Project management is the practice of initiating, planning, executing, controlling,

and closing the work of a team to achieve specific goals and meet specific success
criteria at the specified time.

The primary challenge of project management is to achieve all of the project goals
within the given constraints. This information is usually described in project
documentation, created at the beginning of the development process. The primary
constraints are scope, time, quality and budget. The secondary—and more
ambitious—challenge is to optimize the allocation of necessary inputs and apply
them to meet pre-defined objectives.
A project is a temporary endeavor designed to produce a unique product, service
or result with a defined beginning and end (usually time-constrained, and often
constrained by funding or staffing) undertaken to meet unique goals and
objectives, typically to bring about beneficial change or added value. The
temporary nature of projects stands in contrast with business as usual (or
operations), which are repetitive, permanent, or semi-permanent functional
activities to produce products or services. In practice, the management of such
distinct production approaches requires the development of distinct technical
skills and management strategies.
The objective of project management is to produce a complete project which
complies with the client's objectives. In many cases the objective of project
management is also to shape or reform the client's brief to feasibly address the
client's objectives. Once the client's objectives are clearly established they should
influence all decisions made by other people involved in the project – for example
project managers, designers, contractors and sub-contractors. Ill-defined or too
tightly prescribed project management objectives are detrimental to decision
making.
Project management methods can be applied to any project. It is often tailored to
a specific type of projects based on project size, nature and industry.

For example, the construction industry, which focuses on the delivery of things
like buildings, roads, and bridges, has developed its own specialized form of
project management that it refers to as construction project management and in
which project managers can become trained and certified.

The information technology industry has also evolved to develop its own form of
project management that is referred to as IT project management and which
specializes in the delivery of technical assets and services that are required to
pass through various lifecycle phases such as planning, design, development,
testing, and deployment.

Biotechnology project management focuses on the intricacies of biotechnology

research and development.
For each type of project management, project managers develop and utilize
repeatable templates that are specific to the industry they're dealing with. This
allows project plans to become very thorough and highly repeatable, with the
specific intent to increase quality, lower delivery costs, and lower time to deliver
project results.
A 2017 study suggested that the success of any project depends on how well four
key aspects are aligned with the contextual dynamics affecting the project, these
are referred to as the four P's:

• Plan: The planning and forecasting activities.

• Process: The overall approach to all activities and project governance.
• People: Including dynamics of how they collaborate and communicate.
• Power: Lines of authority, decision-makers, organograms, policies for
implementation and the like.

There are a number of approaches to organizing and completing project activities,

including: phased, lean, iterative, and incremental. There are also several
extensions to project planning, for example based on outcomes (product-based) or
activities (process-based).

Regardless of the methodology employed, careful consideration must be given to

the overall project objectives, timeline, and cost, as well as the roles and
responsibilities of all participants and stakeholders.
The Three Constraints

1 – Time:
Completion of tasks depends on a number of factors such as the number of people working
on the project, experience, skills, etc. Time is a crucial factor which is uncontrollable. On the
other hand, failure to meet the deadlines in a project can create adverse effects. Most often,
the main reason for organizations to fail in terms of time is due to lack of resources.

2 - Cost
It's imperative for both the project manager and the organization to have an estimated cost
when undertaking a project. Budgets will ensure that project is developed or implemented
below a certain cost. Sometimes, project managers have to allocate additional resources in
order to meet the deadlines with a penalty of additional project costs.

3 - Scope
Scope looks at the outcome of the project undertaken. This consists of a list of deliverables,
which need to be addressed by the project team. A successful project manager will know to
manage both the scope of the project and any change in scope which impacts time and cost.
 Types of Project Management Methodologies:

1. Waterfall:

The Waterfall methodology is the oldest methodology on this list. It was first outlined by Dr.
Winston Royce in 1970, since then, it has become widely adopted, most prominently in the
software industry.

The Waterfall methodology is sequential. It is also heavily requirements-focused. You

need to have a crystal clear idea of what the project demands before proceeding further.
There is no scope for correction once the project is underway.
The Waterfall method is divided into discrete stages. You start by collecting and analyzing
requirements, designing the solution (and your approach), implementing the solution and
fixing issues, if any.
Each stage in this process is self-contained; you wrap up one stage before moving onto
another.
Graphically, you can represent it as follows:
Advantages:
• Ease of Use: This model is easy to understand and use. The division between stages is
intuitive and easy to grasp regardless of prior experience.
• Structure: The rigidity of the Waterfall method is a liability, but can also be a strength.
The clear demarcation between stages helps organize and divide work. Since you can't go
back, you have to be "perfect" in each stage, which often produces better results.
• Documentation: The sharp focus on gathering and understanding requirements makes the
Waterfall model heavily reliant on documentation. This makes it easy for new resources to
move in and work on the project when needed.

Disadvantages:

• Higher Risk: The rigidity of this methodology means that if you find an error or need to
change something, you have to essentially start the project from the beginning. This
substantially increases the risk of project failure.
• Front-heavy: The entire Waterfall approach depends heavily on your understanding and
analyzing requirements correctly. Should you fail to do that - or should the requirements
change - you have to start over. This lack of flexibility makes it a poor choice for long and
complex projects.

Best for:

• Short, simple projects

• Projects with clear and fixed requirements
• Projects with changing resources that depend on in-depth documentation
2. Agile:

Agile, another software development-focused PM methodology, emerged as a

response to the failure of Waterfall method for managing complex projects.

In approach and ideology, Agile is the opposite of the Waterfall method. As the name
implies, this method favors a fast and flexible approach. There is no top-heavy
requirements-gathering. Rather, it is iterative with small incremental changes that
respond to changing requirements.

Graphically, it can be represented as follows:

Advantages:

Flexibility and Freedom: Since there are no fixed stages or focus on requirements, it gives
your resources much more freedom to experiment and make incremental changes. This
makes it particularly well-suited for creative projects.
Lower Risk: With Agile management, you get regular feedback from stakeholders and make
changes accordingly. This drastically reduces the risk of project failure since the stakeholders
are involved at every step.

Disadvantages:

No Fixed Plan: The Agile approach emphasizes responding to changes as they occur. This
lack of any fixed plan makes resource management and scheduling harder. You will
constantly have to juggle resources, bringing them on/off on an ad-hoc basis.
Collaboration-Heavy: The lack of a fixed plan means all involved departments - including
stakeholders and sponsors - will have to work closely to deliver results. The feedback-
focused approach also means that stakeholders have to be willing (and available) to offer
feedback quickly.

Best for:

When you don't have a fixed end in mind but have a general idea of a product. When the
project needs to accommodate quick changes. If collaboration and communication are your
key strengths
3. Hybrid:

The Hybrid approach, as the name implies, is a combination of the Waterfall and
Agile methodologies. It takes the best parts of both Waterfall and Agile and
combines them in a flexible yet structured approach that can be used across
different projects.

The Hybrid methodology focuses on gathering and analyzing requirements

initially - a nod to the Waterfall method. From thereon, it takes the flexibility of
Agile approach with an emphasis on rapid iterations.

By combining attributes of Waterfall and Agile, the Hybrid method (sometimes

called "Structured Agile") gives you the best of both worlds.
Advantages

Increased Flexibility: Past the planning stage, the Hybrid method affords you significantly
increased flexibility when compared to the Waterfall method. As long as the requirements
don't change substantially, you can make changes as they're requested.
More Structured: By borrowing the initial planning phase from Waterfall, the Hybrid
method addresses one of the biggest complaints about the Agile approach - lack of structure
and planning. Hence, you get the "best of both worlds".

Disadvantages

Requires Compromise: Since you're essentially reconciling two polar opposite approaches,
both sides will need to compromise on requirements and flexibility. "Best of both worlds"
approach robs you of the flexibility of Agile and the surefootedness of Waterfall. Any
iterations you make will have to comply with the budgeting and scheduling constraints set up
front.

Best for

The Hybrid approach is best-suited for projects that have middling requirements when
compared to Agile and Waterfall, i.e. they require structure as well as flexibility.
Mostly, this would be medium-sized projects with moderately high complexity but fixed
budgets. You would likely have an idea of the end product but you are also open to
experimentation. You will need close collaboration, especially past the planning stage.
4. Scrum:

Scrum isn't a fully-featured project management methodology. Rather, it describes

an approach to Agile management with a focus on project teams, short "sprints"
and daily stand-up meetings.

While it borrows the principles and processes from Agile, Scrum has its own
specific methods and tactics for dealing with project management.

The Scrum approach places the project team front and center of the project. Often,
there is no project manager. Instead, the team is expected to be self-organizing and
self-managing. This makes it ideal for highly focused and skilled teams, but not so
much for others.
Advantages:

Scrum “Sprints": The Scrum approach is heavily focused on 30-day "sprints". This is
where the project team breaks down a wish list of end-goals into small chunks, then works
on them in 30-day sessions with daily stand-up meetings. This makes it easy to manage large
and complex projects.
Fast Paced: The "sprint" approach with its 30-day limit and daily stand-up meetings
promotes rapid iteration and development.
Team- Focused: Since the project team is expected to manage itself, Scrum teams have
clear visibility into the project. It also means that project leaders can set their own priorities
as per their own knowledge of their capabilities.
Besides these, it has all the benefits of Agile - rapid iteration and regular stakeholder
feedback.

Disadvantages:

Scope Creep: Since there is no fixed end-date, nor a project manager for scheduling and
budgeting, Scrum can easily lead to scope creep.
Higher Risk: Since the project team is self-managing, there is a higher risk of failure unless
the team is highly disciplined and motivated. If the team doesn't have enough experience,
Scrum has a very high chance of failure.
Lack of Flexibility: The project-team focus means that any resource leaving the team in-
between will hugely impact the net results. This approach is also not flexible enough for
large teams.
Best For:

The Scrum approach is best for highly experienced, disciplined and

motivated project teams who can set their own priorities and understand
project requirements clearly. It has all the flaws of Agile along with all its
benefits. It works for large projects, but fails if the project team itself is very
large.
In short: use Scrum if you're developing complex software and have an
experienced team at your disposal.
5. Critical Path Method (CPM):

The above four project management methodologies emerged from software

development. While you can certainly use them for non-software projects, there are
better alternatives at your disposal.

In the Critical Path Method, you categorize all activities needed to complete the
project within a work breakdown structure. Then you map the projected duration of
each activity and the dependencies between them.

This helps you map out activities that can be completed simultaneously, and what
activities should be completed before others can start.
Advantages:
Better Scheduling: The emphasis on mapping the duration of activities and their
interdependencies help you schedule tasks better. If task X depends on task Y to
be finished first, CPM will help you identify and schedule for it. Prioritization:
The success of the CPM methodology depends on identifying and mapping
critical and non-critical activities. Once you've mapped these activities, you can
prioritize resources better.

Disadvantages:
Scheduling requires experience: As any experienced project manager will tell you,
things always take more time than you expect. If you don't have real-world
experience with scheduling, you are bound to miscalculate time for each activity.
No flexibility: Like the Waterfall method, CPM is front-heavy. You need to plan
everything out at the very start. If there are any changes, it makes the entire
schedule irrelevant. This makes this method unsuitable for projects with changing
requirements.

Best For:
The Critical Path Method is best-suited for projects with interdependent parts. If
you require tasks to be completed simultaneously, or for one task to end before
another can begin, you'll want to use this methodology.
CPM finds a lot of application in complex, but repetitive activities such as
industrial projects. It is less suited for a dynamic area such as creative project
management.
6. Critical Chain Project Management (CCPM):

Critical Chain PM is one of the newer project management methodologies out

there. It was developed as an alternative to the Critical Path method with a focus
on resource management.

With CCPM, you work backward from the end goal. You recognize the
deliverables, then use past experience to map out the tasks required to complete
the project. You also map out the interdependencies between resources and
allocate them accordingly to each task.

This graph from TrackerSuite shows the difference between a traditional vs. a
CCPM project schedule.
Advantages:

Resource-efficient: The entire focus on proper resource management makes CCPM

one of the most resource-efficient project management methodologies around. The
emphasis on monotasking is also well-aligned with our modern understanding of
the detrimental effects of multitasking. Focused on end goal: CCPM doesn't obsess
over the "optimum" solution to a problem. Instead, it prioritizes "good enough"
solutions that can help meet the end-goal. Since you also work backward from the
end-goal, CCPM usually yields better results for complex projects.

Disadvantages:
Not appropriate for multi-project environments: CCPM's resource-focused
approach can only work in single-project environments. In multi-project
environments, projects might share resources. CCPM can't plan for resource
distribution in such a scenario. Delays common: CCPM allots a gap or padding
between tasks to derive a task time length. In theory, this is supposed to make up
for resources overestimating their own efficiency. In reality, resources, following
Parkinson's Law, fill up the padding with inordinate delays.
Best For:
CCPM works best in environments where resources are devoted to a single
project. If you have a dedicated team for a project, it works great. If your
team is spread across several projects, you'll struggle with resource
planning.
The resource-focused approach of CCPM is also ideal for resource-strapped
project teams. If you find yourself constantly overworked or missing
deadlines, the CCPM methodology might be for you.
7. Integrated Project Management (IPM):

Integrated Project Management (IPM) - sometimes also called "Integrated Project

Delivery" - is a common project management methodology in creative industries.
This methodology emphasizes sharing and standardization of processes across the
organization.

The IPM approach came about as a response to the increasingly integrated nature
of creative campaigns. You don't just produce a single ad; you integrate the ad with
microsites, digital content, etc. Most creative projects are a piece of a larger
campaign.

An integrated project has the following components:

Advantages:
Transparency: Integrating processes across the organization improves
transparency within the organization. The IPM approach focuses on team members
documenting and meeting regularly, which helps keep everyone in the loop.
Accountability: The integrated nature of the IPM approach makes the entire
project team responsible for the project. Since no team member can operate in a
silo, IPM improves accountability.

Disadvantages:
Requires Extensive Planning: With the IPM approach, you will have to plan
extensively upfront and ensure that all processes are well-integrated. This
increases your burden significantly and can lead to delays.

Best For:
Large agencies with diverse teams and processes benefit the most from Integrated
Project Management. It works best for complex creative projects where you need
resources from multiple teams and departments to interface with each other.
8. PRiSM:

PRiSM (Projects integration Sustainable Methods) is a project management

methodology developed by Green Project Management (GPM) Global.

As hinted by the creator's name, the PRiSM approach focuses on accounting for
and minimizing adverse environmental impacts of the project. It is different from
traditional methodologies in that it extends beyond the end of the project. Instead,
it factors in the entire lifecycle of the project post-delivery to maximize
sustainability.

Here's an overview of how activities are organized in PRiSM:

Advantages:

The PRiSM approach is very pertinent for modern projects where environmental
costs and sustainability are key success criteria. For large projects where reducing
energy consumption, managing waste and minimizing environmental impact is
critical, PRiSM offers a viable project management ideology.

Disadvantages:

PRiSM is unsuitable for projects where environmental impact is not a concern

(such as software or creative projects).

Success with the PRiSM approach also requires every part of the project team -
including outside contractors and stakeholders - to be onboard with the
sustainability principle - a hard ask in most organizations.

Best For:

PRiSM is mostly suited for large and complex real estate and industrial projects
where sustainability is a key concern.
9. PRINCE2:

PRINCE2 (Projects IN Controlled Environments) is the official project

management methodology of the UK government (which means that most UK
government projects use it). You can even get a PRINCE2 certification to make
working as a project manager in the UK easier.

PRINCE2 is based on 7 principles, 7 themes and 7 processes. The 7 PRINCE2

principles, for instance, are:

Continued business justification Learn from experience Defined roles and

responsibilities Manage by stages Manage by Exception Focus on products
Tailor to suit the project environment
Six Aspects:

These aspects are also called tolerances or performance goals. They

quantify the project tolerance and are considered during decision-
making processes. In some organizations these can be KPIs. In the
following table project level tolerances are summarized:
Tolerance Type Maintained in the project level

Scope Project Plan

Timescale Project Plan

Risk Risk Management Approach

Quality Project Product Description
Benefits Business Case
Cost Project Plan
Advantages:

Running a PRINCE2 project requires extensive documentation. Additionally, one of

the guiding principles of PRINCE2 is to "Learn from experience". This focus on
documentation and past experience can help reduce risk.

Disadvantages:

The disadvantage of PRINCE2's extensive documentation is that changes can be

hard to accommodate. If the requirements change, you have to redo the
documentation and re-allocate resources, which can hamper project pace.

Best For:

This methodology is best-suited for large and complex projects with fixed
requirements. It is widely used in the country and is a requirement for government
projects.
How to Pick the Right Methodology:

You wouldn’t want to use PRiSM for a software project, just as you wouldn’t want to use
Agile for a big real-estate development.

1. Evaluate the Project:

When choosing a project management methodology, it helps to start from the end. You need
to know exactly what the final deliverable should look like and what you'll need to get it
done.

Focus on gathering initial requirements. If the requirements suggest that you need a large
and diverse team, pick a methodology that supports flexibility.

Similarly, if you have a clear idea of the end result, pick a more structured methodology
such as Waterfall. If the end result is vague (common in case of in-house projects), pick an
iterative methodology like Agile.

Some other things to consider when evaluating the project are:

Project budget Timeline Size and complexity Stakeholder expectations Project type and
industry
2. Evaluate Your Team:
Your project management methodology is essentially a blueprint for the project. It
tells your team what to create and when to create it.

In other words, if your team isn't familiar with the project management methodology
of your choice, you will struggle to get results. You will have to devote time to
learning the methodology, leading to delays.

Also consider your team composition. Identify its strengths and weaknesses. If the
team thrives on collaboration, you can pick a less structured approach like Agile. If
the team is highly motivated and disciplined, a SCRUM approach can work well. If
you have limited resources, pick a resource-efficient approach like CCPM. 512

Here are a few things to consider when evaluating your team:

Team experience Training Self-organization capabilities Team preparedness Team

location (remote, on-site, etc.)
Essentially, pick a methodology that fits your team, instead of forcing your team to
fit the methodology.
3. Evaluate Your Organization:

How your company is organized, its culture and its past records will have a big
impact on your choice of project management methodology. Some methodologies
only work with large organizations with established hierarchies. Others are more
suitable for smaller, leaner outfits.

For instance, if your past records show that all your Agile projects have been
delayed AND poorly received, it's a good idea to avoid this methodology in the
future.

A few things you should consider when evaluating your organization are:

Past records and experience with different methodologies Culture Organization

hierarchy Level of flexibility Organization maturity level Organization size
Available resources, including external resources such as freelancers and
contractors. Your industry
4. Evaluate Your Stakeholders:

When choosing a PM methodology, factor in:

Stakeholder involvement: Some methodologies demand that stakeholders be

regularly involved at every stage of the project. With Agile, for instance, you need
stakeholders to be regularly available for feedback. If the stakeholders are busy,
pick a methodology that requires lower stakeholder involvement. Stakeholder
requirements: How do your stakeholders work? What do they require from the
project manager? If the stakeholders are known to change project scope frequently,
pick a more flexible methodology. Similarly, if the stakeholders require daily
updates, pick a methodology that can accommodate this demand.
Given the importance of stakeholders in the project’s success, keeping their
requirements in mind will make for happier stakeholders and more successful
projects.
5. Evaluate Your Tools:

Project management tools are seldom methodology-agnostic. They are usually

designed to work well with a specific methodology.

Hence, the software tools you have existing access to and expertise in will impact
your choice.

To do this:

Make a list of all software tools you currently use List their limitations and
capabilities Compare their capabilities against the requirements for a specific PM
methodology.
Ideally, the methodology you choose should work with your existing toolset. If you
have to buy new tools, you will not only have to spend more but will also lose
critical time in retraining your team.

Doing this in-depth evaluation will help you choose a methodology that aligns with
your goals, your team’s capabilities, and your stakeholder’s requirements perfectly.
Project management is one of the critical processes of any project. This is due to the
fact that project management is the core process that connects all other project
activities and processes together.
When it comes to the activities of project management, there are plenty. However,
these plenty of project management activities can be categorized into five main
processes.

Let's have a look at the five main project management processes in detail

1 - Project Initiation:
Project initiation is the starting point of any project. In this process, all the activities
related to winning a project takes place. Usually, the main activity of this phase is
the pre-sale.
During the pre-sale period, the service provider proves the eligibility and ability of
completing the project to the client and eventually wins the business. Then, it is the
detailed requirements gathering which comes next.
During the requirements gathering activity, all the client requirements are gathered
and analyzed for implementation. In this activity, negotiations may take place to
change certain requirements or remove certain requirements altogether.
Usually, project initiation process ends with requirements sign-off.
2 - Project Planning:

Project planning is one of the main project management processes. If the project
management team gets this step wrong, there could be heavy negative
consequences during the next phases of the project.
Therefore, the project management team will have to pay detailed attention to
this process of the project.
In this process, the project plan is derived in order to address the project
requirements such as, requirements scope, budget and timelines. Once the
project plan is derived, then the project schedule is developed.
Depending on the budget and the schedule, the resources are then allocated to
the project. This phase is the most important phase when it comes to project cost
and effort.
3 - Project Execution
After all paperwork is done, in this phase, the project management executes the
project in order to achieve project objectives.

When it comes to execution, each member of the team carries out their own
assignments within the given deadline for each activity. The detailed project
schedule will be used for tracking the project progress.

During the project execution, there are many reporting activities to be done. The
senior management of the company will require daily or weekly status updates on
the project progress.

In addition to that, the client may also want to track the progress of the project.
During the project execution, it is a must to track the effort and cost of the project in
order to determine whether the project is progressing in the right direction or not.

In addition to reporting, there are multiple deliveries to be made during the project
execution. Usually, project deliveries are not onetime deliveries made at the end of
the project. Instead, the deliveries are scattered through out the project execution
period and delivered upon agreed timelines.
4 - Control and Validation:

During the project life cycle, the project activities should be thoroughly controlled
and validated. The controlling can be mainly done by adhering to the initial
protocols such as project plan, quality assurance test plan and communication
plan for the project.

Sometimes, there can be instances that are not covered by such protocols. In such
cases, the project manager should use adequate and necessary measurements in
order to control such situations.

Validation is a supporting activity that runs from first day to the last day of a
project. Each and every activity and delivery should have its own validation
criteria in order to verify the successful outcome or the successful completion.

When it comes to project deliveries and requirements, a separate team called

'quality assurance team' will assist the project team for validation and verification
functions.
5 - Closeout and Evaluation:

Once all the project requirements are achieved, it is time to hand over the
implemented system and closeout the project. If the project deliveries are in par with
the acceptance criteria defined by the client, the project will be duly accepted and
paid by the customer.

Once the project closeout takes place, it is time to evaluate the entire project. In this
evaluation, the mistakes made by the project team will be identified and will take
necessary steps to avoid them in the future projects.

During the project evaluation process, the service provider may notice that they
haven't gained the expected margins for the project and may have exceeded the
timelines planned at the beginning.

In such cases, the project is not a 100% success to the service provider. Therefore,
such instances should be studied carefully and should take necessary actions to avoid
in the future.
Six stages of Project Management:

A project undergoes six stages during its life cycles and they are noted below:

• Project Definition - This refers to defining the objectives and the factors to be
considered to make the project successful.

• Project Initiation - This refers to the resources as well as the planning before
the project starts.

• Project Planning - Outlines the plan as to how the project should be executed.
This is where project management triangle is essential. It looks at the time, cost
and scope of the project.

• Project Execution - Undertaking work to deliver the outcome of the project.

• Project Monitoring & Control - Taking necessary measures, so that the

operation of the project runs smoothly.

• Project Closure - Acceptance of the deliverables and discontinuing resources

that were required to run the project.
Having been named after the principality famous for its casinos, the term Monte
Carlo Analysis conjures images of an intricate strategy aimed at maximizing one's
earnings in a casino game.

However, Monte Carlo Analysis refers to a technique in project management where

a manager computes and calculates the total project cost and the project schedule
many times.

This is done using a set of input values that have been selected after careful
deliberation of probability distributions or potential costs or potential durations.
Importance of the Monte Carlo Analysis
The Monte Carlo Analysis is important in project management as it allows a project
manager to calculate a probable total cost of a project as well as to find a range or a
potential date of completion for the project.
Since a Monte Carlo Analysis uses quantified data, this allows project managers to
better communicate with senior management, especially when the latter is pushing
for impractical project completion dates or unrealistic project costs.
Also, this type of an analysis allows the project managers to quantify perils and
ambiguities in project schedules.
A Simple Example of the Monte Carlo Analysis:

A project manager creates three estimates for the duration of the project: one being
the most likely duration, one the worst case scenario and the other being the best
case scenario. For each estimate, the project manager consigns the probability of
occurrence.

The project is one that involves three tasks:

The first task is likely to take three days (70% probability), but it can also be
completed in two days or even four days. The probability of it taking two days to
complete is 10% and the probability of it taking four days to finish is 20%.

The second task has a 60% probability of taking six days to finish, a 20%
probability each of being completed in five days or eight days.
The final task has an 80% probability of being completed in four days, 5%
probability of being completed in three days and a 15% probability of being
completed in five days.

Using the Monte Carlo Analysis, a series of simulations are done on the project
probabilities. The simulation is to run for a thousand odd times, and for each
simulation, an end date is noted.

Once the Monte Carlo Analysis is completed, there would be no single project
completion date. Instead the project manager has a probability curve depicting the
likely dates of completion and the probability of attaining each.

Using this probability curve, the project manager informs the senior management
of the expected date of completion. The project manager would choose the date
with a 90% chance of attaining it.

Therefore, it could be said that using the Monte Carlo Analysis, the project has a
90% chance of being completed in X number of days.
How is the Monte Carlo Analysis Carried Out?:

The above example was one that contained a mere three tasks. In reality, such
projects contain hundreds if not thousands of tasks.

Using the Monte Carlo Analysis, a project manager is able to derive a

probability curve to show the ambiguity surrounding the duration and the costs
surrounding these hundreds or thousands of tasks.

Conducting simulations involving hundreds or thousands of tasks is a tedious

job to be done manually.

Today there is project management scheduling software that can conduct

thousands of simulations and offer the project manager different end results in a
probability curve.
The Different Types of Probability Distributions/Curves
A Monte Carlo Analysis shows the risk analysis involved in a project through a
probability distribution that is a model of possible values.

Some of the commonly used probability distributions or curves for Monte Carlo
Analysis include:

The Normal or Bell Curve - In this type of probability curve, the values in the
middle are the likeliest to occur.

The Lognormal Curve - Here values are skewed. A Monte Carlo Analysis gives
this type of probability distribution for project management in the real estate
industry or oil industry.

The Uniform Curve - All instances have an equal chance of occurring. This type
of probability distribution is common with manufacturing costs and future sales
revenues for a new product.

The Triangular Curve - The project manager enters the minimum, maximum or
most likely values. The probability curve, a triangular one, will display values
around the most likely option.