Introduction to Project Management

Course Objectives
 To provide participants with:
– 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.
– An understanding of the principle elements of design
control to be applied within projects at Culham.
What is a Project?
“Unique process consisting of a set of coordinated and
controlled activities with start and finish dates,
undertaken to achieve an objective conforming to
specific requirements, including constraints of time, cost,
quality and resources”

 A Project is a planned set of activities

 A Project has a scope
 A Project has time, cost, quality and resource constraints
What is Project Management?
 The art of organising, leading, reporting and
completing a project through people
What is Project Management?
 A project is a planned undertaking
 A project manager is a person who causes things
to happen
 Therefore, project management is causing a
planned undertaking to happen.
Project Manager Role
 A Good Project Manager
– Takes ownership of the whole project
– Is proactive not reactive
– Adequately plans the project
– Is Authoritative (NOT Authoritarian)
– Is Decisive
– Is a Good Communicator
– Manages by data and facts not uniformed optimism
– Leads by example
– Has sound Judgement
– Is a Motivator
– Is Diplomatic
– Can Delegate
Stakeholder Engagement
Stakeholder
“A person or group of people who have a
vested interest in the success of an
organization and the environment in which
the organization operates”
Exercise 2 - Typical Stakeholders
 Sponsor
 Funding Body
 Customer
 Suppliers
 End User
 HSE/Environmental Agency
 Maintenance Team
 Neighbours/Community/Shareholders
 Fusion Community
 Interfaces
Stakeholder Engagement process
 Identify Stakeholders
 Assess needs
 Define actions
 Establish communication channels
 Gather feedback
 Monitor and review
Key Points in Project Set-up and Definition

 Create Project Management Plan (PMP)

 Be clear of scope and objectives
 Establish clear statement of what is to be
done (WBS)
 Establish Risks to be Managed
 Establish Costs and Durations
 Establish Resources Required
Project management Plan - PMP
 Master Document for Project
 Defines the following:-
 Project Objectives, Scope, Deliverables
 Stakeholders (Internal & External)
 Work to be done (WBS)
 Project Organisation and Resources (OBS)
 Project Costings (CBS)
 Project Schedule
 Procurement/Contract Strategy
 Risk Management
 Quality management
 Change Management
Project Planning
Project Planning
 Adequate planning leads to the correct
completion of work
Planning
 Inadequate planning leads to frustration
towards the end of the project & poor
project performance

Project Start Project End

Work Breakdown Structure (WBS)
 The Work Breakdown Structure is the
foundation for effective project planning, costing
and management.
 It is the most important aspect in setting-up a
Project
 It is the foundation on which
everything else builds
Work Breakdown Structure - Definition
“A Work Breakdown Structure (WBS) is a
hierarchical (from general to specific) tree
structure of deliverables and tasks that need
to be performed to complete a project.”
Project Planning – WBS (1)
 Lowest Level of WBS is the Work Package
(WP)
 WP can be clearly defined allowing package
to be costed, scheduled and resourced
 WP contains a list of Tasks to be Performed
that form the basis for the Schedule
 WP allows assignment of responsibilities
(Work Package Manger, WPM)
Project Planning – WBS (2)
 WBS allows hierarchical build-up of costs
and schedule
 Cost and Schedule can be reported at any
level of the WBS
 WBS facilitates strong management during
project execution (Cost and Schedule
control)
 WBS can be used for many other things -
Document Management, Risk Management
etc.
Project Planning
 A word about Scheduling
– Schedules (task durations) can have a wide
variation
– There is no unique answer. Rather, there is a
statistical variation depending on assumptions
– Need to understand the basis of scheduling
(Most challenging; Most likely; Absolute certainty
- bet your life on it!)
– Most people are very optimistic/naive
Common schedule development
Accuracy of Timescale Estimates

100
90
80
Subsequent
70 Estimates
Probability

60
50
40
30 First
Estimate
20
10
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Timescale
Project Planning – Key Points
 Recognise that adequate project planning is
essential
 Produce a sound WBS
 Use the framework provided by the Project
Management Plan (PMP) template
 Involve the right people
 Allow enough time
 Be systematic
Project Risk Management
Project Risk – Definition (1)
“Project risk is an uncertain event or condition
that, if it occurs, has a positive or negative
effect on a project objective”
Project Risk – Definition (2)
“A combination of the probability of a defined
threat or opportunity (Likelihood) and the
magnitude of the consequences of the
occurrence (Impact) defines a Risk Index”
Risk Impact
Threat → Scope → Poor Quality Product
Threat → Schedule → Late Delivery
Threat → Cost → Overspend

 In addition there are health, safety and

environmental threats that must be
managed (CDM Regulations)
Risk Management Process
 Identify Risks
 Assess likelihood and impact
 Rank risks and prioritise
 Define risk management approach & actions
 Implement actions
 Monitor & review
Risk Management – Key Points
 Make the management of risk integral to the
way the project is managed
 Ensure that cost and time contingencies are
consistent with identified risks
 Focus on the “significant few” – don’t try to
manage too many risks
 Be vigilant and proactive
Project Monitoring and Control
Exercise 3
 Write down three typical project
control/monitoring activities
Project Monitoring
 Typical Monitoring Activities
– regular reviews of progress against schedule
using WBS as basis (Plan against Baseline)
– regular review of actual costs (O/P from SAP)
against budgeted costs and Earned Value at
WBS level
– regular review of resource loading
– regular progress meetings with project team
– regular meetings with contractors
– production of periodic progress reports
– risk reviews
– inspections/ audits
Project Control
 Typical Control Activities
– assign responsibilities at Work Package level
– staged authorisation of work to be done
– staged release of budgets (staged release of
WBS(e) numbers)
– ensure PM has a ‘Management Reserve’ under
his control
– seek corrective action reports when WPs go ‘off
track’ (overrunning or overspending)
– release Management Reserve carefully
Project Monitoring and Control
Summary
 Monitor against the plan – status regularly
 Take a factual approach to decisions
 Identify management action early
 Check that defined controls are being
applied – correct if necessary
 Apply change control
Design Management
 Design takes place as part of a project
 Design Management is part of Project
Management
 Design Management considerations must be
included in the PMP
Exercise 4
 Write down three Design Management
Activities
Exercise 4 - Design Management Activities
 Sub-divide Design Stages (CD, SD & DD)
 Sub-divide Tasks (WBS)
 Define Constraints and Interfaces (WPD
Summary Sheet)
 Formally Initiate the Design (TCD-R/PERF)
 Ensure Design conforms to H&SE and CDM
Requirements
 Hold Design Reviews (Peer review)
 Formally Approve Design (TCD-I/MMAC)
Design Stages
 Conceptual Design
 Scheme Design
 Detailed Design
Conceptual Design Phase
 TCD-R
 Decide Local or TCS route
 Develop Conceptual Design
 Define Constraints & Interfaces
 Carry out Conceptual Design Review
 Initiate Safety Case Modification if required
 Obtain Approval to Proceed to next stage
Scheme and Detailed Design
 Basic considerations and process similar to
concept
 Need to ensure that safety & environmental
issues receive proper consideration as
design develops (CDM Regulations)
Exercise 5
 List who should be invited to a design review
 Write down three issues that should be
considered at a design review
Exercise 5 - Design Reviews, Attendance
 Project Leader or nominee (Chairman)
 RO (Work Package Manager)
 Customer
 End User
 Safety and Quality Reps
 All other Relevant Interfaces/Stakeholders
 Other Experts in the area being reviewed
 Exercise 5 - Design Reviews, Issues to
Consider
 Assumptions and Constraints
 Technical Solutions - Does it meet the Spec?
 Safety, Environment and CDM issues
 Can it be Manufactured/Maintained?
 Actions from previous DRs
 Issues to be resolved (including Timescales)
Safety & Environment
 Need to ensure that safety & environmental
issues receive proper consideration as
design develops
– Involve the right people from the start
– Systematically identify issues – Hazards/Risks,
Environmental Aspects & Impacts
– Carry out rigorous reviews at each design stage
– Control Design Changes
 MUST take note of CDM Regulations
Project...
 A collection of linked activities,
carried out in an organised
manner,with a clearly defined START
POINT and END POINT to achieve
some specific results desired to
satisfy the needs of the organisation
at the current time
Project Management
 A dynamic process that utilises the
appropriate resources of the
organisation in a controlled and
structured manner, to achieve some
clearly defined objectives identified
as needs.
 It is always conducted within a
defined set of constraints
 What does Project Management
Entail?
 Planning: is the most critical and gets the
least amount of our time
Beginning with the End in mind-Stephen Covey
 Organizing: Orderly fashion
(Contingent/Prerequisites)
 Controlling: is critical if we are to use our
limited resources wisely
 Measuring: To determine if we accomplished
the goal or met the target?
Measuring…….

 Are we efficient?
 Are we productive?
 Are we doing a good job?
 What is the outcome?
 Is it what we wanted to be?
If you can’t plan it, You can’t do it
If you can’t measure it, you can’t manage it
Who uses Project Management?
 Nearly Everyone to some degree
People plan their Days, their Weeks, their
Vacations and their Budgets and keep a
simple project management form known as
‘’To Do’’ list
 Any Process or Means used to track tasks
or efforts towards accomplishing a goal
could be considered Project Management
Why is Project Management used?

 It is necessary to Track or Measure the

progress we have achieved towards a
Goal we wish to accomplish
 We use Project Management to Aid us
in Maximizing and Optimizing our
resources to accomplish our goals
How much time does Project
Management take?
 Not much. Probably more time is wasted
as a consequence of lack of Project
Management tool than is spent to Plan
adequately, Organize, Control effectively
and Measure appropriately
 How long: As long as there are things to
do
Why is Project Management
Important?
 Enables us to map out a course of
action or work plan
 Helps us to think systematically and
thoroughly
 Unique Task
 Specific Objective
 Variety of Resources
 Time bound
Advantages
 In built Monitoring/ Sequencing
 Easy and Early identification of Bottlenecks
 Activity based costing
 Identification and Addition of missing and new
activities
 Preempting unnecessary activity/expenditure
 Timely Completion
 Assigning tasks
 Reporting
Road to Better Project Management
 Find a Project plan that fits your style of
project management needs
 It may be as simple as creating templates,
forms and spreadsheets to track tasks
 Formation of a Project Management
committee
 Listing out all the tasks and sub-tasks to
accomplish a goal
 Jot down the time period and person
responsible against each task/sub-task
Road to Better Project Management

 Identify a Project Manager

 Identify Task Managers
 Sequence the activities in relation to
time period
 Present to the PMC
 Finalize by reaching an agreement
and start work…...
Implementation
 Regular Monitoring
 Resource Support
 Critical issues discussed and solution
 Meeting with the team on completion of
each major milestone
 Track the progress against the plan
 System to add/delete tasks in the PMT
Consequences of
not using PMT
DELAY
COST
WASTE OF RESOURCES
QUALITY
DISSATISFACTION
REPUTATION
The Project Life Cycle
 The acquisition of a constructed facility usually represents a major capital investment,
whether its owner happens to be an individual, a private corporation or a public agency.
 Since the commitment of resources for such an investment is motivated by market
demands or perceived needs, the facility is expected to satisfy certain objectives within
the constraints specified by the owner and relevant regulations.
 With the exception of the speculative housing market, where the residential units may be
sold as built by the real estate developer, most constructed facilities are custom made in
consultation with the owners.
 A real estate developer may be regarded as the sponsor of building projects, as much as
a government agency may be the sponsor of a public project and turns it over to another
government unit upon its completion.
 From the viewpoint of project management, the terms "owner" and "sponsor" are
synonymous because both have the ultimate authority to make all important decisions.
 Since an owner is essentially acquiring a facility on a promise in some form of agreement,
it will be wise for any owner to have a clear understanding of the acquisition process in
order to maintain firm control of the quality, timeliness and cost of the completed facility.
The Project Life Cycle
 Essentially, a project is conceived to meet market demands or needs in a timely
fashion.
 Various possibilities may be considered in the conceptual planning stage, and
the technological and economic feasibility of each alternative will be assessed
and compared in order to select the best possible project.
 The financing schemes for the proposed alternatives must also be examined,
and the project will be programmed with respect to the timing for its completion
and for available cash flows.
 After the scope of the project is clearly defined, detailed engineering design will
provide the blueprint for construction, and the definitive cost estimate will serve
as the baseline for cost control.
 In the procurement and construction stage, the delivery of materials and the
erection of the project on site must be carefully planned and controlled.
 After the construction is completed, there is usually a brief period of start-up or
shake-down of the constructed facility when it is first occupied.
 Finally, the management of the facility is turned over to the owner for full
occupancy until the facility lives out its useful life and is designated for
demolition or conversion.
Figure 1-4. Project life cycle
Figure 1-5. Stages of development
The Project Life Cycle
 Of course, the stages of development in Figure 1-5 may not be strictly
sequential.
 Some of the stages require iteration, and others may be carried out in
parallel or with overlapping time frames, depending on the nature, size
and urgency of the project.
 Furthermore, an owner may have in-house capacities to handle the
work in every stage of the entire process, or it may seek professional
advice and services for the work in all stages.
 Understandably, most owners choose to handle some of the work in-
house and to contract outside professional services for other
components of the work as needed.
 By examining the project life cycle from an owner's perspective we can
focus on the proper roles of various activities and participants in all
stages regardless of the contractual arrangements for different types of
work.
The Project Life Cycle
 In the United States, for example, the U.S. Army Corps of
Engineers has in-house capabilities to deal with planning,
budgeting, design, construction and operation of waterway
and flood control structures.
 Other public agencies, such as state transportation
departments, are also deeply involved in all phases of a
construction project.
 In the private sector, many large firms such as DuPont,
Exxon, and IBM are adequately staffed to carry out most
activities for plant expansion.
 All these owners, both public and private, use outside
agents to a greater or lesser degree when it becomes more
advantageous to do so.
The Project Life Cycle
 The project life cycle may be viewed as a process through which a project is implemented
from cradle to grave.
 This process is often very complex; however, it can be decomposed into several stages
as indicated by the general outlines in Figures 1-4 and 1-5.
 The solutions at various stages are then integrated to obtain the final outcome.
 Although each stage requires different expertise, it usually includes both technical and
managerial activities in the knowledge domain of the specialist.
 The owner may choose to decompose the entire process into more or less stages based
on the size and nature of the project, and thus obtain the most efficient result in
implementation.
 Very often, the owner retains direct control of work in the planning and programming
stages, but increasingly outside planners and financial experts are used as consultants
because of the complexities of projects.
 Since operation and maintenance of a facility will go on long after the completion and
acceptance of a project, it is usually treated as a separate problem except in the
consideration of the life cycle cost of a facility.
 All stages from conceptual planning and feasibility studies to the acceptance of a facility
for occupancy may be broadly lumped together and referred to as the Design/Construct
process, while the procurement and construction alone are traditionally regarded as the
province of the construction industry.
The Project Life Cycle
 Owners must recognize that there is no single best approach in organizing project
management throughout a project's life cycle.
 All organizational approaches have advantages and disadvantages, depending on the
knowledge of the owner in construction management as well as the type, size and
location of the project.
 It is important for the owner to be aware of the approach which is most appropriate and
beneficial for a particular project.
 In making choices, owners should be concerned with the life cycle costs of constructed
facilities rather than simply the initial construction costs.
 Saving small amounts of money during construction may not be worthwhile if the result is
much larger operating costs or not meeting the functional requirements for the new facility
satisfactorily.
 Thus, owners must be very concerned with the quality of the finished product as well as
the cost of construction itself.
 Since facility operation and maintenance is a part of the project life cycle, the owners'
expectation to satisfy investment objectives during the project life cycle will require
consideration of the cost of operation and maintenance.
 Therefore, the facility's operating management should also be considered as early as
possible, just as the construction process should be kept in mind at the early stages of
planning and programming.
Major Types of Construction
 Since most owners are generally interested in acquiring only a specific type of
constructed facility, they should be aware of the common industrial practices for the type
of construction pertinent to them.
 Likewise, the construction industry is a conglomeration of quite diverse segments and
products.
 Some owners may procure a constructed facility only once in a long while and tend to
look for short term advantages.
 However, many owners require periodic acquisition of new facilities and/or rehabilitation
of existing facilities.
 It is to their advantage to keep the construction industry healthy and productive.
 Collectively, the owners have more power to influence the construction industry than they
realize because, by their individual actions, they can provide incentives or disincentives
for innovation, efficiency and quality in construction.
 It is to the interest of all parties that the owners take an active interest in the construction
and exercise beneficial influence on the performance of the industry.
 In planning for various types of construction, the methods of procuring professional
services, awarding construction contracts, and financing the constructed facility can be
quite different.
 For the purpose of discussion, the broad spectrum of constructed facilities may be
classified into four major categories, each with its own characteristics.
Major Types of Construction
 Residential Sector
 Residential housing construction
includes single-family houses,
multi-family dwellings, and high-
rise apartments.
 During the development and
construction of such projects,
the developers or sponsors who
are familiar with the construction
industry usually serve as
surrogate owners and take
charge, making necessary
contractual agreements for
design and construction, and
arranging the financing and sale
of the completed structures.
Major Types of Construction
 Residential Sector
 Residential housing designs are usually performed
by architects and engineers, and the construction
executed by builders who hire subcontractors for
the structural, mechanical, electrical and other
specialty work.
 An exception to this pattern is for single-family
houses which may be designed by the builders as
well.
Major Types of Construction
 Residential Sector
 The residential housing market is heavily affected by
general economic conditions, tax laws, and the monetary
and fiscal policies of the government.
 Often, a slight increase in total demand will cause a
substantial investment in construction, since many housing
projects can be started at different locations by different
individuals and developers at the same time.
 Because of the relative ease of entry, at least at the lower
end of the market, many new builders are attracted to the
residential housing construction.
 Hence, this market is highly competitive, with potentially
high risks as well as high rewards.
Major Types of Construction
 Commercial Sector
 Commercial and institutional
building construction
encompasses a great variety of
project types and sizes, such as
schools and universities,
medical clinics and hospitals,
recreational facilities and sports
stadiums, retail chain stores and
large shopping centers,
warehouses and light
manufacturing plants, and
skyscrapers for offices and
hotels.
Major Types of Construction
 Commercial Sector
 The owners of such buildings may or may not be
familiar with construction industry practices, but
they usually are able to select competent
professional consultants and arrange the financing
of the constructed facilities themselves.
 Specialty architects and engineers are often
engaged for designing a specific type of building,
while the builders or general contractors
undertaking such projects may also be specialized
in only that type of building.
Major Types of Construction
 Commercial Sector
 Because of the higher costs and greater sophistication of institutional
and commercial buildings in comparison with residential housing, this
market segment is shared by fewer competitors.
 Since the construction of some of these buildings is a long process
which once started will take some time to proceed until completion, the
demand is less sensitive to general economic conditions than that for
speculative housing.
 Consequently, the owners may confront an oligopoly of general
contractors who compete in the same market. In an oligopoly situation,
only a limited number of competitors exist, and a firm's price for
services may be based in part on its competitive strategies in the local
market.
Major Types of Construction
 Industrial Sector
 Specialized industrial
construction usually involves
very large scale projects with a
high degree of technological
complexity, such as oil
refineries, steel mills, chemical
processing plants and coal-fired
or nuclear power plants.
 The owners usually are deeply
involved in the development of a
project, and prefer to work with
designers-builders such that the
total time for the completion of
the project can be shortened.
Major Types of Construction
 Industrial Sector
 They also want to pick a team of designers and builders
with whom the owner has developed good working relations
over the years.
 Although the initiation of such projects is also affected by
the state of the economy, long range demand forecasting is
the most important factor since such projects are capital
intensive and require considerable amount of planning and
construction time.
 Governmental regulation such as the rulings of the
Environmental Protection Agency and the Nuclear
Regulatory Commission in the United States can also
profoundly influence decisions on these projects.
Major Types of Construction
 Infrastructure and Heavy
Highway Sector
 Infrastructure and heavy
construction includes projects
such as highways, mass transit
systems, tunnels, bridges,
pipelines, drainage systems and
sewage treatment plants.
 Most of these projects are
publicly owned and therefore
financed either through bonds or
taxes.
 This category of construction is
characterized by a high degree
of mechanization, which has
gradually replaced some labor
intensive operations.
Major Types of Construction
 Infrastructure and Heavy Highway Sector
 The engineers and builders engaged in infrastructure
construction are usually highly specialized since each
segment of the market requires different types of skills.
 However, demands for different segments of infrastructure
and heavy construction may shift with saturation in some
segments.
 For example, as the available highway construction projects
are declining, some heavy construction contractors quickly
move their work force and equipment into the field of mining
where jobs are available.