Project Management

N Siva Prasad
Project

May be defined as a series of related jobs

usually directed toward some major output
and requiring a significant period of time to
perform
Project management can be defined as
planning, directing, monitoring and
controlling the resources( man, machine
and material) to meet the technical, cost
and time constraints of the project
 Types of Development
Projects
Degree
Degree of
of
Change
Change

Type
Type
of
of
Projec
Projec
tt
Types of Project ( wrt
resources)
Pure Project( team is full time limited and
committed to that project)
Functional Project: In this the team
members are assigned from the functional
units of the organisation. The members
continue to be part of functional units while
spending effort in this project.
Matrix Project: Uses people from different
functional areas. The tasks are assigned to
functional units and functional unit
manager uses resources to fulfill the task.
Project Structure
Pure Project

• A self-contained team works full-time on the project.

Functional Project

• Responsibility for the project lies within one functional

area of the firm. Employees from that area work on the
project, usually only part-time.

Matrix Project

• A blend of pure and functional project structures –

people from different functional areas work on the
project, possibly only part-time.
Pure Project Structure
Advantages
Functional Project Structure
Advantages
Matrix Project Structure
Advantages
Structuring a Project
Statement of work or Scope of work(SOW)
WBS( Work Breakdown structure)
Activities
(Job codes,activity codes,work
centers,network elements, cost centers,
profit centers, project building,work force
planning,hard booking,soft booking of
resources, mile stones etc)
Defining the Project
Continued

Project Milestone
Specific events in the life of the project

Work Breakdown Structure

Defines the hierarchy of project tasks,
subtasks, and work packages

Activities
Pieces of work that consume time
 Work Breakdown Structure Example

Overview

Details
 Work Breakdown Structure – Large
Optical Scanner Design

Overview

Details
 Network-Planning Models
A project is made up of a sequence of activities
that form a network representing a project.

The path taking longest time through this

network of activities is called the “critical path.”
The critical path provides a wide range of
scheduling information useful in managing a
project.
Critical path method (CPM) helps to identify the
critical path(s) in the project networks.
CPM( Critical Path Method)
Nodes(source and destination etc.)
Activities
Precedence
Activity duration
Early start
Late start
Early finish
Late finish
Critical path
Float or slack available
 Critical Path Method (CPM)
Identify each activity to be done and
estimate how long it will take.

Determine the required sequence and

construct a network diagram.

Determine the critical path.

Determine the early start/finish and

late start/finish schedule.
AOA
E(3) 5
I(3)

2 7

C(1) J(5)
A(3) H(0)

1 4 8

D(2)
B(3) F(5)
K(7)

3 6
G(1)
AON E(3
)

B(2 G(7
) )

A(3 D(1 H(8

) ) )

C(4 F(8
) )
 Example – Identify Activities and
Construct Network

C(7)
C(7) F(8)
F(8)

A(21
A(21
))
G(2)
G(2)

B(5)
B(5) D(2)
D(2) E(5)
E(5)
Finding Float Time
Find early start time of each event during forward pass
starting from start node.
Consider the maximum of all possible times at that
event/node
Find the latest finish time starting from destination node.
Check the times in reverse pass and consider the least
of all possible finish times.
Float is difference between these two at each node.
The nodes where both are equal are on critical path
Critical path is the path where the activities do not have
any float
Activity float is LF(end node)-Activity duration-ES(start
node)
 Determine Early Start/Early Finish and Late
Start/Late Finish Schedule
ES D EF
LS S/ LF
F

Critical 21 28 28 36
Path 1:
ACFG C(7)
C(7) F(8)
F(8)

2 2 2 3
0 21 1 8 8 6 36 38
A(21
A(21
)) G(2)
G(2)
0 2 3 3
1 21 26 26 28 28 33
6 8
Critical B(5)
B(5) D(2)
D(2) E(5)
E(5)
Path 2:
ABDFG 2 2 2 2 3 3
1 6 6 8 1 6
Activity data
Activity To be Duratio
precede n in
d by wks
A -- 1
B A 4
C A 3
D A 7
E B 6
F C,D 2
G E,F 7
H D 8
I G,H 4
ES D EF

LS S/ LF
F E(6
)

B(4 G(7
) )

A( I(4
1) C(3 )
)

F(2
)

H(8
D(7 )
)
 ES D EF
ES D EF
S/ LS S/ LF
LS LF F
F ES EF
E(6
D ES D EF
)
LS S/ LF S/
F
LS LF
F
B(4 G(7
) )

ES D EF ES D EF
LS S/ LF ES EF
D LS S/ LF
F F
LS S/ LF
A( F I(4
1) C(3 ES D EF )
)
LS S/ LF
F
ES D EF
ES D EF F(2
LS S/ LF
) F
LS S/ LF
F
H(8
D(7 )
)
Use forward pass( ES and EF)
Use reverse/backward pass( LF and LS)
Find slack or float for each activity either by
LS-ES or LF-EF
The path from start to end through “zero”
slack is the critical path.
It is possible to have more than one critical
path
Note: For ES and EF use forward pass
For LF and LS use reverse pass.
 CPM with Activity Time Estimates
When activity times vary, a single time
estimate may not be reliable.
Instead, estimate three values
 Minimum
 Maximum
 Most likely

This allows calculation of a probability

estimate of completion time.
This is the distinguishing characteristic of
the PERT method.
 PERT Method Calculations

   
 
 
 
 
 
Example - Three Time Estimates
 

 
Time-Cost Models and
Project Crashing
A time-cost model extends the CPM model
to consider the trade-off between time
required to complete an activity and total
project cost.
Considers direct activity costs, indirect costs
of project, and activity completion times

It is often referred to as “crashing” the

project to reduce overall duration.
Project Crashing
Example – Project Crashing

 
 Example – Project Crashing

Project has
reached minimum
duration

Activity D cannot
be reduced any
further at this
point
Activity A cannot
be reduced any
further at this
point
Earned Value
Management(EVM)
Project tracking without EVM
Project tracking with EVM
Budget cost of work performed vs actual
cost incurred
Earned Value Management
Calculate Budgeted cost of work scheduled(BCWS)
Calculate Budgeted Cost of Work Performed(BCWP)
Calculate actual cost incurred( from finance
department wrt that particular project) say 45000

 Scheduled variance=BCWP-BCWS( >0 is good)

 Scheduled Performance Index=BCWP/BCWS
(>1 is good)
 Cost Variance=BCWP-Actual Cost(=0 ideal,>0
is good)
 Cost Performance Index=BCWP/AC(=1 ideal,>1
good)
 Example – Earned Value
Management
At time “X”, Activity A is
100% complete (budgeted
cost was $18K).

At time “X”, Activity B is

80% complete (budgeted
cost was $10K).

At time “X”, Activity C

is 70% complete
(budgeted cost was
$20K). 80% of this
activity should be
complete by now.
At time “X”, Activity D is
0% complete (budgeted
cost was $40K). 15% of
this activity should be
complete by now.
Example – Budgeted Cost of Work
Scheduled (BCWS)
Activity A – 100% of $18K = $18K

Activity B – 100% of $10K = $10K

Activity C – 80% of $20K = $16K

Activity D – 15% of $40K = $6K

BCWS = $18K + $10K + $16K + $6K = $50K

Example – Budgeted Cost of Work
Performed (BCWP)
Activity A – 100% of $18K = $18K

Activity B – 80% of $10K = $8K

Activity C – 70% of $20K = $14K

Activity D – 0% of $40K = $0K

BCWP = $18K + $8K + $14K + $0K = $40K

 Example – Performance Measures

Actual cost of
 
$45K
obtained
from
For performance indices: accounting
PI < 1 means costs are higher than records
planned
PI = 1 means costs are exactly as
planned
Project Management Information
Systems(PMIS)
MS Project
SAP PM modules
I-Planner
PMP certification from PMI ( US based)
( Project Management Professional)
PRINCE certification (UK based)
Project Report Samples
Thanks a Lot and Best of
Luck!!!