Introduction to Project Management

PROF. ANIL G. MENDHI

Course Delivery and Grading

   

This is a full credit course. We would cover it in total 12 to 13 sessions University Examination is of 100 marks. University paper is of three hours. Earlier it used to be of four hours. Usually there are seven to nine questions and you are expected to solve any five.
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SESSION TODAY
           

BRIEF HISTORY OF PROJECT MANAGEMENT DEFINITION OF PROJECT MANAGEMENT ATTRIBUTES / CHARACTERISTICS OF PROJECT MANAGEMENT EXAMPLES PROJECT MANAGEMENT FRAMEWORK PROJECT AND PROJECT ENVIRONMENT PM TOOLS AND ADVANTAGES OF PM DIFFERENT STAGES OF PM DUTIES OF PROJECT MANAGER, PM AS AN ENTREPRENEUR PM V/S GM PM AND OTHER DISCIPLINES TYPES OF ORGANIZATIONS

History of Project Management



 

  

Project approach has long been the style of doing business or implementing or undertaking tasks particularly in construction industry. In 1917 Henry Gantt developed the Gantt chart as a tool for scheduling work in job shops. Modern project management began with the Manhattan Project, which the U.S. military led to develop the atomic bomb In 1958, US Navy developed PERT charts In the 1970s, the military began using project management software, as did the construction industry. By the 1990s, virtually every industry was using some form of project management
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WHAT IS A PROJECT?
WEBSTERS DICTIONARY:


A proposal of something to be done, Plan; scheme, an undertaking; specific task, A special unit of work, research, etc. as in school, a laboratory, etc. An extensive public undertaking, as in conservation, construction, etc.
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What Is a Project?


A project is a temporary endeavor undertaken to accomplish a unique purpose A project is a carefully defined set of activities that use resources (money, men, materials, machines, energy, provisions, communication, etc.) to meet the predefined objectives.
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Attributes of projects
   

 

Unique definable single purpose. Temporary, one time activity, never to be exactly repeated. Require resources, often from various areas. Teams are formed for a purpose and disbanded after achieving the purpose. Projects cut across the organizational lines; many disciplines are involved. Should have a primary sponsor and/or customer / stake holder/s Involve uncertainty and unfamiliarity, does not fall under the routine category of activity Project is the process of working to achieve a pre-defined goal and during the process, the project may pass through various phases
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EXAMPLES


 

 

Pyramid of Egypt (2500 B.C. 2.3 Mn. Stone blocks weighing 2 to 70 tons each, quarried and carried over the Niles, height equivalent of 40 storey building, 13 acres of land, deviation of less than an inch in levels, stones fixed with accuracy of .04 inch!!) 100,000 laborers, 40,000 skilled masons, over 150,000 women & children to be housed & fed! Numerous other examples like Taj Mahal, Eiffel tower, international space station by NASA, anti missile system developed by India, etc. From construction, information technology to research, projects could be conceived in all possible fields. Each project is unique in many ways.
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EXAMPLES contd.


AT CORPORATE LEVEL: - Restructuring - Relocation / Diversification (new plant) or Expansion - Acquisition / Merger - New product or system development AT FAMILY / PERSONAL LEVEL: - Remodeling of a home - Wedding - Moving to another house MOST ARTISTIC ENDEAVOURS ARE PROJECTS!!
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EXAMPLES contd.


MOST ARTISTIC ENDEAVOURS ARE PROJECTS!! (Taj Mahal, Statue of Liberty, Eiffel tower, etc.) Saving human life in the event of natural calamities / Disasters is also a project. (Earthquake in Gujarat or Maharashtra, Tsunami, Nuclear fall out at Chernobyl, etc.). Social uplift programs, Family Planning, AIDS control, etc.
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TYPES OF PROJECTS
 

 

 

Manufacturing projects Civil engineering, construction, petrochemical, mining, infrastructure and other projects requiring external organisation Management projects Greenfield Projects for setting up new establishments Scientific Research Projects Systems Development Projects
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EXCEPTIONS..


Building a skyscraper is a project; but mass construction of pre-fabricated homes is a scheduled and repetitive task rather than a project. Repetitive work of accounts and audits is not a project. Exploratory mission to Mars or Moon are projects; conducted tours to tourist places are not projects.
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The Triple Constraint




 

Every project is constrained in different ways by its  Scope goals: Quantity & Quality  Time goals  Cost goals It is the project managers duty to balance these three often competing goals.
The Project Management Triangle The discipline of project management is about providing the tools and techniques that enable the project team (not just the project manager) to organize their work to meet these constraints.
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The Triple Constraint of Project Management

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Competing goals are now five

     

Scope Time Cost Risk Quality Stakeholders with different needs and expectations. Identified requirements
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What is Project Management? Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project (PMI)*,
*The Project Management Institute (PMI) is an international professional society. They have over 2400 members spread over 160 countries. Their web site is www.pmi.org.
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CHARACTERISTICS OF PROJECTS


Project can be described as a unique set of co-ordinated and inter-related activities undertaken by an organisation to meet defined objectives; that has an agreed start and finish time; is constrained by cost & resources and has specified performance requirements. Projects are unique in nature. Everything is special and oneoff. Designs are new and usually unproven. Every industrial or commercial project is a risk venture. The job of the manager is to identify the risks and, through his project management, contain them. The application of techniques and management practices that have been developed will depend on the size and type of project, and upon the relative priorities, which are assigned to the cost, time and performance objectives.
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CHARACTERISTICS OF PROJECTS


Project has a definite start and finish (Scope goals quantity and quality and Time goals). Project consists of a well-defined and unique collection of jobs, activities, or tasks which when complete; mark the end of project. Project is constrained by cost, time & resources and has specified performance requirements. The jobs may be started or stopped independent of each other, within a overall given sequence. The jobs are ordered - i.e., they must be performed in technological order.
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WHO ARE THE STAKE HOLDERS IN AN INDUSTRIAL PROJECT?

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Project Stakeholders


Stakeholders are the people involved in or affected by project activities Stakeholders include
       

The project sponsor or promoter, equity / share holders Project team, Support staff, Customers / users, Suppliers / Vendors / Sub-contractors, Financial Institutions / lenders / bankers Govt. / Approving authorities Affected population / opponents to the project
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PROJECT MANAGEMENT FRAMEWORK



Understand the needs and expectations of various stakeholders. Set the goals viz. scope, time and cost parameters for the project. Deploy nine knowledge areas to achieve the goals / purpose of the project.
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Project Management Knowledge Areas



Knowledge areas describe the key competencies that project managers must develop


Four core knowledge areas lead to specific project objectives (scope, time, cost, and quality) Four facilitating knowledge areas are the means through which the project objectives are achieved (human resources, communication, risk, and procurement management) One knowledge area (project integration management) affects and is affected by all of the other knowledge areas
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Project Management Framework

T
T

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Project Management Tools and Techniques



Project management tools and techniques assist project managers and their teams in various aspects of project management Some specific tools include  Project Charter and Work Breakdown Structure WBS (scope)  Gantt charts, PERT charts, critical path analysis (time)  Cost estimates and Earned Value Analysis (cost)
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Advantages of Project Management



Bosses, customers, and other stakeholders do not like surprises. Good project management (PM) provides assurance and reduces risk. PM provides the tools and environment to plan, monitor, track, and manage schedules, resources, costs, and quality. PM provides a history or metrics base for future planning as well as good documentation. Project members learn and grow by working in a crossfunctional team environment
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Source: Knutson, Joan, PM Network, December 1997, p. 13

PROJECTIZING THE ORGANIZATION

Today, the definition of a project is no more confined to engineering, technology and research; But has expanded to include various fields / situations, one time crisis, and dealing with difficult issues. It has been realised that the solution to majority of corporate problems involves obtaining better control and optimum use of existing corporate resources. Project Management is one of the techniques that can be used to achieve this purpose. Project management is being used by a wide range of disciplines and corporations that had never previously considered it as a viable method of performing work
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PROJECTIZING THE ORGANIZATION Legal offices, hospitals, banking and other services as well as traditional manufacturing firms are increasingly using project management to improve the delivery of their services or for creation of new products. Some typical examples are:
Annual budgeting / auditing exercises Introduction of new systems (ISO 9000) Effecting change in structure, staffing, or style of Organization Software development & implementation Development of new product / Service Campaign for new product launch / election Organizing AGM / sales conference / event
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WHERE IS PM APPROPRIATE?
 1. 2. 3. 4. 5.

Five general criteria are: Unfamiliarity: Major overhaul and not minor changes. Magnitude of the effort: Substantially more resources required. Changing environment: High-tech industries Interrelatedness: When a joint effort is required. Reputation of the organization: In cases where the risk of financial ruin / loss (market share) is high.
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WHERE IS PM NOT APPROPRIATE?

 

Cases not coming under any of the five criteria mentioned earlier. Standardized activities Routine work
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PROJECTS ARE SHAPED BY THEIR ENVIRONMENT

     

TIME TECHNOLOGY CULTURAL SYSTEM SOCIAL SYSTEM POLITICAL SYSTEM REGULATORY AND LEGAL SYSTEM ECONOMIC SYSTEM ORGANISATIONAL SYSTEM.
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IMPACT OF ENVIRONMENT (CONTD.)

RESOURCES, BUDGETS, METHODS AND TOOLS OF PROJECT MANAGEMENT

DEPEND ON ABOVE FACTORS AND CHANGE ACCORDINGLY.

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CURRENT PROJECT ENVIRONMENT

INCREASING GLOBAL COMPETITION RAPID TECHNOLOGICAL CHANGE RAPID PRODUCT OBSOLESCENCE RATE ORGANISATIONAL DOWNSIZING BUSINESS RE-ENGINEERING EMPOWERMENT FOCUS ON QUALITY & CONTINUOUS IMPROVEMENT INFORMATION DELUGE FASTER COMMUNICATION INTER-ORGANISATIONAL SYSTEMS
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IMPACT OF CURRENT PROJECT ENVIRONMENT ON ORGANIZATIONS

Projects are given more importance by the management for survival of the organization Increasing need felt to do projects right & successful the first time More limitations on resources and lesser organisational support Increasing pressure on project management to achieve quick results
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IMPACT OF CURRENT ENVIRONMENT ON PROJECTS

Projects are tending to get more & more complex & large to handle Projects to be completed ahead of schedule, always. Need more flexibility in defining scope, planning & execution to expand project benefits and impact
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ADOPTING PROJECT MINDSET

INFORMATION SHARING
- Not just possessing PROCESS ORIENTATION - Not just system orientation NON-LINEAR THINKING - As opposed to linearity
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PM RESPONSE TO CHANGING ENVIRONMENT

 

Need for a managerial approach to deal with problems and take advantage of opportunities. Modern era implies interdependency, complexity, rapid and radical changes and hence elements of uncertainty and risks. PM is different from management of simpler ongoing, repetitive, operations where the market and technology are predictable. More organic forms of organization are now required to ensure quick adaptability and rapid response to changing environment are necessary. SYSTEMS APPROACH TO MANAGEMENT IS ESSENTIAL!
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PROJECT EFFORTS
CONCEPT DEVELOPMENT & DEFINATION EVALUATION SCOPE SCHEDULE BUDGET RESOURCES ORGANIZATION DETAIL ENGINEERING & DESIGN PROCUREMENT MANUFACTURING & CONSTRUCTION TRIALS & COMMISSIONING DOCUMENTATION SNAG LIST & FAILURE ANALYSIS LEARNINGS OPERATION & MAINTENANCE
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PR O PO SAL PR O PO SAL P LA N N I N G P LA N N I N G I M PLE M E N TAT I O N I M PLE M E N TAT I O N CLO SI N G CLO SI N G

AUTHORIZATION SANCTION HAND OVER

DIFFERENT STAGES OF A PROJECT

PROJECT MANAGER


His responsibility is to plan, organize, direct and integrate work efforts of all participants to achieve the set project goals (costs, time schedules and scope goals). One person in the organization who is accountable for the project and is totally dedicated to achieving its goals. Leadership qualities are essential.
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DUTIES OF A PROJECT MANAGER



AS A RESOURCE MANAGER: Manage and direct project resources to achieve the project objectives. (MEN, MONEY, MATERIAL, MACHINES,
ETC.)

AS A PLANNING & CONTROL MANAGER: Develop the project plan and ensure that the work is completed on time, within budget and with acceptable quality. AS A CO-ORDINATOR: Interface with higher management regarding project review, approvals and addressing project issues. These must also relate successfully to line managers and staff.
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What does a project manager do?

         

DIRECTING MOTIVATING PLANNING SUPERVISING ADMINISTERING DOING TRAINING COUNSELING

: : : : : : : :

DELEGATING : RESOLVING CONFLICT :

Project Resources Project Team Anticipate and plan The Project Work Administrative Tasks Doing some tasks directly Project Team Technical, Business, Project & Personal issues Delegate & supervise Over resources and schedules
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PROJECT TEAM
 

Project work is team work. Project work is accomplished by a group of people from different functional areas and organizations. Size and composition of the team will vary depending on the project requirements. The team may be disbanded after the project work is completed.
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PROJECT MANAGEMENT

PROJECT PLANNING PROJECT IMPLEMENTATION INVESTMENT DECISION SCOPE DEFINITION

PROJECT CLOSURE

PROJECT SCHEDULING

PROJECT BUDGETING

IDEA PROJECT GENERATION ENVIRONMENT

GANTT CHARTS

NETWORK TECHNIQUES PERT CPM CRITICAL CHAIN Activity based costing Cost breakdown Cash flow Earned value
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FEASIBILITY & APPRAISAL Market Technical Financial Economic Ecological

RISK ASSESSMENT

Specifications Deliverables Time frame Sensitivity Organization Scenario Budgets Simulation Decision tree WBS / CBS

PROJECT MANAGEMENT

PROJECT PLANNING

PROJECT IMPLEMENTATION

PROJECT CLOSURE

PROJECT MONITORING

PROGRESS REPORTING

PROJECT CONTROL Control actions Revised scope Revised schedule Revised budget

SCHEDULE UPDATE

COST SCOPE TILL DATE CHANGE

PERIODIC REPORTS

AD-HOC REPORTS

ACTUAL STATUS Activity Completion % Critical path Delays Project completion %

Current status Time to complete Cost to complete Earned value

Special studies Milestone reports Discrepancy report Hand over report Documentation Failure analysis Learnings
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Committed Incurred Balance budget

Periodicity Detailing Summary Distribution

PROJECT MANAGEMENT SYSTEM / ORGANIZATION

 

INFORMAL ORGANIZATION FORMAL ORGANIZATION TRADITIONAL PROJECT TEAM APPROACH MATRIX TYPE
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(Functional, location, Product, Customer, Process)

How Project Management (PM) Relates to Other Disciplines



Much of the knowledge needed to manage projects is unique to PM However, project managers must also have knowledge and experience in
 

General management The application area of the project

Project managers must focus on meeting specific project objectives

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Project Management and Other Disciplines

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PROJECT MANAGEMENT V/S GENERAL MANAGEMENT

   

PROJECT MANAGEMENT Long term, usually much more than one year. More strategic thinking involved. PROCESS: Has to be developed & designed new each time. Considerable uncertainty and many unknown factors New multi-disciplinary team to be created usually from of personnel from other departments. Projects are initiated to bring about change. Substantially Large

   

   

GM/MANUFACTURING Short & medium term, usually within one year. Focus on minor day-to day issues Stabilised over a period of time due to experience, minimum uncertainty. Plant & personnel already exist. Direct control over personnel. Minimal change is expected in set routine. Comparatively smaller

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The Project Management Profession



A 1996 Fortune article called project management the number one career choice. Other authors, like Tom Peters and Thomas Stewart, stress that projects are what add value to organizations. Professional societies like the Project Management Institute have grown tremendously.
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Project Management Certification



PMI provides certification as a Project Management Professional (PMP) A PMP has documented sufficient project experience, agreed to follow a code of ethics, and passed the PMP examination. The number of people earning PMP certification is increasing quickly.
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QUESTION PAPER PATTERN FOR UNIVERSITY EXAMINATION

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QUESTION PAPER PATTERN

   

Question paper is of 100 MARKS and DURATION will be THREE HOURS. Earlier it used to be 4 hours. ANY FIVE questions from usually 7 to 9 will have to be attempted. Each question will be of 20 marks. Question paper will usually have two theory (descriptive) questions. The contents of these questions is more or less standardized!! There would normally be a choice (any four out of six sub-questions) total 40 marks for these two questions. Last year there was only one theory question. Remaining questions would usually be a blend of theory and numerical problem. Numerical may have higher weight of marks in these questions usually 12 or 14 leaving the balance for theory.
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QUESTION PAPER PATTERN (contd.)



NUMERICAL problems are mainly on the following topics: 1. Market forecasting (three types of standard numerical problems), 2. Project evaluation techniques (Financial appraisal / discounting techniques, etc.), Break even analysis, etc. 3. Probability Theory and decision tree techniques, risk management 4. Cash Flows 5. Gantt charts, Work Flow, PERT, CPM or networking techniques, Cost and Schedule Performance Analysis, etc.
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Numerical problems on PERT, CPM, CPI, SPI ..



TYPE I on three time estimates



Sequence of activities and three time estimates of duration of each activity are given. You will have to draw PERT network, compute slack for each activity, show CP and estimate the time required for completion. You will be expected to make use of z tables and estimate the probability that the project will be completed in specific number of days. Or Time required for completion with given level of certainty / probability (e.g. what would be the duration for completion of the project with 84.1 % probability?)
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Numerical problems on PERT, CPM, CPI, SPI ..



TYPE II: Gantt chart, Resource constraints, leveling, float calculation



Sequence of activities, normal time required and resource (manpower or budget) requirement are given You will have to draw Gantt chart, resource graph, find out free float and total float, total time for completion, days of over allocation of resources given maximum availability of the resource. Rearrange activities suitably for leveling resources.
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Numerical problems on PERT, CPM, CPI, SPI ..



TYPE III: AoA and AoN network diagrams



Activities, their sequence and duration are given. You will have to draw AoA and AoN diagrams, find out total time for project completion, identify critical path and estimate total floats available on various non critical activities.

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Numerical problems on PERT, CPM, CPI, SPI ..



TYPE IV: Crashing activity.



 

List of activities, their duration and normal costs are given. Costs of crashing (per day) the activities are given along with indirect costs (per day). You are expected to find out the optimum duration and associated minimum cost of completing the project by crashing activities. In 2009, this was a numerical of 20 marks!! Specific deadline for achieving the project completion will be mentioned. You will have to crash the activities and find out additional optimum cost and identify critical activities after crashing.
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Numerical problems on PERT, CPM, CPI, SPI ..



TYPE V: CPI, SPI.



Total budgeted cost and duration of a project are given. You will be asked to take a review of the progress of the project after a specific number of days / moths given the following data: Earned Value (BCWP), Actual Expenses incurred (ACWP) and scheduled earned value (BCWS). You will have to estimate CPI and SPI and estimated time and cost to completion. This question will usually be liked with theory on S curve and concept of earned value (fairly descriptive question)
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Numerical problems on project evaluation / appraisal



TYPE I: (Discounting techniques)



A list of three / four projects will be given along with their initial investments, project life and expected annual cash flows. You will have to rank the projects based on their NPV, Pay back period, IRR etc. when the companys cost of capital is given. You may be asked to select a combination of projects within the overall budget restriction given.
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Numerical problems on project evaluation / appraisal

 

TYPE II: (Discounting techniques) Cash flows for a period of five to seven years for a project may be given (or you will have to prepare them based on a set of data provided) along with its initial and periodical investment/s. Given the cost of capital for the company, you would be asked to comment on whether the project should be accepted for implementation or not. NPV for the project will have to be estimated. Positive NPV will mean acceptance and negative would mean that you have to reject the project.
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Numerical problems on discounting or NPV / IRR calculations.



TYPE III: (Discounting techniques)



Quotes or initial costs / investments for two machines / plants are given along with their operating and maintenance costs. Machine / plant Life period of each of the machines is also mentioned. Given the marginal cost of capital for the company, you are asked to select one of the machines / plants.

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Review Questions on Introduction



 

Give three examples of activities that are projects and three examples of activities that are not projects. What distinguishes them from projects? Which activities are difficult to classify one way or the other? What are the basic functions of a Project Manager? What qualities, qualifications and experience would you recommend for an effective Project Manager? (2000) Discuss Human Aspects of Project Management in relation to Authority, Personnel Orientation, Motivation and Team Building. (2000) How does project management differ from the management of other types of manufacturing activities? (2001) How is Managing a project different from Managing a Factory? (2006)
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Review Questions (contd.)

 

Write short note on main features and advantages of Matrix type organisation for projects. (2001) Define Project. What are the main characteristics that identify and differentiate projects? Do you think that the specialised project management techniques can be applied effectively to nonengineering areas of organizational functions? Explain your answer with suitable examples. (2002) Define Project Management. What are the main criteria for assessing success of projects? (2003)
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Review Questions (contd.)

How is project management different from general management?  Describe the nine areas of project management identified in PMBOK.  Define Project Management. State the scope of Project Management. (2006)  Write a note on Computerized Project Management. (2006) ASSIGNMENT:  Different types / structures of organization that can be used for project management, advantages and drawbacks of each type of organization structure.

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REFERENCES
1. Projects - Planning, Analysis, Selection, Implementation & review
by Prasanna Chandra: Tata Mc.Grow-Hill, New Delhi. 2. Project Management for Business & Technology by John M. Nicholas: Prentice Hall India, New Delhi 3. Project Management the Managerial Process by Clifford Gray & Erik W. Larson Third Edition by McGraw Hill 4. Financial Management by M.Y. Khan & Jain, Tata Mc.Grow-Hill, New Delhi. 5. Project Management Harvey Maylor: Macmillan Publication (India) 6. A management Guide to PERT/CPM by Jerome D. Wiest, Ferdinend K. Levy : Prentice Hall India Pvt. Ltd.
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REFERENCES contd.
7. Handbook of Project Management by Dennis Lock: Jaico Publishing House, Bombay 8. Project Management - A Systems Approach to Planning, Scheduling & Controlling By Harold Kerzner: Van Nostrand Reinhold, New York 9. Project Management using Network Analysis by H. R. Hoare: McGraw Hill Book Company (UK) Ltd. 10. AMA Handbook of Project Management Editor: Paul C. Dinsmore 11. Global Project Management Handbook by Cleland, David, Gareis & Roland 12. Project Management - A Managerial Approach by Jack R. Meredith, Samuel J. & Mantel Jr.

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