PROJECT MANAGEMENT

PROJECT DEFINITION:
A project is a temporary endeavor undertaken to create a unique product, service, or result.

PROJECT MANAGEMENT:
Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Ref: A Guide to Project Management Body of knowledge, Third Edition)

BACKGROUND OR HISTORY:
The International Project Management Association (IPMA) was founded in Europe in 1967, as a federation of several national project management associations. IPMA offers a Four Level Certification program based on the IPMA Competence Baseline (ICB). In 1969, the Project Management Institute (PMI) was formed in the USA. PMI publishes A Guide to the Project Management Body of Knowledge (PMBOK Guide), which describes project management practices that are common to "most projects, most of the time." PMI also offers multiple certifications. Ref: A Guide to Project Management Body of knowledge, Third Edition)

PRINCIPLE OF PROJECT MANAGEMENT:

1. There must be a project as defined in the PMBOK, and not just a task or an ongoing activity. 2. There must be a single leader (project manager), who is experienced and willing to take the responsibility for the work. 3. There must be an informed and supportive management that delegates appropriate authority to the project manager. 4. There must be a dedicated team of qualified people to do the work of the project. 5. There must be a proper strategical and technical Planning, using a top down planning approach whilst breaking the project down into component parts using a work break down structure to achieve the goal.

6. The project goal must be clearly defined and quality maintained along with priorities of the shareholders. 7. There must be a schedule establishing the time goals of the project. 8. There must be a budget of costs and/or resources required for the project.
(.Cleland, David, & H. Kerzner, A Project Management Dictionary of Terms, Van Nostrand, New York, 1985, p187.)

Project Feasibility:
The purpose of a feasibility study is to determine if a business opportunity is possible, practical, and viable. A feasibility study enables them to take a realistic looks at both the positive and negative aspects of the project

I. Financial Feasibility
The Financial feasibility aims to ascertain whether the proposed project will be financially viable and whether the proposed project will satisfy the return expectations of the capital provider While conducting a financial appraisal certain aspects has to be looked into like: Projected profitability Financing means Investment outlay and cost of project Cash flows of the project Projected financial position

II. Technical and Operational Feasibility

This section lays out the operational aspects and procedures of the proposed business. The various aspects are Supply of labor and its quality (including management) Supply and costs of key inputs needed for operations Technical characteristics and specifications of required plant and equipment Assessment of potential operational capacity and efficiency Location considerations and assessment

III. Market Feasibility

Market feasibility is primarily concerned with the aggregate demand of the proposed product/service in future and the market share expected to be captured which depends on the customers. For understanding the consumers the following criteria are studied: Consumer behaviour, intentions, motivations, attitudes, preferences and requirements Trends in types of product consumption Production possibilities and constraints Cost structure Product demand and supply Distribution channels and marketing policies in use

 Ease or limitations of entering the market

IV. Economic Feasibility

Economics is the study of costs- and- benefits. Economic feasibility leads one to the unit cost of the product .Here the entrepreneur is concerned whether the capital cost as well as the cost of the product is justifiable with the price at which it will sell at the market place Ref: Vital Steps: A Cooperative Feasibility Study Guide, John W. Brockhouse, Jr., and James J. Wadsworth PROJECT SUCCESS/FAILURE CRITERIA:

Project Success:
Project success means that the project is completed on time and on budget, with all the features and functions as originally specified. The key criteria for project success are as follows:

Project failure:
A number of factors are involved in any particular project failure, some of which interact with each other. Here are six of the most important reasons for failure.

Project success criteria

Time The project completed on schedule. Cost The project came in on budget. Quality Product of acceptable quality Executive support User involvement Clear business objectives Firm basic requirements Formal methodology Reliable estimates

Project failure criteria

cost overruns time overruns A rollout with fewer features or functions than promised. Lack of User Involvement Long or Unrealistic Time Scales Poor or No Requirements Scope Creep No Change Control System

Project Success: Definitions and Measurement Techniques, Project Management Journal, 19:1, February 1988, p. 67

PROJECT PROCESS:

Initiation:
It determines nature and scope of the project It include the following areas

Understand project stakeholders. Develop a preliminary scope statement. Prepare a business case for the project. Reviewing of the current operations Financial analysis of the costs and benefits including a budget Project charter including costs, tasks, deliverables, and schedule

Planning

After the initiation stage, the project is planned to an appropriate level of detail. Project planning generally consists of

developing the scope statement; selecting the planning team; identifying deliverables and creating the work breakdown structure; estimating the resource requirements for the activities; estimating time and cost for activities; developing the schedule and budget risk planning;

Execution
Execution process involves coordinating people and resources, as well as integrating and performing the activities of the project in accordance with the project management plan. The deliverables are produced as outputs from the processes performed as defined in the project.

Monitoring and controlling

Monitoring and controlling includes:

Monitoring the project variables (cost, effort, scope, etc.) against the project management plan. Measuring the ongoing project activities Identify corrective actions to address issues and risks properly Influencing the factors that could circumvent integrated change control so only approved changes are implemented

Closing
Closing includes the formal acceptance of the project and Finalizing all activities across all of the process groups to formally close the project.

(Ref: The Definitive Guide to Project Management. Nokes, Sebastian. 2nd Ed.n. London (Financial Times / Prentice Hall): 2007)

PROJECT TERMINATION:
A project can be said to be terminated when work on the substance of the project has ceased or slowed to the point that further progress is no longer possible There are four fundamentally different ways to close out a project: extinction, addition, integration, and starvation

Project Termination Factors:

Low Probability o Technical Objectives o Commercial Viability o ROI Achieved No Solution o Engineering Design o Lasting Process Intellectual Property Issues Successful completion

Components of termination process

Whether or not to terminate o Goal/Objective-based o or o Qualification factors If terminate: o Carry out termination procedures o Planned

o Orderly o Procedures vary

The Implementation Process:

Duties of the termination manager: Complete all remaining work Notification to & acceptance by client Complete documentation (accurately!) Final payments Redistribute assets Legal Review Files & Records Follow-on support

Project Termination Areas:

Project Closeout

Organization

Financial

Purchasing

Site

Closeout Mtg Plans Personnel

Payables Receivables Budget Report

Contracts Supplier Comm Final Payments

Close Facilities Dispose Equip/Mat'l

Ref: Project Management: A Managerial Approach 2006 John Wiley and Sons, Inc.

POST PROJECT APPRAISAL:

A post project appraisal determines the extent to which a project met the budget, timetable and the key deliverables. Project appraisal is presumed to be scheduled to take place 12 months after the completion of the implementation expenditure for a project. Post project appraisals should be completed by the Project Manager and should identify:

The final project cost, which should be compared with both the latest authorized amount and the original authorized amount. Explanations of all variances should be noted. The actual completion date of the implementation stage of the project, which should be compared with the latest authorized completion date and the original completion date. The delivered key deliverables, which should be compared with the latest authorized key deliverables and the original key deliverables. Explanations should be given for significant variances. Any lessons to be learnt from the project, and how these will be embedded in future.

Post-Project Appraisal steps:

The key stages of this scheme are:

Evaluation of the Project Procurement, Construction and Operational Commissioning Stage Evaluation of the Project in Use shortly after opening Evaluation of the Project in Use after 2 years

PROJECT MANAGEMENT ORGANIZATION STRUCTURE:

Three main types organization structures are used in projects: Functional project organization Pure project organization Matrix project organization

1. Functional project organization: A functional project is housed within a functional division

Key Factors
A team member can work on several projects ` Technical expertise is maintained within the functional area ` The functional area is a home after the project is completed ` Critical mass of specialized knowledge

2. Pure Project Organization: A pure project is where a self-contained team works full-time on the project

Key Factors ` The project manager has full authority over the project ` Team members report to one boss ` Shortened communication lines ` Team pride, motivation, and commitment are high

3. Matrix Project Organization:

Key Factors A hybrid form that combines both some characteristics of functional and pure project organization forms. Project manager and functional managers share responsibility. Project manager decides what tasks will be done, and when they will be done. Functional manager decides who will work in the project and which technologies will be used.
Ref: Gray, Clifford F. and erik W. Larson, Project Management , 3rd Ed. McGraw-Hill,2006

PROJECT MEMBERS ROLES AND RESPONSIBILITY:

Clearly defined project stakeholders roles and responsibilities provide each individual associated with the project, with a clear understanding of the authority granted and responsibility exacted for the successful accomplishment of project activities.

Role

Responsibilities

Provides executive team approval and sponsorship for the project. Has budget ownership for the project and is the major Project Sponsor stakeholder and recipient for the project deliverables.

Project Owner Provides policy definition to the Project team. Resolves all policy issues with the appropriate policy owners in order to provide a clear, decisive definition. Makes final decisions and resolves conflicts or issues regarding project expectations across organizational and functional areas. The project owner and the project manager have a direct link for all communication. Project Manager Provides overall management to the project. Accountable for establishing a Project Charter, developing and managing the work plan, securing appropriate resources and delegating the work and insuring successful completion of the project. All project team members report to the project manager. Steering Provide assistance in resolving issues that arise beyond the Committee project managers jurisdiction. Monitor project progress and provide necessary tools and support when milestones are in jeopardy. Stakeholder Key provider of requirements and recipient of project deliverable and associated benefits. Deliverable will directly enhance the stakeholders business processes and environment. Team Member Working project team member who analyzes, designs and ultimately improves or replaces the business processes. This includes collaborating with teams to develop high level process designs and models, understanding best practices for business processes and partnering with team members to identify appropriate opportunities.

PROJECT LEADERSHIP REQUIREMENT AND QUALITIES:

The following are the major skills required by a project manager: Conflict resolution, conflict management Critical thinking, problem solving Understands, balances priorities Strong leadership ability Excellent communication skills Ability to handle stress Good interpersonal skills People management (customers, suppliers, functional managers and project team) Time Management

PROJECT COORDINATION AND CONTROL

Project coordination: Project coordination is an act of maintaining coherence between activities, resources, equipment, and information. To satisfy this need the project coordinator functions in their primary role. Project Control Project control is that element of a project that keeps it on-track, on-time and within budget. Project control begins early in the project with planning and ends late in the project with postimplementation review, having a thorough involvement of each step in the process When to control project? Unexpected technical problems arise Insufficient resources are unavailable when needed Quality or reliability problems occur Owner/Client requires changes in technical specifications Inter-functional complications and conflicts arise Market changes that increase/decrease the projects value

Mechanisms of Project Control Cybernetic Go/No-go Post-control 1. Cybernetic control mechanisms System output monitored by sensor Sensor measurements transmitted to Comparator Measurements compared with predetermined standards Deviation from standard sent to decision-maker If deviation from standard is too large, signal sent to

This is a Third-order cybernetic control system,Examples: Most Project management systems 2. Go/No-go Mechanisms of Project Control Testing to see if some specific precondition has been achieved Yes/No (discrete) Control in most PM fall into this category 3. Post-Control Types of Project Control Also called: Post-performance control, Post-performance review Is done after the activity or project is over

Ref :Mantel, Meredith, Shafer, and Sutton. Core Concepts: Project Management in Practice, 2e, Wiley and Sons, Inc., 2005.

PROJECT PERFORMANCE
Performance measurement is the ongoing monitoring and reporting of program accomplishments, particularly progress towards pre-established goals. It is typically conducted by program or agency management. Most performance measures can be grouped into one of the following six general categories. 1. Effectiveness: A process characteristic indicating the degree to which the process output (work product) conforms to requirements. 2. Efficiency: A process characteristic indicating the degree to which the process produces the required output at minimum resource cost. 3. Quality: The degree to which a product or service meets customer requirements and expectations. 4. Timeliness: Measures whether a unit of work was done correctly and on time. Criteria must be established to define what constitutes timeliness for a given unit of work. The criterion is usually based on customer requirements. 5. Productivity: The value added by the process divided by the value of the labor and capital consumed. 6. Safety: Measures the overall health of the organization and the working environment of its employees.

The earned value chart

This is a way of measuring overall performance is by using an aggregate performance measure called earned value The earned value of work performed for those tasks in progress is found by multiplying the estimated percent completion for each task by the planned cost for that task The result is the amount that should have been spent on the task so far The concept of earned value combines cost reporting and aggregate performance reporting into one comprehensive chart

Cost and performance graph Variances on the earned value chart follow two primary rules: 1. A negative is means there is a deviation from plannot good 2. The cost variances are calculated as the earned value minus some other measure EV - Earned Value: budgeted cost of work performed AC - actual cost of work performed PV - Planned Value: budgeted cost of work scheduled

ST - scheduled time for work performed AT - actual time of work performed EV - AC = cost variance (CV, overrun is negative) EV - PV = schedule variance (SV, late is negative) ST - AT = time variance (TV, delay is negative)

3. Variances are also formulated as ratios rather than differences Cost Performance Index (CPI) = EV/AC Schedule Performance Index (SPI) = EV/PV Time Performance Index (TPI) = ST/AT 4. If the earned value chart shows a cost overrun or performance under run, the project manager must figure out what to do to get the system back on target

Mantel, Meredith, Shafer, and Sutton. Core Concepts: Project Management in Practice, 2e, Wiley and Sons, Inc., 2005.