Chapter One

Project Management:
Introduction

Hailekiros Sibhato (Ph.D.)

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Group Discussion

Define project management

Unique characteristics of project
management

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 Project
 A unique set of co-ordinated activities, with definite
starting and finishing points, undertaken by an
individual or organization to meet specific objectives
within defined schedule, cost and performance
parameter (BS 6079-1 ‘Guide to Project Management)
 A project is a sequence of unique, complex, and
connected activities having one goal or purpose and
that must be completed by a specific time, within
budget, and according to specification

 Project management is the application of knowledge,

skills, tools and techniques to project activities in
order to meet or exceed customer expectations (PMI*, Project
Management Body of Knowledge (PMBOK® Guide), 2000, p. 6)
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 Project Management
 Project management
 The planning, monitoring and control of all aspects of a
project and the motivation of all those involved in it, in
order to achieve the project objectives within agreed
criteria of time, cost and performance
 PROJECT MANAGER
 The individual who has the responsibility, authority and
accountability assigned to him or her to achieve safely the
project objectives within agreed time, cost and
performance /quality criteria
 Project Charter
 sets out the responsibilities and limits of authority of the
project manager

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 Project management
 project management is essentially management of change,
while running a functional or ongoing business is managing a
continuum or ‘business-as-usual’

Project organization Functional or line organization

 Building a house
 Designing a car
 Organizing a party
 Setting up a filing system
 Setting up retail cash points
 Building a process plant
 Introducing a new computer system
 Manufacturing bricks
 Mass producing cars
 Serving the drinks
 Doing the filing
 Selling goods and operating tills
 Producing sausages
 Operating credit control procedures

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 Project Management
 Managing a project typically includes, but is not
limited to
 Identifying requirements
 Addressing the various needs, concerns, and expectations of
the stakeholders in planning and executing the project
 Setting up, maintaining, and carrying out communications
among stakeholders that are active, effective, and
collaborative in nature
 Managing stakeholders towards meeting project
requirements and creating project deliverables
 Balancing the competing project constraints, which include,
but are not limited to:
• Scope • Budget
• Quality • Resources, and
• Schedule • Risks

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 Project Management Framework

4 core knowledge areas 4 facilitating knowledge areas are the

lead to specific project means through which the project
objectives objectives are achieved
1 knowledge area (project integration management) affects and is affected
by all of the other knowledge areas
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 Mission of project management
 The main purposes of project management are
Deliver outputs that can satisfy the customer needs and
expectations
Improve project delivery performance related to quality, scope,
schedule and cost
Reduce the support cost of producing the out come
Do the right thing right the first time
Anticipate and respond to related issues before they become
problems
Communicate effectively with stakeholders
Manage changes and risks

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 Project objectives
 Must meet three fundamental criteria safely :
1. The project must be completed on time
2. The project must be accomplished within the budgeted cost
3. The project must meet the prescribed quality requirements
 In certain industries like airlines, railways and mining ,safety, is
considered to be equally important, if not more so (project
diamond)

Project triangle Hailekiros S.MU

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 Priority of criteria
 The order of priority given to any of these criteria is not only
dependent on the industry, but also on the individual project

 Time-bound project: opening match

 Cost-bound project: A local authority housing

development cost
 Performance (quality)-bound project: Armament
manufacturing (range, accuracy and rate of fire)
 Safety-bound project: All Projects

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 The Relationships Among Portfolios, Programs, and Projects

 Portfolio refers to a collection of projects, programs,

sub portfolios, and operations managed as a group to
achieve strategic objectives

 Programs are grouped within a portfolio and are

comprised of subprograms, projects, or other work
that are managed in a coordinated fashion in support
of the portfolio

 Individual projects that are either within or outside

of a program are still considered part of a portfolio
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1 2
• Strategies and priorities • Performance reports
• Progressive elaboration • Change requests with
• Governance impact on other portfolios,
• Disposition on requested changes
• Impacts from changes in other
programs, or projects
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 Characteristics of Industrial Projects
 Importance of Industrial Projects
 Industry represents the pulse of economic development of any nation
 The goods and services provided by industry directly influence the social,
political, economic, and cultural structures of any population
 successful industrial project management holds a key position in
advancing local, regional, and national development
 Time–cost–result Goals of Industry
 The objectives that constitute industrial project goals may be in terms of
time, costs, or technical results
 Project management techniques are widely used in many endeavors,
including construction management, banking, manufacturing,
engineering management, marketing, health care delivery systems,
transportation, research and development, defense, and public services
 The application of project management is particularly of high value in
industrial enterprises

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 Industrial Projects
 Lasting Legacy Of Project Management
 Project management has had more direct impacts on human
development than any other single discipline of study in the history of the
world
 From the time of ancient history and Mesopotamia’s early development
to the modern times (Pyramids, Stonehenge)
 The ancient projects using gears and pulleys required extreme
preparation, labor coordination, and cooperation
 processes of planning, organizing, scheduling and control were used
 Elements Of Industrial Operations
 to achieve and sustain industrial development, both the technical and
managerial aspects of industrial projects must come into play
 The primary goal of any industry is to plan operations ahead and allocate
resources appropriately to improve industrial project efficiency,
effectiveness, and productivity while reducing production waste (Lean)
and improving product quality (Six Sigma)

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 Industrial Projects
 Using a formal project management approach makes it
possible to achieve this goal
 Manufacturing is the process of creating a product by
processing raw materials from an initial point through to the
end product
 It encompasses several functions that must be strategically
planned, organized, scheduled, controlled, and terminated
 A manufacturing cycle includes such functions as forecasting,
inventory control, process planning, machine sequencing,
quality control, decision analysis, production planning, cost
analysis, process control, facility layout, work analysis, and
others
 All of these are functions that fall within the process of
planning, organizing, scheduling, and control cycles of project
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 Industrial Projects
 Industrial projects can be characterized by a combination of
the following attributes:
 Large external stakeholders, customers, owners
 Internal stakeholders
 Short product life cycle (in high-tech industries)
 Variable investment sources
 Narrow margins for success

Fig. Focus on people, process, and technology

 Industrial operations are predicated on strategic operations,
which utilize high-tech tools, knowledge workers, and complex
processes
 Consequently, project management in an industrial operation
implies the management of people, process, and technology
to satisfy time, cost, and performance constraints
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 Industrial Production Planning
 Production planning is the process of coordinating
activities to get raw material stage to the finished-goods
stage
 It is the function of making sure that new designs are
added as new products while old products are modified
or discontinued
 It involves setting up production objectives, allocating
resources, and establishing standards and procedures to
govern the production environment

 The production-planning function is an iterative process

that is reviewed and revised based on the state of the
system
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Production tasks that may need to be coordinated as project
activities
1. Materials and Supplies: Generation of reports showing
materials and supplies assigned to and used by each
production center
2. Labor Requirements: Analysis of labor hours required for
production operations
3. Overhead Allocation: The distribution of overhead to
production centers. An analysis is made of overhead
allocated and overhead actually incurred for specific jobs
4. Job Control: Tracking of job status and milestones
5. Job Transfer: Routing of a job from one production center to
another
6. Supply and Demand Trending: Seasonality of certain products
7. Inventory Management: Tracking of physical assets and
resources of the organization.
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 Project Model of Industrial Production
 The manufacturing enterprise is a project consisting of distinct
production activities
 In a large organization, the industrial system may be configured
as a multi-project endeavor, and the components of the project
may be managed as any conventional project
 The Figure below shows the typical components of an industrial
enterprise organized as a project network of industrial

Fig. Manufacturing project network

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 INDUSTRIAL PROJECT INTERFACES
 The interface between project management functions and the
industrial enterprise is easily observable throughout any organization
 Many functions that directly or indirectly support the industrial effort
can best be managed using project management concepts
 Some of the specific tasks and issues to be addressed when managing
industrial projects are

• Project selection and prioritizing  Activity modeling

• Resource requirements planning  Human resource management
• Cost estimation  Multi-project coordination
• Team formation  Management of global
• Facility design and management interfaces
• Project inventory analysis  Project economics
 Project forecasting  Contract procurement

All of these fall within the purview of a formal project management approach
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Project management interfaces in industrial organizations
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Growth of Industrial Project Management

Fig Evolution of industrial systems performance

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 Project Life Cycle
 The Project Life Cycle refers to a logical sequence of
activities to accomplish the project’s goals or
objectives
 Regardless of scope or complexity, any project goes
through a series of stages during its life
Four Phases in the Life of a Project
 Phase I : Conception and Selection
 Phase II : Planning and Scheduling
 Phase III : Implementation, Monitoring and Control
 Phase IV : Evaluation and Termination

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 Project Life Cycle
 Definition/initiation : identify the need costs benefits, and risks
 Planning: who, how long, what to do?
 Execution/control: doing and checking the project
 Termination/closing: ending the project
Level of Effort

Definition Planning Execution/Impl./Control Closeout

 Selection  Estimates  Status Reports  Training
 Charter  Schedules  Changes  Transfer
 Goals  Sequencing  Quality Documents
 Specs  Budgets  Forecasts  Release
 Tasks  Resources Resources
 Responsi  Risks  Lessons
bilities  Staffing Learned
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Overlap of Process Phases

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 Managing the Project Scope
 The scope of the project determines the boundaries of
the project
 The scope specifies what features/ a characteristic of the
project product is included and what is not included
 In project management there are actually two different
scopes
 Product Scope: which is what the end result of the project will
create
 The product scope is what customers focus on—what they are envisioning the
firm to create
 The product scope describes the thing or service that will exist as a result of
undertaking the project.
 Project Scope: on the other hand, describes all the work to
create the product scope
 It includes all of the work, and only the required work, to complete the project
deliverable
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 Project Context
 Projects cannot be run in isolation
 Projects are influenced by a multitude of factors
which can be external or internal
 Project managers should recognize what these factors
are and how they impact on the project during the
various phases
 These external or internal influences are known as the
project context or project environment
 The external factors making up this environment are the
client or customer (see figure below)
 Internal influences include
 organization’s management, the project team, internal
departments, and possibly the shareholders
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The project environment
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 Organizational Structures
 Organizational structure is an enterprise environmental factor,
which can affect the availability of resources and influence
how projects are conducted
 Organizational structures range from functional to projectized,
with a variety of matrix structures in between
 Three basic organizational structures
 Functional: functional managers report to the CEO
 Project: program managers report to the CEO
 Matrix: middle ground between functional and project
structures; personnel often report to two or more bosses;
structure can be weak, balanced, or strong matrix

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 Functional Organization

Strong Matrix Organization

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Projectized Organization
Influence of Organizational Structures on Projects

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 Organizational Culture
 Organizational culture
 is a set of shared assumptions, values, and behaviors that
characterize the functioning of an organization
 Many experts believe the underlying causes of many
companies’ problems are not the structure or staff, but the
culture
 Characteristics of Organizational Culture
 Member identity*  Risk tolerance*
 Group emphasis*  Reward criteria*
 People focus  Conflict tolerance*
 Unit integration*  Means-ends orientation
 Control  Open-systems focus*
*Project work is most successful in an organizational culture where these items are
strong/high and other items are balanced.

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 Types of projects in project management
 Project scope: amount of people involved and the scale of the impact of its
outcomes(big or small )
 Timeframe: A project’s timeframe is defined from its initiation or
conception until result evaluation
 Organization: how tasks and activities are organized and prioritized
 Cost: Projects can be expensive or relatively cheap depending on their
overall cost
 Communication: What are the types of project that require
communication?
 Stakeholder Management: Projects can vary depending on the number of
stakeholders involved
 Task assignation: completed by individual members or groups and how
responsibilities will be defined
 Quality of results: Results of projects vary among the different types of
projects

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 Project Classification

Projects can also be classified on the following

factors
 Complexity: (Easy, Complicated)
 Source of capital (Public, Private, Mixed)
 project content (Construction, IT, Business, Service or
product production)
 those involved (Departmental, Internal, Matriarchal,
External)
 Objective (Production, Social)
 Educational (Community, Research)

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 Advantages of Using Formal Project Management

 Better control of financial, physical, and human resources

 Improved customer relations
 Shorter development times
 Lower costs
 Higher quality and increased reliability
 Higher profit margins
 Improved productivity
 Better internal coordination
 Higher worker morale

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 Recent Trends in Project Management
 Increased Emphasis on Project Management Soft Skills
 interpersonal communication, leadership, negotiation skills, influencing,
and personnel management
 Social Responsibility and Planning for Sustainability in
Projects
 Globalization
 Outsourcing:
 Outsourcing is when an organization acquires goods
and/or sources from an outside source. Offshoring is
sometimes used to describe outsourcing from another
country

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Emerging Trends in Project Management
 Team diversity—cognitive, cultural, and geographic
 Innovation: Technology development
 Virtual teams:
 A virtual team is a group of individuals who work across
time and space using communication technologies
 Agile project management:
 able to move quickly and easily

References
1. Lester, A.( 2007). Project Management, Planning and Control. 5th ed.
Elsevier Ltd.
2. Adedeji B., Abi, B. and Ade B. (2008). Industrial Project Management:
Concepts, tools and techniques. Taylor and Francis.
3. Project Management Institute (2013). A Guide to the Project
Management Body of Knowledge. 5th ed.
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 Assignment #1
Why is project management a separate
branch of study, away from the general
management?
Describe the Characteristics of project
management in Ethiopia (failure
/success)
One page each
Two-three References
Ten minute presentation
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