Fundamentals of

Project Management

CHAPTER ONE

INTRODUCTION TO
PROJECT
1.1. History of Project Management
Is Project Management a New Practice?
 Definitely, the answer is no, project management
is not new. It has been in use for thousands of
Years.
It is possible to say that the concept of project
management has been around since the beginning
of history. It has enabled leaders to plan massive
projects and manage materials and labor within a
designated time frame. E.g. An ark project by
Noah.
And others like, The Pyramids of Egypt, Great
Wall of China, Lalibela, Axum & Fasil
 Cont…

1958, the military (US Navy) was the key industry

behind the development of several project
management techniques.

For example, The Polaris Project, Submarine

Ballistic Missile Project after world war II (during
the cold war) Introduced many techniques to deal
with the inherent system complexity in the
Polaris Project.

This includes the use of the Network Diagram,

Critical Path Method (CPM), PERT (Program
Evaluation and Review Techniques).
 Cont…
In 1971, Henry Gantt , an American mechanical
engineer, designed the Gantt chart as a tool for
scheduling work in factories
A Gantt chart is a project management tool assisting
in the planning and scheduling of project activities and
particularly useful for simplifying complex projects.  

A Gantt chart helps in scheduling, managing, and

monitoring specific tasks and resources in a project.

The chart is the most widely used chart in project

management such as building dams, bridges and
highways, software development, and development of
other goods and services.
 Cont…
In summary, by the mid-20th century, project managers
began the work of seeking recognition for project
management as a profession.
One aspect of this work involved in obtaining
agreement on the content of the body of knowledge
(BOK) called project management. This BOK became
known as the Project Management Body of Knowledge
(PMBOK).
PMBOK is the sum of knowledge with in the profession
of project management. As with other professions such as
law medicine, accounting and so on, the body of
knowledge rests with the practitioners and academics who
apply and advance it. As a result, the PMBOK is constantly
evolving.
 Cont.…
The primary purpose of PMBOK is to identify that subsets
of the project management body of knowledge that is
generally recognized as good practice.

“Generally recognized” means that the knowledge and

practices described are applicable to most projects most of the
time, and that there is widespread consensus about their
value and usefulness.

“Good practice” means that there is general agreement that

the correct application of these skills, tools and techniques can
enhance the chances of success over a wide rage of different
projects. Good practice does not mean that the knowledge
described should always be applied uniformly on all projects;
the project management team is responsible for
determining what is appropriate for nay given project.
 Cont.…
The Project Management Institute (PMI) produced a
baseline of charts and glossaries for the PMBOK.
In the late -20th century, particular in 1990’s Many
companies created Project Management Offices (PMO).
PMO is an organizational structure that standardizes
the project-related governance processes and facilitates
the sharing of resources, methodologies, tools, and
techniques.
The responsibilities of a PMO can range from providing
project management support functions to the direct
management of one or more projects.
Examples:
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1.2. Concepts and Definitions of Project
and Project Management
What is a project?
As a working definition, several authors have
provided various definitions of a project. Some of
the widely accepted definitions of project are as
follows:
A Project is:
 a Problem Scheduled for Solution.
a temporary endeavor undertaken to create a
unique product/service.
 Cont…
 An endeavor in which human, machine material
and financial resources are organized in a novel
way, to undertake a unique scope of work, of
given specification, within constraints of cost
and time, so as to deliver beneficial change defined
by qualitative and quantitative objects.
 we can also define project as an organized program
of pre determined group of activities that are non-
routine in nature and that must be completed
using the available resources within the given
time limit.
A project uses one or more scarce resources during
a specific time for the purpose of producing some
economic returns or outputs at a later date.
 Features of a project
1. Specific and Unique:
• Every project is unique in that it requires doing
something different than was done previously.
• Each project is unique in the sense that the activities
of a project are non routine.
• A project is a one-time activity, never to be exactly
repeated again. They do not involve repetitive
processes.
• Projects involve doing something that has not been
done before in the same environment: having
different location, different design, different
circumstances and situations and so on.
No two projects, even projects with the same general
objectives, are ever identical in planning or implementation.
 Cont…
2. Temporary
A project has a definite beginning and definite end(finite
duration).
Temporary does not necessarily mean the duration of the
project is short.
• It refers to the project’s engagement, it can be Can be a
3month project or 25 years project or …
Temporary does not typically apply to the product, or
service created by the project;
•Most projects are undertaken to create a lasting
outcome.
Projects are temporary activities as an ad hoc
organization of personnel, material, and facilities is
assembled to accomplish a goal, usually within a scheduled
time frame.
3. Progressive Elaboration

Continuously improving the plan as more

information becomes available as the project
progresses.

The characteristics of the product/service of the

project are determined incrementally and
continually refined and worked out in detail as the
project progresses or un-folds.

Planning and documentation are iterative and

ongoing activities.
 Cont…

4. Requires Resources

Project have resource limits, such as a limited

amount of budget, human, equipment and
materials that are dedicated to the project.

5. Risk
Projects involve an element of risk i.e. Projects
entail a level of uncertainty regarding cost,
schedule or performance outcome and therefore
carry project risk.
 Cont…

6. Definable objective
Project involves a definable objective usually
specified in terms of cost, schedule, and
performance requirements.

7. Project has life cycle:

 Project is the process of working to achieve a
goal; during the process, projects pass through
several distinct phases, called the project life
cycle. The tasks, people, organizations, and other
resources change as the project moves from one
phase to the next.
 Cont…

8. Team Work
Project is a team work and it normally consists of
diverse areas. There will be personnel
specialized in their respective areas and co-
ordination among the diverse areas calls for
team work.

9. Complexity
A project is a complex set of activities relating
to diverse areas.
 PROJECT VS. OPERATION
Discussion activity
People get confused between Projects and Operations
because they share some characteristics, such as:
 Both are performed by people.
 Both are planned, executed and controlled.
 Both have resource limitations.

Construction of a house is a project

but
manufacturing a product is a not project. Why?
 Cont…

Operations are an ongoing execution of

activities and they follow an organization’s
procedures to produce the same result or a
repetitive service. Operations are permanent in
nature.
Ordinary daily work typically requires doing the
same or similar work over and over,
while a project is done only once; a new product or
service exists when the project is completed.
 Projects should not be confused with everyday work.
 A project is not routine, repetitive work!
 Comparison Projects/ Operations/
criteria (for Project Work Functional work
Differences)

Type of work/product Unique The same

Work/Product
Time Definite beginning No definitive
and ending beginning and ending
Occurrence Temporary in nature Ongoing, repetitive

Budgets For specific projects On-going operational

budgets

Focus Completing the Accomplishing

project effective work
Portfolio Vs. Program Vs. Project
Portfolio
A collection of subsidiary portfolios, programs,
projects, and operations managed as a group to
achieve strategic objectives. Or
• Portfolios are collections of work (projects,
programs, or sub-portfolios) and are a way to plan
and manage the projects from an organization
perspective. The projects may or may not be
related.
Investment Process:
1. Security analysis (Risk and Return)
2. Portfolio selection

“Do not put all your eggs in one basket”

 Cont…

Program
A group of related projects, subsidiary programs,
and program activities managed in a coordinated
manner to obtain benefits not available from
managing them individually.

• Programs are larger initiatives that are broken

up into a set of smaller projects and subprograms
and then coordinated centrally. The projects in
a program are related to each other.
Business plan Vs. Business Proposal Vs. Project Proposal

People tend to mix their meaning and are unable to

differentiate them. Business plans, project proposal and
business proposals are amongst these misleading
terminologies.

What is the difference ?

Business Plan
Business plans reflect the long term plan of a
business and it reflects the way a business plans to
establish itself over a longer period of time.

The business plan is intended for the management as

well as the lenders and many others.

Business plans are needed for establishing a

guideline for standing up a business from scrap. It
usually defines the directions the business has to
follow step wise in order to achieve it.
Business proposal
Business proposal, on the other hand, is not meant
for longer term. It is an intention to work out a
business venture with another business.
Business proposal is an offer that are made in
writing to other companies to work together.
A business proposal is a document that you submit to
another enterprise proposing a business
arrangement.
They are short term and only needed to communicate
a business's intentions to work with another
business
Project proposal
Project proposals are documents designed to present
a plan of action, outline the reasons why the action
is necessary, and convince the reader to agree with
and approve the implementation of the actions
recommended in the body of the document.

The structure of project proposal is determined by the

nature of the project as well as by the funding
agency’s requirements.
Project Management

• Project Management is the skills, tools and

management processes required to undertake a project
successfully”.

• Project management is a set of principles, practices,

and techniques applied to lead project teams and
control project schedule, cost, and performance risks
to result in delighted customers.

• It is a temporary endeavor that involves management

functions to achieve certain pre defined objectives.
• Project management involves a series of management
techniques and processes required to monitor and
control time, cost, quality and scope of projects.

• Project management is the discipline of planning,

organizing, securing, and controlling resources to
bring about the successful completion of specific
project goals.

• All the management functions are required to

effectively and efficiently manage resources required
to complete the project. These are :
Project planning involves:
 Looking ahead and charting out future course of
operation for projects
Formulation of Objectives, policies, procedure, rules,
schedules and budgets
In the planning stage, managers establish
organizational goals and create a course of action
to achieve them.
During the planning phase, management makes
strategic decisions to set a direction for the
organization
Project organizing involves
Bringing resources together and tying them
together in the pursuit of common objectives.
Enumeration and identification of activities,
classification of activities, fitting individuals into
functions and assignment of authority for action.
A project manager's organizational skills can help to
ensure a company or departmental unit runs
smoothly.
Knowing which employees or teams are best suited
for specific tasks.
Organization isn't just about delegating tasks
efficiently and making sure employees have what
Project directing involves
Guiding, overseeing and leading people
Motivation, leadership, decision making.
Directing/Leading consists of motivating employees
and influencing their behavior to achieve
organizational objectives.
Though managers may direct team members by
giving orders and directing to their team, managers
who are successful leaders usually connect with
their employees by using interpersonal skills to
encourage, inspire and motivate team members
to perform to the best of their abilities. 
Project Controlling
 Laying standards, comparing actual performance
against standards and correcting deviation-achieve
objectives according to plans.
To ensure all of the above functions are working
toward the success of a company, managers should
consistently monitor employee performance, quality
of work, and the efficiency and reliability of
completed projects.
Controlling is the process of evaluating the execution
of the plan and making adjustments to ensure that the
organizational goal is achieved.
Project Objectives
There are three basic and common objectives
of any project:
The project must meet the prescribed quality
requirements,

The project must be accomplished within the

budgeted cost,

The project must be completed on time.

 Cont…

Performance/quality:
The end result of the project must be fit for the
purpose for which it was intended. It should fulfill the
requirements based on the specification.

The project owner and all the other stakeholders must

be satisfied.

Development projects for consumer goods must

produce articles that satisfy the market requirements
and conform to all relevant legislation.
 Cont…

Budget:
The project must be completed without exceeding the
authorized expenditure.

Financial resources are not always inexhaustible and a

project might have to be abandoned altogether if funds
run out before completion, in which case the money
and effort already invested become forfeit and must be
written off.
 Cont…

Time of Completion:
Actual progress has to match or beat planned progress.

All significant stages of the project must take place no

later than their specified dates, to result in total
completion on or before the planned finish date.

Consistently failing to keep delivery promises can not

enhance the contractor’s market reputation and disrupt
the company’s following projects.
 Cont…

The project scope is the definition of what the project

is supposed to accomplish and the budget (time
and money) that has been created to achieve these
objectives.
Any change to the scope of the project has a matching
change in budget, either time or resources. If the
project scope is to build G+3 building with a budget of
Birr 10,000,000 the project manager is expected to do
that. However, if the scope is changed to G+4, the
project manager must obtain an appropriate change in
budgeted resources. If the budget is not adjusted, the
project manager will avoid the change in scope.
 Cont…
A key point to note in relation to project goals is that they
should be stated in a way that facilitates measurement of
achievements.
The general rule is that project goals should be SMART – an
acronym for:
Specific :
well defined and clear to anyone that has a basic knowledge
of the project,
Measurable :
How do we know how far away completion is and when it
has been achieved,
Action-oriented:
Indicate what should be done to achieve the objective,
 Cont…

Reliable/achievable :
Do we have the resources (human, financial,
material, information, time) to make the goal
happen? Is the objective achievable with the
available resources and timeframe.
Time-based :
It should identify a definite target date for
completion and/or frequencies for specific action
steps that are important for achieving the goal
on/within a specific time period.
 Key stakeholders of a project
Key stakeholders who are directly linked to most projects
are;
1. Project manager:
The project manager has primary responsibility for the quality of a
project's deliverables and its successful completion.

Project managers can have the responsibility of the planning,

execution, and closing of any project and ensuring that the project
is successfully completed on time and within budget.

Key project management responsibilities include creating clear

and attainable project objectives, building the project
requirements, and managing the triple constraint for projects,
which is cost, time, and scope.
2. Project Sponsor
The project sponsor can be a public or private entity
and should have the influence to ensure that the project
has sufficient priority to enable success.

The sponsors are responsible for providing the funding

and staffing resources to complete the project
successfully.

The project sponsor usually represents the recipient of

the project’s end result.
3. The user
The user is the person or organization using the product
of the project.
End users are responsible for ensuring that their needs
are expressed and verifying that a completed project
meets those expressed needs.
4. The contractor:
Typically builds a unique project in a very competitive
environment.
Project Management Knowledge Areas
Project Time Management:
To ensure timely completion of the project. It consists
of activity definition, activity sequencing, activity
duration estimating, schedule development & schedule
control.

 Project Cost Management:

To ensure that the project is completed within the
approved budget. It consists of resource planning, cost
estimating, cost budgeting, & cost control.
Project Management Knowledge Areas
Project Quality Management:
The project will satisfy the needs for which it was
undertaken. It consists determining the required
condition, quality planning, quality assurance &
quality control.

Project Human Resource Management:

The processes required to make the most effective use
of the people involved with the project. It consists of
organizational planning, staff acquisition & team
development.
Project Communications Management:
Required to ensure timely and appropriate generation,
collection, dissemination, storage, and ultimate
disposition of project information. It consists of
communications planning, information distribution,
performance reporting & administrative closure.
Project Risk Management:
Process of identifying, analyzing, and responding to
project risk. It includes risk management planning, risk
identification, qualitative risk analysis, quantitative risk
analysis, risk response planning & risk monitoring and
control.
 Cont…

Project Procurement Management:

To acquire goods and services to attain project scope

from outside the performing organization.
 It consists of procurement planning, solicitation,
source selection, contract administration & contract
closeout.
Chapter End!