Semester III Assgn I Project Management

Assignment 1
PROJECT
MANAGEMENT
(5577)
MBA Executive
ZAHID NAZIR
Roll # AB523655
Semester: Autumn 2009
ALLAMA IQBAL OPEN UNIVERSITY,

ISLAMABAD.
PROJECT MANAGEMENT
QUESTION 1
Explain “Project” and “Project

Management Process”, why a project is
initiated? Also discuss the Project Life
Cycle in detail.
(20)
2
ZAHID NAZIR AB523655
PROJECT MANAGEMENT
PROJECT
According to the PMI (Project Management Institute) definition:

“A project is a temporary endeavor consisting of a series of activities
and tasks undertaken to create a unique product or service”.
A project is a planned activity. A project is usually a onetime activity with a
well defined set of desired end results. It can be divided into subtasks that
must be accomplished in order to achieve the project goals.
Projects are different from standard business operational activities as they:
Are unique in nature. They do not involve repetitive processes. Every

project undertaken is different from the last, whereas operational
activities often involve undertaking repetitive (identical) processes.
Have a defined timescale. Projects have a clearly specified start and
end date within which the deliverables must be produced to meet a
specified customer requirement.
Have an approved budget. Projects are allocated a level of financial
expenditure within which the deliverables must be produced to meet a
specified customer requirement.
Have limited resources. At the start of a project an agreed amount of
labor, equipment and materials is allocated to the project.
Involve an element of risk. Projects entail a level of uncertainty and
therefore carry business risk.
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Achieve beneficial change. The purpose of a project, typically, is to

improve an organization through the implementation of business
change.
Examples of Projects are:
Construction of a building
Manufacturing of product
Development of a payroll software package
Computerization of a office
PROJECT MANAGEMENT
“Project Management is the skills, tools and management processes

required to undertake a project successfully”.
Project Management comprises:
A set of skills. Specialist knowledge, skills and experience are required

to reduce the level of risk within a project and thereby enhance its
likelihood of success
A suite of tools. Various types of tools are used by project managers to
improve their chances of success. Examples include document
templates, registers, planning software, modeling software, audit
checklists and review forms
A series of processes. Various management techniques and processes
are required to monitor and control time, cost, quality and scope on
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PROJECT MANAGEMENT
projects. Examples include time management, cost management,

quality management, change management, risk management and issue
management.
PROJECT MANAGEMENT PROCESS
Project Management Processes define, organize and complete the work

defined for the project. There are five project management process areas that
apply to most projects and are defined in the PMBOK i.e. Project
Management Body of Knowledge:
Initiating Processes: authorizing the project or phase.

Planning Processes: defining the project objectives and selecting the
most appropriate approach for the project to attain the objectives.
Executing Processes: managing the resources required to carry out
the projects as defined in the plan.
Controlling Processes: ensuring that project objectives are met as
defined by monitoring, measuring progress against plan, identifying
variance from plan and taking corrective action.
Closing Processes: formalizing acceptance of a phase and or the
project and closing all associated activities.
Project management is integrative and to effectively manage a project, a
project manager uses all of the body of knowledge areas and all of the
processes throughout the life cycle of a project.
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PROJECT MANAGEMENT
WHY A PROJECT
Planning is the determining in advance of what is to be done, how it is
to be done, when it is to be done and who will do it. It encompasses
setting objectives, and making day-to-day decisions on how these
objectives can best be achieved.
Projects never go according to plan. Things arrive late, there are
deviations, and production falls behind schedule and resources are
suddenly not available. This is not a reason not to plan. In fact, it is a
good reason to plan.
Planning gives direction to leaders and teams. It focuses on the
objectives of the Project and/or the organization. If the team is aware
of the objectives for which the project strives, coordination, co-
operation and team work will most likely be enhanced.
Planning can reduce duplication of work and unnecessary activities.
When team members know exactly what to do, inefficiencies become
more apparent.
One of the most effective ways of planning an action programme is to work

systematically through the elements of project formulation:
rationale;
goal;
objective;
strategy;
outputs and targets;
activities;
inputs;
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timetable and work plan;

monitoring;
evaluation
A methodical approach makes it possible to:
determine how realistic the project is and whether it can be
implemented with locally available resources and expertise;
anticipate problems;
check on the progress of the work (monitoring) and on whether the
project has achieved its aims (evaluation).
PROJECT LIFE CYCLE
A project has specific objectives to be completed within certain

specifications. It has defined start and end dates, is performed by human and
non-human resources (people, materials, money etc), is planned, executed
and controlled, and is constrained by limited resources (limited budget,
people, equipment, time etc). Companies performing projects will generally
sub-divide their projects into several phases or stages to provide better
management control. Collectively these project phases are called the Project
Life Cycle.
Project Lifecycle consists of four phases:
1. Project Initiation
2. Project Planning
3. Project Execution
4. Project Closure
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PROJECT MANAGEMENT
Fig: Four Phases of Project LifeCycle
Fig: Project LifeCycle
The initiation phase essentially involves the project ‘start-up’. It is the
phase within which the business problem or opportunity is identified, the
solution is agreed, a project formed to produce the solution and a project
team appointed. The following diagram depicts the activities undertaken:
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PROJECT MANAGEMENT
1.1 Develop Business Case
Once a business problem or opportunity has been identified, a Business Case

is prepared. This includes:
A detailed definition of the problem or opportunity
An analysis of the potential solution options available. For each option,
the potential benefits, costs, risks and issues are documented. A formal
feasibility study may be commissioned if the feasibility of any
particular solution option is not clear
The recommended solution and a generic implementation plan.
The Business Case is approved by the Project Sponsor and the required
funding is allocated to proceed with the project.
1.2 Perform Feasibility Study
At any stage during (or after) the development of a Business Case, a formal
Feasibility Study may be commissioned. The purpose is to assess the
likelihood of a particular solution option’s achieving the benefits outlined in
the Business Case. The Feasibility Study will also investigate whether the
forecast costs are reasonable, the solution is achievable, the risks are
acceptable and/or any likely issues are avoidable.
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1.3 Establish Project Charter
After the solution has been agreed and funding allocated, a project is
formed. The Project Charter defines the vision, objectives, scope and
deliverables for the project. It also provides the organization structure (roles
and responsibilities) and a summarized plan of the activities, resources and
funding required to undertake the project. Finally, any risks, issues, planning
assumptions and constraints are listed.
1.4 Appoint Project Team
At this point the scope of the project has been defined in detail and the
project team are ready to be appointed. Although a Project Manager can be
appointed at any stage of the project, s/he will need to be appointed prior to
the establishment of the project team. The Project Manager documents a
detailed Job Description for each project role and appoints a human resource
to each role based on his/her relevant skills and experience. Once the team
are ‘fully resourced’, the Project Office is ready to be set-up.
1.5 Set up Project Office
The Project Office is the physical environment within which the team will be
based. Although it is usual to have one central project office, it is possible to
have a ‘virtual project office’ environment, with project team members in
various locations around the world. Regardless of the location, a successful
project office environment will comprise the following components:
Location (either physical or virtual)
Communications (telephones, computer network, email, internet
access, file storage, database storage and backup facilities)
Documentation (methodology, processes, forms and registers)
Tools (for accounting, project planning and risk modeling).
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1.6 Perform Phase Review
At the end of the Initiation Phase, a Phase review is performed. This is

basically a checkpoint to ensure that the project has achieved its stated
objectives as planned.
2. Project Planning
By this stage, the benefits and costs of the project have been clearly
documented, the objectives and scope have been defined, the project
team has been appointed and a formal project office environment
established. It is now time to undertake detailed planning to ensure that
the activities performed in the execution phase of the project are properly
sequenced, resourced, executed and controlled.
2.1 Develop Project Plan
The first step is to document the Project Plan. A ‘Work Breakdown Structure’
(WBS) is identified, which includes a hierarchical set of phases, activities and
tasks to be undertaken on the project. After the WBS has been agreed, an
assessment of the effort required to undertake the activities and tasks is
made. The activities and tasks are sequenced, resources are allocated and a
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PROJECT MANAGEMENT
detailed project schedule is formed. This project schedule will become the
primary tool for the Project Manager to assess the progress of the project.
2.2 Develop Resource Plan
Immediately after the Project Plan is formed, it is necessary to allocate the

resources required to undertake each of the activities and tasks within the
Project Plan. Although general groups of resources may have already been
allocated to the Project Plan, a detailed resource assessment is required to
identify the:
Types of resources (labor, equipment and materials)
Total quantities of each resource type
Roles, responsibilities and skill-sets of all human resources
Items, purposes and specifications of all equipment resource
Items and quantities of material resource.
A schedule is assembled for each type of resource so that the Project
Manager can assess the resource allocation at each stage in the project.
2.3 Develop Financial Plan
Similar to the Resource Plan, a Financial Plan is prepared to identify the

quantity of money required for each stage in the project. The total cost of
labor, equipment and materials is quantified and an expense schedule is
defined which provides the Project Manager with an understanding of the
forecast spending vs. the actual spending throughout the project. Preparing
a detailed Financial Plan is extremely important as the project’s success will
depend on whether or not it is delivered within the ‘time, cost and quality’
estimates for this project.
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2.4 Develop Quality Plan
Meeting the quality expectations of the customer is critical to the success of

the project. To ensure that the quality expectations are clearly defined and
can reasonably be achieved, a Quality Plan is documented. The Quality Plan:
Defines what quality means in terms of this project
Lists clear and unambiguous quality targets for each deliverable. Each
quality target provides a set of criteria and standards which must be
achieved to meet the expectations of the customer
Outlines a plan of activities which will assure the customer that the
quality targets will be met (i.e. a Quality Assurance Plan)
Identifies the techniques used to control the actual level of quality of
each deliverable as it is built (i.e. a Quality Control Plan).
Finally, it is important to review the quality not only of the deliverables
produced by the project but also of the management processes which
produce them. A summary of each of the management processes undertaken
during the execution phase is identified, including Time, Cost, Quality,
Change, Risk, Issue, Procurement, Acceptance and Communications
Management.
2.5 Develop Risk Plan
The foreseeable project risks are then documented within a Risk Plan and a
set of actions to be taken formulated to both prevent each risk from
occurring and reduce the impact of the risk should it eventuate. Developing
a clear Risk Plan is an important activity within the planning phase as it is
necessary to mitigate all critical project risks prior to entering the Execution
phase of the project.
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2.6 Develop Acceptance Plan
The key to a successful project is gaining acceptance from the customer that
each deliverable produced meets (or exceeds) his/ her requirements. To
clarify the criteria used to judge each deliverable for customer acceptance, an
Acceptance Plan is produced. The Acceptance Plan provides the criteria for
obtaining customer acceptance, a schedule of acceptance reviews within
which customer acceptance will be sought and a summary of the process
used to gain acceptance of each deliverable from the customer.
2.7 Develop Communications Plan
Prior to the Execution phase, it is also necessary to identify how each of the
stakeholders will be kept informed of the progress of the project. The
Communications Plan identifies the types of information to be distributed,
the methods of distributing information to stakeholders, the frequency of
distribution and responsibilities of each person in the project team for
distributing information regularly to stakeholders.
2.8 Develop Procurement Plan
The last planning activity within the Planning phase is to identify the
elements of the Project which will be acquired from external suppliers to the
project. The Procurement Plan provides a detailed description of the
Products (i.e. goods and services) to be procured from suppliers, the
justification for procuring each product externally, as opposed to from
within the business, and the schedule for procurement. It also references the
process for the selection of a preferred supplier (“Tender Process”) and the
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process for the actual order and delivery of the procured products
(“Procurement Process”).
2.9 Contract Suppliers
Although external suppliers may be appointed at any stage of the project, it

is usual to appoint suppliers after the Project Plans have been documented
but prior to the Execution phase of the project. Only at this point will the
Project Manager have a clear idea of the role of the supplier and the
expectations for his/her delivery. A formal Tender Process is invoked to
identify a short-list of interested suppliers and select a preferred supplier to
meet the procurement needs of the project. The Tender Process involves
creating a Statement of Work, a Request for Information and Request for
Proposal to obtain sufficient information from each potential supplier to
select a preferred supplier. Once a preferred supplier has been chosen, a
Supplier Contract is agreed for the delivery of the requisite product.
At the end of the Planning phase, a Phase review is performed. This is

The Execution phase is typically the longest phase of the project (in terms
of duration). It is the phase within which the deliverables are physically
constructed and presented to the customer for acceptance. To ensure that
the customer’s requirements are met, the Project Manager monitors and
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controls the activities, resources and expenditure required to build each

deliverable throughout the execution phase. A number of management
processes are also undertaken to ensure that the project proceeds as
planned.
3.1 Build Deliverables
This phase requires the physical

construction of each deliverable for
acceptance by the customer. The
actual activities undertaken to
construct each deliverable will vary,
depending on the type of project
(e.g. engineering, building
development, computer
infrastructure or business process
re-engineering projects).
Deliverables may be constructed in
a ‘waterfall’ fashion (where each
activity is undertaken in sequence
until the deliverable is finished) or
an ‘iterative’ fashion (where iterations of each deliverable are constructed
until the deliverable meets the requirements of the customer). Regardless
of the method used to construct each deliverable, careful monitoring and
control processes should be employed to ensure that the quality of the
final deliverable meets the acceptance criteria set by the customer.
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3.2 Monitor and Control
Whilst the Project Team are physically producing each deliverable, the
Project Manager implements a series of management processes to
monitor and control the activities being undertaken.
An overview of each management process follows.
Time Management
Time Management is the process within which time spent by staff
undertaking project tasks is recorded against the project. As time is a scarce
resource on projects, it is important to record the time spent by each
member of the team on a Timesheet to enable the Project Manager to
control the level of resource allocated to a particular activity. A Timesheet
Register provides a summary of the time currently spent on the project and
enables the Project Plan to be kept fully up to date.
Cost Management
Cost Management is the process by which costs (or expenses) incurred on
the project are formally identified, approved and paid. Expense Forms are
completed for each set of related project expenses such as labor, equipment
and materials costs. Expense Forms are approved by the Project Manager
and recorded within an Expense Register for audit purposes.
Quality Management
Quality is defined as “the level of conformance of the final deliverable to the
customer’s requirements”. Quality Management is the process by which the
quality of the deliverables is assured and controlled for the project, using
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Quality Assurance and Quality Control techniques. Quality reviews are

frequently undertaken and the results recorded within a Quality Register.
Change Management
Change Management is the process by which changes to the project’s scope,
deliverables, timescales or resources are formally defined, evaluated and
approved prior to implementation. A core aspect of the Project Manager’s
role is to manage change within the project successfully. This is achieved by
understanding the business and system drivers requiring the change,
documenting the benefits and costs of adopting the change and formulating
a structured plan for implementing the change. To formally request a change
it is often necessary to complete a Change Form. The change request details
may then be recorded within a Change Register.
Risk Management
Risk Management is the process by which risks to the project (e.g. to the
scope, deliverables, timescales or resources) are formally identified,
quantified and managed during the project. A project risk may be identified
at any stage of the project by completing a Risk Form and recording the
relevant risk details within the Risk Register.
Issue Management
Issue Management is the method by which issues currently affecting the
ability of the project to produce the required deliverable are formally
managed. After completion of an Issue Form (and logging the details within
the Issue Register), each issue is evaluated by the Project Manager and a set
of actions undertaken to resolve the issue at hand.
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Procurement Management
Procurement Management is the process by which product is sourced from
an external supplier. To request the delivery of product from a supplier, a
Purchase Order must be approved by the Project Manager and sent to the
supplier for confirmation. The status of the purchase is then tracked using a
Procurement Register until the product has been delivered and accepted by
the project team.
Acceptance Management
Acceptance Management is the process by which deliverables produced by
the project are reviewed and accepted by the customer as meeting his/her
specific requirements. To request the acceptance of a deliverable by the
customer, an Acceptance Form is completed. The Acceptance Form
describes the criteria from which the deliverable has been produced and the
level of satisfaction of each criterion listed.
Communications Management
Communications Management is the process by which formal
communications messages are identified, created, reviewed and
communicated within a project. The most common method of
communicating the status of the project is via a Project Status Report. Each
communication item released to the project stakeholders is captured within
a Communications Register.
At the end of the Execution Phase, a Phase review is performed. This is

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4. Project Closure
Following the completion of all project deliverables and acceptance by the
customer, a successful project will have met its objectives and be ready for
formal closure. Project Closure is the last phase in the project and must
be conducted formally so that the business benefits delivered by the
project are fully realized by the customer.
4.1 Perform Project Closure
Project Closure involves undertaking a series of activities to wind up the

project, including:
Assessing whether the project completion criteria have been met

Identifying any outstanding items (activities, risks or issues)
Producing a hand-over plan to transfer the deliverables to the
customer environment
Listing the activities required to hand over documentation, cancel
supplier contracts and release project resources to the business
Communicating closure to all stakeholders and interested parties.
A Project Closure Report is submitted to the Customer and/or Project

Sponsor for approval. The Project Manager is then responsible for
undertaking each of the activities identified within the Project Closure
Report on time and according to budget. The project is closed only when all
activities identified in the Project Closure Report have been completed.
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4.2 Review Project Completion

The final activity undertaken on any project is a review of its overall success
by an independent resource. Success is determined by how well it performed
against the defined objectives and conformed to the management processes
outlined in the planning phase. To determine performance, a number of
questions are posed. For example:
Did it result in the benefits defined in the Business Case?

Did it achieve the objectives outlined in the Project Charter?
Did it operate within the scope of the Project Charter?
Did the deliverables meet the criteria defined in the Quality Plan?
Was it delivered within the schedule outlined in the Project Plan?
Was it delivered within the budget outlined in the Financial Plan?
To determine conformance, a review is undertaken of the level of conformity

of the project activities to the management processes outlined in the Quality
Plan. The above results, key achievements and lessons learnt are
documented within a Post Implementation Review report and presented to
the Project Sponsor for approval.
References:
www.scribd.com
www.method123.com
Fundamentals of Project Management by James Lewis
Project Management AIOU
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QUESTION 2
Every business activity as carried out for
profit making and one of the principles of
profit making is cost minimization and
effective cost management. All the business
activities need strong financial support for its
smooth and effective completion. Financial
resources are the key factors among all the
given resource of any business organization,
therefore the success of a project depends on
effective cost management. You are required
to write a detailed note on project cost
management.
(20)
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PROJECT COST MANAGEMENT

“Project Cost Management includes the processes required to ensure
that the project is completed within the approved budget.”
Cost is one of the three pillars supporting project success or failure, the other
two being schedule and performance. Projects that go significantly “over
budget” are often terminated without achieving the project goals because
stakeholders simply run out of money or perceive additional expenditures as
“throwing good money after bad.” Projects that stay within budget are the
exception, not the rule. A project manager who can control costs while
achieving performance and schedule goals should be viewed as somewhat of
a hero, especially when we consider that cost, performance, and schedule are
closely interrelated.
Cost management consists of the four main activities or processes as shown
in Figure below.
1. Resource Planning: determining what resources (people, equipment,
materials) and what quantities of each should be used to perform
project activities.
2. Cost Estimating: developing an approximation (estimate) of the costs
of the resources needed to complete project activities.
3. Cost Budgeting: allocating the overall cost estimate to individual
work items.
4. Cost Control: controlling changes to the project budget.
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Fig: Cost Management Process

These processes interact with each other and with the processes in the other
knowledge areas as well. Each process may involve effort from one or more
individuals or groups of individuals based on the needs of the project. Each
process generally occurs at least once in every project phase.
Project cost management is primarily concerned with the cost of the
resources needed to complete project activities. However, project cost
management should also consider the effect of project decisions on the cost
of using the project product. For example, limiting the number of design
reviews may reduce the cost of the project at the expense of an increase in
the customer’s operating costs. This broader view of project cost
management is often called life-cycle costing.
On some projects, especially smaller ones, resource planning, cost
estimating, and cost budgeting are so tightly linked that they are viewed as a
single process (e.g., they may be performed by a single individual over a
relatively short period of time). They are presented here as distinct processes
because the tools and techniques for each are different.
1. Resource Planning
Resource planning involves determining what physical resources (people,
equipment, materials) and what quantities of each should be used to
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perform project activities. It must be closely coordinated with cost

estimating. For example:
A construction project team will need to be familiar with local building
codes. Such knowledge is often readily available at virtually no cost by
using local labor. However, if the local labor pool lacks experience with
unusual or specialized construction techniques, the additional cost for
a consultant might be the most effective way to secure knowledge of
the local building codes.
An automotive design team should be familiar with the latest in
automated assembly techniques. The requisite knowledge might be
obtained by hiring a consultant, by sending a designer to a seminar on
robotics, or by including someone from manufacturing as a member of
the team.
1.1 Inputs to Resource Planning
1. Work breakdown structure. The work breakdown structure (WBS)

identifies the project elements that will need resources and thus is the
primary input to resource planning. Any relevant outputs from other
planning processes should be provided through the WBS to ensure proper
control.
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2. Historical information. Historical information regarding what types of

resources were required for similar work on previous projects should be used
if available.
3. Scope statement. The scope statement contains the project justification
and the project objectives, both of which should be considered explicitly
during resource planning.
4. Resource pool description. Knowledge of what resources (people,
equipment, material) are potentially available is necessary for resource
planning. The amount of detail and the level of specificity of the resource
pool description will vary. For example, during the early phases of an
engineering design project, the pool may include “junior and senior
engineers” in large numbers. During later phases of the same project,
however, the pool may be limited to those individuals who are
knowledgeable about the project as a result of having worked on the earlier
phases.
5. Organizational policies. The policies of the performing organization
regarding staffing and the rental or purchase of supplies and equipment
must be considered during resource planning.
1.2 Tools and Techniques for Resource Planning
1. Expert judgment. Expert judgment will often be required to assess the

inputs to this process. Such expertise may be provided by any group or
individual with specialized knowledge or training and is available from many
sources including:
Other units within the performing organization.
Consultants.
Professional and technical associations.
Industry groups.
2.Alternatives identification.
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1.3 Outputs from Resource Planning
Resource requirements. The output of the resource planning process is a

description of what types of resources are required and in what quantities for
each element of the work breakdown structure. These resources will be
obtained either through staff acquisition or procurement.
2. Cost Estimating
Cost estimating involves developing an approximation (estimate) of the costs
of the resources needed to complete project activities.
When a project is performed under contract, care should be taken to
distinguish cost estimating from pricing. Cost estimating involves
developing an assessment of the likely quantitative result—how much will it
cost the performing organization to provide the product or service involved.
Pricing is a business decision—how much will the performing organization
charge for the product or service—that uses the cost estimate as but one
consideration of many.
Cost estimating includes identifying and considering various costing
alternatives. For example, in most application areas, additional work during
a design phase is widely held to have the potential for reducing the cost of
the production phase. The cost estimating process must consider whether
the cost of the additional design work will offset the expected savings.
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2.1 Inputs to Cost Estimating
1. Work breakdown structure: It will be used to organize the cost

estimates and to ensure that all identified work has been estimated.
2. Resource requirements:
3. Resource rates: The individual or group preparing the estimates must
know the unit rates (e.g., staff cost per hour, bulk material cost per cubic
yard) for each resource in order to calculate project costs. If actual rates are
not known, the rates themselves may have to be estimated.
4. Activity duration estimates: Activity duration estimates will affect cost
estimates on any project where the project budget includes an allowance for
the cost of financing (i.e., interest charges).
5. Historical information: Information on the cost of many categories of
resources is often available from one or more of the following sources:
Project files—one or more of the organizations involved in the project
may maintain records of previous project results that are detailed
enough to aid in developing cost estimates. In some application areas,
individual team members may maintain such records.
Commercial cost estimating databases—historical information is often
available commercially.
Project team knowledge—the individual members of the project team
may remember previous actual or estimates. While such recollections
may be useful, they are generally far less reliable than documented
results.
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6. Chart of accounts: A chart of accounts describes the coding structure

used by the performing organization to report financial information in its
general ledger. Project cost estimates must be assigned to the correct
accounting category.
2.2 Tools and Techniques for Cost Estimating
1. Analogous estimating: Analogous estimating, also called top-down

estimating, means using the actual cost of a previous, similar project as the
basis for estimating the cost of the current project. It is frequently used to
estimate total project costs when there is a limited amount of detailed
information about the project (e.g., in the early phases). Analogous
estimating is a form of expert judgment.
Analogous estimating is generally less costly than other techniques, but it is
also generally less accurate. It is most reliable when (a) the previous projects
are similar in fact and not just in appearance, and (b) the individuals or
groups preparing the estimates have the needed expertise.
2. Parametric modeling: Parametric modeling involves using project
characteristics (parameters) in a mathematical model to predict project
costs. Models may be simple (residential home construction will cost a
certain amount per square foot of living space) or complex (one model of
software development costs uses 13 separate adjustment factors each of
which has 5–7 points on it).
Both the cost and accuracy of parametric models varies widely. They are
most likely to be reliable when (a) the historical information used to develop
the model was accurate, (b) the parameters used in the model are readily
quantifiable, and (c) the model is scalable (i.e., it works as well for a very
large project as for a very small one).
3. Bottom-up estimating: This technique involves estimating the cost of
individual work items, then summarizing or rolling-up the individual
estimates to get a project total.
The cost and accuracy of bottom-up estimating is driven by the size of the
individual work items: smaller work items increase both cost and accuracy.
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The project management team must weigh the additional accuracy against
the additional cost.
4. Computerized tools: Computerized tools such as project management
software and spreadsheets are widely used to assist with cost estimating.
Such products can simplify the use of the tools described above and thereby
facilitate rapid consideration of many costing alternatives.
2.3 Outputs from Cost Estimating
1. Cost estimates: Cost estimates are quantitative assessments of the likely

costs of the resources required to complete project activities. They may be
presented in summary or in detail.
Costs must be estimated for all resources that will be charged to the project.
This includes, but is not limited to, labor, materials, supplies, and special
categories such as an inflation allowance or cost reserve.
Cost estimates are generally expressed in units of currency (dollars, francs,
yen, etc.) in order to facilitate comparisons both within and across projects.
Other units such as staff hours or staff days may be used, unless doing so will
misstate project costs (e.g., by failing to differentiate among resources with
very different costs). In some cases, estimates will have to be provided using
multiple units of measure in order to facilitate appropriate management
control.
Cost estimates may benefit from being refined during the course of the
project to reflect the additional detail available. In some application areas,
there are guidelines for when such refinements should be made and what
degree of accuracy is expected.
2. Supporting detail: Supporting detail for the cost estimates should
include:
A description of the scope of work estimated. This is often provided by
a reference to the WBS.
Documentation of the basis for the estimate, i.e., how it was
developed.
Documentation of any assumptions made.
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PROJECT MANAGEMENT
An indication of the range of possible results, for example, $10,000 ±

$1,000 to indicate that the item is expected to cost between $9,000 and
$11,000.
The amount and type of additional detail varies by application area.
Retaining even rough notes may prove valuable by providing a better
understanding of how the estimate was developed.
3. Cost management plan: The cost management plan describes how cost
variances will be managed (e.g., different responses to major problems than
to minor ones). A cost management plan may be formal or informal, highly
detailed or broadly framed based on the needs of the project stakeholders. It
is a subsidiary element of the overall project plan.
3. Cost Budgeting
Cost budgeting involves allocating the overall cost estimates to individual
work items in order to establish a cost baseline for measuring project
performance.
3.1 Inputs to Cost Budgeting
1. Cost estimates.
2. Work breakdown structure. The work breakdown structure identifies
the project elements that costs will be allocated to.
3. Project schedule. The project schedule includes planned start and
expected finish dates for the project elements that costs will be allocated to.
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PROJECT MANAGEMENT
This information is needed in order to assign costs to the time period when
the cost will be incurred.
3.2 Tools and Techniques for Cost Budgeting
1. Cost estimating tools and techniques: The tools and techniques already
described used for developing project cost estimates are used to develop
budgets for work items as well.
3.3 Outputs from Cost Budgeting
1. Cost baseline: The cost baseline is a time-phased budget that will be used
to measure and monitor cost performance on the project. It is developed by
summing estimated costs by period and is usually displayed in the form of an
S-curve, as illustrated in Figure.
Many projects, especially larger ones, may have multiple cost baselines to
measure different aspects of cost performance. For example, a spending plan
or cash flow forecast is a cost baseline for measuring disbursements.
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PROJECT MANAGEMENT
4. Cost Control
Cost control is concerned with (a) influencing the factors which create
changes to the cost baseline to ensure that changes are beneficial, (b)
determining that the cost baseline has changed, and (c) managing the actual
changes when and as they occur. Cost control includes:
Monitoring cost performance to detect variances from plan.
Ensuring that all appropriate changes are recorded accurately in the
cost baseline.
Preventing incorrect, inappropriate, or unauthorized changes from
being included in the cost baseline.
Informing appropriate stakeholders of authorized changes.
Cost control includes searching out the “whys” of both positive and negative
Variances. It must be thoroughly integrated with the other control processes
(scope change control, schedule control, quality control). For example,
inappropriate responses to cost variances can cause quality or schedule
problems or produce an unacceptable level of risk later in the project.
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PROJECT MANAGEMENT
4.1 Inputs to Cost Control
1. Cost baseline.
2. Performance reports: Performance reports provide information on cost
performance such as which budgets have been met and which have not.
Performance reports may also alert the project team to issues which may
cause problems in the future.
3. Change requests: Change requests may occur in many forms—oral or
written, direct or indirect, externally or internally initiated, and legally
mandated or optional. Changes may require increasing the budget or may
allow decreasing it.
4. Cost management plan.
4.2 Tools and Techniques for Cost Control
1. Cost change control system. A cost change control system defines the
procedures by which the cost baseline may be changed. It includes the
paperwork, tracking systems, and approval levels necessary for authorizing
changes. The cost change control system should be integrated with the
overall change control system.
2. Performance measurement. Performance measurement techniques help
to assess the magnitude of any variations which do occur. Earned
value analysis is especially useful for cost control. An important part of cost
control is to determine what is causing the variance and to decide if the
variance requires corrective action.
3. Additional planning. Few projects run exactly according to plan.
Prospective changes may require new or revised cost estimates or analysis of
alternative approaches.
4. Computerized tools. Computerized tools such as project management
software and spreadsheets are often used to track planned costs vs. actual
costs, and to forecast the effects of cost changes.
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PROJECT MANAGEMENT
4.3 Outputs from Cost Control
1. Revised cost estimates: Revised cost estimates are modifications to the

cost information used to manage the project. Appropriate stakeholders must
be notified as needed. Revised cost estimates may or may not require
adjustments to other aspects of the overall project plan.
2. Budget updates: Budget updates are a special category of revised cost
estimates. Budget updates are changes to an approved cost baseline. These
numbers are generally revised only in response to scope changes. In some
cases, cost variances may be so severe that “rebaselining” is needed in order
to provide a realistic measure of performance.
3. Corrective action: Corrective action is anything done to bring expected
future project performance into line with the project plan.
4. Estimate at completion: An estimate at completion (EAC) is a forecast of
total project costs based on project performance. The most common
forecasting techniques are some variation of:
EAC = Actuals to date plus the remaining project budget modified by a
performance factor, often the cost performance index. This approach is
most often used when current variances are seen as typical of future
variances.
EAC = Actuals to date plus a new estimate for all remaining work. This
approach is most often used when past performance shows that the
original estimating assumptions were fundamentally flawed, or that
they are no longer relevant due to a change in conditions.
EAC = Actuals to date plus remaining budget. This approach is most
often used when current variances are seen as atypical and the project
management team’s expectation is that similar variances will not occur
in the future.
Each of the above approaches may be the correct approach for any given
work item.
5. Lessons learned: The causes of variances, the reasoning behind the
corrective action chosen, and other types of lessons learned from cost
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PROJECT MANAGEMENT
control should be documented so that they become part of the historical

database for both this project and other projects of the performing
organization.
References:
www.method123.com
A Guide to the Project Management Body of Knowledge
Condensed GSAM Handbook
####################
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PROJECT MANAGEMENT
QUESTION 3
Write a detailed note on “Project Quality

Management.”
(20)
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PROJECT MANAGEMENT
PROJECT QUALITY MANAGEMENT
Quality management is the process for ensuring that all project

activities necessary to design, plan and implement a project are
effective and efficient with respect to the purpose of the objective and
its performance.
Project quality management (QM) is not a separate, independent process
that occurs at the end of an activity to measure the level of quality of the
output. It is not purchasing the most expensive material or services available
on the market. Quality and grade are not the same, grade are characteristics
of a material or service such as additional features. A product may be of good
quality (no defects) and be of low grade (few or no extra features).
Quality management is a continuous process that starts and ends with the
project. It is more about preventing and avoiding than measuring and fixing
poor quality outputs. It is part of every project management processes from
the moment the project initiates to the final steps in the project closure
phase.
QM focuses on improving stakeholder’s satisfaction through continuous and
incremental improvements to processes, including removing unnecessary
activities; it achieves that by the continuous improvement of the quality of
material and services provided to the beneficiaries. It is not about finding
and fixing errors after the fact, quality management is the continuous
monitoring and application of quality processes in all aspects of the project.
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PROJECT MANAGEMENT
The Purpose of Management of Quality

Quality management is not an event - it is a process, a consistently high
quality product or service cannot be produced by a defective process. Quality
management is a repetitive cycle of measuring quality, updating processes,
measuring, updating processes until the desired quality is achieved.
The main principle of project quality management is to ensure the project

will meet or exceed stakeholder’s needs and expectations. The project team
must develop a good relationship with key stakeholders, specially the donor
and the beneficiaries of the project, to understand what quality means to
them. One of the causes for poor project evaluations is the project focuses
only in meeting the written requirements for the main outputs and ignores
other stakeholder needs and expectations for the project.
Quality must be viewed on an equal level with scope, schedule and budget. If
a project donor is not satisfied with the quality of how the project is
delivering the outcomes, the project team will need to make adjustments to
scope, schedule and budget to satisfy the donor’s needs and expectations. To
deliver the project scope on time and on budget is not enough, to achieve
stakeholder satisfaction the project must develop a good working
relationship with all stakeholders and understand their stated or implied
needs.
Project quality management consists of four main processes:
Quality Planning
Quality Assurance
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PROJECT MANAGEMENT
Quality Control
Quality Improvements
These processes interact with each other as well as with the processes
of other knowledge areas
Each process involves an effort of one or more individual or group of
individuals based on the need of the project.
Each process occurs at least once in every project phase during the
project life cycle.
1. QUALITY PLANNING
Quality Planning is identifying which quality standards are relevant to

the project and determining how to satisfy them.
Quality Planning involves identifying with quality standards
It is a key facilitating process during the Project planning Process
In modern quality management quality is planned in and not

inspected in
Prior to the development of ISO 9000 series, quality planning concepts

were widely discussed as part of quality assurance.
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PROJECT MANAGEMENT
Quality Planning Flowchart
INPUTS TOOLS AND OUTPUTS

TECHNIQUES
1-Quality policy 1- Benefit/ cost 1-Quality Management

2- Scope statement analysis plan
3- Product description 2- Benchmarking 2- operational;
4- Standards and 3- flowcharting definitions
regulations 4- Design of 3- checklists
5- Other process experiments 4-inputs to other
outputs processes
Quality Planning Inputs

Quality policy
the over all intentions and direction of an organization with regard to

quality, as formally expressed by the top management.
In the case of a joint venture, a quality policy for the individual project
should be developed.
The management team is responsible for dissipating the quality policy
to all project stakeholders through appropriate information
distribution channels.
Scope Statement
The scope statement is a key input to quality planning because it
documents major project deliverables as well as project objectives
which serve to define important stakeholder requirements.
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PROJECT MANAGEMENT
Product description
Although the elements of the product description may be embodied in
the scope statement, the product description often contains details of
technical issues and other concerns that may affect quality planning.
Standards and Regulations

The project management team any application-area-specific standards
or regulations that may affect the project.
Other Process Outputs

In addition to the scope statement and product description, processes
in other knowledge areas may produce outputs that should be
considered as part of the quality planning.
Example: procurement planning outputs may identify contractor
quality requirements that should be reflected in the overall Quality
Management Plan.
Tools and Techniques for Quality Planning

Benefit / cost analysis
The planning process must consider benefit/cost tradeoffs.
The Primary Benefit: Is less work, higher productivity, lower costs, and
increased stakeholder satisfaction.
The Primary Cost: Is the expanses associated with PQM activities.
Note: it is elementary that the benefit should outweigh the cost.
Benchmarking
Benchmarking involves comparing actual or planned project practices
to those of other projects to generate ideas to:
1- Generate ideas for improvement
2- provide a standard for measurement of performance
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PROJECT MANAGEMENT
Note: other projects compared may be within the same organization or out
side and may be within the same application area or in another.
Flow charting
The flowcharting techniques in quality management generally include
 cause and effect diagram.
 System or process flow charts.
Flowcharting can help in anticipating probable quality problems and
thus helps to develop approaches for dealing with them.
Design of Experiments
This is an analytical technique which aims to define variables that have
most influence on the overall outcome.
This technique is commonly applicable to the product of the project
issues.
However this technique can also be used in project management issues
such as cost and schedule tradeoffs to allow for optima solutions.
Outputs from Quality Planning

Quality Management Plan
The quality management plan should describe how a project
management team will implement its quality policy.
Also called Quality System, (in ISO terminology), the plan should
define :
 The organizational structure
 Roles and responsibilities
 Resources needed for implementation of quality management
The Quality Plan should address:
 Quality Control of the project
 Quality Assurance
 Quality Improvement of the project
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PROJECT MANAGEMENT
Note: the project quality plan can be highly detailed or broadly framed based
on the needs of the project.
Operational Definitions
An operational definition describes what something is and how it is
measured by the quality control process. For example:
 the project management team must indicate the start and end of every
activity in a detailed schedule.
 Weather the whole activity or certain deliverables are to be measured.
Operational definitions are also called Metrics in some areas of application.
Checklists
A checklist is a structured tool used to verify that a set of required
steps or requirements have been performed.
Many organizations have standard checklists to ensure consistency of
frequently performed activities.
Inputs to Other Processes

The quality planning process may identify need for further activity in
another area.
2. QUALITY ASSURANCE
Quality assurance is evaluating the overall project performance on a

regular basis to provide a confidence that the project will satisfy the
relevant quality standards.
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PROJECT MANAGEMENT
Quality assurance encompasses all the planned and systematic activity

implemented in a quality system to provide confidence that the project
will satisfy the relevant quality standards
Quality assurance is provided by a Quality Assurance dept.
Quality assurance can be INERNAL ( from the project management

team to the performing organization)
Quality assurance can be EXTERNAL (provided to the customer and

other parties actively involved in the work of the project
Quality Assurance Flowchart

TECHNIQUES
1-Quality management 1- Quality planning 1-Quality

plan tools and techniques improvement
2- Results of quality 2- Quality audits
control measurements 3- The PDA Cycle
3- Operational
definitions
Inputs to Quality Assurance

Quality management plan as previously described
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PROJECT MANAGEMENT
Results of quality control measurements which are records of

quality control testing and measurement in a format of comparison or
analysis
Operational definitions as previously described in the output of the
Quality Planning
Tools and Techniques for Quality Assurance

Quality Planning tools and techniques , which can be used for
quality assurance as well.
Quality Audits which are a structured review of other quality
management activities:
 they may be timely or carried out randomly.
 They may be carried out by properly trained Internal-auditors or by
third parties such as quality systems registration agencies.
The PDCA Cycle
The most popular tool used to determine quality assurance is the
Shewhart Cycle. This cycle for quality assurance consists of four steps:
Plan, Do, Check, and Act. These steps are commonly abbreviated as
PDCA.
The four quality assurance steps within the PDCA model stand for:
Plan: Establish objectives and processes required to deliver the
desired results.
Do: Implement the process developed.
Check: Monitor and evaluate the implemented process by
testing the results against the predetermined objectives
Act: Apply actions necessary for improvement if the results
require changes.
The PDCA is an effective method for monitoring quality assurance
because it analyzes existing conditions and methods used to provide
the product or service to beneficiaries. The goal is to ensure that
excellence is inherent in every component of the process. Quality
assurance also helps determine whether the steps used to provide the
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PROJECT MANAGEMENT
product or service is appropriate for the time and conditions. In

addition, if the PDCA cycle is repeated throughout the lifetime of the
project helping improve internal efficiency.
Outputs from Quality Assurance

Quality Improvement
Quality improvement includes taking action to increase the
effectiveness and efficiency of the project to be provide added benefits
to the stakeholders of that project .
In many cases the implementation of quality improvements will
require preparation of change requests or taking corrective actions and
will be handled according to procedure for overall change control
3. QUALITY CONTROL
Quality Control is the monitoring of specific project results to

determine if they comply with the relevant quality standards and
identifying ways to eliminate causes of unsatisfactory performance.
Quality control involves monitoring specific project results to

determine if they comply with relevant standards and identifying ways
to eliminate causes of unsatisfactory results.
Project results mentioned include both PRODUCT results such as
deliverables and MANAGEMENT results such as cost and schedule
performance
Quality control is often performed by a quality control department
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PROJECT MANAGEMENT
The project management team should have a working knowledge of

statistical quality control especially sampling and probability to help
evaluate and control outputs.
Quality Control Flowchart

TECHNIQUES
1-Work results 1- Inspection 1-Quality

2- Quality 2- Control charts improvement
management plan 3- Pareto diagram 2- Acceptance
3- Operational 4- Statistical sampling decisions
definitions 5- Flowcharting 3- Rework
4- Checklists 6-Trend analysis 4-Process adjustments
Inputs to Quality Control

Work results : including both product results and process results.
The quality management plan
Operational definitions
Checklists
Tools and Techniques for Quality Control

Inspection
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PROJECT MANAGEMENT
Inspection includes activities such as measuring, examining and

testing undertaken to determine whether results conform to
requirements.
Inspection can be carried out on the level of a single activity or a final
product.
Inspections can be called reviews, product reviews, audits, and walk-
through.
Control Charts
These charts are graphical representations that display the result of a
process over time and are used to determine if the process is “in
control”.
When in control the process should not be adjusted , however it may
be changed in order to provide improvements.
Control charts may be used to monitor any type of output variable.
Control charts are most often used to monitor repetitive activity in
production but can also be used to monitor cost and schedule
variances.
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Pareto Charts
Pareto Charts based on Pareto’s rule, which states that 80 percent of the
problems are often due to 20 percent of the causes. The assumption is that
most of the results in any situation are determined by a small number of
causes and helps identify the vital few contributors that account for most
quality problems. The chart is a form of histogram that orders the data by
frequency of occurrence; it shows how many defects were generated by a
type of category of identified cause. For example to determine the errors in
the collection of beneficiary data the project team identified five causes and
for each cause the frequency they contained errors, the data is plotted as
shown in the chart below, the bars represent each category and the line the
cumulative percentage of the errors, the chart allows to identify that 80% of
the errors could be reduced just by improving the collection of data in two
categories instead of focusing efforts to correct all categories.
Statistical Sampling
Statistical sampling involves choosing a part of a population of interest
for inspection.
Appropriate sampling can effectively reduce the cost of quality control.
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PROJECT MANAGEMENT
There is a vast body of knowledge related to statistical sampling and

therefore the management must be aware of the various sampling
techniques.
Flowcharting
Flowcharting is used in quality control to help analyze how a problem
occurs.
Trend Analysis
The trend analysis involves the use of mathematical techniques to
forecast future outcomes based on historical results it is often used to
monitor:
 Technical performance – how many defects have been identified
and how many remain uncorrected.
 Cost and schedule performance – how many activities in a certain
period were completed with significant variances.
Outputs for Quality Control

Quality improvement
Acceptance decisions, where the inspected items will either be
accepted or rejected and those rejected may be reworked.
Rework, which is an action taken to bring defects or nonconforming
items into compliance with requirements and specifications. Rework is
a frequent cause of project over-runs and the project management
team must make an effort to minimize it.
Completed Checklists, which become a part of a project record when
they are used
Process Adjustments, which involves immediate corrective or
preventive action as a result of quality control measurements. In some
cases the adjustment may need to be handled according to procedures
for overall change control.
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PROJECT MANAGEMENT
4. QUALITY IMPROVEMENT
It is the systematic approach to the processes of work that looks to remove

waste, loss, rework, frustration, etc. in order to make the processes of work
more effective, efficient, and appropriate.
Quality improvement refers to the application of methods and tools to close

the gap between current and expected levels of quality by understanding and
addressing system deficiencies and strengths to improve, or in some cases,
re-design project processes.
A variety of quality improvement approaches exists, ranging from individual

performance improvement to redesign of entire project processes. These
approaches differ in terms of time, resources, and complexity, but share the
same four steps in quality improvement:
Identify what you want to improve; the project using the data found
in the quality control process identifies the areas that need
improvement.
Analyze the problem or system, the team then investigates the causes
for the problem and its implications to the project, the causes may be
internal or external to the project.
Develop potential solutions or changes that appear likely to improve
the problem or system, the team brainstorms ideas and potential
solutions to the problem, taking in consideration its impact to the
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PROJECT MANAGEMENT
project schedule and budget. After careful considerations the team

decides and chooses the best alternative.
Test and implement the solutions. The team may decide to test the
solution on a small scale to verify that it is capable of fixing the
problem, it testes for the initial assumptions made about the problem
and once it confirms that the solution is a viable alternative, it then
proceeds to implement in a full scale the solution.
Cost of Quality
The cost of quality is the sum of costs a project will spend to prevent poor
quality and any other costs incurred as a result of outputs of poor quality.
Poor quality is the waste, errors, or failure to meet stakeholder needs and
project requirements. The costs of poor quality can be broken down into the
three categories of prevention, appraisal, and failure costs:
Prevention costs: These are planned costs an organization incurs to

ensure that errors are not made at any stage during the delivery
process of that product or service to a beneficiary. Examples of
prevention costs include quality planning costs, education and training
costs, quality administration staff costs, process control costs, market
research costs, field testing costs, and preventive maintenance costs.
The cost of preventing mistakes are always much less than the costs of
inspection and correction.
Appraisal costs: These include the costs of verifying, checking, or
evaluating a product or service during the delivery process. Examples
of appraisal costs include receiving or incoming inspection costs,
internal production audit costs, test and inspection costs, instrument
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PROJECT MANAGEMENT
maintenance costs, process measurement and control costs, supplier

evaluation costs, and audit report costs.
Failure costs: A project incurs these costs because the product or
service did not meet the requirements and had to be fixed or replaced,
or the service had to be repeated.
References:
www.pm4dev.com
PMI body of knowledge
####################
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PROJECT MANAGEMENT
QUESTION 4
There are different levels of management
in an organization and every level tries to
meet its assigned goals. In every project
all the levels of management act jointly for
the successful completion of the project.
Compare and evaluate the role of these
levels, also explain the conflict that can
arise between these levels with your
proposed solutions of these problems.
(20)
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PROJECT MANAGEMENT
PROJECT CONFLICT MANAGEMENT
Conflict in project management is inevitable. The potential for conflict in

information systems development projects is usually high because it involves
individuals from different backgrounds and orientations working together to
complete a complex task. The cause of conflict in team projects can be
related to differences in values, attitudes, needs, expectations, perceptions,
resources, and personalities. Proper skills in dealing with conflict can assist
project managers and other organization members to handle and effectively
resolve conflicts which can lead to a more productive organization as a
whole.
Project Management Overview

Project management is a methodological approach to achieving agreed upon
results within a specified time frame with defined resources. It involves
applying knowledge, skills, tools, and techniques to a wide range of activities
in order to meet the requirements of a project. The major objectives of
project management include performance, cost, and time goals. The focus is
to meet customer expectations, deliver projects within budget, and complete
projects on time. Project management is helpful in achieving these objectives
by organizing, planning, monitoring, controlling, and correcting the project
activities. These activities consist of creating a workable project
environment, keeping the work environment healthy, planning the essential
activities to build the information system or product, and controlling
execution of the plan.
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PROJECT MANAGEMENT
Using project management principles brings value to an organization.

Applying these principles give managers the ability to establish success
measures, quantify value proportionate with cost, use optimal organizational
resources, allow customer focus and alignment, incorporate quality
principles, implement the practice of strategic plans, resolve problems more
quickly, work within the scope of the project, address future risk before
becoming a problem, and create a higher quality product the first time. The
time and resources put into project management will make up for the cost
over the life of the project.
Project management relies on proven and repeatable processes and

techniques. These processes and techniques are utilized to coordinate
resources to accomplish predictable results. Although success is never
guaranteed, a project is more likely to be successful when conventional
project management processes are practiced. The four phases of the project
management process are explained below.
The first phase of the process involves performing activities to evaluate

the project size, scope, and degree of difficulty and to establish
procedures for supporting later project activities. Examples of activities at
this phase are forming a project initiation team, building the customer
relationship, developing effective management procedures, and
constructing a project workbook.
2. Project Planning
The second phase of the process involves defining clear, distinct activities
and work required to complete the activities for each individual project.
Examples of activities at this phase are defining the project scope,
defining the work breakdown structure, estimating resource
requirements, outlining communication procedures among managers,
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PROJECT MANAGEMENT
team members, and the customer, identifying and evaluating risk, and
developing a Baseline Project Plan.
The third phase of the process involves implementing the plans created in
the earlier phases, Project Initiation and Project Planning. Examples of
activities at this phase are executing the baseline plan, managing changes
to the baseline plan, monitoring project progress, and communicating
project status to managers, team members, and the customer.
4. Project Closedown
The final phase of the process involves bringing the project to an end.
Examples of activities at this phase are evaluating team members,
conducting final project reviews, and closing the customer contract.
The project manager is responsible for carrying out the initiation, planning,
execution, and closedown phases of a project. The success of a project relies
strongly on the project manager. The role of this person is to evaluate project
feasibility and to create the plan of activities required to meet the objectives.
This individual must be able to build an environment in which the project
can be executed while protecting the environment from factors that could
impede progress, planning the work that has to be completed to reach the
goal, and keeping the course of the project in control. It is important for a
project manager to possess a diverse set of skills - management, leadership,
technical, customer relationship, and conflict management.
Managers spend 42% of their time on reaching agreement with others when
conflict occurs. Conflict management within a team environment requires
the ability to solve problems, set goals, compromise, settle personality
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PROJECT MANAGEMENT
differences, and resolve conflicts. Training for project managers in this area
is necessary for their success, as they are typically responsible for handling
conflict during a project. The remainder of this paper will address conflict
and its resolution in project management.
Understanding Conflict
“A process that begins when one party perceives that another party has
negatively affected, or is about to negatively affects something that
first cares about.”
“Conflict occurs when there are two or more competing responses to a

single event.”
“Is a process that begins when one party perceives that has negatively
affected, or is about to negatively affect, something that the first party
cares about.”
Conflict is viewed as a cycle: "As with any social process, there are causes;
also, there is a core process, which has results or effects. These effects feed
back to effect the causes." To understand conflict further, the situation must
include elements of interdependence, emotions, perceptions, and behaviors.
For example, conflict occurs between parties whose tasks are
interdependent, who are angry with each other, who perceive the other party
as being at fault, and whose actions cause a business problem.
Conflict can be constructive and healthy for an organization. Constructive

conflict occurs when people change and grow personally from the conflict,
involvement of the individuals affected by the conflict is increased,
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PROJECT MANAGEMENT
cohesiveness is formed among team members, and a solution to the problem

is found. However, if conflict is not managed properly, it can be detrimental
to an organization by threatening organizational unity, business
partnerships, team relationships, and interpersonal connections.
Deconstructive conflict occurs when a decision has not been found and the
problem remains, energy is taken away from more important activities or
issues, morale of teams or individuals is destroyed, and groups of people or
teams are polarized.
Destructive conflict has a predictable pattern known as the Drama Triangle.

By learning how to identify these unproductive roles and how to effectively
handle each role player, managers can prevent some conflicts from occurring
and resolve those that do. Most individuals know how to assume the
following three roles:
1. Persecutor refers to a person who uses aggressive behavior against

another person, attacking the intended victim. An attack can be direct
or indirect and be physical, verbal, or both. The persecutor's actions
deliver a message that "you are not okay" while making the persecutor
feel righteous and superior.
2. Victim refers to a person who uses nonassertive behavior so others
view them as "I'm not okay." This behavior encourages others to either
rescue or persecute the victim. Victims will feel helpless, inadequate,
sad, scared, or guilty. The victim role is often used because the
individual is feeling stressed, has low self-esteem, or is being
persecuted by another.
3. Rescuer refers to a person who uses either nonassertive or agressive
behavior. Individuals become rescuers because they will not say "no"
and unwillingly assume the responsibility of solving the victim's
problem. In contrast, others will assume the rescuer role to
demonstrate superiority over the victim.
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It is important for a project manager to understand the dynamics of conflict

before being able to resolve it. The internal characteristics of conflict include
perception of the goal, perception of the other, view of the other's actions,
definition of problem, communication, and internal group dynamics.
What is Conflict Management?
Conflict may be defined as a struggle or contest between people with

opposing needs, ideas, beliefs, values, or goals. Conflict on teams is
inevitable; however, the results of conflict are not predetermined. Conflict
might escalate and lead to non-productive results, or conflict can be
beneficially resolved and lead to quality final products.
Therefore, learning to manage conflict is integral to a high performance

team. Although very few people go looking for conflict, more often than not,
conflict results because of miscommunication between people with regard to
their needs, ideas, beliefs, goals, or values. Conflict management is the
principle that all conflicts cannot necessarily be resolved, but learning how
to manage conflicts can decrease the odds of non productive escalation.
Conflict management involves acquiring skills related to conflict

resolution, self-awareness about conflict modes, conflict
communication skills, and establishing a structure for management of
conflict in your environment.
How do people respond to conflict? Fight or Flight?
Physiologically we respond to conflict in one of two ways - we want to “get

away from the conflict” or we are ready to “take on anyone who comes our
way.” Think for a moment about when you are in conflict. Do you want to
leave or do you want to fight when a conflict presents itself? Neither
physiological response is good or bad - it’s personal response. What is
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important to learn, regardless of our initial physiological response to

conflict, is that we should intentionally choose our response to conflict.
Whether we feel like we want to fight or flee when a conflict arises, we can
deliberately choose a conflict mode. By consciously choosing a conflict mode
instead of to conflict, we are more likely to productively contribute to
solving the problem at hand.
STRATEGIES FOR CONFLICT MANAGEMENT
Larson and Gray’s list of five strategies for managing dysfunctional conflict
provides a good summary of approaches.
Mediation:
The goal is to identify multiple possible alternatives and to mutually select
one that is acceptable to all involved parties and in the interest of project
objectives.
Arbitration:
This strategy requires the project manager to provide a safe and productive
opportunity for the conflicted parties to air their disagreements. After careful
attention and fully listening to each party, the project manager should
formulate, define, and provide a solution to the parties. This strategy is
based on the forcing approach to conflict described earlier. Arbitration can
often be effectively combined with mediation by forcing an initial conflict
solution and then allowing the parties to negotiate to a more mutually
acceptable alternative.
Control:
Based on the smoothing approach described earlier, this strategy seeks to
bring tension and emotions down to a level at which productive discussion
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PROJECT MANAGEMENT
and negotiation can occur. Humour is often an effective tool, as well as the
use of temporary breaks or time-outs in the discussions between conflicted
parties.
Acceptance:
The decision can be made that the conflict consequences are negligible
relative to project objectives and, therefore, require no action. This strategy
carries significant risk of later escalation and should be combined with
specific plans for monitoring the situation to ensure that the conflict
remains at an acceptable level.
Elimination:
Finally, the elimination strategy is reserved for those conflicts that have
become so dysfunctional that the project can no longer tolerate any impacts
from them. Often a last resort, elimination involves the removal of the
conflicted parties from involvement with the project.
Factors affecting Conflict Modes
Gender
Self-concept
Expectations
Situation
Position (Power)
Practice
Determining the best mode
Communication skills
Life experiences
APPROACHES TO CONFLICT RESOLUTION

In Project Management: A Systems Approach to Planning, Scheduling, and
Controlling, five modes for conflict resolution are explained and the
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situations when they are best utilized are identified. These modes are
Confronting, Compromising, Smoothing, Forcing, and Avoiding.
The Owl (CONFRONTING)
Confronting is also described as problem solving, integrating, collaborating

or win-win style. It involves the conflicting parties meeting face-to-face and
collaborating to reach an agreement that satisfies the concerns of both
parties. This style involves open and direct communication which should
lead the way to solving the problem. Confronting should be used when:
Both parties need to win.

You want to decrease cost.
You want create a common power base.
Skills are complementary.
Time is sufficient.
Trust is present.
Learning is the ultimate goal.
The Fox (COMPROMISING)

Compromising is also described as a "give and take" style. Conflicting parties
bargain to reach a mutually acceptable solution. Both parties give up
something in order to reach a decision and leave with some degree of
satisfaction. Compromising should be used when:
Both parties need to win.

You are in a deadlock.
Time is not sufficient.
You want to maintain the relationship among the involved parties.
You will get nothing if you do not compromise.
Stakes are moderate.
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PROJECT MANAGEMENT
The Teddy Bear (SMOOTHING)

Smoothing is also referred to as accommodating or obliging style. In this
approach, the areas of agreement are emphasized and the areas of
disagreement are downplayed. Conflicts are not always resolved in the
smoothing mode. A party may sacrifice it's own concerns or goals in order to
satisfy the concerns or goals of the other party. Smoothing should be used
when:
Goal to be reached is overarching.

You want to create obligation for a trade-off at a later time.
Stakes are low.
Liability is limited.
Any solution is adequate.
You want to be harmonious and create good will.
You would lose anyway.
You want to gain time.
The Shark (FORCING)

Forcing is also known as competing, controlling, or dominating style.
Forcing occurs when one party goes all out to win it's position while ignoring
the needs and concerns of the other party. As the intesity of a conflict
increases, the tendency for a forced conflict is more likely. This results in a
win-lose situation where one party wins at the expense of the other party.
Forcing should be used when:
A "do or die" situation is present.

Stakes are high.
Important principles are at stake.
Relationship among parties is not important.
A quick decision must be made.
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The Turtle (AVOIDING)

Avoiding is also described as withdrawal style. This approach is viewed as
postponing an issue for later or withdrawing from the situation altogether. It
is regarded as a temporary solution because the problem and conflict
continue to reoccur over and over again. Avoiding should be used when:
You can not win.

Stakes are low.
Stakes are high, but you are not prepared.
You want to gain time.
You want to maintain neutrality or reputation.
You think problem will go away.
You win by delaying.
Conclusion
Conflict in project management is not necessarily unfavorable when properly
managed. Several advantages have been identified such as increasing
personal growth and morale, enhancing communication, and producing
better project outcomes. However, conflict can be the decline of an
organization if it is not effectively managed. The challenge for organizational
leaders and project managers is to try to maintain the right balance and
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PROJECT MANAGEMENT
intensity of conflict in project management. By utilizing project

management principles, understanding the dynamics of conflict, and
learning approaches to conflict resolution, managers will be able to establish
an environment in which creativity and innovation is encouraged and
project goals are accomplished.
References:
http://www.pmi.org/projectmanagement/success.htm
http://itprojmngt.8m.net/projman/pm_what.html
http://www.newgrange.org/FTP/pm.ppt
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QUESTION 5
Discuss the following in detail:
i). PERT
ii). GANNT Charts
iii). WBS
(20)
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PROJECT MANAGEMENT
PERT
A PERT chart (program evaluation and review technique) is a graphic

representation of a project’s schedule, showing the sequence of tasks, which
tasks can be performed simultaneously, and the critical path of tasks that
must be completed on time in order for the project to meet its completion
deadline. The chart can be constructed with a variety of attributes, such as
earliest and latest start dates for each task, earliest and latest finish dates for
each task, and slack time between tasks. A PERT chart can document an
entire project or a key phase of a project. The chart allows a team to avoid
unrealistic timetables and schedule expectations, to help identify and
shorten tasks that are bottlenecks, and to focus attention on most critical
tasks.
When to use it:

Because it is primarily a project-management tools, a PERT chart is most
useful for planning and tracking entire projects or for scheduling and
tracking the implementation phase of a planning or improvement effort.
How to use it:

Identify all tasks or project components. Make sure the team
includes people with firsthand knowledge of the project so that during
the brainstorming session all component tasks needed to complete the
project are captured. Document the tasks on small note cards.
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PROJECT MANAGEMENT
Identify the first task that must be completed. Place the

appropriate card at the extreme left of the working surface.
Identify any other tasks that can be started simultaneously with
task #1. Align these tasks either above or below task #1 on the working
surface.
Identify the next task that must be completed. Select a task that
must wait to begin until task #1(or a task that starts simultaneously
with task #1) is completed. Place the appropriate card to the right of
the card showing the preceding task.
Identify any other tasks that can be started simultaneously with
task #2. Align these tasks either above or below task #2 on the
working surface.
Continue this process until all component tasks are sequenced.
Identify task durations. Using the knowledge of team members,
reach a consensus on the most likely amount of time each task will
require for completion. Duration time is usually considered to be
elapsed time for the task, rather than actual number of hours/days
spent doing the work. Document this duration time on the appropriate
task cards.
Construct the PERT chart. Number each task, draw connecting
arrows, and add task characteristics such as duration, anticipated start
date, and anticipated end date.
Determine the critical path. The project’s critical path includes
those tasks that must be started or completed on time to avoid delays
to the total project. Critical paths are typically displayed in red.
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Sample PERT Chart
GANTT Charts
A Gantt chart is a horizontal bar chart developed as a production control

tool in 1917 by Henry L. Gantt, an American engineer and social scientist.
Frequently used in project management, a Gantt chart provides a graphical
illustration of a schedule that helps to plan, coordinate, and track specific
tasks in a project.
Gantt Charts (Gant Charts) are useful tools for analyzing and planning more
complex projects. They:
Help you to plan out the tasks that need to be completed
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PROJECT MANAGEMENT
Give you a basis for scheduling when these tasks will be carried out
Allow you to plan the allocation of resources needed to complete the
project, and
Help you to work out the critical path for a project where you must
complete it by a particular date.
When a project is under way, Gantt Charts help you to monitor whether the
project is on schedule. If it is not, it allows you to pinpoint the remedial
action necessary to put it back on schedule.
A Gantt chart is constructed with a horizontal axis representing the total

time span of the project, broken down into increments (for example, days,
weeks, or months) and a vertical axis representing the tasks that make up
the project (for example, if the project is outfitting your computer with new
software, the major tasks involved might be: conduct research, choose
software, install software). Horizontal bars of varying lengths represent the
sequences, timing, and time span for each task. Using the same example, you
would put "conduct research" at the top of the verticle axis and draw a bar
on the graph that represents the amount of time you expect to spend on the
research, and then enter the other tasks below the first one and
representative bars at the points in time when you expect to undertake
them. The bar spans may overlap, as, for example, you may conduct research
and choose software during the same time span. As the project progresses,
secondary bars, arrowheads, or darkened bars may be added to indicate
completed tasks, or the portions of tasks that have been completed. A
vertical line is used to represent the report date.
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PROJECT MANAGEMENT
Gantt charts give a clear illustration of project status, but one problem with
them is that they don't indicate task dependencies - you cannot tell how one
task falling behind schedule affects other tasks. The PERT chart, another
popular project management charting method, is designed to do this.
Automated Gantt charts store more information about tasks, such as the
individuals assigned to specific tasks, and notes about the procedures. They
also offer the benefit of being easy to change, which is helpful. Charts may be
adjusted frequently to reflect the actual status of project tasks as, almost
inevitably, they diverge from the original plan.
Sample Gantt Chart
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PROJECT MANAGEMENT
Work Breakdown Structure (WBS)
WBS is a hierarchical listing of the subcomponents of a project. The WBS is

an essential tool in the project planning process The WBS is a logical
hierarchy that organizes and breaks down the work that needs to be
accomplished on a project. WBS can be defined as:
“A deliverable-oriented grouping of project elements that organizes

and defines the total scope of the project work.”
Work not in the WBS is not in scope of the project.

Each descending level represents an increasingly
detailed description of the project elements.
Often used to develop or confirm a common
understanding of project scope.
Importance of WBS
It defines and breaks down the work on a project into manageable
chunks, often called work packages.
It tells us what activities or tasks have to be done in order to complete
the project.
It serves as the foundation for the development of schedules, budgets,
and resource requirements.
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PROJECT MANAGEMENT
It serves as a useful tool for identification of activities and assignment

of responsibilities.
WBS Role
It is the basis for
 Estimating
 Budgeting
 Pricing
 Controlling Costs
 Assigning Responsibility
 Scheduling
 Allocating Resources
 Reporting, Monitoring, and Controlling
Basic guidelines for WBS

Work described in a higher level must be the sum of all the work in the
next lower level.
Definitions of work should be usable as communications tools so
results can be compared with expectations for the work when the
project is implemented.
Work that will be performed by different people should be clearly
differentiated.
WBS should define measurable deliverables for each work component
of the project.
WBS should be flexible enough to allow for changes.
The most common Work Breakdown Structure is the six-level
indented structure shown in the figure below.
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PROJECT MANAGEMENT
Level Description
1 Total Program
Managerial Project
2
Levels 3 Task
4 Subtask
Technical 5 Work Package
Levels 6 Level of Effort
Benefits of WBS
Risk and
Contingency
Plans
Estimates
Schedule
WBS
Risk Control
Project
Control Change
Control
Activity List
Communication Control
Progress
Project Plan Reports
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PROJECT MANAGEMENT
References:
www.mindstool.com
PMBOK Guide
####################
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Semester III Assgn I Project Management

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Assignment 1

ALLAMA IQBAL OPEN UNIVERSITY,

Explain “Project” and “Project

According to the PMI (Project Management Institute) definition:

Projects are different from standard business operational activities as they:

Are unique in nature. They do not involve repetitive processes. Every

Achieve beneficial change. The purpose of a project, typically, is to

Development of a payroll software package

“Project Management is the skills, tools and management processes

Project Management comprises:

A set of skills. Specialist knowledge, skills and experience are required

projects. Examples include time management, cost management,

PROJECT MANAGEMENT PROCESS

Project Management Processes define, organize and complete the work

Initiating Processes: authorizing the project or phase.

One of the most effective ways of planning an action programme is to work

timetable and work plan;

PROJECT LIFE CYCLE

A project has specific objectives to be completed within certain

Fig: Four Phases of Project LifeCycle

Fig: Project LifeCycle

1.1 Develop Business Case

Once a business problem or opportunity has been identified, a Business Case

1.3 Establish Project Charter

1.6 Perform Phase Review

At the end of the Initiation Phase, a Phase review is performed. This is

2.1 Develop Project Plan

Immediately after the Project Plan is formed, it is necessary to allocate the

Similar to the Resource Plan, a Financial Plan is prepared to identify the

2.4 Develop Quality Plan

Meeting the quality expectations of the customer is critical to the success of

2.6 Develop Acceptance Plan

Although external suppliers may be appointed at any stage of the project, it

At the end of the Planning phase, a Phase review is performed. This is

controls the activities, resources and expenditure required to build each

3.1 Build Deliverables

This phase requires the physical

3.2 Monitor and Control

Quality Assurance and Quality Control techniques. Quality reviews are

At the end of the Execution Phase, a Phase review is performed. This is

4.1 Perform Project Closure

Project Closure involves undertaking a series of activities to wind up the

Assessing whether the project completion criteria have been met

A Project Closure Report is submitted to the Customer and/or Project

4.2 Review Project Completion

Did it result in the benefits defined in the Business Case?

To determine conformance, a review is undertaken of the level of conformity

PROJECT COST MANAGEMENT

Fig: Cost Management Process

perform project activities. It must be closely coordinated with cost

1.1 Inputs to Resource Planning

1. Work breakdown structure. The work breakdown structure (WBS)

2. Historical information. Historical information regarding what types of

1.2 Tools and Techniques for Resource Planning

1. Expert judgment. Expert judgment will often be required to assess the

1.3 Outputs from Resource Planning

Resource requirements. The output of the resource planning process is a

2.1 Inputs to Cost Estimating

1. Work breakdown structure: It will be used to organize the cost

6. Chart of accounts: A chart of accounts describes the coding structure

2.2 Tools and Techniques for Cost Estimating

1. Analogous estimating: Analogous estimating, also called top-down

2.3 Outputs from Cost Estimating