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PROJECT MANAGEMENT
UNIT I GLAU MBA IV TRIMESTER
Compiled By: Dr. Ankit Saxena

Project

A project is a unique endeavor to produce a set of deliverables within clearly specified time, cost and quality constraints.

A project is defined as work that is temporary and produces a unique product or service.

"A project is a one-shot, time-limited, goal-directed, major undertaking, requiring the commitment of varied skills and resources".

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Characteristics of Projects

Objectives Life Cycle Defined Time Limit Uniqueness Team Work Complexity Sub Contracting

Risk and Uncertainty Change Response to Environment

Rational Choice Optimality Control Mechanism

Project Management

Project Management is the skills, tools and management processes required to undertake a project successfully.

Project management is the planning, scheduling, and controlling of project activities to meet project objectives.

Project management is normally reserved for focused, nonnon-repetitive, time-limited activities with some degree of timerisk and that are beyond the usual scope of operational activities for which the organization is responsible.

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Process Flow of PM

EVOLUTION PROJECT MGMT

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History of Project Management

Project management has been practiced since early civilization.

Until 1900 civil engineering projects were generally managed by creative architects and engineers themselves,

It was in the 1950s that organizations started to systematically apply project management tools and techniques to complex projects.

As a discipline, Project Management developed from several fields of application including construction, engineering, and defense activity.

Two forefathers of project management are

Henry Gantt called the father of planning and control Gantt, techniques, who is famous for his use of the Gantt chart as a project management tool; and

Henri Fayol for his creation of the management functions which form the foundation of the body of knowledge associated with project and program management.

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Both Gantt and Fayol were students of Frederick Winslow Taylor's theories of scientific management.

His work is the forerunner to modern project management tools including work breakdown structure (WBS) and resource allocation.

The 1950s marked the beginning of the modern Project Management era.

Project management was formally recognized as a distinct discipline arising from the management discipline.

In the United States, prior to the 1950s, projects were managed on an ad hoc basis using mostly Gantt Charts, and informal techniques and tools.

At that time, two mathematical project-scheduling models were developed

"Critical Path Method" (CPM) "Program Evaluation and Review Technique (PERT)

At the same time, as project-scheduling models were being developed.

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In 1956, the American Association of Cost Engineers (now AACE International; the Association for the Advancement of Cost Engineering) was formed.

The International Project Management Association (IPMA) was founded in Europe in 1967, as a federation of several national project management associations.

IPMA maintains its federal structure today and now includes member associations on every continent except Antarctica.

In 1969, the Project Management Institute (PMI) was formed in the USA.

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PROJECT TAXANOMY

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Taxonomy of Projects

Based on the Type of Activity Based on the Location of Project Based on the Project Completion Time Based on Ownership Based on Size Based on Need

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(A) Based on Type of Activity

Industrial Projects Non Industrial Projects Ex.: Health Care Projects, Educational Projects, Irrigation Projects, Soil Conservation Projects, Pollution Control Projects, Water Supply Projects, High-way Projects.

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(B) Based on the Location of Project

National Projects International Projects

Setting up of Fully Owned Subsidiaries Abroad Setting up of Joint Ventures Abroad Setting up of Projects abroad by way of Mergers and Aquisitions

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(C)

Based on the Project Completion Time

Normal Projects (No Constraint on Time)

Crash Projects (To be completed within a stipulated time, even at the cost of ending up with a higher project cost) Ex.: Construction of Canal Lining to be completed before Monsoon starts

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(D) Based on Ownership

Private Sector Projects (Ownership in the hands of Project Promoters and InvestorsProfit Maximization!)

Public Sector Projects (Owned by the StateSocial Benefit! )

Joint Sector Projects (Ownership is shared by the Government and by Private Entrepreneurs)

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(E) Based on Size

Small Projects Medium Projects Large Projects

As per the Directives of the Government of India, Projects with investment on Plant and Machinery up to Rs. 1 crore are categorized as Small Scale Projects while those with investment in Plant and Machinery above Rs. 100 crores are categorized as Large Scale Projects.

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(F) Based on Need

New Project Balancing Project Expansion Project Modernization Project Replacement Project Diversification Project Backward Integration Project Forward Integration Project

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Project Development

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Waterfall Development

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Iterative Development

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PROJECT LIFE CYCLE

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Project Life Cycle

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(A) Project Initiation

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(B) Project Plan

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(C) Project Execution

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(D) Project Closure

Following the completion of all project deliverables and acceptance by the customer, a successful project will have met its objectives and be ready for formal closure.

Project Closure is the last phase in the project and must be conducted formally so that the business benefits delivered by the project are fully realized by the customer

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FUNCTIONS
PROJECT MANAGEMENT

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Project Management: Functions

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Selection

Pursuing the correct projects is easily as important as the effectiveness with which the project is carried out.

Project selection contains the following activities:

Create a business case for the project. Align the projects goals in the organization. Prioritize the project relative to other projects and ongoing operations.

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Definition

After a project is selected, a project manager is assigned and goes to work building the foundation for the projects success.

Project definition activities include the following:

Identify all stakeholders on the project and document their goals and involvement.

Develop a relationship with the project sponsor. Record the goals and constraints of the project using a statement of work or similar document.

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Planning

With a clear goal in place, documented by the statement of work and business case, the project manager builds the action plan that describes the who, what, when, where, and how of accomplishing the project.

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Planning typically includes the following activities:

Develop a detailed description of the work on the project using a work breakdown structure (WBS).

Analyze the sequence of the tasks. Estimate the tasks to determine the required skills, effort, equipment, and materials.

Establish detailed project schedules documenting specific start and finish dates, responsibilities, and completion criteria for each task.

Determine the number of people on the team and what skills are necessary.

Prepare contracts for vendors who are participating in the project.

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Control

For project managers, driving the project includes:

Monitor the progress of the project against the plan. Communicate with the project team and stakeholders. Form the project team and attend to its health. Maintain the cost-schedule-quality equilibrium. Take corrective action to keep the project on track.

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Risk Management

Because every project is unique, every project includes a high degree of uncertainty.

Risk management is the systematic practice of identifying and reducing the threats that exist in the project and the projects environment.

Planning for risk begins during the development of the business case and continues through definition and planning as each successive function provides a more detailed view of the project.

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Quality Management

Practices developed and established within the quality discipline (as defined by Deming, Crosby, et al.) can be applied to the project management discipline.

This integration begins as the project is conceived and carries forward until the outcome of the project is created and is accepted by the customer.

These practices focus on clearly understanding what the customer wants and consciously planning to deliver it, including methods for ensuring the product will be correctly built.

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Close Out

Project completion goes beyond delivery of the product.

A significant goal of project close out is capturing the lessons of the project so that they can be passed on to the organization.

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PROJECT ORGANIZATION

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Project Organization

Organization Structure is concerned with the allocation of task and establishment of AuthorityResponsibility Relationship between the members of the organization.

Broadly Organizational Structure can be of three types, viz.

Functional Organization Product Organization Matrix Organization

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Functional Organization
General Manager

Manager (Finance)

Manager (Production)

Manager (Personnel)

Manager (Marketing)

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Functional Organization
MERITS

Suitable for Smaller Organizations that offer a limited line of Products.

DEMERITS

Ineffective Controlling Difficulty to fix accountability and difficult to judge the performance of the members.

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Product Organization
General Manager

Manager (Food Products)

Manager (Pharmacy Products)

Manager (Cosmetics)

Manager (Health Products)

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Product Organization
MERITS

All activities, skills and expertise required to produce and market a particular product are grouped under a single head.

Better Coordination and a higher level of performance

DEMERITS

Subordination of organizational interest to personal interest

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Matrix Organization
General Manager
Manager (Finance)
Functional Responsibility

Manager (Production)

Manager (Personnel)

Manager (R & D)

Project Manager A Project Manager B Project Manager C

Project Responsibility

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Matrix Organization

Combine merits of Functional and Product Organization

Suitable for Project-driven Organizations. Project Manager has the total responsibility and accountability for making the project a success.

Functional Manager is responsible to maintain functional excellence in all the projects.

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Success functioning of a Matrix Organization requires:

Coordination of Project and Functional Managers Both of Project and Functional Managers should provide inputs to planning

The horizontal line of control must be allowed to operate freely as a separate entity except for administrative purpose.

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MERITS

Sharing of Authority and Responsibility between Project Managers and Functional Managers results in Synergy.

Optimum Resource Utilization Maximum Control of Project Manager over Project Top Management can devote more attention for planning

Sharing of Knowledge

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DEMERITS

Conflicts and Power Struggle between the Project Department and Functional Department

Danger of Dual Reporting Duplication of Efforts More Discussions than Actions Costly to implement Matrix form of Organization Greater focus on inter-personnel relationship and organizational development

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Modified Matrix Organization

General Manager
Director (Projects) Project Manager A Project Manager B Project Manager C Manager (Finance)
Functional Responsibility

Manager (Production)

Manager (Personnel)

Manager (R & D)

Project Responsibility

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Pure Project Organization

Project Manager

Design

Engineering

Research

Procurement

Production

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Pure Project Organization

Project Manager in in total control of all other departments.

Suitable if organization has a complex project whose resource requirements are large.

Every project is treated as a separate entity. Costly affair since separate human and physical resources are to be assigned and maintained for each projects.

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Selection of Project Organization Structure

Condition
Project Driven Enterprise Stable and Repetitive Environments Non-Routine Projects Labour Intensive Projects Projects involving High Complexity and requiring Huge Resources

Suitable Organization Structure

Matrix Organization Structure Functional Organization Structure Departmental Project Management Structure Pure Project Organization Structure, Matrix Organization Structure Pure Project Organization Structure

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Work Breakdown Structure (WBS)

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Work Breakdown Structure (WBS)

A process by which the whole project is divided (i.e. broken down) into various sub-projects, the subprojects into various tasks, the tasks into various sub-tasks and finally the sub-tasks into workpackages.

The WBS and the constituent work-packages become the basis for project planning, scheduling and controlling.

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Types of WBS

Product Oriented WBS

The project is sub-divided in to sub-projects on the basis of products. And so on

Functionally Oriented WBS

The project is broken down on the basis of functional departments (or functional tasks). And so on

In practice, a combination of product oriented and a functionally oriented WBS can be used.

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Organization Breakdown Structure

The project organization can be broken up in to several groups, sub-groups, individuals etc.

The breaking down of project organization is done in such a way that an individual or a group of individuals can be identified with the work packages arrived at as per WBS..(Integrating WBS with OBS)

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PROJECT MANAGERS MUST BE LEADERS

Effective project managers are able to:

Communicate a vision. Motivate and inspire the team. Build trust within the team. Influence stakeholders beyond the project team. Make abstract things concrete. Demonstrate determination. Manage and resolve conflict. Know when to make a decision. Maintain the big picture perspective while organizing details.

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PM Tools and Techniques

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1.

Brainstorming Process
Define and agree the objective. Brainstorm ideas and suggestions having agreed a time limit.

Categorize / Condense / Combine / Refine. Assess / Analyze effects or results. Prioritize Options / Rank list as appropriate. Agree action and timescale. Control and Monitor follow-up.

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2.

Fishbone / Ishikawa Diagram

Ishikawa's diagram became known as a fishbone diagram, obviously, because it looks like a fishbone.

Fishbone diagrams are chiefly used in quality management fault-detection, and in business process improvement.

The model is also very useful in project management planning and task management generally.

Fishbone diagrams are very good for identifying hidden factors which can be significant in enabling larger activities, resources areas, or parts of a process.

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Fishbone diagrams are also called 'Cause and Effect Diagrams' and Ishikawa Diagrams, after Kaoru Ishikawa (1915-89), a Japanese professor specializing in industrial quality management and engineering who devised the technique in the 1960s.

For each project the main categories of factors are identified and shown as the main 'bones' leading to the spine.

Into each category can be drawn 'primary' elements or factors (shown as P in the diagram), and into these can be drawn secondary elements or factors (shown as S).

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Cause and Effect Diagram

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3.

Project Critical Path Analysis (Flow Diagram or Chart)

'Critical Path Analysis' sounds very complicated, but it's a very logical and effective method for planning and managing complex projects.

A critical path analysis is normally shown as a flow diagram, whose format is linear (organized in a line), and specifically a time-line.

Critical Path Analysis flow diagrams are very good for showing interdependent factors whose timings overlap or coincide.

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Example: Critical Path Method

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4.

Gantt Chart

Gantt Charts are extremely useful project management tools.

The Gantt Chart is named after US engineer and consultant Henry Gantt (1861-1919) who devised the technique in the 1910s.

Gantt charts are excellent models for scheduling and for budgeting, and for reporting and presenting and communicating project plans and progress easily and quickly.

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Practical Application

These charts are generally introduced during the planning and scheduling stage of projects

From beginning to the end, the charts force us to:

Make a realistic assessment of the end-time of the project. Sequence our tasks (or phases, or activities) - one after the other, as well as in parallel.

Think in terms of task dependencies - which task is dependent on what.

Concentrate on the necessary resources, both when and where, throughout the run of the project.

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Example: Gantt Chart

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Example: Gantt Chart

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5. Run Chart

A run chart, also known as a Run-sequence plot is a graph that displays observed data in a time sequence.

Often, the data displayed represent some aspect of the output or performance of a manufacturing or other business process.

Run charts are analyzed to find anomalies in data that suggest shifts in a process over time or special factors that may be influencing the variability of a process.

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Run Chart: Illustration

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6. Responsibility Assignment Matrix

A Responsibility Assignment Matrix (RAM), (also known as RACI matrix or Linear Responsibility Chart (LRC)), describes the participation by various roles in completing tasks or deliverables for a project or business process.

It is especially useful in clarifying roles and responsibilities in cross-functional/departmental projects and processes.

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RACI Matrix: Illustration

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6.A RACI Matrix

R = Responsible
(People who do the work)

A = Accountable
(People who make sure the work gets done)

C = Consulted
(People who provide input before and during the work)

I = Informed
(People who are kept informed of progress)

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Developing a Responsibility Assignment Matrix

Step One Step Two

: Define Your Deliverables : Identify the People Involved

Step Three

: Create Your Responsibility Matrix

Step Four

: Communicate

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Step I: Define your Deliverables

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Step II: Identify the People Involved

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Step III: Create Your Responsibility Matrix

Identify training needs Survey current practice PM: Kim CSM: Ron CEC: Terry TC: Nancy CSS: Reagan CSR: John R C A R Coordinate the training Evaluate the results

Define Prepare ReLocate Analyze new training survey resources results practice schedule practices A R C I C C R R C R C C A I A A R A R R

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Step IV: Communicate

When Responsibility Assignment Matrix is complete, communicate it to all stakeholders.

Its a good idea to post it in an area where people will see it.

Used effectively, the RAM helps people understand what they should be doing at all stages of the project.

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6.B RACI-VS Matrix RACI

6.C RACIO (CARIO)

Responsible Accountable Consulted Informed Verifier Signatory

Responsible Accountable Consulted Informed

Out of the Loop (or Omitted)

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6.D

DACI

6.E

RSI Matrix

Driver Approver Contributors Informed

Responsible Sponsor Informed

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6.F

PARIS Matrix

6.G

PACE Matrix

Primary Assigned Review Required Input Required Signature Required

Process Owner (Process Leader)

Approver Consulted Executers

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7. Financial Tools

Types of labour costs to be incurred during the project Items of equipment needed to deliver the project Various materials needed by the project Unit costs for labor, equipment and materials Other costs types such as administration Amount of contingency needed

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8. Project Health Check

Developed by Professor Jaafari. A project and or program is subject to continuous change and evolution.

The actual performance of the team on a given project can be assessed through the project health check (PH-Check).

The focus of PH-Check is on managerial capabilities and actual state of practice on a given project at the given time.

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Project Success
Key Concern Area:

Complexity Uncertainty Risks

Success depends on:

Creative Reflective Skills Smart Tools Tailored Factors

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Focus: Project Health Check

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