ASSIGNMENT NO-O1 NAME REGISTRATION NUMBER LEARNING CENTRE LEARNING CENTRE CODE COURSE SEMESTER SUBJECT MODULE DATE

OF SUBMISSION MARKS ALLOCATED DIVYA ABHIJIT DEHERKAR

1205006125 DADAR 02835 MBA 2ND SEM PROJECT MANAGEMENT MB0044 18/02/2013

Director of Distance Education Sikkim Manipal University II Floor, Syndicate House Manipal-576 104

Signature of Coordinator

Signature of Centre

Signature of Evaluator

MB 0049 Operation Research (Book ID:B1632)

Q1.

Discuss the various steps of PMIS planning?

Ans: The success of a PMIS depends on its effective planning. The PMIS is used for many purposes by a project manager like budget estimation of costs, creating a schedule, define the scope, etc. Hence, these should be considered while planning for PMIS. The planning of PMIS includes the following steps: Identify the information needed: Identification of the information that is needed is necessary for improving the decision making and the structure of the PMIS. Information requirements of project stakeholders include the recipients of information, the type of information that is needed, which includes format, contents, and level of details, the time the information is required and how (by what media) will it be communicated to them. Capture data: Term Capture data is used to state a process of preparing and collecting data i.e. as element of a process improvement or similar project. The function of data collection is to attain information to maintain record, to make decisions for vital issues, and to pass information on to others. Data can come from actual observation or from records. Data collected from records is known as secondary data. Data collected from direct observation is known as primary data. It should be ensured that all relevant groups are represented in the data. A formal data collection process is essential as it makes certain that the gathered data are both defined and precise and that subsequent decisions based on opinion embodied in the findings are valid. Data has to be possibly arranged in tabular form, data array or frequency distribution. Process data into information and store It.: An organisation, to achieve its aims, needs to process the data collected into meaningful information. It should be presented in its most useful formats. Data must be processed in a context to give it meaning. Data is transformed into information using mathematical, statistical, or other tools including computer software. Information can be stored in electronic form or hard copies represented in the most useful form. Communicate information to stakeholders: Communication is the process by which information is exchanged between individuals through a common system of symbols, signs, or behaviour. To show the importance of communication, Cleland quotes the following statements: Peter Drucker states that the ability to communicate, heads the list of criteria for success. Harvard Business Review reports that the ability to communicate was at the top among 22 personnel attributes in promotions. A project manager uses communication more than any other force to manage the project.

Q2. What are the different phases of contract management? Ans: Contract management is the management of contracts which is entered with clients, sellers, partners or employees. It comprises of negotiating the terms and conditions and ensuring the compliance with the terms and conditions, with documenting and approving on any changes or amendments that may occur during its implementation or execution. As we discussed in the previous section, a purchase order becomes a legal contract after accepting by the vendor or the agent. Most of the projects include a huge amount of capital investment on purchasing the equipment and machinery. Organisations can also get these equipments on a contractual basis. Hence, the project manager needs to negotiate with the suppliers on quality, delivery schedule, price, payment schedule, service, and other relevant legal contractual aspects. The process of deliberation is called negotiation. Contracting has three phases:(1)Contract planning (2)Contract negotiations (3)Contract administration Contract planning: Contract planning should be done at the project schedule stage. The process of contract planning includes the preparation of resource plans. The following points should be considered for preparing the contract planning: Work Break Down (WBS) and packaging Requirement of resources, mainly equipment and manpower for various work packages Type and numbers of contracts to be awarded and approximate to whom. Technical, financial, and operational capabilities of the contractor Scope of work for each contractual job Method of contracting - ICB, LCB, open tender, limited tender, etc Choosing among suitable and comparable parties Obligations of both parties should be reasonable

Contract negotiations: The negotiator brings the buyer and the seller face to face. All assumptions and parameters related to price are analysed. Eventually, a more realistic picture emerges, which is agreed to by both the buyer and the seller. The following aspects should be kept in mind at the time of contract 1. Negotiations:- Price could be fixed or adjustable during the contract period. Fixed price is generally applicable under stable market conditions and in case of firm specifications and product schedule. Adjustable price applies to unstable labour market conditions. Price-related terms:- uncertain specifications and product schedule. A suitable price adjustable clause is agreed and included to take care of these situations. Payment terms: Any of the payment terms which include advance, credit for specified period, cash on delivery, and retiring document through bank may be selected mutually. Retiring a document through bank is adopted by the supplier to obviate any delay in payment after receipt of the consignment. The process involves the following steps: Dispatch document in the form of railway receipt, RR (in case of rail transport), consignment note (in case of road transport), or bill of lading or bill of exchange (in case of ocean transport) is sent by the supplier to its banker, after receiving the indicated amount, with a request to handover the document to the purchasing company. In the document, the supplier puts its name as consigner and consignee. The supplier signs on the back of the document (like bearer cheque). A letter is also written to the consignee to retire the document from the bank. The recipient company gets the document after making the specified payment and collects the consignment from the transporter after producing the dispatch document. The bank charges some fee from the consigner for this service.

2. 3.

Delivery conditions: These may include which mode to be used, how much quantity to be delivered, and when.

Agency for inspection: It is to be agreed whether inspection is to be done by a third party or by buyers or supplier's own inspection. Cancellation: Cancellation of contract may be done due to default by the vendor in failing to perform as agreed in contract while making deliveries, convenience of the buyers, or mutual consent. In a situation where the seller is not at fault, it is to be ensured that he or she does not suffer any loses. Quantity: Quantity may be fixed or variable in case of variable quantity; the lower and upper bound needs to be specified. Contract administration: Various problems may arise during the execution of the contract such as: Extra work including excess quantities of work Deleted work including lower quantities of work Non-compliance with specifications Delays in time schedules Late payments Taking over of completed works Warranties Contract close out

As and when the problems arise, they must be sorted out immediately based on the provisions of the agreed contract. Q3. Describe the process of project performance evaluation.?

Ans: It is very useful tool to find out the reasons behind a failure to achieve intended outcomes. The modifications that need to be made to a project can be determined by following the below steps: Project identification:- Identification of appropriate projects (or project ideas) is the first and the most important stage in project management. This is done through appropriate type of opportunity studies. Opportunity studies are indicative rather than detailed ones and are based on macro parameters and rough estimates. Such studies can be grouped into 3 categories: Area studies: About a given geographical area Sectoral studies: About specific economic sector such as power plants,food processing, Resource-based studies: Studies about renewable and non-renewable national resources, industrial products like minerals, etc.

Pre-feasibility studies:- After the identification stage, the project ideas are screened through prefeasibility studies. Pre-feasibility studies are the intermediate studies between the opportunity studies and detailed project report. This is basically carried out to check for the viability of the project and have a rough estimate of the cost of project and profitability. An outline of a prefeasibility study is given below: Executive summary About the report Project sponsor's background and history Location and site, for example, the report recommends the location and site along with essential related activities and their cost estimates. Requirement of raw materials and their sources Requirement of utilities and auxiliary services such as power, water, steam, compressed air, transportation, etc Selection of the conversion process (technology) Fixation of overall plant capacity based on technology selected

Selection of plant equipment and machinery based on capacity proposed An outline of the production process and plant layout Capital cost estimate Plant organisation and manpower requirement and their cost estimates Production costs Profitability analysis Construction schedule General layout and flow sheets (supporting drawings) Detailed project report: Techno-economic feasibility study Preparation of Detailed Project Report (DPR) is a further step in examining the feasibility of the project from all angles: Technical, financial, economical managerial, and also the Environmental Impact Analysis (EIA). This is a major proposal and is necessary as per government directives and is considered as a bankable report based on which banks can advance loans. Appraisal and evaluation: Appraisal and evaluation are essential parts of good financial management. The general principles should apply to any proposal whether project, programme, or policy related with implications for expenditure/use of resources. The effort that should go into them and the detail to be considered, however, is a matter of judgment. For example, the proposals involving modest expenditure / use of resources may merit less detailed appraisal and evaluation. The major techniques for financial appraisal criteria are: Q4. Pay Back period (PBP) Net Percent Value (NPV) Internal Rate of Return (IRR) Accounting Rate of Return (ARR) Cost-benefit ratio Cash flow considerations Discuss the various elements of project control?

Ans: Control of the project is exercised through formal and informal processes exercised by the project manager, project team, and stakeholders. The process of conducting reviews and monitoring reports exerts a degree of control over the project. This discussion will, however, focus on the formal processes of control established by the project plan. As project has a lot of associated uncertainties, project control is essential. System of Project Control concentrates mainly on Identify output and performance objective. There are three basic performance objectives/standards for a project which a manager is expected to control. These include time schedule (project duration), project cost, and conformance to design specifications which ensure quality. Two common methods to evaluate these objectives are variance analysis and earned value method. However, variance and earned value analysis are not applied to the objective, quality, as there is difficulty in quantifying it. In this case, the project manager may develop his or her own standards or adopt available ones and tries to ensure that they are met. Performance monitoring for schedule and cost is also equally important point to be taken care of. This tells who is to monitor the information and at what frequency. Normally, for a moderate size project, a separate project monitoring cell is created for collecting, analysing, and reporting information to all concerned for the purpose of information and controlling the project. The task of the group may include: 1.Monitor progress 2. Calculate variance/earned value 3. Prepare variance/earned value report and other reports and send them to all concerned 4. Present the report in review meeting 5. Compile the measures arrived at in the meeting to deal with variances 6. Follow up the implementation of suggested measures Frequency of monitoring depends on nature, duration, and importance of projects and the stakeholders need. Time between monitoring may vary from continuous to several days.

Q5. A. What could be the reasons for project termination? Ans: Project termination is one of the most serious decisions of a project management team and its control board. The decision of project termination affects all the stakeholders of the project and can put some negative impact on the organisations growth. So it is important to critically evaluate all the aspects before taking the decision. The project manager and his or her team members will feel that they personally failed. It can also put a negative i mpact on the team members motivation level and their productivity. The following are the key reasons to terminate a project: Technological reasons Results of project requirements or specifications are not clear or impractical Fundamental change in project requirements or specifications, so that the underlying contract cannot be changed accordingly Lack of project planning, especially risk management The planned result or product of the project turn into obsolete, is not any longer needed Sufficient human resources, tools, or material are not accessible The increase in project cost leads lower profit than expected The parent organisation do not exist longer The change in strategy of parent organisation, leads towards the project does not support the new strategy Essential conditions disappear Lack of management support Insufficient customer support

B. Write a note on project follow up? Ans: Traditionally, this stage is considered as a part of project completion phase but now it is considered as a separate phase of project life cycle. This is particularly so in very political environments, and/or where project benefits have relatively low visibility and meaning to stakeholders (staff, customers, investors, etc), especially if the project also has very high costs. For example, ICT (Information and Communications Technology) projects often are like this low visibility of benefits but very high costs, and also very high stress and risk levels too. After delivery or completion of the project, the staff performance has to be evaluated. The tasks involved in this phase are: Documenting the lessons learnt from the project Analysing project feedback Preparing project execution report Analysing the problems encountered during the project

Q6. Discuss the advantages of using PM software package. What are the common features available in PM software packages? Ans: The following are the key advantages of using project management software: Speed, effort, and accuracy: For a large project, manually carrying out activities like drawing a network, carrying out time analysis, reporting project progress, generation of various types of reports, updating network, and maintaining records is quite time and effort consuming. Accuracy level is also below par. Use of the software package greatly reduces the time and effort needed for these activities and at the same time enhances accuracy. Ability to carry out special functions: The software has the ability to carry out some special functions like resource scheduling, what if experiment, and export and import of data with ease and within reasonable time. Manually carrying out these functions is extremely difficult or not feasible. Affordability: The price of PC-based software is under $500 which is affordable for an organisation. Easy to use: Over the years, the project management software packages have become easy to use. The package can be handled with minimum training.

Maintenance of record: A project generates a lot of data, reports, documents, etc. Manually archiving and retrieving these are time and effort consuming. The software package can handle these functions with relatively less time, effort, and cost.

Common Features available in Most of the Project Management Software:-Before knowing the practical use of project management software, we should study some of the common features available in most of the project management software. An attempt is made to present an overview of generic features associated with various project management software packages available today. These generic features include: Data entry features 1. Project data and calendar: A project start date is specified. A calendar can be used to define the working days and hours for each individual resource on a project. The calendar is used in calculating the schedule for the project. Most systems provide a default for the standard working period, such as Monday to Friday from 8:00 AM to 5:00 AM, with an hour for lunch. The calendar can be modified for each resource. For example, work hours can be modified, company holidays can be entered as nonworking days, and various shifts can beentered. Human resources: Suppose a particular activity needs 2 unskilled person and 1 skilled person to complete the task. These two resources may be entered separately and will appear as 2L and 1S on activity description in network. Labour cost: One of the many ways to specify labour cost is as, Skilled worker $ 2.0 Unskilled worker $1.2 Human resources available: All software requires periods and amount of resources that are available for the project. Cost of construction materials: Materials needed for each task and their estimated costs for the project may be as given below:

(a) 2.

3. (a) (b) 4. 5.

Activity identifier: Each activity of the project is assigned a code or identifier. Activity description: Each activity has a description. The number of characters should be within the number of characters specified by the software for the activity name field. Precedence relationship: There are various options to show the linkage between two consecutive activities in a network. One common option is Finish-Start type. It means that the succeeding activity can start only if all preceding activities to it have been completed. This option (Finish-Start type) is the default option in all project management software today for linking two activities Data entry error: All good management software contains error detection routines that identify and reports errors. However, there are certain errors which cannot be detected by software. These include: 1.An incorrect activity duration 2. An incorrect activity name 3. An Incorrect precedence logic 4.An Incorrect cost data 5.A wrong resource entered