Engineering Project

Management

Dr. Hassan Darwish

A Frame Work For Project Management

1. Introduction and Key Concepts 6. Controlling Projects

2. Project Life Cycle Models 7. Closing Projects

3. Initiating Projects 8. Organizational Impacts

4. Planning Projects 9. Overview of Knowledge Areas

5. Executing Projects 10. Role of the Project Manager

Session Objectives

• An awareness of the importance of applying good practice Project

Management in projects of any size.

• An understanding of essential elements, including the Leadership Role of

the Project Manager, Project Planning, Risk Management and

Stakeholder Engagement.
 Tasks Sheduling

Project location
Competing Demands / Project Constraints

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Understanding Project Cost Management Principles
Cost Management

 It includes the processes involved in estimating, budgeting, & controlling

costs so that the project can be completed within the approved budget.
 Its processes are:

 Estimate Cost

 Convert it into budget

 Load the cost into schedule

 Administer changes

 Control Cost
Cost Estimating

 After developing a good resource requirements list, PMs

and their teams must develop several estimates of the

costs for these resources .

 Project managers must take cost estimates seriously if

they want to complete projects within budget constraints .

 It’s important to know the types of cost estimates, how to

prepare cost estimates, and typical problems associated

with cost estimates .

Cost Estimation Tools

 Cost budgeting involves allocating the project cost estimate to individual work items over time

 The WBS is a required input to the cost budgeting process since it defines the work items.

 To produce a Cost Baseline :

1. A time-phased budget that project managers use to measure and monitor cost

performance.

2. Estimating costs for each major project activity over time provides management with a

foundation for project cost control.

3. Cost budgeting also provides info for project funding requirements –at what point(s) in

time will the money be needed.

Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles

1. OPPORTUNITY COST:
Often used as a way of selecting which project to do. It works out the return that
would have been earned if you went ahead with one activity over another. For
example, if you choose to do Project A and not Project B, and Project B offered a
return of € 60k, then your opportunity cost is € 60k.

2. SUNK COST:
Costs already incurred on your project that you can’t get back. Most relevant when
talking about whether or not you should close down a project. You won’t be able to
recoup the sunk costs if a project is closed.

3. WORKING CAPITAL:
Money to be spent on capital assets e.g. physical things like a printer for the office.
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Assignment # (4)

Answer The Following 4 Questions.

Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Understanding Project Cost Management Principles
Competing Demands / Project Constraints

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Project Quality Management
Project Quality Management
 Quality management applies to :
The Deming Cycle
 Project activities
 Project results (deliverables, components)
PLAN:

Design or revise business process components to improve results

DO:

Implement the plan and measure its performance

CHECK:

Assess the measurements and report the results to decision makers

ACT:

Decide on changes needed to improve the process

Quality Management
 Quality Control :

 This is the Detection of defects after the event Implement an untried / unproven method.

 Estimate the relative amount of eggs, flour and water and bake it .

 Check to see if you have something edible.

 No upfront cost but many cakes thrown away.

 Quality Assurance
 This is the Prevention of defects before they happen.

 Following a recipe.

 Ensure the cake we bake is perfect first time and every time.

 Small upfront cost.

Quality Management
 Conduct Quality Checks
 Don’t rush quality checks to meet deadlines
 Determine quality benchmarks in the planning phase
 Inspect Deliverables using the most appropriate tools (checklist, statistical sampling, inspections)
 Accept or reject deliverables based on previously defined measures

 Track Milestones
 Here are few examples:
 The sponsor’s acceptance of a set of customer requirements for a new service
 The successful testing of a product prototype
 Installation of a critical piece of equipment
 Delivery of finished components to the stockroom
 Completion of the project – the ultimate milestone!
Quality Managing System
Assignment # (5)

Explain the following with real life examples:

 Types of project costs.

 Net Present Value.

 Tasks Sheduling

Project location
Project Management Process

1 INITIATE
Define the project
and set up
expectations.
3 EXECUTE
Start implementing the
project plan
3 4
The project process can often go back
and forth between the planning,
executing and monitoring phases.

5
PLAN

2
Create a plan with
schedules, tasks, MONITOR CLOSE
resources and Make sure the Reach the project
budget. execution is in line goal and compile
with the project all the documents

4
plan. and reports.
Different Outlines for Project Management
1. Define the project

2. Plan the project (timescales, costs, team, management tools)

3. Communicate project plan

4. Agree on roles and responsibilities

5. Manage, and enable the project team

6. Check, measure, and review project performance

7. Complete project

8. Follow up, measure, and report

 Tasks Sheduling

Project location
Competing Demands / Project Constraints

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Human Resource Management
 Resources includes, Human, Tools, Money & all involved substances.

 Project is performed by human,

 Project management is human and organisation management.

 who decides ?
 who is responsible on ?
 who controls ?
 who takes benefits of ?

 Complex projects are based on

complex organizations

 Best skills for all complex tasks

worldwide
Competing Demands / Project Constraints

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Risk Management

What is a Risk?

 A risk is an uncertain event which may occur in the future

 A risk may prevent or delay the achievement of an

organization’s or units objectives or goals

 A risk is not certain – Its likelihood can only be estimated

Note: Not all risk is bad, some level of risk must be

taken in order to progress / prevent stagnation.

2- What is Risk.mp4
Risk Management

What is Risk Management?

It is a process to:

 Identify all relevant risks

 Assess / rank those risks

 Address the risks in order of priority

 Monitor risks & report on their management

3- What is risk management_.mp4

Why Risk Management?

 Promotes good management

 May be a legal requirement depending upon industry

 Resources available are limited

 Focused response to Risk Management is needed

Hazard vs Risk.mp4
Risk Management Cycle

Risk Management Process.mp4

Risk Management Cycle

Step 1: Confirm Strategy

Risk Management Cycle

Step 2: Risk Identification & Assessment

 What are the threats and uncertainties associated with my organization’s

or units objectives?

 Separate out the risk into its cause & possible effect

 Be concise & clear

 Do not concentrate on symptoms only

Risk Management Cycle

Step 2: Risk Identification & Assessment

 Assess the risk’s

 Impact

 Likelihood

(Guidance on both later!)

 Prioritize the risks

 Hint: Get input from appropriate individuals

Risk Management Cycle

Step 3: Challenge & Evaluate Control

 Challenge & Evaluate Controls

 Control: Policy, action, procedure or process designed to prevent risk or

to limit its impact

 Do they work, are they effective?

 Residual Risk only should be measured

Risk Management Cycle

Step 4: Take Action

 For serious risks where controls are

A) Weak

B) Absent

 For risks where the Risk Appetite is exceeded

 Examine Cost vs. Benefit

Risk Management Cycle

Step 4: Take Action

Types of Action

A)Tolerate

B)Treat

C)Substitute

D)Terminate

(The choice of the above will be decided upon by your risk appetite)
Risk Management Cycle

Step 5: Monitor & Report

 Use a standard format for capturing risk data e.g. a “Risk Register”

 Review all risks at least annually

 Serious risks to be reviewed more often depending on circumstances

 Report on risk to senior management / Board

 Make Risk Register available to stakeholders to show good governance

Risk Management Summary

 Five Steps for Managing Risks :

 Identify Risk
 Evaluate & Analyze Risk
 Prioritize the risk
 Take actions to avoid or minimize risk
 Monitor & develop contingency plans

• Handling Unanticipated Risks

 Perform experiments quickly

 Emphasize early delivery of value
 Staff the project with people who have a talent for learning & adapting
 Avoid over relying on decision making tools and assume predictability
Risk Assessment Matrix

How to use a Risk Matrix.mp4

Risk Assessment Matrix

 Risk Weight = Likelihood * Impact

 Risk Level

 Weight < or = 6 Low

 Weight > 6 < 16

Medium

 Weight > or = 16
Risk Assessment Matrix

5
 Risk Weight = Likelihood * Impact
4 X

Impact
 Risk Weight =
3
 X = 3 * 4 = 12 2
 Weight > 6 < 16
1
Medium

1 2 3 4 5
 Risk Level = Medium
Likelihood
Risk Management
Project Plan Overview

 A concise written document containing some or all of the following Elements of a Plan:

 Project’s mission statement

 Scope of the project
 Description of project’s deliverables
 Relationship between the project’s goals and higher organizational goals
 Expected time frame & milestones
 Budget, allocations, and resources available
 List of constraints
 List of assumptions
 Outline of roles and responsibilities
 Benefits of the project
Project Management Plan (PMP)

Project Project
Stakeholders
Objectives, Work to be Organisation
(Internal &
Scope, done (WBS) and Resources
External)
Deliverables (OBS)

Procurement/
Project Costing Project Risk
Contract
(CBS) Schedule Management
Strategy

Quality Change
management Management
Wrapping Up the Project

 Importance of Wrapping Up :

 Ongoing Performance Evaluation (Scorecards, Key Performance

Indicators, Process Validation Programs, In Line Controls)

 Documentation (for future reference)

 Lessons Learnt (for future reference)

 Celebration & Acknowledgment

Project Management Process

1 INITIATE
Define the project
and set up
expectations.
3 EXECUTE
Start implementing the
project plan
3 4
The project process can often go back
and forth between the planning,
executing and monitoring phases.

5
PLAN

2
Create a plan with
schedules, tasks, MONITOR CLOSE
resources and Make sure the Reach the project
budget. execution is in line goal and compile
with the project all the documents

4
plan. and reports.
How To Be A Good Project Manager
Questions
 Engineering Project
Management

Dr. Hassan Darwish