGANISATIONAL STRUCTURES
13.1.1 Introduction
This Unit discusses: functional organisational structure, autonomous project organisational

structure, matrix organisational structure and the advantages and disadvantages of
organisational structures.
The Unit ends with a summary and activities. After studying Unit Thirteen of this study
guide together with Chapter Thirteen of the prescribed textbook the student should be able to
complete the learning outcomes.
Learning outcomes:
 “Explain the three types of project management organisational structures

 Discuss the advantages and disadvantages of each type of project management
organisational structure
 Describe the role of project management office in a matrix organisational
structure” (Gido and Clements, 2015:436).
13.2 A FUNCTIONAL ORGANISATIONAL STRUCTURE
In a functional organisational structure individuals are:
 Organised in groups
 Perform the same function
 May have the same expertise or skills.
“Functional organisational structures are typically used in businesses that primarily sell and
produce standard products. For example, a company that manufactures and sells electronic
medical devices may have a functional organisational structure. In the functional
organisational structure, groups consist of individuals who perform the same function, such
as engineering, manufacturing, or have the same expertise or skills such as graphics design or
mechanical assembly.

Each functional group, or component, concentrates on performing its own activities in

support of the company’s business mission. … A company with a functional organisational
structure may periodically form project teams to work on internal company projects, such as
developing new products, implementing a new information system, redesigning the office
floor plan, improving manufacturing processes, implementing an energy reduction project, or
updating the company policy and procedures manual. For such projects, a multifunctional
project team is formed, with members selected by company management from the
appropriate sub functions in marketing, engineering, manufacturing, and procurement” (Gido
The members can be assigned to the project on a part time or full time basis or for the entire
duration of the project. Usually individuals continue to perform their regular functional jobs
while serving part time on the project. The designated Project Manager can be one of the
team members or one of the functional managers or vice presidents. In a functional
organisational structure the Project Manager may have project authority but this does not
extend over the project team. The respective functional managers still retain their authority
over the project team. Team conflict would usually work its way through the organisation
hierarchy to be resolved. This slows down the project effort.
Projects are not usually a part of the normal routine in a functional organisational structure
therefore it is necessary to establish a clear understanding of the roles and responsibilities of
every person assigned to the project team. The Project Manager can be given full authority
over the project by the company president. The Project Manager can make decisions when
conflict situations arise among team members. However in such a case, decisions may
reflect the interest of the Project Manager’s own functional component and not necessarily
the interest of the overall project.
When the Project Manager does not have full authority over project decisions he/she should
rely on leadership and persuasion skills to build consensus, handle conflict, and unify team
members so that the project objective is accomplished. The Project Manager must also
update the functional managers on a regular basis on the status of the project and thank them
for the support of the people that are assigned to the project team. Companies in a functional
organisational structure may outsource a project.

See figure 13.1 on pages: 438 – 439 of the prescribed textbook for a representation of a
functional structure for an industrial business that sells standard electronics products.
13.3 THE AUTONOMOUS PROJECT ORGANISATIONAL STRUCTURE
This type of company is highly responsive to the project objective and customer needs. Such
a company does not produce standard products. It is the projects business and works on
many projects at any one time. The following occurs in an autonomous project
organisational structure:
 Each project operates as its own independent entity with dedicated resources
that are assigned solely to each project.
 Each project can be valued at millions of dollars.
 Projects can take several years to complete.
 Products are not standard.
 Resources are assigned full time to work on a project.
 “A full time manager has complete project and administrative authority over
the project team” (Gido and Clements, 2015:440).
 People are hired for their required expertise and skills and each team is
dedicated to work on one specific project.
 When the projects end such people can be reassigned to other projects.
 Teams are dedicated to specific projects.
“An autonomous project organisation can be cost inefficient both for individual projects and
for its parent company. Each project must pay the salaries of its dedicated project team; even
during periods of the project when they are not fully utilised…a projectised organisation can
be cost inefficient because of duplication of resources or tasks on several concurrent projects.
Because resources are not shared among projects they are usually not diverted to similar
concurrent project even when they are not fully utilised on the project to which they are
dedicated” (Gido and Clements, 2015:440).
An autonomous project organisation requires detailed and accurate planning and must ensure
effective control systems to assure optimum utilisation of project resources to complete the

project successfully within budget. “Autonomous project organisational structures are found
primarily in companies that are involved in very large projects….Projectised organisational
structures are prevalent in the construction and aerospace industries” (Gido and Clements,
2015:441).
See figure 13.2 on page: 440 of the prescribed textbook for an illustration of a business
that has an autonomous project organisational structure.
13.4 THE MATRIX ORGANISATIONAL STRUCTURE
“A matrix organisational structure is a hybrid of the functional and autonomous project

organisational structures, in which resources from appropriate functional components are
temporarily assigned to particular projects that have managers from the project component of
the organisation” (Gido and Clements, 2015:441).
“The matrix organisation structure provides the project and customer focus of the
autonomous project structure, but retains the functional expertise of the functional structure.
The project and functional components of the matrix structure each have specific
responsibilities in contributing jointly to the success of each project and the company. The
Project Manager is responsible for the project results, whereas the functional managers are
responsible for providing resources needed to achieve the results” (Gido and Clements,
2015:441). In this type of structure company resources are effectively utilised. Project
Managers are assigned to specific projects.
A Project Manager may manage several smaller projects all together. Larger projects are
assigned to full-time Project Managers. Project Managers are the intermediary between the
company and the customer and define the work scope and schedule and the budget to
accomplish project objectives to the customer’s satisfaction.
The Project Manager is responsible and does the following:
 Leads and develops the project plan.

 Establishes the project schedule and the project budget.
 Allocates specific work packages or activities.

 Allocates the budget to the various functional components of the company or

organisation.
 Controls the performance of the work within the project schedule and budget.
 Controls the reporting project performance to the customer.
 Controls the reporting performance to the company’s upper management.
A Project Manager may be assisted by a project administrator that is assigned to each project.
Individuals are assigned to a project for the period of time as needed and some may be
assigned to a project for its entire duration. Individuals can be assigned part time to several
concurrent projects. Available individuals coming off a project that has reached completion
are assigned to new projects.
“Each functional manager in a matrix organisational structure is responsible for how the
assigned work activities will be accomplished and who (which specific people) will do each
activity. The functional manager of each organisation component provides technical
guidance and leadership to the individuals assigned to the projects” (Gido and Clements,
2015:444).
Read up on this section on pages: 441-445 of the prescribed textbook.
13.5 THE ADVANTAGES AND DISADVANTAGES OF ORGANISATIONAL

STRUCTURES
The advantages and disadvantages of organisational structures include that of the functional
organisational structure, autonomous project organisational structure and the matrix
organisational structure listed below:
a) Functional Structure
Advantages:
 There is no duplication of activities.

 There is functional excellence.

Disadvantages:
 Response time is slower.

 There is a lack of customer focus.
b) Autonomous Project Structure
Advantages:
 There is control over resources.

 There is responsiveness to customers.
Disadvantages:
 There can be cost inefficiency.

 There is a low level of knowledge transfer among projects.
c) Matrix Structure
Advantages:
 Resources are efficiently utilised.

 Functional expertise can be available to all projects.
 There is increased learning and knowledge transfer.
 There is improved communication and customer focus.
Disadvantages:
 This structure has dual reporting relationships.

 There is a need for balance of power.
(The above information is taken from table 13. 1 Advantages and Disadvantages of
Organisational Structure on page 446 of the prescribed textbook.)

13.6 SUMMARY
Three of the most common structures that are used to organise people to work on projects
are: functional, autonomous project and matrix organisational structures. These structures
exist within large businesses and in public organisations and in not-for-profit organisations.
Advantages and disadvantages exist in all three of these structures. In the functional
organisational structure advantages are that there is no duplication of activities and functional
excellence. Disadvantages of this structure are insularity, slow response time and a lack of
customer focus.
The advantages of the autonomous project organisational structure are that there is control
over resources and responsiveness to customers. The disadvantages of this structure are
found in cost in-efficiency and low level of knowledge transfer among projects.
In the matrix organisational structure, the advantages are efficient utilisation of resources,
functional expertise is available to all projects and there is increased learning and transfer of
knowledge. Other advantages are, improved communication and customer focus. Two
disadvantages of this structure is dual reporting relationships and the need for a balance of
power.
You have now come to the end of Unit Thirteen and the end of this study guide. Please do
the activities at the end of this unit. There is no case study given for this Unit.
ACTIVITY: 13.1
Name the THREE most common structures used to organise people to work on
projects.

ACTIVITY: 13.2
What are some of the advantages of a matrix structure?
ACTIVITY: 13.3
Within the matrix organisational structure, name FOUR responsibilities of the

project manager.

ANSWERS TO ACTIVITY QUESTIONS

ACTIVITY: 1.1
Question: Why is it important to evaluate the performance of a project upon its

completion?
Answer: This is done to find out what lessons were learnt during the project. Team
members have to also know that their contribution made a positive or negative
difference to the project.
ACTIVITY: 1.2
Question: What are some of the factors that constrain a project?
Answer: Resources such as labour, equipment, machinery, materials, schedule, budget

and scope. Any changes to the project can also constrain the project.
ACTIVITY: 1.3
Question: Why is it important for the Project Manager and his/her team to communicate
regularly and effectively with a project’s stakeholders? Explain.
Answer: Stakeholders have an influence over the project or they are directly affected
by the project. The Project Manager and project team should communicate
regularly with a project’s stakeholders to accomplish a successful project.
ACTIVITY: 2.1
Question: What document is prepared by the customer or sponsor and used to solicit
proposals from potential contractors?
Answer: The Request For Proposal Document (RFP).

ACTIVITY: 2.2
Question: State whether the following statement is true or false: The Project Charter
document contains the sponsor’s or the customer’s commitment to fund the
project.
Answer: This is true.
ACTIVITY: 2.3
Question: How is a project identified?
Answer: A project can be identified when a need, problem or opportunity arises in

which a project is identified to address the need.
ACTIVITY: 2.4
Question: Provide one example of how a need could arise as well as the project for this
need. (You may use one of the examples provided in this course guide or
create your own similar example)
Answer: Example:A homeowner’s family is growing and an additional bedroom is

required. The homeowner has a need for another bedroom to be added to the
existing home. Therefore, the project identification is to build this extra
bedroom to the house for the need to be satisfied.
ACTIVITY: 2.5
Question: What are the FIVE elements that one should consider when evaluating any
project?
Answer:
a) Benefits
b) Consequences
c) Advantages

d) Disadvantages
e) Pros and cons.
ACTIVITY: 2.6
Question: Mention FOUR features that a project charter includes.
Answer:
a) The project title

b) The purpose
c) Description
d) Objective
(Any four of the nine features mentioned in this course guide)
ACTIVITY: 3.1
Question: Name the TWO types of contracts that can be signed between the contractor
and the customer.
Answer:
a) Fixed-Price Contracts
b) Cost Reimbursement Contracts
ACTIVITY: 3.2
Question: Name the THREE sections that are covered in the proposal.
Answer:
a) Technical section
b) Management section
c) Cost section.

ACTIVITY: 3.3
Question: a) Why is there a need to build relationships with customers and partners?
Answer: The customer and or organisation will want to work with people they know
and trust, therefore, the contractor should make every effort to earn the trust of
the customer or organisation.
Question: b) If you were a contractor, what are some of the measures you would take to
build a better relationship with your clients?
Answer:
 Keep in mind that the first impression is a lasting impression.

 Be a good listener and learn more about the client.
 Give the personal touch.
 Know how to guide the conversation between self and the client.
 The contractor must indicate a can-do-attitude.
 Be ethical, credible based on performance.
 Go the extra mile and exceed expectations, put the client first.
 A satisfied client will bring in more business!
ACTIVITY: 3.4
Question: Explain what a bid/no-bid decision is.
Answer: A bid/no bid is referred to as a decision that is taken by a contractor on

whether to go forward with the preparation of the proposal or not.
ACTIVITY: 3.5
Question: In terms of a ‘winning proposal’, what can a contractor do to convince the

customer? Mention at least THREE points.
Answer:

a) The contractor must convince the customer that he/she understand what the
customer is looking for.
b) The contractor must convince the customer that he/she can carry out the
proposed project.
c) The contractor must convince the customer that he/she will provide the
greatest value to them.
(Any three of the nine points mentioned in this course guide)
ACTIVITY: 3.6
Question: As a contractor, deliberate on the pricing considerations when quoting a

customer.
Answer: As a contractor, it is normal to compete with other contractors, however it is

important to note that you should not over- price a proposed project. If my
project is over-priced then it may not be selected by the customer. However, I
am also aware that I should not under-price the project for the mere purpose of
winning the contract as this could jeopardize the quality of the project. Such
actions could cause a loss to my business and in the process my reputation
could be harmed.
ACTIVITY: 4.1
Question: Can you use the RAM tool and assign responsibility for your project team to
assist you to accomplish the work in putting together a High School Reunion
party with some of your friends. Be creative! Think about and write down
who will do the invites, book the venue, order the meals, liaise with the
service providers etc.
Answer: There is no set answer to this question as this is your own attempt!

ACTIVITY: 4.2
Question: What is the purpose of a Project Management Information Systems?
Answer: Such a system is helpful to support the project manager and project team in
planning, monitoring and controlling projects.
ACTIVITY: 4.3
Question: Name and explain the FOUR elements that should be included in the project
objectives.
Answer:
a) Expected benefits
The expected benefits are what the customer expects from the completed
project. This is the reason for the project.
b) Primary project end product or deliverable
Examples of end products: Construction of a shopping complex, low cost

housing, elite residential flats, business complexes, marketing campaign etc.
c) Date of completion
This is the date the project must be completed by.
d) Budget
This is the estimated amount within which the project should be completed.

ACTIVITY: 4.4
Question: Define a project scope.
Answer: A project scope addresses what needs to be done. A project scope is all the
work that has to be undertaken to produce the project deliverables. The project
deliverables must satisfy the customer/sponsor. The project deliverable must
meet the required acceptance criteria and accomplish the project objective. A
project scope document is prepared by the project team or by the contractor.
A project scope document is detailed and includes many of the items that are
contained in the project charter, RFP, or the contractor’s proposal.
ACTIVITY: 4.5
Question: Explain what a work Breakdown Structure (WBS) is and what takes place
within this structure?
Answer: WBS is a structured approach for organising the project work and
deliverables.
Work is put into logical groupings and subdivided into more manageable
components.
WBS is a hierarchical tree of deliverables that will be accomplished by the

project team or the contractor during the project.
The project is subdivided into smaller pieces and this is known as the work
items.
The lowest-level work item of any one branch on the WBS is called a work
package.
Work package contains specific work activities.
These work activities have to be completed to produce work package

deliverable.

ACTIVITY: 5.1
Question: Why is project control process important? Discuss.
Answer: The project control process is important in measuring actual progress to

planned progress as corrective action can be taken immediately if there is a
need for this
ACTIVITY: 5.2
Question: What should happen when a project has a negative total slack?
Answer: A project with negative slack time will require that some activities need to be
accelerated so that the project can be completed timeously.
ACTIVITY: 5.3
Question: As a contractor, when estimating the resources for a project that you will be
undertaking, what should be the five core fundamentals that you should
consider?
Answer:
 The types and quantities of resources needed. (This can be human resources,
equipment, materials etc.)
 Are the specific resources readily available?
 What types of resources are available?
 What quantities of resources are available?
 Will the right quantities of resources be available during the project phases?

ACTIVITY: 5.4
Question: How can a contractor develop a project schedule?
Answer: A contractor can develop a project schedule by providing a timetable for each
activity. This will assist the contractor and customer to identify the earliest
start and finish times for each activity related to the project.
This schedule also allows the contractor and customer to establish the latest
times of when each activity can start and finish.
ACTIVITY: 5.5
Question: What are the effects of actual scheduled performance?
Answer: During the life of the project there will be activities that are completed on
time, or ahead of time and others will be completed later than scheduled.
Simply put, any delays in the actual finish times will alter and affect the
remaining activities estimated start and estimated finish times and the total
slack.
If a preceding activity takes longer to complete than initially estimated all the
other activities will be affected and will finish later than scheduled. The total
slack will be negative.
ACTIVITY: 6.1
Question: What are resources? Explain.
Answer: Resources are people including subcontractors and consultants and include
labour, equipment, materials, budget and facilities that are required to
accomplish the project deliverable.

ACTIVITY: 6.2
Question: Why is resource levelling used on a project?
Answer: Resource leveling is used to level the resources over the activities of the
project as uniformly as possible without extending the completion date of the
project.
ACTIVITY: 6.3
Question: When is it appropriate to use the ‘resource-limited scheduling’ method?
Answer: This method is appropriate when the resources available for the project are
limited and these resource limits cannot be exceeded. This method will extend
the project completion time, if necessary, to keep within the resource limits. It
is an iterative method in which resources are allocated to activities based on
the least slack.
ACTIVITY: 7.1
Question: Why is it important to manage the cash flow of a project? Explain.
Answer: Cash flow on a project must be managed well enough to ensure that there is
enough money to cover the costs of performing the project.
The Project Manager must check that the funds or payments from the
customer are received in time.
“The key to managing cash flow is to ensure that cash comes in faster than it
goes out” (Gido and Clements, 2015:261).
If funds are low or nil, the project can come to a standstill.

ACTIVITY: 7.2
Question: What should the Project Manager do when he/she learns that the project is
over-running the budget?
Answer: The Project Manager must take immediate corrective action to bring the
project back on track.
ACTIVITY: 7.3
Question: What are the TWO steps involved in the project budget process?
Answer:
a) Determine the total budgeted cost (aggregate amount of the estimated costs of
all activities of the project).
b) Develop a time-phased budget (this is a distribution by time of the total
budgeted cost for a work package over the life of the project).
ACTIVITY: 7.4
Question: Explain how cumulative actual cost is calculated and provide a reason to its
need.
Answer: The data that is collected on actual cost and any committed costs will need to
be summed up by work packages. This is done to compare actual cost to the
cumulative budgeted cost for the work package. This is then known as the
cumulative actual cost
The cumulative actual cost allows the contractor to determine the actual
amount of costs expenditure and committed to accomplish the work of the
project up to a specific point

ACTIVITY: 8.1
Question: There are six major risk categories that can jeopardize the project. Name any
FOUR of these categories.
Answer:
a) Technical
b) Schedule
c) Cost
d) Human resources
e) External
f) Sponsor/customer
ACTIVITY: 8.2
Question: State whether the following statement is true or false:
Project meetings are a good forum for regularly reviewing, updating and
addressing risks.
Answer: This is true.
ACTIVITY: 8.3
Question: Explain what a risk response plan is used for?
Answer:
a) Avoid the risk.

Risk is eliminated by choosing a different course of action.
b) Mitigate the risk.

Action is taken to reduce the likelihood that the risk event will occur.
Mitigating the risk is to reduce the potential impact.

c) Accept the risk.

Accepting a risk is to deal with it when it occurs. No prior action is taken to
reduce or avoid the impact if the risk is likely to occur.
ACTIVITY: 9.1
Question: Name TWO potential consequences for a contractor if a project is terminated

at any stage by a dissatisfied customer?
Answer:
a) The reputation of the contractor is at stake as he/she may not be able to secure
future contracts.
b) The termination of the project could result in a financial loss for the
contractor.
ACTIVITY: 9.2
Question: List TWO reasons for having a post-project evaluation meeting with the
customer.
Answer:
a) To obtain feedback and to determine if the project provided the customer

with the expected benefits.
b) To determine if the level of customer satisfaction or dissatisfaction.
ACTIVITY: 9.3
Question: Name the FIVE actions that are required to close the project.
Answer:
a) Collecting and making final payments.

b) Recognising and evaluating staff.

c) Conducting a post-project evaluation.

d) Documenting lessons learnt.
e) Organising and archiving project documents.
ACTIVITY: 9.4
Question: Explain the importance for a contractor to archive project documents
Answer: Some of the documents may be required to look up information for future
projects. The customer may also come back with a dispute on the particular
project at a later stage. Lessons learnt can be looked up and key contact
details of subcontractors and suppliers can also be retrieved for future
projects.
ACTIVITY: 10.1
Question: What are the three primary responsibilities of the Project Manager?
Answer: Provide leadership, plan, organise and control the work of the project from
start to finish.
ACTIVITY: 10.2
Question: In order to manage and control project changes, what system should be put in
place at the beginning of a project?
Answer: A control system.
ACTIVITY: 10.3
Question: If you were a project manager, how would you control a project that you are
undertaking?
Answer: I would firstly implement a project management information system which

will track the actual progress of the project.

This will assist in controlling the project by comparing the actual progress to
my initial planned progress.
This system will help to distinguish between busyness and accomplishment.
The team members working on the project will be expected to monitor the
progress of their assigned tasks and provide regular data on the actual
progress, schedule, costs and earned value of the work performed.
Regular project review meetings will be conducted to discuss progress.
As the project manager I have the right to intervene when things are not going
according to plan since there is no guarantee that the project will go
ACTIVITY: 10.4
Question: State if this statement is true or false: A project manager leads the project
team without dictating to them.
Answer: True.
ACTIVITY: 10.5
Question: Communication is key to the success of any project. Discuss any THREE
ways in which a project manager can manage communication in a project?
Answer:
a) Communicate regularly with the project team, subcontractors, the customer,

and with the project organisation’s upper management, and other
stakeholders.
b) Communication must be clear and the message must be timely, honest and
unambiguous.
c) Communicate effectively. Really listen to hear exactly what is being said
when someone speaks and then ask questions.

ACTIVITY: 11.1
Question: Name the FOUR stages of team development?
Answer:
a) Forming
b) Storming
c) Norming
d) Performing
ACTIVITY: 11.2
Question: A project kick-off meeting is usually scheduled by the project manager. What
is the purpose of this meeting?
Answer: The purpose of a project kick-off meeting is to inform, reduce anxiety, and
manage expectations and to motivate the project team. The meeting should set
the tone for the entire project.
ACTIVITY: 11.3
Question: There are several barriers that can hinder projects effectiveness. How can a
project manager overcome the following barrier?
Unclear vision and objective
Answer:
To overcome this barrier, the Project Manager must ensure that project objective,
scope, quality requirements, budget, schedule as well as a vision for the project
results and the benefits are communicated to the project team at the first project kick-
off meeting.

The information must be clearly understood by the individuals in the team.

The information should then be communicated to each team member in
writing together with any clarifications. The project objective must be discussed
frequently at the status review meetings.
It is important for the Project Manager to frequently discuss the project objective at
the project status review meetings. Mentioning the objectives only at the beginning
of the project is inadequate.
ACTIVITY: 11.4
Question: What are the TWO actions that a project organisation can take to help prevent
unethical behaviour?
Answer:
a) Have a written policy on ethical behaviour

b) Training must be provided to all on ethics in the workplace
ACTIVITY: 12.1
Question: Why is effective listening important in communication?
Answer: Gido and Clements (2015:403) state that the purpose of communicating is to
reach understanding and that communicating is more than talking and hearing.
Effective listening is an important skill. When one really listens one can learn
more. Listening is an active process. It increases understanding and reduces
conflict.
ACTIVITY: 12.2
Question: List FIVE collaborative communication tools that a project team can use to
communicate when face-to-face meetings are not feasible.
Answer:
a) Teleconferencing

b) Web video-conferencing
c) Conference calls
d) Video-conferencing
e) Content management systems
f) Extranets
g) Collaborative project workspaces on the Web
h) Emails
ACTIVITY: 12.3
Question: How does personal communication occur?
Answer:
 Can occur through words or by nonverbal behaviour such as body language.

 Can be face to face via some medium such as by phone, voice mail, email,
texting, letters, video conferencing etc.
 Can be verbal or written.
ACTIVITY: 13.1
Question: Name the THREE most common structures used to organise people to work
on projects.
Answer:
a) Matrix organisational structure

b) The functional structure
c) The autonomous project structure.

ACTIVITY: 13.2
Question: What are some of the advantages of a matrix structure?
Answer: In the matrix organisational structure, the advantages are efficient utilisation
of resources, functional expertise is available to all projects and there is
increased learning and transfer of knowledge. Other advantages are improved
communication and customer focus.
ACTIVITY: 13.3
Question: Within the matrix organisational structure, name FOUR responsibilities of the
project manager.
Answer:
a) Leads and develops the project plan.

b) Establishes the project schedule and the project budget.
c) Allocates specific work packages or activities.
d) Allocates the budget to the various functional components of the company or
organisation.

BIBLIOGRAPHY
Books
Learning, USA.
Learning, USA.
Van der Waldt, G and William, F. (2015). A Guide to Project Management. (2nd Edition).
Shumani Mills Communications, Juta and Company (Pty) Ltd, SA.
Internet Sources
arrivealive.co.za. 2015. 2010 World Cup Road Safety. [Online]. Available:

https://arrivealive.co.za/2010-World-Cup-Road-Safety [Accessed: 11 Nov 2015].
pmi.org. 2015a. What is PMI? [Online]. Available: http://www.pmi.org/About-Us/About-Us-

What-is-PMI.aspx [Accessed: 11 Nov 2015].
pmi.org. 2015b. Project Management Institute: PMI. [Online]. Available:

http://www.pmi.org/ [Accessed: 13 Nov 2013].
pmi.org. 2015c. Membership. [Online]. Available: www.pmi.org/membership.aspx

[Accessed: 13 Nov 2015].
Southafrica.info. 2015. Counting the World Cup Benefits. [Online]. Available:

http://www.southafrica.info/2010/worldcup-overview.htm [Accessed: 11 Nov 2015].
youtube.com. 2015. Words from our Volunteer Leaders. [Online]. Available:

https://www.youtube.com/watch?v=mNE9_YcvR0g [Accessed: 13 Nov 2015].

APPENDIXES
A–I
CASE STUDIES

APPENDIX: A
CASE STUDY 1: A NOT-FOR-PROFIT ORGANISATION
At a local college, the offices for the student community service organisation which collects
and buys food and distributes it to people in need are having their February meeting. Sitting
in the meeting room are Beth Smith, the organisation’s president, and two officers: Rosemary
Olsen, vice president, and Steve Andrews, volunteer coordinator.
Beth announces, “Our funds are almost exhausted. The demands on the food bank have been
increasing. We need to figure out how to get more funds.”
“We need to have a fund-raising project,” responds Rosemary.
Steve suggest, “Can’t we ask the city government if they can increase their allocation of
funds to us?”
“They’re strained. They may even cut our allocation next year,” replies Beth.
“How much do we need to get us through this year?” asks Rosemary.
“About $10, 000,” answers Beth. “And we are going to start needing that money in about two
months.”
“We need a lot of things besides money. We need more volunteers, more space for storage,
and more food donations,” says Steve.
“Well, I guess we can make that all part of the fund-raising project. This is going to be fun!”
says Rosemary excitedly.
“This project is growing. We’ll never get it done in time,” Beth says.
Rosemary responds, “We’ll figure it out and get it done. We always do.”
“Is a project what we need? What are we going to do next year – Another project?” asks
Steve. “Besides, we’re having a hard time getting volunteers anyway. Maybe we need to
think about how we can operate with less money. For example, how can we get more food
donations on a regular basis so we won’t have to buy as much food?”
Rosemary jumps in. “Great idea! You can work on that while we also try to raise funds. We
can’t leave any stone unturned.”
“Times out,” says Beth. “These are all very good ideas, but we have limited funds and
volunteers and growing demand. We need to do something now to make sure we don’t have
to close our doors in two months. I think we all agree we need to undertake some type of
initiative. But I’m not sure we all agree on the objective.”

CASE QUESTIONS
1. What are the needs that have been identified?
2. What is the project objective?
3. What assumptions, if any, should be made regarding the project to be

undertaken?
4. What are the risks involved in the project?
APPENDIX: B
CASE STUDY 1: A MIDSIZE PHARMACEUTICAL COMPANY
Jennifer Childs is the owner and chief executive officer of midsize global pharmaceutical
company with sales offices or manufacturing plants in eight countries. At an October staff
meeting she tells her managers that company profits for the year are expected to be
$2,000,000 more than anticipated. She tells them she would increase sales or reduce costs.
She asks her three key managers to get together to develop a prioritised list of potential
projects and then to meet with her to “sell” her on their ideas. She mentions that they should
not assume the funds will be divided equally among the tree of them. She also mentions that
she is willing to put all of the funds into just one project if it seems appropriate.
Julie Chen, manager of product development, has had a team of scientists working on a new
prescription drug. This effort has been taking much longer than expected. She is worried
that larger firms are working on a similar prescription drug and that these firms might get it
to the marketplace first. Her team has not made any major breakthroughs yet, and some tests
are not producing the expected results. She knows this is a risky project but feels that she
cannot stop it now. Julie believes the company’s long-term growth depends on this new
drug, which can be sold worldwide. She has tried to be optimistic at staff meetings about
progress on this development project, but she knows that Jennifer is growing impatient and
that her peers believe she should have terminated the project after the initial tests were less
than promising. Julie would like to use the additional funds to accelerate the development
project. She would hire a highly respected scientist from a larger firm and buy more
sophisticated labouratory equipment.
Tyler Ripken, manager of production at the firm’s largest and oldest manufacturing facility,
has been with the company only six months. His early observation is that the production
flow is very inefficient. He believes this is the result of poor planning when additions were
made to the plant over the years as the company grew. Tyler would like to form several
employee teams to implement a better layout of the equipment in the plant. He thinks this
would increase plant capacity while reducing costs. When Tyler mentions this idea to some

of his supervisors, they remind him that when Jennifer’s father ran the business, Jennifer was
in charge of production, and she was responsible for the design of the current plant layout.
They also remind Tyler that Jennifer is not a fan of using employee teams. She believes
production employees are paid to do their jobs, and she expects her managers to be the ones
to come up with and implement new ideas.
Jeff Matthews, manager of the operations, is responsible for the company’s computers and
information systems as well as its accounting operations. Jeff believes that the company’s
computer systems are outdated, and as the business has grown with locations worldwide, the
older computer equipment has been unable to handle the volume of transactions. He thinks
that a new computer system could keep better track of customer orders, reduce customer
complaints, and issue more timely invoices, thus improving cash flow. The employees in
Jeff’s operation joke about their outdated computer systems and put pressure on Jeff to buy
new equipment. Jennifer has told Jeff in the past that she is not interested in spending money
on new computers just for the sake of having the latest equipment, especially if the current
system is working all right. She had suggested that Jeff look into hiring an outside service to
do the accounting operations and reduce his own staff. Jeff would like to use this year’s
excess profits to buy new computers and to hire a computer programmer to upgrade the
software to run on the new computers. He feels that this would be cost-effective. After
Jennifer’s October staff meeting, Joe Sanchez, manager of marketing, stops by Jennifer’s
office. He says that although he has not been asked to come up with project ideas for the
extra profits, his feeling is that she should forget this project nonsense and just give him a
larger budget to hire more sales representatives in several additional countries. “That would
increase sales faster than anything else,” Joe tells her. “And besides, that’s what your father
would have done!” Joe is counting on disagreements among the other three managers in
establishing priorities. He hopes that if Jennifer sees a lack of consensus, she might give him
funds to hire the additional sales representatives.
CASE QUESTIONS
1. How should Jennifer go about making her decision?
2. What kind of additional data or information should she collect?
3. What exactly should Jennifer require the others to submit in the way of proposals?
4. What do you think Jennifer should do with the $2,000,000? In explaining your
answer, address the concerns and position of Julie, Tyler Jeff and Joe.

APPENDIX: C
CASE STUDY 1: MEDICAL INFORMATION SYSTEMS
Maggie Pressman, Paul Goldberg, and Steve Youngblood are equal partners in their own
consulting business, which specializes in designing and installing computer-based
information systems for physicians. These systems usually include patient records,
prescriptions, billings, and medical insurance processing. In some cases, the physician
customers have a manual system and want to computerise it; in other situations, they have an
existing computer system that needs to be upgraded and enhanced.
In most cases, the consulting firm purchases the necessary hardware as well as some
packaged software. They add some of their own customized software to meet the specific
requirements of the physician, and they install the complete integrated system. They also
provide training for the employees in the physician’s office. The cost of these projects
ranges from $10,000 to $40,000, depending on the amount of hardware needed. Most
physicians are willing to spend such amounts rather than hire an additional office person to
keep up with the ever-increasing paperwork.
Dr. Houser, one of the physicians for whom Paul had done a project in the past, left her
private practice to join a large regional medical practice. This organisation has six offices
throughout the region, with an average of eight physicians in each office. Two of the offices
also include a pharmacy. The organisation employs a total of 200 people. Dr. Houser
contacted Paul and asked if his consulting firm would be interested in submitting a proposal
to upgrade the information system for the entire regional medical practice. The project will
include integrating the six offices and two pharmacies into one system; the physicians will
eventually hire an information systems person to oversee the operation of the system.
Presently, each office has its own system.
Paul learns from Dr. Houser that some of the other physicians have patients who work for
large consulting firms that they think could also do the job. She says that a team of
representatives from the six offices and two pharmacies, with the help of the organisation’s
purchasing manager, has prepared a request for proposal. The proposals are due in two
weeks. The RFP was issued two weeks ago to larger consulting firms, which are already
working on their proposals. The purchasing manager was not familiar with Paul’s consulting
firm, and that is why he did not receive a copy of the RFP.
Dr. Houser tells Paul that she is sorry she cannot talk to him about this, but she has not been
involved like some of the other physicians, who discussed ideas with their patients who work
at the larger consulting firms before the RFP was issued. Dr Houser says she will have the

purchasing manager send Paul the RFP if he is interested and will be able to submit a
proposal within two weeks.
“Sure,” Paul says. “I’ll drive over this afternoon and pick it up!” He asks if she knows how
much money the medical practice has allocated for the project, but she does not. Paul picks
up the RFP and makes copies for Maggie and Steve. Paul is enthusiastic about the
opportunity when he meets with them. “If we do this project, it will propel us into a whole
new business arena,” Paul tells them. “This is the big break we’ve been waiting for!” he
shouts.
Maggie moans, “This couldn’t have come at a worse time. I’m working on three projects for
other physicians, and they’re all hounding me to finish up. In fact, one of them is not very
satisfied. He said that if I don’t finish his project in two weeks, he doesn’t want it and won’t
recommend us to other physicians. I’m working 16 hours a day to keep up. I’m just
overcommitted. I agree with you, Paul, It is a great opportunity, but I’m afraid I won’t be
able to spend any time helping with the proposal.”
Steve wonders out loud, “Preparing the proposal is one thing, but can we do the project? I
think we have the expertise among the three of us to do such a project, but this is a really big
one, and we have other customers, too.”
Paul replies, “We can hire more people. I have a few friends who would probably want some
part-time work. We can do it! If we don’t go after projects like this, we’ll always be a small
firm, each of us working 12-hour days for peanuts. And these small jobs for individual
offices aren’t going to last forever. Someday they’ll all be computerised, and we’ll be out of
business. What do we have to lose by submitting a proposal? We can’t win if we don’t
submit one!”
CASE QUESTIONS
1. Why did this team not receive the RFP at the same time the larger consulting firms did?
2. Why is this team being considered as a candidate to submit a proposal?
3. Develop a bid/no bid checklist to help determine if they should submit a proposal.
4. What should Maggie, Paul, and Steve do? In explaining your answer, address the
concerns of each of the three team members.

APPENDIX: D
CASE STUDY 1: A NOT-FOR-PROFIT MEDICAL RESEARCH CENTER
You are Alexis, the director of external affairs for a national not-for profit medical research
center that does research on diseases related to aging. The center’s work depends on funding
from multiple sources, including the general public, individual estates and grants from
corporations, foundations, and the federal government.
Your department prepares an annual report of the center’s accomplishments and financial
status for the board of directors. It is mostly text with a few charts and tables, all black and
white, with a simple cover. It is voluminous and pretty dry reading. It is inexpensive to
produce other than the effort to pull together the content, which requires time to request and
expedite information from the center’s other departments.
At the last board meeting, the board members suggested the annual report be “up-scaled” into
a document that could be used for marketing and promotional purposes. They want you to
mail the next annual report to the center’s various stakeholders, past donors, and targeted
high-potential future donors. The board feels that such a document is needed to get the
center “in the same league” with other large not-for-profit organisations with which it feels it
competes for donations and funds. The board feels that the annual report could be used to
inform these stakeholders about advances the center is making in its research efforts and its
strong fiscal management for effectively using the funding and donations it receives.
You will need to make a report to produce a shorter, simpler, easy-to-read annual report that
shows the benefits of the center’s research and the impact on people’s lives. You will
include pictures from various hospitals, clinics, and long-term care facilities that are using
the results of the center’s research. You also will include testimonials from patients and
families who have benefited from the center’s research. The report must be “eye-catching”.
It needs to be multicolor, contain a lot of pictures and easy-to-understand graphics, and be
written in a style that can be understood by the average adult potential donor.
This is a significant undertaking for your department, which includes three other staff
members. You will have to contract out some of the activities and may have to travel to
several medical facilities around the country to take photos and get testimonials. You will
also need to put the design, printing, and distribution out to bid to various contractors to
submit proposals and prices to you. You estimate that approximately 5 million copies need
to be printed and mailed.

It is now April 1. The board asks you to come to its next meeting on May 15 to present a
detailed plan, schedule, and budget for how you will complete the project. The board wants
the annual report “in the mail” by November 15, so potential donors will receive it around
the holiday season when they may be in a “giving mood.” The center’s fiscal year ends
September 30, and its financial statements should be available by October 15. However, the
nonfinancial information for the report can start to be pulled together right after the May 15
board meeting.
Fortunately, you are taking a project management course in the evenings at the local
university and see this as an opportunity to apply what you have been learning. You know
that this is a big project and that the board has high expectations. You want to be sure you
meet their expectations, and get them to approve the budget that you will need for this
project. However, they will only do that if they are confident that you have a detailed plan
for how you will get it all done. You and your staff have six weeks to prepare a plan to
present to the board on May 15. If approved, you will have six months, from May 15 to
November 15, to implement the plan and complete the project.
Your staff consists of Grace, a marketing specialist; Levi, a writer/editor; and Lakysha, a
staff assistant whose hobby is photography (she is going to college part-time in the evenings
to earn a degree in photojournalism, and has won several local photography contests).
CASE QUESTIONS:
You and your team (if possible) need to prepare a plan to present to the board. You must:
1. Establish the project objective, and make a list of your assumptions about the project.
2. Develop a work breakdown structure.
3. Prepare a list of the specific activities that need to be performed to accomplish the project
objective.
4. For each activity, assign the person who will be responsible.
5. Create a network diagram that shows the sequence and dependent relationships of all the
activities.
Note: This case study will continue in Chapter 5 through 8, so save the results of your work.

APPENDIX: E
CASE STUDY 3: STUDENT FUND- RAISING PROJECT
In September at its initial meeting of the academic year, the Council of Fraternities and
Sororities (CFS) at Mount Clement University decided to organise a project to raise funds to
help upgrade the paediatric intensive care unit at the local hospital. The CFS consists of
representatives from each of the 24 fraternities and sororities. There were 15 representatives
at the meeting. Although the council members who were at the meeting expressed
enthusiasm for such an endeavour, they also raised some concerns, including:
What kind of project should we do?
When would be the best time of the year to do it?
Do we have a goal for how much money we should try to raise?
How should we assign responsibilities to all the fraternities and sororities?
What about the council members who are not at the meeting? What if they do not
support the idea?
Are we going to need any money at the beginning to get things going and pay for
things like advertising and other necessities?
Do we need any kind of approvals?
Hannah said, “This is getting complicated. There are a lot of questions and unknowns.”
Marcus Added, “What if we don’t raise a lot of money? That will be embarrassing,
especially if we do a lot of work.”
Teresa responded, “Sure it may be a lot of work, but we have a lot of people in our
fraternities and sororities who we can get to help.”
Cathy said, “Maybe we should identify what the risks may be, then see if we still think we
can do it?”
Meghan said, “I’m not going to stand on corners with a can collecting money.”
Wendy added, “Me either, but there are a lot of other things we can do to raise money that
could be fun for all students.” “Maybe even get the community to come, too. That will help
us raise more money than just from students,” added Sophie.
Suli spoke up, “I’m willing to chair a planning committee. Who else wants to be on it? We’ll
meet here tomorrow at 5:00. I’ll send an email to the CFS members who aren’t here, inviting
them to come. We are going big time and are going to raise a lot of money. Hey, there are
risks in anything we do, but they’ll work out. We have got to have a can-do attitude.”

CASE QUESTIONS
1. What would you recommend for the next possible steps?
2. Identify three potential projects to raise funds for the hospital paediatric intensive care
unit.
3. Select one of the three projects and identify four risks that could jeopardize the
success of the project.
4. Develop a response plan for how each of the four risks can be either avoided or
mitigated.
APPENDIX: F
CASE STUDY 1: FACTORY EXPANSION PROJECT
Jacob Clemson is the owner of Digitsig, Inc., a growing Canadian electronics company. The
company has been receiving orders from customers worldwide, and sales have been
expanding rapidly. The factory is now working three shifts and is at capacity. Jacob had to
lease additional space in building several miles away. He knows he must expand his factory
to keep up with growing demand, to increase efficiency, and to reduce the costs associated
with trucking materials and products back and forth between his factory and the building he
is leasing. The cost of the lease was very high because there just was not much good
available space in the area and Jacob was desperate to get additional space right away, or he
would not be able to keep up with demand and customers would go to his competitors.
Jacob met Andy Gibson, part-owner of AG Contractors, at a recent business networking

event. He told Andy about his expansion needs. Andy said, “We can do that for you, Mr.
Clemson. We’ve done many similar projects. As you may know, business is booming in the
region, and getting a contractor won’t be easy. But it could be lucky we met because we are
just finishing up another project and could probably get working on yours if we can get an
agreement soon. I’ve got four other proposals pending, and if they come in, we won’t be
able to handle any other projects. And like I said, I understand all the other contractors are
just as busy. It sounds like you really need to start on this factory expansion right away, and
I think we can help you out.”
Jacob became worried that he might not be able to get another contractor, and he did not
want to waste any more time. So he signed a contract with AG Contractors for what he
thought was a reasonable price, to design and build the expansion to his factory. The
expansion space would be used primarily for inventory storage of incoming materials and

finished goods. He agreed to a bonus clause in the contract to pay AG Contractors a 10

percent bonus if it completed the building in 12 months rather than 15 months Andy told him
it would normally take.
It is now 14 months later. Andy Gibson and Gerri Penk, a recently hired project manager for
AG Contractors, walked into Jacob Clemson’s office. The receptionist asked, “May I help
you?”
Andy asked, “Is Jacob in?”
“Yes, he is. Do you have an appointment?” responded the receptionist. Andy hurried by the
receptionist, saying, “I don’t need one. This will only take a minute.” A surprised Gerri
followed after him. He knocked on Mr. Clemson’s door once, opened it, and walked in
without waiting for a response.
Astonished, Jacob Clemson looked up and said, “I’m right in the middle of this important…”
Andy interrupted. “This will only take a minute. I just wanted to say that we got your
factory expansion project completed on time and within budget. We finished in 12 months,
just like I knew we, I mean, like I hoped we would. I had to kick butt with some of our
subcontractors, but that’s the way it goes in business. Sometimes you’ve got to be an SOB to
get the job done. I’m sure you’re the same way, Jacob, or you wouldn’t be where you’re at.”
Jacob Clemson spoke up. “Well, there were some problems…”
But Andy interrupted again. “In a big project like this, there are always problems, and some
people’s feathers get ruffled. But that always happens. Don’t be concerned about that. In the
end, it all worked out. I thought maybe we could go to lunch to celebrate, but we have
another meeting across town. Give me a call sometime, and maybe we can get together and
see if I can help you with any other projects you might have.” Andy then turned and quickly
left Jacob’s office, walking right past Gerri, who ran to catch up with him.
After they left, Jacob was somewhat stunned and became furious. He thought to himself,
“Another project? Over my dead body. An SOB? What kind of person does he think I am?
Getting the project done on time and within budget – does he think that is all that it’s about?
This project was a nightmare. It finished up costing about 50 percent more than AG’s
original price because of all the changes they came back with. They never asked, never,
listened, never told me what was going on, and never returned my phone calls. What a bunch
of jerks! I’ll never do business with them again.”
As Andy and Gerri walked to Andy’s car, he told Gerri, “There you go, another satisfied AG
customer. And a pretty naïve one too,” Andy chuckled. “I knew we could get the project
done in 12 months. But I knew he was desperate, and told him it would take 15 months, and
then got him to agree to a bonus payment if we got it done in 12 months.”
Gerri asked, “Andy, isn’t that unethical?”

“Hey, business is booming for Digitsig; they have plenty of money. Besides, it’s his problem
for waiting so long before deciding on doing the expansion anyway. He was lucky we
helped him out of a bind. But I’ve got to tell you, Gerri, I wondered why he was building all
that warehouse space for inventory when most other businesses are going to just-in-time
deliveries. But I wasn’t about to tell him that. It’s amazing he’s in business at all. Oh, well,
you’ll find out it’s a dog-eat-dog world out there, Gerri.”
Gerri responded, “Andy, I got a sense that maybe Mr. Clemson wasn’t totally satisfied, I
mean he really didn’t’ say he was.”
“He didn’t say he wasn’t either,” snapped Andy. “Besides, he never seemed interested in the
project, he never asked to have any meetings, and when I tried to schedule a meeting, he was
too busy. And then his payments were always late – like he was anal or something. Believe
me, he’s tickled with what AG did. He was desperate to get the project done, and we did it
for him – on time and within budget and made a bunch of money on the project. So we both
came out winners.”
“Hey, Gerri, you’ll learn that you’ve got to focus on the next customer and not worry about
the old ones. It works, believe me, or I wouldn’t be driving this Porsche. Maybe they didn’t
teach you that in MBA school, Gerri, but I learnt from the school of hard knocks when I took
this business over from my father. He was well liked in this community, and I’m just
following in his footsteps.”
CASE QUESTIONS
1. What should Andy Gibson have done differently in his meeting with Jacob Clemson in
Jacob’s office?
2. What are some things Andy could have done differently in his initial contact with Jacob
and during the project?
3. What are some things Jacob could have done differently from the time he met Andy
Gibson initially and during the project?
4. What Should Gerri do?

APPENDIX: G
CASE STUDY 1: CODEWORD
Codeword is a medium-size firm that designs and manufactures electronic systems for the
mass transit industry. It competes with other firms to win contracts to provide such systems.
When Codeword receives a contract, it creates a project to complete the work. Most projects
range from $10 million to $50 million in cost and from one to three years in duration.
Codeword can have 6 to 12 projects going on at any one time, in various stages of
completion - some just starting and others finishing.
Codeword has a handful of project managers who report to the general manager; other people
report to their functional manager. For example, the electronics engineers all report to the
manager of electrical engineering, who reports to the general manager. The functional
manager assigns particular individuals to work on various projects. Some people work full
time on a project, whereas others split their time among two or three projects. Although
individuals are assigned to work for a project manager on a specific project, administratively
they still report to their functional manager.
Jack Kowalski has been with the company for about 12 years, since graduating from college
with a BS in electronic engineering. He has worked his way up to senior electronics engineer
and reports to the manager of the electrical engineering. He has worked on many projects
and is well respected within the company. Jack has been asking for an opportunity to be a
project manager. When Codeword is awarded a $15 million contract to design and
manufacture an advanced electronics system for a new aircraft, the general manager
promotes Jack to project manager and asks him to run this project.
Jack works with the functional managers to get the best people available assigned to the
project. Most of the people are buddies who have worked with Jack on previous projects.
However, with Jack’s position as senior electronics engineer vacant, the manager of electrical
engineering has no one with the appropriate level of expertise to assign to Jack’s project. So
the manager hires a new person, Alfreda Bryson. Lured away from a competitor, Alfreda has
a PhD, in electronic engineering and eight years experience. She was able to command a
high salary-more than Jack is making. She is assigned to Jack’s project full time as the
senior electronics engineer.
Jack takes a special interest in Alfreda’s work and asks to meet with her to discuss her design
approaches. Most of these meetings turn into monologues, with Jack suggesting how Alfreda
should do the design and paying little attention to what she says.

Finally, Alfreda asks Jack why he is spending so much more time reviewing her work than
that of the other engineers on the project. He responds, “I don’t have to check theirs. I know
how they work. I’ve worked with them on other projects. You’re the new kid on the block,
and I want to be sure you understand the way we do things here, which may be different than
at your previous employer.”
On another occasion, Alfreda shows Jack what she thinks is a creative design approach that
will result in a lower-cost system. Jack tells her, “I don’t even have a PhD and I can see that
won’t work. Don’t be so esoteric; just stick to basic sound engineering.”
During a business trip with Dennis Freeman, another engineer assigned to the project who
has known Jack for six years, Alfreda says that she is frustrated with the way Jack treats her.
“Jack is acting more like the electronics engineer for the project than the project manager,”
she tells Dennis. “Besides, I have forgotten more about designing electronics than Jack ever
knew! He really isn’t up to date on electronic design methodologies.” She also tells Dennis
that she’s planning to discuss the matter with the manager of electrical engineering and that
she would never have taken the job with Codeword if she had known it was going to be like
this.
CASE QUESTIONS
1. Do you think Jack is ready to serve as a project manager? Why or why not? How
could Jack have prepared for his new role?
2. What is the major problem with the way Jack interacts with Alfreda?
3. Why do you think Alfreda has not had an open discussion with Jack about the way he
is treating her? If Alfreda approaches Jack directly, how do you think he will
respond?
4. How do you think the manager of electrical engineering will respond to this situation?
What should the manager do?

APPENDIX: H
CASE STUDY 1: TEAM EFFECTIVENESS?
Colin and Raouf had been having one of their typical sidebar conversations during the
meeting when an obviously irritated Henri looked at Colin. “In my 20 years of experience,
I’ve never seen such shabby hardware design. A first year college student could do better,”
said Henri, raising his voice at Colin. “No wonder we’re a month behind schedule. Now
we’re going to have to spend more time and money on redesign. If you were in over your
head, Colin, you should have asked someone for help. I’ll review the situation with Jack
when he gets back on Friday. That’s it – the meeting is over. We need to spend more time
working than chitchatting at meetings.” Everyone else on the project team was somewhat
stunned by Henri’s tirade, but it wasn’t the first time. They all felt badly for Colin, but others
had experienced the wrath of Henri in the past.
Henri is the hardware systems team leader, and Colin is a hardware system designer assigned
to Henri’s team. Jack, the project manager, was out of town several days for meeting with
the customer and had asked Henri to run the weekly project meeting in his absence.
After the meeting, Colin went to Raouf’s office. Raouf is an application software designer.
Colin and Raouf have developed a friendship during the past year. They discovered that they
both graduated from the same university, a couple years apart. They are among the younger
members of the project team, along with Fatima, the software system team leader. “I’m
gonna get that jerk if it’s the last thing I do,” Colin told Raouf.
“Take it easy, Colin. You’re right; he’s a jerk. Everybody knows he doesn’t know what he’s
doing, and he is in over his head. We all have his number,” responded Raouf. “But notice
that Henri never behaves like that in front of Jack. Only when Jack isn’t around or in the
meetings when Jack isn’t there.” Well, I’m gonna see Jack first thing on Friday when he gets
back and tell him about Henri. Nobody needs to take that kind of crap in front of
everybody,” Colin said.
“Maybe you should talk to Henri first, Colin.” suggested Raouf. “Yea, right!” chuckled
Coin.
“What do you think Jack will do?” asked Raouf.
“Fire him, I hope,” answered Colin.
“I doubt it,” Raouf said. “Jack seems to always cut him a break, like he feels sorry for him or
something.”
“Maybe Jack should be concerned about all the good apples, and get rid of the bad apple!”
replied Colin.

Jack was back in the office Friday morning. He was just taking off his jacket when Colin
appeared. “Jack, at one of the project meetings you said you had an open door policy, so I’m
here to talk to you about a problem with Henri,” Colin said. Jack began unpackaging his
briefcase and had a lot of things to catch up on after being out the whole week. He saw Colin
was upset, so he said, “Sure, Colin I have about 10 minutes before I need to meet without
contracts department to go over some amendments to the contract.”
Colin blurted out, “This won’t take long. I just want to say that while you were out, Henri
accused me of being a lousy designer in front of the whole project team. He blamed me for
the project being a month behind schedule. He always does this kind of stuff. Why do you
let him get away with it? Nobody likes him. Can’t you get rid of him or assigned to some
other project?”
Jack was taken aback. He responded, ”Colin, you really seem upset. Let’s get together on
Monday when I have more time and you can have the weekend to cool off.”
“There’s nothing more to talk about. That’s all there is to it. You can ask anybody if you
don’t believe me,” replied Colin, as he left Jack’s office.
Jack asked Rosemary, his administrative assistant, who had been intently eavesdropping on
the conversation from outside of Jack’s office, to schedule a meeting with Henri for later that
afternoon. At the meeting, Jack told Henri about Colin’s comments. Jack knew Henri had
been under stress because his son had recently been arrested for selling drugs. Henri told
Jack, “it sounds to me like Colin overreacted and blew things way out of proportion. At the
meeting, I told Colin that there were some shortcomings in his design and suggested he get
together with some folks and take another look at it. You know how these young people are;
they have got to learn to be responsible for their actions.”
“What about the project being behind schedule? That’s news to me,” asked Jack.
Henri replied, “well, I didn’t mean it was Colin’s fault. To be honest with you, Fatima and
her group of software whiz kids aren’t the hardest workers. I mean, I always see them
clowning around and yakking with each other and bothering my hardware team. No wonder
the project is behind schedule. Anyway, don’t worry about Colin. He’s young and will have
to learn to develop a thick skin. I’ll talk to him. I’ll tell him to stop hanging around with
those software people so he doesn’t develop any bad habits.”
That same Friday afternoon, Colin went around asking most of the younger members from
the project team to meet for a few drinks at a happy hour after work. They included most of
the software people, and Rosemary, Jack’s administrative assistant. She is attracted to Colin
and has been hoping he’d ask her out. She told Colin that she overheard Henri tell Jack that
Fatima and the software group were causing delays in the project because they spend too
much time fooling around rather than working. Later in the evening, Colin went over to talk
to Fatima and Raouf who had been sitting together. Colin told them, “I have firsthand
information that Henri told Jack that the project is way behind schedule because of your
software team. I suggest you go and talk with Jack. Henri is poisoning this project. If Jack

believes him, we’ll all be fired before this project is over. Hey, I had the guts to go to Jack.
Now you’ve got to do it, too. We have got to stand together against Henri. Jack has to be
told that Henri is a big bag of wind and is disrupting the whole project team and causing
dissension, and that’s why the project is behind schedule. Simply put, the project will never
be successful as long as Henri is working on it and that is going to affect all of our careers –
being associated with a failed project. Jack won’t have any choice when he sees it’s all of us
against Henri.”
CASE QUESTIONS
1. What are some things Colin could have done in or after the meeting when Henri verbally
attacked him?
2. Is there anything more Raouf could have done during or after his meeting with Colin to
prevent the situation from escalating?
3. Could Jack have handled his meeting with Colin in a better way? Was there anything
Jack could have done after his meeting with Colin and before he met Henri?
4. What should Fatima do?

APPENDIX: I
CASE STUDY 1: OFFICE COMMUNICATIONS
Cathy Buford is the design leader on a project team for a large, complex technical project for
a very demanding customer. Joe Jackson is an engineer assigned to her design team.
It is about 9:30am when Joe walks into Cathy’s office. Her head is down, and she is hard at
work.
“Hey, Cathy,” says Joe, “going to the Little League game tonight? Ya know, I volunteered to
coach this year.”
“Oh, Hi, Joe. I’m really busy,” Cathy tells him.
Joe then proceeds to sit down in Cathy’s office. “I hear your kid is a pretty good ball
player.”
Cathy shuffles some papers and tries to focus on her work. “Huh? I guess so. I am so
swamped.”
“Yeah, me too,” Joe says. “I had to take a break to get away from it for a while.”
“Since you’re here,” Cathy says, “I’ve been thinking that maybe you should evaluate using
bar coding or optical character recognition technology for data entry. It might…”
Joe interrupts, “Look at those dark clouds forming outside. I hope the game isn’t rained out
tonight.”
Cathy continues, “Some of the advantages of these technologies are…” She goes on for a few
minutes. “So what do you think/”
“Huh? No, they won’t work” is Joe’s response. “Trust me. Besides, the customer is a low-
tech kind of guy, and it would increase the project costs.”
“But if we can show the customer that it could save him money and reduce input errors,”
Cathy persists, “he probably would pay the extra needed to implement the technologies.”
“Save him money!” Joe exclaims. “How? By laying off people? We already have too much
downsizing in this country. And the government and politicians aren’t doing anything about
it. It doesn’t matter who you vote for. They’re all the same.” “By the way, I still need your
input for the progress report,” Cathy reminds him. “I need to e-mail it to the customer
tomorrow. As you know, I’ll need about 8 to 10 pages. We need a thick report to show the
customer how busy we’ve been.’
“What? Nobody told me,” says Joe.
“I sent the design team an e-mail a couple of weeks ago, saying that I need everyone’s input
by last Friday. You could probably use the material you’ve prepared for the project status
review meeting tomorrow afternoon,” Cathy responds.

“I have to make a presentation at the meeting tomorrow? “That’s news to me,” Joe tells her.
“It was on the agenda distributed last week,” says Cathy
“I don’t have time to keep up with all the e-mails in my inbox,” Joe snorts. “Well, I’ll just
have to wink it. I’ll use some of the slides from my pitch six months ago. Nobody will know
the difference. Those meetings are a waste of time anyway. Nobody cares about them.
Everybody thinks they are just a waste of two hours each week.”
“Anyway, can you e-mail me your input for the progress report by the end of the day?” asks
Cathy.
“I have to leave early for the game.”
“What game?”
“Aren’t you listening to anything I say? The Little League game.”
“Maybe you should start working on it now,” Cathy suggests.
“I just have to call Jim, my assistant coach, first about the game tonight,” says Joe. “Then
I’ll write up a couple of paragraphs. Hey, hold on a minute, I’ll call Jim right now!” Joe
picks up Cathy’s desk phone and calls Jim and proceeds to ask Jim several questions about
the game. Cathy tries to focus on her work as Joe talks very loudly to Jim. After hanging up,
Joe remarks, “Can’t you just take notes at the meeting tomorrow when I give my pitch? That
should give you what you need for the report.”
“It can’t wait until then. The report has to be e-mailed tomorrow, and I’ll be working on it
later into the night.”
“So, you won’t be at the game?”
”Just e-mail me your input.”
“I’m not being paid to be typist,” Joe declares. “I can write it much faster. You can get
somebody to type it. You’ll probably want to edit it anyway. The last report to the customer
looked completely different from the input I provided. It looked like you completely rewrote
it.”
Cathy looks back down at her desk and attempts to continue work.

CASE QUESTIONS
1. What are some of the communication problems presented in this case?
2. What should Cathy do? What do you think Joe will do?
3. How could Cathy and Joe have handled this situation better?
4. What could have been done to prevent the communication problem between Cathy
and Joe?

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Bachelor of Commerce Degree

Regent Business School 2

UNIT SEVEN: DETERMINING COSTS, BUDGET, AND EARNED VALUE……….96

UNIT TWELVE: PROJECT COMMUNICATION AND DOCUMENTATION……..167

UNIT THIRTEEN: PROJECT MANAGEMENT ORGANISATIONAL STRUC-

ANSWERS TO ACTIVITY QUESTIONS…………………………………………...195

APPENDICES A-I (CASE STUDIES)…………………………………..……………215

Regent Business School 3

INTRODUCTION TO PROJECT MANAGEMENT STUDY GUIDE

Part One - Unit One

 Definition of a project and its attributes.

Part One - Unit Two

 How projects are identified and selected.

Regent Business School 4

Part One - Unit Three

 Building relationships with customers and partners.

Part Two - Unit Four

 Clearly defining the project objective.

Part Two - Unit Five

 Estimating the resources required for each activity.

Regent Business School 5

 Identifying the critical (longest) path of activities.

Part Two - Unit Six

 Taking resource constraints into account when developing a network diagram.

Part Two - Unit Seven

 Estimating the costs of activities.

Part Two - Unit Eight

 Identifying risks and their potential impact.

Regent Business School 6

Part Two - Unit Nine

 Actions that should be taken when closing a project.

Part Three – Unit Ten

 The responsibilities of the Project Manager.

Part Three - Unit Eleven

 How teams are acquired and assigned.

Regent Business School 7

Part Three - Unit Twelve

 Suggestions for enhancing personal communication, such as face-to-face

Part Three - Unit Thirteen

 The characteristics of the three types of organisational structures.

Regent Business School 8

HOW TO USE THE STUDY GUIDE

 Do the activities after studying each unit to test your knowledge.

 Enhance your knowledge by referring to and reading some of the recommended

Additional Recommended Reading:

2. Bricknell., Fraser., Goldman., Kara., Labuschagne., Maritz., McGregor., Radford., (2014).

Regent Business School 10

PROJECT MANAGEMENT CONCEPTS

Regent Business School 11

PART ONE – UNIT ONE

1.1 PROJECT MANAGEMENT CONCEPTS

 Define what a project is

Regent Business School 12

1.2 DEFINING A PROJECT

1.2.1 Project Objective and Deliverable

1.2.2 Project Attributes

Regent Business School 13

 Expected benefits and outcomes

A statement of expected benefits and outcomes may be included in the project

 Interdependent activities (tasks)

Regent Business School 14

plumbers, electricians and so on. Organisations could be the government, or a

In constructing a building, equipment and tools are required such as forklifts,

 Specific time frame or finite lifespan