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Chapter 1 An Overview Of Project Management

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Project management involves coordinating activities to complete a unique goal within constraints of time, cost, and quality. It became a separate field due to increased complexity of projects and need for specialized skills. A project has defined start and end points and creates a unique product or service. Project managers coordinate resources and processes to meet objectives while satisfying stakeholder needs.

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Chapter 1 An Overview of Project Management Definition of Project What is Project Management? Why Project Management? The Life Cycle of a Project. Managing the Project Scope. Who should be the Project Manager and who should not be? Project Manager v/s Line Managers Project Communication Management The Growth of Project Management Project Management in India Ethics in Project Management Management of International Projects
Two Important Questions Managing a project is called Project Management. Q1: What is a project? Q2: Why did project management become a separate branch of study, away from the general management?
Definition of Project A project is a Group of unique, inter-related activities that are planned and executed in a certain sequence to create a unique product or service, within a specific time frame, budget and the clients specifications. According to Project Management Institute’s a Project is defined as “ A temporary endeavor undertaken to create a unique product or service” The British standard defines a project as “ A unique set of coordinated activities, with definite starting and finishing points, undertaken by an individual or organization to meet specific objectives within defined schedule, cost and performance parameters”.
A project means “ any undertaking that has definite, final objectives representing specified values to be used in the satisfaction of some need or desire” A commercial project involves the following key considerations; What is the cost? What is the time required? What are the capabilities that it provides to the organizations? Whether it will fit into the strategies of the organization?
Some Of The Project Initiatives Include: Redesigning or relocating a production facility (Manufacturing Project) Implementing a management information system (MIS Project) Developing a new alloy required for a space vehicle. (Spacecraft Project) Constructing national highways (Infrastructure Project) Organizing the Olympics (Sports project) Constructing a dam for better irrigation facilities. (Infrastructure Project) Launching of new product (Advertising and Marketing Project) Implementing a new computer system (IT project or upgrade) Designing and Implementing a new organizational structure (HR Project) Designing and Constructing a house or colony (Construction Project)
Project Parameters Some common constraints that influence a project are: Scope Quality Cost Time Resources
Relationship between Project Parameters The scope and quality of a project are influenced by a variety of constraints like Time Cost and Availability of resources
The Scope Triangle Resource Availability C A Time B Cost Project Scope and Quality
Project Success or Failure formula S = W i r i t=1 Where: 1 to 3 = Time, Cost and Performance Wi = Weight assigned to each factor: time, cost and performance Ri = degree of success in each factor
Difference between Project and Program Project Program Project includes all activities to complete a given job. A program is defined as an ongoing process or ongoing operation indefinitely. It has narrow scope and has shorter duration It has broader scope and has longer duration Project is a part of Program It is a main activity Projects is individual activity. A program is a group of projects managed in a coordinated way to obtain benefits not available from managing them individually
Types of Projects Project Typology: Uncertainty and Complexity First step in classification of projects is to recognize the class of project involved, so as to determine the type of organization system and leadership style to set up. Next most important is to consider “ How much” project management to apply. This depend upon the level of risk involved and the degree of project complexity.
Shenhar(1996) has proposed the following project classification dimensions . Shenhar Classification : Source : http://www.maxwideman.com/papers/improvingpm/fig2.gif
What is Project Management? Managing a project is called Project Management. According to PMI “ PM is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations”. PM includes defining project goals, specifying how the goals will be accomplished, what resources are needed, and relating budgets and time for completion.
Project Management Objectives Coordinate the various interrelated processes of the project. Ensure project includes all the work required, and only the work required, to complete the project successfully. Ensure that the project is completed on time and within budget. Ensure that the project will satisfy the needs for which it was undertaken. Ensure the most effective use of the people involved with the project. Promote effective communication between the projects team members and key stakeholders. Ensure that project risks are identified, analyzed, and responded.
Why Project Management? The decision on whether or not to set up a separate project management division is subjective as it depends upon various factors some of them are: Interactions or interdependencies between various departments. Sharing of common resources The importance of the project to the organization Size of the project Degree of unfamiliarity with the work involved and its complexity Changes in the market and The reputation of the organization
Four Phases in the Life of a Project 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. Phase I : Conception and Selection Phase II : Planning and Scheduling Phase III : Implementation, Monitoring and Control Phase IV : Evaluation and Termination Project Life Cycle
Functions Performed in Phase I Conception & Selection Phase II Planning & Scheduling Phase III Implementation, Monitoring and Control Phase IV Evaluation & Termination Identifying a need for a project Establishing goals to be achieved by the project. Estimating the amount that the firm will have to commit for the project. Presenting the project idea or various alternative ideas to the management and get their approval Set up a technical team to decide on how the project can e implemented. Plan for the requirements of personnel, finance, materials etc. Prepare a schedule. Procuring materials Building and testing the tools Developing support systems Producing the system that is aimed at. Verifying whether the performance is up to the laid down standard. Making modification if required. Training operational Staff Transfer of materials Transferring the responsibilities Releasing surplus resources, that remain after use Releasing the project staff for the next assignment.
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.
Project Manager and the client prepares project scope and deliverables. The project manager then prepares a Project Overview Statement based on the list of deliverables. The POS will be sent to the firms top management for approval. The PM prepares a Project Definition Statement with his team members that can be used as a reference in executing the project. Managing the Project Scope Continued….
Who should be the Project Manager? In any organization we find two types of people: 1. Those who give excellent ideas from their knowledge and experience but are not very good at getting things done and 2. Those whose are good at handling men and matters, but are not as sound as the former in technical matters. People who have great ideas are not necessarily good implementers. The manager of a project should be one who can work effectively with different groups of people, interact with various departmental heads, and integrate all the functions to get the project move. Harold Kerzner calls the first type of people ‘ Project Champions’ and the Second ‘Project Manager”.
Project Manager Vs Line Managers There is always a constant tussle between the line managers and the project manager to share the organizations resources like; Money, Manpower, Equipment, Facilities and Information Technology. Manpower is controlled by Line Managers. Allocation of manpower will be done by Line Managers based on the request made by Project Manager. Employees provided to Project Manager continue to report to Line Manager and give preference to the commands of the Line Manager over the Project Manager. Success of Project depends on good working relationship between PM and LM
Project Communication Management Effective communication is crucial for the success of a project. Project communication , which includes both formal and informal communication at various levels, involves all the activities and behavior by which information is exchanged between the project manager and his team members. Project Communication Management includes all those processes that are required to ensure that information pertaining to the project is generated, collected, disseminated, stored and ultimately disposed of, in a timely and appropriate manner.
Project communication planning involves determining the information and communication requirements of the various stakeholders of a project. Steps in communication planning are: Identifying information requirements Choosing the appropriate communication technology Stakeholder analysis Communication management plan
Growth of Project Management Phase I: Before 1950s PM was only informal Projects were handled on an informal basis by some people chosen from various departments. No formal project management departments. Handling projects was also done by Line Managers Formal Lines of Communication were unnecessary Sophisticated organization structure was non-existent.
Phase II : Late Sixties PM gained widespread acceptance. Complexity of the tasks and the sizes of the organizations increased. Formal Project Management Departments came into force Clear cut distinction between the role of Project Manager and Line Manager were established All the departments started involving in the project activities Effective communication system were in place. Resistance from the people involved was very high on account of Pay packets, Power in the organization and visibility to the top management.
Phase III - Late Seventies Project Management started spreading further and further and following benefits started to accrue from it. Unhindered flow of work horizontally and vertically Improvement in the orientation towards customer problems. Easier demarcation of responsibilities Better adaptation to a dynamic environment Ability to handle a multi-disciplinary activity within specified constraints. Improvement in organizational design.
Project Management Institute(PMI) To meet the industrial requirements , to improve the skills and standards and to make project manager more professional , an international institution the Project Management Institute was set up in 1969. PMI is a non-profitable professional organization dedicated to promoting Project Management. It has more then 150000 members over 150 countries. Role of PMI To Set industry standards Conducts research and provides education Certification Program Conducts Seminars and International Workshops to discuss the present context and improve the standards of project management.
Project Management In India Project Management has been adopted in India after Independence. Right from the inception, it has been a failure in India. Severe time and cost overruns have been the characteristic features of projects, particularly in the public sector. Commonly quoted reasons for the overruns are: Internal Reasons External Reasons
Internal Reasons Disputes with local people on acquisition of land and compensation. Bad choice of technology Non-availability of skilled personnel Lack of proper planning Non-availability of the equipment of required quality at the required time. Poor quality of the inputs purchased Labor disputes Lack of proper handling of organizational issues such as appointment of the project manager Absence of proper co-ordination between different departments involved, such as customs, sales tax. Etc. Lack of proper monitoring and follow up.
External Reasons Funds not being released by the concerned department on time. Changes in foreign exchange rates Inflation Political instability and lack of Political Will to implement projects quickly and efficiently Budget deficits Diversion of funds to other unforeseen uses like meeting a natural calamity.
Ethics in Project Management Ethics means science of conduct. Doug Wallace and John Pekel define Ethics as the basic ground rules by which humans live. These ground rules differ from society to society and individual to individual, and similarly from a project executed in one country to one executed in another. Therefore, ethics refer to the moral principles that are accepted by the majority of the members of the society. Project Manager should exercise care when dealing with ethical issues that arise during the development and implementation of a project.
Ethics and Project Management The decision taken by project management professionals will have an impact on the quality of life of various stakeholders of the project. Some common ethical mistakes committed by businesses; Taking shortcuts in order to meet the schedule or budget Using inferior quality materials Compromising on safety measures Violation of standards
Management of International Projects Globalization has a significant impact on the way the projects are managed. According t Rudd Lubbers, Globalization is a process of minimizing the significance of geographical distance, in developing and maintaining international economic, political and socio-cultural relations. There are 3 basic models of project management based on the project management styles in different geographic locations. The European Model- Fully structured and systematic procedure for handling technical issues The North American Model : The system is not as formal and rigid as it is in Europe. The Japanese Model : They believe that superior technology brings in superior core competency.
Impact of the Business Environment on International Projects The fundamental difference between an international project and a domestic project is that international projects require an in-depth analysis of the various constituents of the macro and micro environments. The Major constituents are; Language Culture Political Environment Economic conditions Government regulations Availability of infrastructure Human capital The success or failure of an international project is based on the pre-analysis of the micro and macro environment of the country, where the project is to be implemented.
Challenges in International Projects Political disturbances Economic instability Sudden changes in Tax laws Time consuming government procedures Cultural barriers Patent laws Dispute settlements Lack of physical proximity
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Chapter 1 An Overview Of Project Management

  • 1. Chapter 1 An Overview of Project Management Definition of Project What is Project Management? Why Project Management? The Life Cycle of a Project. Managing the Project Scope. Who should be the Project Manager and who should not be? Project Manager v/s Line Managers Project Communication Management The Growth of Project Management Project Management in India Ethics in Project Management Management of International Projects
  • 2. Two Important Questions Managing a project is called Project Management. Q1: What is a project? Q2: Why did project management become a separate branch of study, away from the general management?
  • 3. Definition of Project A project is a Group of unique, inter-related activities that are planned and executed in a certain sequence to create a unique product or service, within a specific time frame, budget and the clients specifications. According to Project Management Institute’s a Project is defined as “ A temporary endeavor undertaken to create a unique product or service” The British standard defines a project as “ A unique set of coordinated activities, with definite starting and finishing points, undertaken by an individual or organization to meet specific objectives within defined schedule, cost and performance parameters”.
  • 4. A project means “ any undertaking that has definite, final objectives representing specified values to be used in the satisfaction of some need or desire” A commercial project involves the following key considerations; What is the cost? What is the time required? What are the capabilities that it provides to the organizations? Whether it will fit into the strategies of the organization?
  • 5. Some Of The Project Initiatives Include: Redesigning or relocating a production facility (Manufacturing Project) Implementing a management information system (MIS Project) Developing a new alloy required for a space vehicle. (Spacecraft Project) Constructing national highways (Infrastructure Project) Organizing the Olympics (Sports project) Constructing a dam for better irrigation facilities. (Infrastructure Project) Launching of new product (Advertising and Marketing Project) Implementing a new computer system (IT project or upgrade) Designing and Implementing a new organizational structure (HR Project) Designing and Constructing a house or colony (Construction Project)
  • 6. Project Parameters Some common constraints that influence a project are: Scope Quality Cost Time Resources
  • 7. Relationship between Project Parameters The scope and quality of a project are influenced by a variety of constraints like Time Cost and Availability of resources
  • 8. The Scope Triangle Resource Availability C A Time B Cost Project Scope and Quality
  • 9. Project Success or Failure formula S = W i r i t=1 Where: 1 to 3 = Time, Cost and Performance Wi = Weight assigned to each factor: time, cost and performance Ri = degree of success in each factor
  • 10. Difference between Project and Program Project Program Project includes all activities to complete a given job. A program is defined as an ongoing process or ongoing operation indefinitely. It has narrow scope and has shorter duration It has broader scope and has longer duration Project is a part of Program It is a main activity Projects is individual activity. A program is a group of projects managed in a coordinated way to obtain benefits not available from managing them individually
  • 11. Types of Projects Project Typology: Uncertainty and Complexity First step in classification of projects is to recognize the class of project involved, so as to determine the type of organization system and leadership style to set up. Next most important is to consider “ How much” project management to apply. This depend upon the level of risk involved and the degree of project complexity.
  • 12. Shenhar(1996) has proposed the following project classification dimensions . Shenhar Classification : Source : http://www.maxwideman.com/papers/improvingpm/fig2.gif
  • 13. What is Project Management? Managing a project is called Project Management. According to PMI “ PM is the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations”. PM includes defining project goals, specifying how the goals will be accomplished, what resources are needed, and relating budgets and time for completion.
  • 14. Project Management Objectives Coordinate the various interrelated processes of the project. Ensure project includes all the work required, and only the work required, to complete the project successfully. Ensure that the project is completed on time and within budget. Ensure that the project will satisfy the needs for which it was undertaken. Ensure the most effective use of the people involved with the project. Promote effective communication between the projects team members and key stakeholders. Ensure that project risks are identified, analyzed, and responded.
  • 15. Why Project Management? The decision on whether or not to set up a separate project management division is subjective as it depends upon various factors some of them are: Interactions or interdependencies between various departments. Sharing of common resources The importance of the project to the organization Size of the project Degree of unfamiliarity with the work involved and its complexity Changes in the market and The reputation of the organization
  • 16. Four Phases in the Life of a Project 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. Phase I : Conception and Selection Phase II : Planning and Scheduling Phase III : Implementation, Monitoring and Control Phase IV : Evaluation and Termination Project Life Cycle
  • 17. Functions Performed in Phase I Conception & Selection Phase II Planning & Scheduling Phase III Implementation, Monitoring and Control Phase IV Evaluation & Termination Identifying a need for a project Establishing goals to be achieved by the project. Estimating the amount that the firm will have to commit for the project. Presenting the project idea or various alternative ideas to the management and get their approval Set up a technical team to decide on how the project can e implemented. Plan for the requirements of personnel, finance, materials etc. Prepare a schedule. Procuring materials Building and testing the tools Developing support systems Producing the system that is aimed at. Verifying whether the performance is up to the laid down standard. Making modification if required. Training operational Staff Transfer of materials Transferring the responsibilities Releasing surplus resources, that remain after use Releasing the project staff for the next assignment.
  • 18. 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.
  • 19. Project Manager and the client prepares project scope and deliverables. The project manager then prepares a Project Overview Statement based on the list of deliverables. The POS will be sent to the firms top management for approval. The PM prepares a Project Definition Statement with his team members that can be used as a reference in executing the project. Managing the Project Scope Continued….
  • 20. Who should be the Project Manager? In any organization we find two types of people: 1. Those who give excellent ideas from their knowledge and experience but are not very good at getting things done and 2. Those whose are good at handling men and matters, but are not as sound as the former in technical matters. People who have great ideas are not necessarily good implementers. The manager of a project should be one who can work effectively with different groups of people, interact with various departmental heads, and integrate all the functions to get the project move. Harold Kerzner calls the first type of people ‘ Project Champions’ and the Second ‘Project Manager”.
  • 21. Project Manager Vs Line Managers There is always a constant tussle between the line managers and the project manager to share the organizations resources like; Money, Manpower, Equipment, Facilities and Information Technology. Manpower is controlled by Line Managers. Allocation of manpower will be done by Line Managers based on the request made by Project Manager. Employees provided to Project Manager continue to report to Line Manager and give preference to the commands of the Line Manager over the Project Manager. Success of Project depends on good working relationship between PM and LM
  • 22. Project Communication Management Effective communication is crucial for the success of a project. Project communication , which includes both formal and informal communication at various levels, involves all the activities and behavior by which information is exchanged between the project manager and his team members. Project Communication Management includes all those processes that are required to ensure that information pertaining to the project is generated, collected, disseminated, stored and ultimately disposed of, in a timely and appropriate manner.
  • 23. Project communication planning involves determining the information and communication requirements of the various stakeholders of a project. Steps in communication planning are: Identifying information requirements Choosing the appropriate communication technology Stakeholder analysis Communication management plan
  • 24. Growth of Project Management Phase I: Before 1950s PM was only informal Projects were handled on an informal basis by some people chosen from various departments. No formal project management departments. Handling projects was also done by Line Managers Formal Lines of Communication were unnecessary Sophisticated organization structure was non-existent.
  • 25. Phase II : Late Sixties PM gained widespread acceptance. Complexity of the tasks and the sizes of the organizations increased. Formal Project Management Departments came into force Clear cut distinction between the role of Project Manager and Line Manager were established All the departments started involving in the project activities Effective communication system were in place. Resistance from the people involved was very high on account of Pay packets, Power in the organization and visibility to the top management.
  • 26. Phase III - Late Seventies Project Management started spreading further and further and following benefits started to accrue from it. Unhindered flow of work horizontally and vertically Improvement in the orientation towards customer problems. Easier demarcation of responsibilities Better adaptation to a dynamic environment Ability to handle a multi-disciplinary activity within specified constraints. Improvement in organizational design.
  • 27. Project Management Institute(PMI) To meet the industrial requirements , to improve the skills and standards and to make project manager more professional , an international institution the Project Management Institute was set up in 1969. PMI is a non-profitable professional organization dedicated to promoting Project Management. It has more then 150000 members over 150 countries. Role of PMI To Set industry standards Conducts research and provides education Certification Program Conducts Seminars and International Workshops to discuss the present context and improve the standards of project management.
  • 28. Project Management In India Project Management has been adopted in India after Independence. Right from the inception, it has been a failure in India. Severe time and cost overruns have been the characteristic features of projects, particularly in the public sector. Commonly quoted reasons for the overruns are: Internal Reasons External Reasons
  • 29. Internal Reasons Disputes with local people on acquisition of land and compensation. Bad choice of technology Non-availability of skilled personnel Lack of proper planning Non-availability of the equipment of required quality at the required time. Poor quality of the inputs purchased Labor disputes Lack of proper handling of organizational issues such as appointment of the project manager Absence of proper co-ordination between different departments involved, such as customs, sales tax. Etc. Lack of proper monitoring and follow up.
  • 30. External Reasons Funds not being released by the concerned department on time. Changes in foreign exchange rates Inflation Political instability and lack of Political Will to implement projects quickly and efficiently Budget deficits Diversion of funds to other unforeseen uses like meeting a natural calamity.
  • 31. Ethics in Project Management Ethics means science of conduct. Doug Wallace and John Pekel define Ethics as the basic ground rules by which humans live. These ground rules differ from society to society and individual to individual, and similarly from a project executed in one country to one executed in another. Therefore, ethics refer to the moral principles that are accepted by the majority of the members of the society. Project Manager should exercise care when dealing with ethical issues that arise during the development and implementation of a project.
  • 32. Ethics and Project Management The decision taken by project management professionals will have an impact on the quality of life of various stakeholders of the project. Some common ethical mistakes committed by businesses; Taking shortcuts in order to meet the schedule or budget Using inferior quality materials Compromising on safety measures Violation of standards
  • 33. Management of International Projects Globalization has a significant impact on the way the projects are managed. According t Rudd Lubbers, Globalization is a process of minimizing the significance of geographical distance, in developing and maintaining international economic, political and socio-cultural relations. There are 3 basic models of project management based on the project management styles in different geographic locations. The European Model- Fully structured and systematic procedure for handling technical issues The North American Model : The system is not as formal and rigid as it is in Europe. The Japanese Model : They believe that superior technology brings in superior core competency.
  • 34. Impact of the Business Environment on International Projects The fundamental difference between an international project and a domestic project is that international projects require an in-depth analysis of the various constituents of the macro and micro environments. The Major constituents are; Language Culture Political Environment Economic conditions Government regulations Availability of infrastructure Human capital The success or failure of an international project is based on the pre-analysis of the micro and macro environment of the country, where the project is to be implemented.
  • 35. Challenges in International Projects Political disturbances Economic instability Sudden changes in Tax laws Time consuming government procedures Cultural barriers Patent laws Dispute settlements Lack of physical proximity