PROJECT MANAGEMENT: PLANNING, EXECUTION,

EVALUATION AND CONTROL

Prof. Sanjib Chowdhury
Vinod Gupta School of Management
IIT Kharagpur

Module 02: Organization Strategy and Project Selection

Lecture 05: Non-Financial and Multi-criteria Project Selection Models
Concepts Covered:
➢ Linkages between Strategy and Projects
➢ Integrated Management of Project
➢ Project Portfolio Management System – need for and major functions
➢ Project Governance - An Integrative Approach
➢ Design of project portfolio system
• Classifications of projects
• Financial criteria of project selection
(Financial Metrics – NPV, IRR, Payback period)
• Non-financial criteria of project selection
• Multi-criteria selection models
• Managing Portfolio system
 Activity/Problem Solving
1. Alpha Co. is evaluating two similar projects whose initial investment and expected
future cash flow are shown in the following table:
Project X Project Y
Year Cash flow ($) Cash flow ($)
Y0 (800,000) (850,000)
Y1 100,000 200,000
Y2 200,000 300,000
Y3 300,000 400,000
Y4 500,000 500,000
Y5 300,000 -

The company expects to earn at least 14 percent on its investment. The Financial
Advisor of the company has informed that inflation would remain stable at 2
percent for the entire period. Based on financial consideration, determine the
Payback period, NPV, and Profitability index of both projects, which project the
company would fund?
Non-financial Strategic Criteria
• Capture larger market share
• Create difficulties for competitors to enter market
• Develop enabler product to↑ sales
• Develop core technology for next-gen product
• Reduce dependency on unreliable suppliers
• Prevent government intervention and regulation
• ↑ corporate image, brand recognition
• Commitment for corporate citizenship, Support community development
➢ Multi-criteria selection models
Illustrative
‒ Checklist models
Sample Selection Questions used In Practice
Topic Question

Strategy/alignment What specific strategy does this project align with?

Driver What business problem does the project solve?

Success metrics How will we measure success?

Sponsorship Who is the project sponsor?

Risk What is the impact of not doing this project?

Risk What is the project risk to our organization?

Risk Where does the proposed project fit in our risk profile?

Benefits, value, ROI What is the value of the project to this organization?

Benefits, value, ROI When will the project show results?

Objectives What are the project objectives?

➢ Multi-criteria selection models
Illustrative
‒ Checklist models
Sample Selection Questions used In Practice
Topic Question

Organization culture Is our organization culture right for this type of project?

Resources Will internal resources be available for this project?

Approach Will we build or buy?

Schedule How long will this project take?

Schedule Is the time line realistic?

Training/resources Will staff training be required?

Finance/portfolio What is the estimated cost of the project?

Portfolio Is this a new initiative or part of an existing initiative?

Portfolio How does this project interact with current projects?

Technology Is the technology available or new?

➢ Multi-criteria selection models Illustrative
‒ Multi-weighted scoring model
Project Screening Matrix
 Activity/Problem Solving (Project Screening Matrix)
1. The Custom Bike Company has set up a weighted scoring matrix for evaluation of potential projects.
Below are five projects under consideration.
a. Using the scoring matrix below, which project would you rate highest? Lowest?
b. If the weight for “Strong Sponsor” is changed from 2.0 to 5.0, will the project selection change? What
are the three highest weighted project scores with this new weight?

Part a. Part b.
Activity/Problem Solving
(Project Screening Matrix)
Project Screening Process
Portfolio Management System
➢ Design of a project portfolio system:
• Classification of a project
• Selection criteria
• Sources of proposals
• Evaluating proposals
• Managing the project portfolio
‒ Sr. management input
‒ PMO responsibilities
‒ Balancing portfolio for risks and types of projects
 Project Portfolio Matrix

Source: David and Jim Matherson, The Smart Organization, Harvard Business School Press, 1998, pp.203-09
Conclusion:
• Further to the previous lecture, this module also illustrates non-financial criteria of project
selection which is necessary for strategic and compliance projects. The chapter further
discusses multi-criteria selection models such as check list model, and multi-weighted scoring
model to design and manage a robust portfolio system.
• It also explains project screening process, and project portfolio matrix in terms of “technical
feasibility/risk” and “net present value/commercial potential” of project, and categorized R&D
projects as four types, namely, Bread-and-butter, Pearl, Oyster, and white elephant projects.
References:
1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and
Joshi, R., McGraw Hill Education, 8th edition.
2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson
Publishing Ltd., 5th edition.
3. Projects Planning, Analysis, Selection, Implementation, and Review, Prasanna
Chandra, McGraw Hill Education, 8th edition.
4. Project Management, Pradeep Pai, Pearson India Education Services Pvt Ltd.,
2019, 1st edition.
PROJECT MANAGEMENT: PLANNING, EXECUTION,
EVALUATION AND CONTROL
Prof. Sanjib Chowdhury
Vinod Gupta School of Management
IIT Kharagpur

Module 03: Organization Structure and Culture

Lecture 06: Organization Structure
Concepts Covered:
• Factors influencing success of the project
• What is an appropriate project management structure?
• What are the types of project management structure?
• What are the characteristics of each structure?
• Which structure is best for an organization?
• Organizational Culture and its characteristics
• Relation between organization culture, project management structure and
project success
• Key dimensions of organization culture
Organization Structure
• Factors influencing success of the project
• Appropriate project management structure
• Project management structures are pre-dominantly 3-types and its
combinations
‒ Functional form
‒ Dedicated project team / Projectized form
‒ Matrix form
 Functional Structure

Source: Project Management, Gray and Larson

• What is Functional structure?

• When do we use Functional structure?
• Advantages – No change, max flexibility, in-depth expertise, easy post-project transition
• Disadvantages - Focus, Integration, Ownership, Slow
 Dedicated Project Team

• What is Dedicated Project Team?

• When do we use Dedicated Project Team?
Source: Project Management, Gray and Larson

Advantages – Simple, Cohesive, x-functional Integration, Fast

Disadvantages – Expensive, Internal Strife, Limited expertise, post-project Transition
 Projectized Organizational Structure

Source: Project Management, Gray and Larson

• What is Projectized organizational structure?

• When do we use Projectized organizational structure?
 Matrix Organization Structure

Source: Project Management, Gray and Larson • What is Matrix structure?

• When do we use Matrix structure?
 Matrix Organization Structure

• Hybrid organizational structure

• Optimize resources

 Different Matrix Form

• Weak Form
• Balanced Form
• Strong Form

Advantages – Efficient (resource ), Focus, Transition, Flexible

Disadvantages - Dysfunctional conflict, Infighting, Stressful , Slow
 Project management organization structure continuum

FM FM FM FM FM FM
PM PM
FM FM FM PM
P.M. PM
P.M.
PM PM

Lightweight project managers FM FM FM

Pure functional PM
Increasing project Balanced
organisation PM
P.M.
orientation matrix
Pure project organisation PM
organisation Heavyweight project managers
PM
PM
P.M. FM FM FM FM FM FM
PM PM PM
PM
P.M. PM
P.M.
PM PM
FM = Functional manager
PM = Project manager
Conclusion:
• This module discusses an appropriate project management structure, and the factors
that influence the success of a project. An appropriate project management structure
balances the needs of the project with the needs of the organization. There is a
strong relation between success of a project and the autonomy and authority of the
project manager – i.e., the power he commands
• There are mainly three types of project management organization structure, namely,
functional, projectized, and matrix structures. The characteristics and suitability of
each structure, their advantages and disadvantages, and project management
organization structure continuum have been elaborated.
References:
1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and
Joshi, R., McGraw Hill Education, 8th edition.
2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson
Publishing Ltd., 5th edition.
3. Project Management: A Managerial Approach, Meredith, J.R. and Mantel, S.J.,
Wiley, PMBOK Guidelines Book
4. Project Management for Business and Technology – Principles and Practice, John
M. Nicholas, Prentice-Hall of India Ltd.
PROJECT MANAGEMENT: PLANNING, EXECUTION,
EVALUATION AND CONTROL
Prof. Sanjib Chowdhury
Vinod Gupta School of Management
IIT Kharagpur

Module 03: Organization Structure and Culture

Lecture 07: Organization Culture
Concepts Covered:
• Factors influencing success of the project
• What is an appropriate project management structure?
• What are the types of project management structure?
• What are the characteristics of each structure?
• Which structure is best for an organization?
• Organizational Culture and its characteristics
• Relation between organization culture, project management structure and
project success
• Key dimensions of organization culture
What’s the right Project Management Structure?
 Organization (Form) Considerations
• Importance of the project
• Percentage core work
• Resource availability

 Project Considerations
• Size
• Strategic importance
• Novelty, innovation
• Integration (no. of depts.)
• Environmental complexity (no. of external interfaces)
• Budget and time constraints
• Stability of resource requirements
Organizational Culture
 What is Organizational Culture?
• A system of shared norms, beliefs, values, and assumptions which bind people
together, thereby creating shared meanings (Deal & Kennedy, 1982)
• Culture of cooperation, Culture of competition, Riverboat trip

 Relation between organization culture, project management structure

and project success
• Instances of successfully managing projects with functional structure; Failure of
matrix structure; Relying on independent project teams
Organizational Culture
 What is meant by “personality” of the organization?
• Sense of identity to its members
• Legitimize management system of the organization
• Clarifies and reinforces standards of behavior

 How to identify Cultural Characteristics of a Co.?

• Study the physical characteristics of an organization
• Read about the organization
• Observe how people interact within the organization
• Interpret stories and folklore surrounding the organization
Organizational Culture

 Challenges for Project Managers in Navigating Org. cultures

• Interacting with the culture and subcultures of the parent organization
• ….. the project’s clients/customer
• ….. other organizations related to the project
 Key dimensions of defining an Organization’s Culture

Source: Project Management, Gray and Larson

 Cultural dimensions of an Organization Supportive of Project Management

Source: Project Management, Gray and Larson

Conclusion:
• Further to the previous lecture wherein we have discussed the various aspects of
organization structure, in this class the relation between organization culture, project
management structure and project success is elucidated.
• Further, it explains the importance of organizational culture for the success of the
project, the effect of culture of cooperation and culture of competition; and how to
identify cultural characteristics of a Co.?
• It also dwells on challenges for project managers in navigating different organization
cultures, and key dimensions of defining an organization’s culture supportive of
project management.
References:
1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and
Joshi, R., McGraw Hill Education, 8th edition.
2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson
Publishing Ltd., 5th edition.
3. Project Management: A Managerial Approach, Meredith, J.R. and Mantel, S.J.,
Wiley, PMBOK Guidelines Book
4. Project Management for Business and Technology – Principles and Practice, John
M. Nicholas, Prentice-Hall of India Ltd.
PROJECT MANAGEMENT: PLANNING, EXECUTION,
EVALUATION AND CONTROL
Prof. Sanjib Chowdhury
Vinod Gupta School of Management
IIT Kharagpur

Module 04: Defining the Project

Lecture 08: Project Scope of Work and Deliverables
Concepts Covered:
• Defining the Project Scope
• Establishing Project Priorities
• Creating the Work Breakdown Structure (WBS)
• Integrating the WBS with the Organization
• Coding the WBS for the Information System
• Responsibility Matrices
• Project Communication Plan
Defining the Project (Step 1)
 Project Scope Statement/SOW
• specific, tangible, measurable

 Purpose of Scope Statement

• Clearly defined deliverables, focus on project completion, plan and
measure

 Project Charter
• Expanded version, R&R, authorization

 Scope Creep
Defining the Project (Step 1)
 Project Scope Checklist
1. Project objective
2. Deliverables
3. Milestones
4. Technical requirements
5. Limits and exclusions
6. Reviews with customer
Establishing Project Priorities (Step 2)
• Causes of Project Trade-offs
‒ Shifts in the relative importance of criterions related to cost, time, and
performance parameters
o Budget (Cost)
o Schedule (Time)
o Performance (Scope)

Project Management Trade-off

Establishing Project Priorities (Step 2)
• Managing the Priorities of Project Trade-offs
‒ Constrain: a parameter is a fixed requirement
‒ Enhance: optimizing a criterion over others
‒ Accept: reducing (or not meeting) a criterion requirement

Project Priority Matrix

Creating Work Breakdown Structure (Step 3)

 What is a WBS?

 How WBS helps Project Manager?

• Evaluate cost, time, performance
• Plan, schedule and budget
• Assign responsibilities, Level wise info, OBS
• Define communication channels, coordinate tasks

 What is a Work package?

(Defines task/work, determine duration, budget, resource need,
responsibility, monitoring point/milestones for measuring)
 Creating Work Breakdown Structure (Step 3)

Source: Project Management, Gray and Larson

Source: Project Management, Gray and Larson Work Breakdown Structure
Illustrative
Conclusion:
• This module discusses the steps in defining the project, which include (i) defining the
project scope, (ii) establishing project priorities: priority trade-off, concept of constrain,
enhance and accept, and (iii) creating work breakdown structure (WBS) and work
package, which are the keys to managing the project.
• It also explains how WBS helps project manager, clients, and other important
stakeholders.
References:
1. Project Management – The Managerial Process, Gray, C.F., Larson, E.W., and
Joshi, R., McGraw Hill Education, 8th edition.
2. Project Management – Achieving Competitive Advantage, Jeffrey K. Pinto, Pearson
Publishing Ltd., 5th edition.
3. Successful Project Management, Gido, J. and Clements, J.P., Cengage Learning,
6th edition.
4. Project Management: A Managerial Approach, Meredith, J.R. and Mantel, S.J.,
Wiley, PMBOK Guidelines Book