PROJECT MANAGEMENT TECHNIQUES

Dr. Rajshree Upadhyay

A project is an endeavor to accomplish a specific objective through a unique set of interrelated

tasks and the effective utilization of resources. It has a well-defined objective stated in terms of
scope, schedule, and costs. It is an organised programme of activities carried out to reach a
defined goal, often of a non-recurring nature with a specified terminal point.
It can be considered to be any series of activities and tasks that:

Have a specific objectives to be achieved within certain specifications;

Have defined start and end dates;

Consume resources (time, money, equipment etc.); and

Generate wealth (tangible or intangible).

The application of knowledge, skills, tools and techniques to project activities in order to meet or
exceed stakeholder needs and expectations from a project is referred to as Project Management.
It is the application of a collection of tools and techniques to direct the use of diverse resources
towards the accomplishment of a unique, complex, one time task within time, cost and quality
constraints. Each task requires a particular mix of these tools and techniques structured to fit a
project environment and life cycle of the project. Thus, project management means dedicating
organizational resources to the end objectives and keeping the totality in focus all the time. The
emphasis in a project management is on results with holistic approach. A good project
management seeks to remove, among other things, delays in execution, avoid cause of delays
and identification of technical flaws in executing projects.
Employing project management technologies minimizes the disruption of routine activities in
many cases by placing under a single command all of the skills, technologies, and resources
needed to realize the project. The skills required depend on each specific project and the
resources available at that time. The greater the amount of adjustments a parent organization
must make to fulfill project objectives, the greater chance exists for project failure. The form of
project management will be unique for every project endeavor and will change throughout the
project.
It is the people (project manager and project team), not the procedures and techniques, that are
critical to accomplishing the project objective. Procedures and techniques are merely tools to
help the people do their jobs.

Project Management tools and techniques

Project management is a challenging task with many complex responsibilities. Fortunately, there
are many tools available to assist with accomplishing the tasks and executing the responsibilities.
Some require a computer with supporting software, while others can be used manually. Project
managers should choose a project management tool that best suits their management style. No
one tool addresses all project management needs.
Some techniques can be listed as under:

Manpower Planning (MPP)

Organizational Development (OD)
Organizational Analysis
O& M
Performance budgeting
Ratio Analysis Technique
Financial Accounting
Cost Benefit Analysis
Cost Effective Analysis
Quantitative Techniques
Electronic Data Processing (EDP)
Management Information System (MIS)
Programme Evaluation and Review Technique (PERT)
Critical Path Method (CPM)
Gantt chart Method
Work Study
Method Study
Work Measurement
Economic Order Quantity
ABC Analysis

Manpower Planning (MPP)

It is a process of information, collection, analysis and projection to determine the likely effects of
existing or proposed manpower policies on the manpower system under study, and to present,
and advice upon, possible course of action to overcome present or future problem.
Organizational Development (OD)
The technique aims at increasing the capacity of an organization which is so vital for the
performance of any human and economic activity. It implies planned changes in one or more sub
systems should be such as to build flexibility and adaptability into the system to cope effectively
with complex external environment while maintaining its own dynamic equilibrium
.
Cost effective analysis

It is more promising tool than cost benefit analysis .It is similar to the latter except that benefit,
instead of being expressed in monetary terms, is expressed in terms of results achieved.
Quantitative techniques
The quantitative techniques are those which are increasingly being used in almost all the areas of
management of studying a wide and varied range of problems. For example linear programming
is used to solve resource allocation problems decision theory is used to select the best course of
action when information is given in probabilities; games theory determines the optimum strategy
in competitive situation; simulation is used to initiate an operation or process, and index number
facilitate is measurement of fluctuations in prices, volumes, economics activity or other
variables over a period of time relative to a base.
Electronic data processing
The rationale in using this technique is to reduce the manpower required , the time taken for a
given process and to reduce the possibility of error.
Management information system
This technique is tailored to provide such information to the decision-makers which is most
relevant, accurate ,complete, concise, timely, economic, reliable and efficient .A good
information system provide data for monitoring and evaluating the programmes and gives the
requisite feedback to the administrators and planners at all levels.
Organisational analysis
It is a technique in the direction of organization building. It is mainly concerned with division of
work, fixing responsibilities, and creating environment for the accomplishment of organisational
objectives with minimum costs.
O&M
It is generally used to describe the activities of groups of people in government and other public
bodies or in private firms who are asked to advise administrators or managers on the question of
organisation and methods so as to increase the efficiency of work for which they are
responsible ,either by providing a better service, or a cheaper one or both.
Performance building
It is one of the cardinal tools of financial management to facilitate better programming , decision
making review and control .It is defined as comprehensive operational document conceived,
presented and implemented in terms of programmes, projects , and activities, with their financial
and physically aspects closely interwoven.
Programme evaluation and review technique
It emphasizes the efficient performance of a project. In a simplest form of PERT, a project is
viewed as a total system and consist of setting up of schedule of dates for various stages and
exercise of management control, mainly through project status reports, on its progress.

Critical Path Method (CPM)

It aims at reducing the time required to implement the project. By breaking the project into
activities that must be undertaken for its implementation and by determining their sequence, it is
possible to isolate most critical activities in the project and to compute the critical path scheduled
for their implementation.
Gantt Chart Method
It is one of the techniques used in the efficient implementation of the project. Simply stated, it is
a graphic presentation displaying the schedule of activities amenable to comparative assessment
of the schedule and actual performance.
Work Study
It is one of the most important techniques aimed at eliminating inefficicancy and ensuring all
round performance in the administrative organizations as well as at the works. Work study is thus
primarily concerned with increasing productivity by optimum use of human and material
resources.
Work Measurement
It again forms a part and parcel of Work study technique. It aims at fixing yardsticks to measure
the individual and collective performance.
Method study
It is one of the techniques of work study. It is only concerned with reducing the work content of
a job or operation but also improving the methods of work to raise the level of productivity of
staff, equipment and materials. According to British Standard Institution, method study is the
systematic recording and critical examination of existing and proposed ways of doing work as a
means of developing and applying easier and more effective methods and reducing costs.
Ratio Analysis Technique
It is another technique of financial management to serve as a guiding force in determining the
trend of performance over a period of time.
Ratio analysis aims at taking intelligent decisions by comparing and measuring the current and
past and current achievements with regard to profitability, solvency, effectiveness and efficiency
of the organization.
Financial accounting
The technique is used in interpreting the financial conditions and operations of an organization.
In simple words, financial accounting is described as the art of classifying, recording and
reporting significant financial events to facilitate effective economic activities.
Cost Benefit Analysis (CBA)
This technique is designed to consider the social costs and benefits attributed to the project. The
benefits are expressed in monetary terms, whether a given programme is economically sound,
and select the best out of the appropriate programme. Its advantage lies not in making decisionmaking simpler, but in its possibilities for systematic examination of each part of problem in
hand, for putting diverse decision on a par and following logical sequence.

Economic Order Quantity (EQQ)

This technique is an off shoot of the inventory management. It facilitates in planning production
schedules/procurement of goods at such economic costs/quantity that there is neither piling up of
stocks nor shortage of materials
ABC Analysis
It is a technique which would enable a busy executive to chase those files ardently which would
quicken the wheels of administrative machinery. By arranging his work in an order of priorities,
he can decide on which items to concentrate first and deals others later.
Among them PERT is relatively well known and widely used because of several distinguishing
characteristics. These are discussed in detail.
Programme Evaluation and Review Technique (PERT)
PERT deals with the problem of uncertainty in the activity time. As a managers tool it defines
and coordinates what must be done to successfully accomplish the objectives of a project on
time. It aids the decision-maker but does not make decisions for him. In PERT time is the basic
measure. It usually expressed in calendar weeks. The time associated with the activity is
probabilistic and the expected times of each activity are determined from three-time estimates
namely optimistic, pessimistic and most-likely. Whereas in CPM, a simple estimate is developed
and the time estimate for an activity is deterministic.
Advantages
PERT provides the management the ability to plan the best possible use of resources to
achieve a given goal within the overall time and cost limitations.
It helps management to handle the uncertainties involved in the programme.
It processes for the right action at the right point and at right time in the organization.
It provides information on existence of slack period between activities and what activities are
crucial to meet the completion date.
PERT allows a large amount of data to be presented in a well-organized diagram (network)
from which both the executor and customer can make joint decisions.
Limitations
The basic difficulty comes in the way of time estimate for the completion of activities
because activities considered are of non-repetitive type.
The technique does not consider resources required at various stages of the project.
Network fundamentals
Networks are composed of activities and events as defined below:

Activity
Activity is defined as a process or operation of a job which consumes time and resources. In a
network diagram, it is represented by an arrow ( ) .
Event
An event is defined as the starting or ending point of an activity or a group of activities. It
represents a milestone and does not consume time or resources. Event is described by a circle
(O) in the network.
To draw network diagram an interdependencies between events and activities must be identified
so that master plan can be developed which illustrate the up-to-date picture of operations during
the project and which can also be easily be understood by all. Network analysis provides
valuable information for planning, scheduling and controlling the large complex programmes. It
helps to eliminate the need for crisis management by providing a graphic representation of the
total programme from which the decisions such as impact of late starts, early starts, etc., can be
taken.
Rules for network construction
1.

Each activity must have a preceding and a succeeding event

2

2.

Each event should have a distinct (unique) number

3.

There should not be loop in the project network as shown below:

2

4.

Note more than one activity can have the same preceding and succeeding event
1

5.

Any number of activities may merge with an event

Dummy activity
Dummy activity also known as Zero-time activity is necessary to reflect the dependency
relationship between activities in the network, and is needed to satisfy one of the rules for
constructing of network i.e., no two events can be directly connected by more than one
activity. It is generally denoted by X1, X2 or Z1, Z2 .. etc. in the network with dotted lines
() as shown below.

3
A

Z1

Z2

6
E

In the above network B is a common immediate activity predecessor of both D and E activities,
while activity A is an immediate predecessor of activity D alone and activity C is the immediate
predecessor of activity E. Hence, two dummy activities Z 1 and Z2 are used to indicate the
precedence relationship as shown by broken lines in the above network.
Steps in development of network
1.

Enumerate the activities in the project, which you feel needs close monitoring in terms of
completion of the job intimae.

2.

Define each activity

Preceding activity (the activity which precede it)
Succeeding activity (the activity which followed)
Concurrent activity (the activity that can be done concurrently)

3.

Expected time for the completion of each activity

The estimation of expected time for the completion of each activity is important in the
network analysis. This can be done considering three possible completion time
assumptions.
I)

Optimistic time (a):

This time assumes that every thing will go according to plan and with a minimum
amount of difficulties. This may be visualized approximately one per cent of the
time.

II)

Most pessimistic time (b):

This time assumes that every thing will not go according to plan and that the
maximum potential difficulties may develop. This type of situation may be
expected approximately one per cent of the time.

III)

Most likely or normal time (m):

This is the time that, in the mind of the manager, would most often occur should
this effort be repeated over a time.

Considering the above, three types of line, the expected time (te) of the completion of an activity
is:
te

(a + 4m+b)
---------------6

te
a
m
b

=
=
=
=

expected time
most optimistic time
normal time
most pessimistic time

where,

and the associated degree of error also known as s.d. is calculated from the following formula:
s.d. (te)

(b a)
= -------6

The s.d. of the expected time indicates the confidence of the manager on the completion of the
activity within the prescribed time. Larger the s.d. indicate less confidence in the manager on the
completion of the activity within the expected time.
FLOW CHART:

In a flow chart the activity and its duration is shown in a box. The boxes are connected with lines
according to the preceding and succeeding activity relationship. The critical path for the project
can be identified by comparing the various path lengths (sum of activity time on the path). The
longest path in the chart is the critical path. The flow charts do not give many details like start
and completion time of each activity.
START

A
13

B
12
C

E
15

D
8
F
2

FINISH

In the above flow diagram there are three alternate paths to reach from Start to Complete.
These are as under,
Sl no
1
2
3

Path
B-D-F
A-C-D-F
A-E

Path length
12+8+2
13+2+8+2
13+15

Total
22
25
28 (Maximum)

The path A-E being the longest path i.e., having the maximum time is the critical path and
activities A and E falling in this path are critical activities. Even though it is possible to identify
the critical path and the critical activities from a flow diagram, this does not facilitate
computation of slacks or floats on the events. On the other hand, the analysis of the network
facilitates both identification of critical path and computation of slacks / floats.
NETWORK
2
15
E

13

A
C

4
12
B

8
D

From the network additional information on time schedule of each event like Early Starting Time
(EST) and Late Starting Time (LST) can be worked out. This information helps the Project
Manager to reschedule his activity times and in reallocation of resources effectively.
Earliest Starting Time (EST)
EST is the time at which the activity cannot be started earlier than this time (Waiting time).
In the above network, event 4 occurs when activities (A(1-2), B(1-3), C(2-4) and D(3-4) are
completed. In other words event 4 occurs when paths (1-2-3-4) and (1-3-4) are completed and
the requirement of expected time for the two paths is 23 and 20 weeks, respectively. In general,
the EST of an event is the duration of the longest path among the paths. In this case 1-2-3-4 is the
path with longest time (23 weeks). Therefore, the EST for the activity F is shown in the network
as:

23
23

Latest Starting Time (LST)

LST is the time, at which the starting of an activity cannot be delayed beyond this time (nonwaiting time).
The LST for an event is obtained by making EST and LST is equal for the end event and
calculated by working backward. The path with shortest time among the paths is considered as
LST. In this example the LST of an event 2 is 12 since between the two paths 2-5 and 2-3-4-5,
the path 2-3-4-5 is the shortest. The same can be shown in the network for event 2 as:
2

12

Similarly LST and EST of other events are calculated and shown below.
2
13

13

15
E

13

1
0
0 0

c 2
1
4

0
23

12
B

3
3
15
15

28

28

26

18

Identification of critical events

The critical events are the events with zero slack in the network. Event Slack is defined as the
difference between the Latest Starting Time (LST) and Earliest Starting Time (EST) of an event.
Event Slack Time = (LST-EST)
Slack time (week) for the events 2, 3 and 4 are calculated and shown below:

Events
4
3
2

LST
26
18
13

EST
23
15
13

Slack (LST-EST)
3
3
0

Besides the start and finish event the event 2 is the critical event in above network.
Identification of critical activity
An activity can be called as critical activity if the following conditions are satisfied.
i.

LST and EST are equal at the head event.

ii.

LST and EST are equal at tail event.

iii.

Difference between EST at head and tail event of the activity equals to the activity
time.

iv.

Difference between LST at head and tail event of the activity equals to the activity
time.

In the above network the activity A & E satisfying above conditions are critical activities.
Identification of critical path
The critical path is the chain of critical activity spanning the network from start to end i.e. the
path joining all the critical events. It is also the longest path from start to end of the project
network. Alternatively therefore comparing all the possible path lengths can identify the critical
path (see flow diagram). The critical path time is the shortest duration of the project. The critical
path is denoted preferably by denoting the critical events on the path.
Critical path for the project is, A E.
The critical path of the project can also be denoted in terms of the event numbers. In the present
project it is 1- 2 5. To distinguish the critical path from other paths in the project, it is
preferable to use a thicker line to demarcate the critical path. It is quite possible that a project can
have multiple critical paths. In such cases the length of all the critical paths will be equal.
Critical Path and Project Management:
The critical path time being the shortest project time any delay in completion of any of the
activity on the critical path would delay the entire project. Therefore it is the critical activity that
needs to be monitored for timely completion of the project. However, the activities with positive
event slack could be rescheduled within the available time frame for efficient utilization i.e.
smoothing of the demand on the available resources. If the duration of the project requires to be

reduced, activities on the critical path will be the ones to be considered for completion at an early
date with allocation of additional resources.
Determining the probability of completion of a project by a specific date (d)
Assuming the probability distributions of activities on the critical path are independent, the
variance of the time of the critical path is obtained by adding variances of activities on the
critical path (C.P.). In the previous example, A and E are the activities on the critical path.
The variance of the activity times on C.P. (Te)
s.d. (Te)

=
Var (ta) + Var (te)
SQRT [Var (ta) + Var (te)]

With the information on mean (m) and s.d (s) of critical path duration, and assuming as normally
distributed, we can compute the probability of completion of a project by a specific date (d) as
shown below:
Step 1 :
Find Z = (d m) / sd
Step 2 :
Obtain cumulative probability up to z from the table area under normal curve.
As an illustration consider a dummy network with mean (m) and s.d (s) of a critical path as 28
weeks and s.d 3.0 weeks respectively. Then the probability of completion of a project by certain
specified dates are given by:
Specified period (weeks)

Z-value

20
25
30

(20-28) / 3 = -2.67
(25-28) / 3 = -1.0
(30-28) / 3 = 0.67

Probability of completion
of project by a specified
period (d)
0.005
0.159
0.73

It is seen from the above table that the project can be completed within 30 weeks with higher
probability (0.73). On the other hand it is highly impossible to complete it within 20 weeks as
indicated by the probability (0.005).