Introduction to Project Management

Soumitra Chakraborty
2
What exactly is a project?
PM 1 Im in charge of the construction of a retail development in the centre
of a large town. There are 26 retail units and a super market in the complex.
My main responsibilities are to co-ordinate the work of the various contractors
to ensure that the project is completed to specification, within budget and on
time.
PM 2 I am directing a team of research scientists. We are running trials on a
new analgesic drug on behalf of a pharmaceutical company. It is my
responsibility to design the experiments and make sure that proper scientific
and legal procedures are followed, so that our results can be subjected to
independent statistical analysis.
PM 3- The international aid agency which employs me is sending me to New
Delhi to organize the introduction of multimedia resources at a teachers
training college. My role is quite complex. I have to make sure that
appropriate resources are purchased- and in some cases developed within the
college. I also have to encourage the acceptance of these resources by
lecturers and students within the college.
3
PM 2 I am directing a team of research scientists. We are
running trials on a new analgesic drug on behalf of a
pharmaceutical company. It is my responsibility to design the
experiments and make sure that proper scientific and legal
procedures are followed, so that our results can be subjected to
independent statistical analysis.
PM 3- The international aid agency which employs me is sending
me to New Delhi to organize the introduction of multimedia
resources at a teachers training college. My role is quite
complex. I have to make sure that appropriate resources are
purchased- and in some cases developed within the college. I
also have to encourage the acceptance of these resources by
lecturers and students within the college.
PM 1 Im in charge of the construction of a retail development
in the centre of a large town. There are 26 retail units and a
super market in the complex. My main responsibilities are to co-
ordinate the work of the various contractors to ensure that the
project is completed to specification, within budget and on time.
Project is not defined by the type of outcome it is set up to achieve
4
Basic Definition of Project
Have a specific and finite tasks to be
accomplished, whether large or small
scales, long or short run


A Project is a temporary endeavor
undertaken to create a unique
product, service, or result``.

Characteristics of a Project
5
Purpose
Project
usually a one-time activity with a set of desired
end result
can be divided into subtasks, which required
coordination & control
Life Cycle
Project life cycle
slow beginning progress to a buildup of size
peak begin decline finally must terminate
Characteristics of a Project
6
Interdependencies
Projects interact with other project being carried out
simultaneously by parent org., but always interacts with the
parents standard, ongoing operations, etc.
The patterns of interaction between functional dept. may change.
e.g:








Project mgr- keep these interactions clear & maintain




Marketing
Finance
Manufacturing
Finance
Marketing

Beginning
of project
Intermediate of project
End of
project
Definition and Characteristics of a
Project
Uniqueness
Every project are unique no two projects are the same
Some degree of customization is there
Conflict
Project mgr. full of conflict; projects compete with
functional dept. for resources & people
Project members conflicting for projects resources &
leadership roles in solving problems; deal with clients &
org.
Individuals conflict two bosses at the same time;
different objectives & priorities
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Difference between project management
and production management
Project management
Production
management
Quantity Only one project at a time
Large numbers
(mass production)
Product No two projects are the same
Similar but with variety
(e.g;consumer goods-
cars,household,computers,
etc)
Input to the
process
Brought to the site
(e.g; equipments, man,
material)
Put together in a
facility (factory) but
based on product
No of
process and
activities
Most activities carried out
once
Carried out
repetitively/more
than once
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Aspect
Mgmt
Four different types
of projects . . .
Shaft sinking at an Australian nickel mine
1 Civil or chemical engineering and
construction projects
- construction
- land reclamation
- tunnels and bridges
- mining and quarrying
- petrochemical plant
- oil and gas
2 Manufacturing projects
(the outcome is a product)
- new product development
- equipment manufacture
- shipbuilding
- heavy engineering
- aircraft construction
- pharmaceuticals
- food processing
Ingersoll milling machine
3 Management projects
(often in-house)

- organize an exhibition or stage
play
- relocate a company
- quality improvement project
- marketing project
- new production or IT facility
- disaster recovery
4 Projects for pure scientific research
- high risk of failure
- also possibility of high rewards
- possible public apprehension
- outcome often unpredictable
Why Project Management?
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Project manager expected to coordinate & integrate all
activities to reach projects goals
Project allows the mgr to be responsive to the client &
environ, to identify & correct problems, make timely
decisions, ensure mgrs at separate tasks do not sub-
optimize
Advantages of project mgmt;
Better control & better customer relations
Shorter development times, lower costs, higher quality & reliability,
higher profit margins
Sharper orientation towards results, better interdepartmental
coordination & higher worker morale
Some disadvantages of project mgmt
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Increased organizational complexity
Increase the likelihood that organizational policy being
violated project mgr being autonomous
Higher costs, management difficulties, low personnel
utilization
PM is difficult even when everything goes well - what
more if things go badly
Project organization is the only feasible way to
accomplish certain goals - literally not possible to
design & build a major weapon system in a timely &
economically acceptable manner, except through
project organization i.e. applying PM tools
The Triple Constraint
of Project Management
16
The Quadruple Constrains
of Project Management
1-17
Project Management
Framework
1-18
Project Life Cycle

Phases of the Project Life Cycle 1
The first phase involves the identification of a
need, problem, or opportunity.
The need and requirements are usually written by the
customer into a document called a request for proposal
(RFP).
Phases of the Project Life Cycle 2
The second phase is the development of a
proposed solution to the need or problem.
This phase results in the submission of a proposal.
The customer and the winning contractor negotiate
and sign a contract (agreement).
Phases of the Project Life Cycle 3
The third phase is performing the project.
Different types of resources are utilized
Results in the accomplishment of the project
objective
Phases of the Project Life Cycle 4
The final phase is terminating the project.
Perform close-out activities
Evaluate performance
Invite customer feedback
Project Life Cycle
5. Requirements
Project Management Maturity
Organizational Project
Management Performance
Project management maturity is a
widely accepted term when
discussing the extent that an
organization has adopted project
management processes.
PM Maturity can be identified
through key project related areas
(i.e organizational structure,
processes, etc).
The Benefits Of Being Mature!
Manage all projects undertaken
effectively.
Continually improve the
performance of all projects
undertaken.
Create an organization-wide ability
for managing projects.
Define roles and responsibilities for
carrying out all project-related
activities.
Achieve strategic goals.
Project Management Maturity Model(PMMM)
PM Maturity is ranked
into 1 of 5 maturity
levels.
Integrated multi-project
Planning and Control
Ad-hoc
Level1
Planned
Level 2
Managed
Level 3
Integrated
Level 4
Sustained
Level 5
Basic PM Processes
Individual Project
Planning
Systematic Project
Planning and Control
Continuous PM
Process Improvement
Level 1
Level 1 :Common
Language
Recognize the need
Acquire knowledge
Ad-hoc
Level1
Common Language
Level 2
Level 2: Common
processes: Common
processes defined
Success can be
repeated
Ad-hoc
Level1
Planned
Level 2
Common Language
Common Processes
Level 3
Singular Methodology
:combining all corporate
methodology into
singular methodology
Ad-hoc
Level1
Planned
Level 2
Managed
Level 3
Common Language
Common Process
Singular Methodology
Level 4
Process Improvement
Best Practices
Benchmarking
Ad-hoc
Level1
Planned
Level 2
Managed
Level 3
Integrated
Level 4
Common Language
Common Processes
Singular Methodology
Level 5
Concept of quality
Decision of
benchmarking
Benchmarking
Ad-hoc
Level1
Planned
Level 2
Managed
Level 3
Integrated
Level 4
Sustained
Level 5
Common Language
Common Processes
Singular Methodology
Continuous Process
Improvement
PM Maturity Model in Practice
Overlap of processes.
Overlap level 1 & 2
Overlap level 3 & 4
Overlap level 4 & 5
Project Selection
Project Selection
Project selection is the process of evaluating
individual projects or groups of projects, and
then choosing to implement some set of them so
that the objectives of the parent organization will
be achieved
Managers often use decision-aiding models to
extract the relevant issues of a problem from the
details in which the problem is embedded
Models represent the problems structure and
can be useful in selecting and evaluating
projects

Criteria for Project Selection Models
Realism - reality of managers decision
Capability- able to simulate different scenarios and
optimize the decision
Flexibility - provide valid results within the range of
conditions
Ease of Use - reasonably convenient, easy execution,
and easily understood
Cost - Data gathering and modeling costs should be low
relative to the cost of the project
1Easy Computerization - must be easy and convenient
to gather, store and manipulate data in the model
Nature of Project Selection
Models
2 Basic Types of Models
Numeric
Nonnumeric
Two Critical Facts:
Models do not make decisions - People do!
All models, however sophisticated, are only
partial representations of the reality the are
meant to reflect
Nonnumeric Models
Sacred Cow - project is suggested by a senior and powerful
official in the organization
Operating Necessity - the project is required to keep the
system running
Competitive Necessity - project is necessary to sustain a
competitive position
Product Line Extension - projects are judged on how they fit
with current product line, fill a gap, strengthen a weak link, or extend
the line in a new desirable way.
Comparative Benefit Model - several projects are
considered and the one with the most benefit to the firm is selected

Numeric Models:
Profit/Profitability
Payback period - initial fixed investment/estimated annual
cash inflows from the project
Average Rate of Return - average annual profit/average
investment
Discounted Cash Flow - Present Value Method
Internal Rate of Return - Finds rate of return that equates
present value of inflows and outflows
Profitability Index - NPV of all future expected cash
flows/initial cash investment