l1 introduction to pm

8/3/2019 l1 Introduction to Pm

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Introduction to

Project Management

PROF. ANIL G. MENDHI


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Course Delivery and Grading

This is a full credit course.

We would cover it in total 12 to 13 sessions University Examination is of 100 marks.

University paper is ofthree hours. Earlier it

used to be of four hours.

Usually there are seven to nine questions and

you are expected to solve any five.


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SESSION TODAY

BRIEF HISTORY OF PROJECT MANAGEMENT

DEFINITION OF PROJECT MANAGEMENT

ATTRIBUTES / CHARACTERISTICS OF PROJECTMANAGEMENT

EXAMPLES PROJECT MANAGEMENT FRAMEWORK

PROJECT AND PROJECT ENVIRONMENT

PM TOOLS AND ADVANTAGES OF PM

DIFFERENT STAGES OF PM

DUTIES OF PROJECT MANAGER, PM AS ANENTREPRENEUR

PM V/S GM

PM AND OTHERDISCIPLINES

TYPES OF ORGANIZATIONS


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History of Project Management

Project approach has long been the style of doing businessor implementing or undertaking tasks particularly inconstruction industry.

In 1917 Henry Gantt developed the Gantt chart as a tool

for scheduling work in job shops. Modern project management began with the Manhattan

Project, which the U.S. military led to develop the atomicbomb

In 1958, US Navy developed PERT charts

In the 1970s, the military began using projectmanagement software, as did the construction industry.

By the 1990s, virtually every industry was using some formof project management


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WHAT IS APROJECT?

WEBSTERS DICTIONARY:

A proposal of something to be done, Plan;

scheme, an undertaking; specific task,

A special unit of work, research, etc. as in

school, a laboratory, etc.

An extensive public undertaking, as in

conservation, construction, etc.


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What Is a Project?

A project is a temporary endeavor

undertaken to accomplish a unique purpose A project is a carefully defined set of

activities that use resources (money, men,

materials, machines, energy, provisions,communication, etc.) to meet the pre-

defined objectives.


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Attributes of projects

Unique definable single purpose.

Temporary, one time activity, never to be exactly repeated.

Require resources, often from various areas.

Teams are formed for a purpose and disbanded after achieving thepurpose.

Projects cut across the organizational lines; many disciplines areinvolved.

Should have a primary sponsor and/or customer / stake holder/s

Involve uncertainty and unfamiliarity, does not fall under theroutine category of activity

Project is the process of working to achieve a pre-defined goaland during the process, the project may pass through various

phases


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EXAMPLES

Pyramid of Egypt (2500 B.C. 2.3 Mn. Stone blocksweighing 2 to 70 tons each, quarried and carried over the

Niles, height equivalent of 40 storey building, 13 acres ofland, deviation of less than an inch in levels, stones fixedwith accuracy of .04 inch!!)

100,000 laborers, 40,000 skilled masons, over 150,000women & children to be housed & fed!

Numerous other examples like Taj Mahal, Eiffel tower,

international space station by NASA, anti missile systemdeveloped by India, etc.

From construction, information technology to research,projects could be conceived in all possible fields.

Each project is unique in many ways.


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EXAMPLES contd.

AT CORPORATE LEVEL:

- Restructuring

- Relocation / Diversification (new plant) or Expansion

- Acquisition / Merger- New product or system development

AT FAMILY / PERSONAL LEVEL:

- Remodeling of a home

- Wedding- Moving to another house

MOST ARTISTIC ENDEAVOURS ARE PROJECTS!!


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EXAMPLES contd.

MOST ARTISTIC ENDEAVOURS ARE

PROJECTS!! (Taj Mahal,Statue of Liberty,

Eiffel tower, etc.) Saving human life in the event of natural

calamities / Disasters is also a project.

(Earthquake in Gujarat or Maharashtra,

Tsunami, Nuclear fall out at Chernobyl, etc.). Social uplift programs, Family Planning, AIDS

control, etc.


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TYPES OF PROJECTS

Manufacturing projects

Civil engineering, construction, petrochemical,

mining, infrastructure and other projectsrequiring external organisation

Management projects

Greenfield Projects for setting up newestablishments

Scientific Research Projects

Systems Development Projects


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EXCEPTIONS..

Building a skyscraper is a project; but mass

construction of pre-fabricated homes is a

scheduled and repetitive task rather than aproject.

Repetitive work of accounts and audits is not a

project.

Exploratory mission to Mars or Moon are

projects; conducted tours to tourist places are

not projects.


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The Triple Constraint

Every project is constrained in different ways by its

Scope goals: Quantity & Quality

Time goals

Cost goals

It is the project managers duty to balance thesethree often competing goals.

The Project Management Triangle

The discipline of project management is aboutproviding the tools and techniques that enable theproject team (not just the project manager) to organizetheir work to meet these constraints.


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The Triple Constraint of

Project Management


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Competing goals are now five

Scope

Time

Cost Risk

Quality

Stakeholders with different needs andexpectations.

Identified requirements


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What is Project Management?

Project management is the

application of knowledge, skills, tools,

and techniques to project activities inorder to meet or exceed stakeholder

needs and expectations from a project

(PMI)*,*The Project Management Institute (PMI) is an international

professional society. They have over 2400 members spread over 160

countries. Their web site is www.pmi.org.


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CHARACTERISTICSOF PROJECTS

Project can be described as a unique set of co-ordinated andinter-related activities undertaken by an organisation to meetdefined objectives; that has an agreed start and finish time; isconstrained by cost & resources and has specified

performance requirements. Projects are unique in nature. Everything is special and one-

off. Designs are new and usually unproven. Every industrialor commercial project is a risk venture. The job of themanager is to identify the risks and, through his project

management, contain them. The application of techniquesand management practices that have been developed willdepend on the size and type of project, and upon the relative

priorities, which are assigned to the cost, time andperformance objectives.


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CHARACTERISTICS

OF PROJECTS

Project has a definite start and finish (Scope goals quantity and quality and Time goals).

Project consists of a well-defined and unique collection

of jobs, activities, or tasks which when complete; markthe end of project.

Project is constrained by cost, time & resources and hasspecified performance requirements.

The jobs may be started or stopped independent of eachother, within a overall given sequence.

The jobs are ordered - i.e., they must be performed intechnological order.


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WHO ARE

THE STAKE HOLDERS

IN

AN INDUSTRIALPROJECT?


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Project Stakeholders

Stakeholders are the people involved in or affected byproject activities

Stakeholders include

The project sponsor or promoter, equity / share holders

Project team,

Support staff,

Customers / users,

Suppliers / Vendors / Sub-contractors, Financial Institutions / lenders / bankers

Govt. / Approving authorities

Affected population / opponents to the project


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PROJECT MANAGEMENT FRAMEWORK

Understand the needs and expectations of

various stakeholders.

Set the goals viz. scope, time and cost

parameters for the project.

Deploy nine knowledge areas to achieve the

goals / purpose of the project.


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Project Management Knowledge Areas

Knowledge areas describe the key competenciesthat project managers must develop

Four core knowledge areas lead to specific project

objectives (scope, time, cost, and quality) Four facilitating knowledge areas are the means

through which the project objectives are achieved(human resources, communication, risk, and

procurement management) One knowledge area (project integration

management) affects and is affected by all of theother knowledge areas


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Project Management

Framework

T

T


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Project Management

Tools and Techniques

Project management tools and techniques assist project

managers and their teams in various aspects of project

management

Some specific tools include

Project Charter and WorkBreakdown Structure -

WBS (scope)

Gantt charts, PERT charts, critical path analysis(time)

Cost estimates and Earned Value Analysis (cost)


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Advantages of Project Management

Bosses, customers, and other stakeholders do not likesurprises.

Good project management (PM) provides assurance and

reduces risk. PM provides the tools and environment to plan, monitor,

track, and manage schedules, resources, costs, and quality.

PM provides a history or metrics base for future planning aswell as good documentation.

Project members learn and grow by working in a cross-functional team environment

Source: Knutson, Joan,PM Network, December 1997, p. 13


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Today, the definition of a project is no more confined to engineering,

technology and research; But has expanded to include various fields /

situations, one time crisis, and dealing with difficult issues.

It has been realised that the solution to majority of corporate

problems involves obtaining better control and optimum use of

existing corporate resources. Project Management is one of the

techniques that can be used to achieve this purpose.

Project management is being used by a wide range of disciplines and

corporations that had never previously considered it as a viable

method of performing work

PROJECTIZING THE ORGANIZATION


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Legal offices, hospitals, banking and other services as well

as traditional manufacturing firms are increasingly using

project management to improve the delivery of their

services or for creation of new products. Some typical

examples are:

Annual budgeting / auditing exercises

Introduction of new systems (ISO 9000)

Effecting change in structure, staffing, or style of Organization Software development & implementation

Development of new product / Service Campaign for new product

launch / election

Organizing AGM / sales conference / event

PROJECTIZING THE ORGANIZATION


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WHERE IS PM APPROPRIATE?

Five general criteria are:

1. Unfamiliarity: Major overhaul and not minorchanges.

2. Magnitude of the effort: Substantially moreresources required.

3. Changing environment: High-tech industries

4. Interrelatedness: When a joint effort is required.

5. Reputation of the organization: In cases wherethe risk of financial ruin / loss (market share) ishigh.


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WHERE IS PM NOT APPROPRIATE?

Cases not coming under any of

the five criteria mentionedearlier.

Standardized activities

Routine work


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TIMETIME

TECHNOLOGYTECHNOLOGY

CULTURAL SYSTEMCULTURAL SYSTEM

SOCIAL SYSTEMSOCIAL SYSTEM

POLITICAL SYSTEMPOLITICAL SYSTEM

REGULATORY AND LEGALREGULATORY AND LEGAL

SYSTEMSYSTEM

ECONOMIC SYSTEMECONOMIC SYSTEM

ORGANISATIONAL SYSTEM.ORGANISATIONAL SYSTEM.

PROJECTSARE SHAPEDPROJECTSARE SHAPED

BY THEIR ENVIRONMENTBY THEIR ENVIRONMENT


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RESOURCES,

BUDGETS,

METHODS AND TOOLS OF

PROJECT MANAGEMENTDEPEND ON ABOVE

FACTORS AND CHANGEACCORDINGLY.

IMPACT OF ENVIRONMENT (CONTD.)


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CURRENT PROJECT ENVIRONMENT

INCREASING GLOBAL COMPETITION

RAPID TECHNOLOGICAL CHANGE

RAPID PRODUCT OBSOLESCENCE RATE

ORGANISATIONAL DOWNSIZINGBUSINESS RE-ENGINEERING

EMPOWERMENT

FOCUS ON QUALITY & CONTINUOUS

IMPROVEMENTINFORMATION DELUGE

FASTERCOMMUNICATION

INTER-ORGANISATIONAL SYSTEMS


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Projects are given more importance by the management

for survival of the organization

Increasing need felt to do projects right & successful thefirst time

More limitations on resources and lesser organisational

support Increasing pressure on project management to achieve

quick results

IMPACT OF CURRENT PROJECT

ENVIRONMENT ON ORGANIZATIONS


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Projects are tending to get more & more

complex & large to handle

Projects to be completed ahead of schedule,

always.

Need more flexibility in defining scope,

planning & execution to expand project

benefits and impact

IMPACT OF CURRENT

ENVIRONMENT ON PROJECTS


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INFORMATION SHARING

- Not just possessing

PROCESSORIENTATION

- Not just system orientation

NON-LINEAR THINKING

- As opposed to linearity

ADOPTING PROJECT MINDSET


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PM RESPONSE TO

CHANGING ENVIRONMENT

Need for a managerial approach to deal with problems and takeadvantage of opportunities.

Modern era implies interdependency, complexity, rapid andradical changes and hence elements of uncertainty and risks.

PM is different from management of simpler ongoing,repetitive, operations where the market and technology are

predictable.

More organic forms of organization are now required to ensure

quick adaptability and rapid response to changing environmentare necessary.

SYSTEMS APPROACH TO MANAGEMENT ISESSENTIAL!


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DIFFERENTSTAG

ESOFAPROJEC

PROPOSAL

PROPOSAL

CONCEPTCONCEPT

DEVELOPMENTDEVELOPMENT

& DEFINATION& DEFINATION

EVALUATIONEVALUATION

PLA

NNING

PLA

NNING

SCOPESCOPE

SCHEDULESCHEDULE

BUDGETBUDGET

RESOURCESRESOURCES

ORGANIZATIONORGANIZATION

IMPLEMENTATION

IMPLEMENTATION

DETAILDETAIL

ENGINEERINGENGINEERING

& DESIGN& DESIGN

PROCUREMENTPROCUREMENT

MANUFACTURINGMANUFACTURING

& CONSTRUCTION& CONSTRUCTION

TRIALSTRIALS

& COMMISSIONING& COMMISSIONING

DOCUMENTATIONDOCUMENTATION

AUTHORIZATION

AUTHORIZATION

SANCTION

SANCTION

HH

PROJECT EFFORTSPROJECT EFFORTS


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PROJECT MANAGER

His responsibility is to plan, organize, direct

and integrate work efforts of all participants

to achieve the set project goals (costs, timeschedules and scope goals).

One person in the organization who is

accountable for the project and is totallydedicated to achieving its goals.

Leadership qualities are essential.


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DUTIES OF

A PROJECT MANAGER

AS A RESOURCE MANAGER: Manage anddirect project resources to achieve the projectobjectives. (MEN, MONEY, MATERIAL, MACHINES,ETC.)

AS A PLANNING & CONTROL MANAGER:Develop the project plan and ensure that the work iscompleted on time, within budget and withacceptable quality.

AS

A CO-ORDINATOR: Interface with highermanagement regarding project review, approvalsand addressing project issues. These must also relatesuccessfully to line managers and staff.


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What does a project manager do?

DIRECTING : Project Resources

MOTIVATING : Project Team

PLANNING : Anticipate and plan

SUPERVISING : The Project Work

ADMINISTERING : Administrative Tasks

DOING : Doing some tasksdirectly

TRAINING : Project Team

COUNSELING : Technical, Business,

Project & Personal issues DELEGATING : Delegate & supervise

RESOLVING CONFLICT : Over resources andschedules


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PROJECT TEAM

Project work is team work.

Project work is accomplished by a group of

people from different functional areas andorganizations.

Size and composition of the team will vary

depending on the project requirements. Theteam may be disbanded after the project work

is completed.


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PROJECT MANAGEMENT

PROJECT CLOSUREPROJECT IMPLEMENTATIONPROJECT PLANNING

PROJECTSCHEDULING

SCOPEDEFINITION

INVESTMENTDECISION

PROJECTBUDGETING

PROJECTENVIRONMENT

IDEAGENERATION

RISKASSESSMENT

FEASIBILITY &APPRAISAL

NETWORKTECHNIQUES

GANTTCHARTS

MarketTechnicalFinancialEconomicEcological

PERTCPMCRITICAL CHAIN

SpecificationsDeliverablesTime frameOrganizationBudgetsWBS / CBS

Activity based costingCost breakdownCash flowEarned value

SensitivityScenarioSimulationDecision tree


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PROJECT MANAGEMENT

PROJECT CLOSUREPROJECT IMPLEMENTATIONPROJECT PLANNING

PROJECTCONTROL

PROGRESSREPORTING

PROJECTMONITORING

COSTTILL DATE

SCHEDULEUPDATE

SCOPECHANGE

AD-HOCREPORTS

PERIODICREPORTS

ACTUAL STATUSActivity

Completion %Critical pathDelaysProject

completion %

PeriodicityDetailingSummaryDistribution

Control actionsRevised scopeRevised scheduleRevised budget

CommittedIncurredBalance budget

Current statusTime to completeCost to completeEarned value

Special studiesMilestone reports

Discrepancy reportHand over reportDocumentationFailure analysisLearnings


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PROJECT MANAGEMENT SYSTEM

/ ORGANIZATION

INFORMAL ORGANIZATION

FORMAL ORGANIZATION

TRADITIONAL(Functional, location, Product, Customer, Process)

PROJECT TEAMAPPROACH

MATRIX TYPE


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How Project Management (PM)

Relates to Other Disciplines

Much of the knowledge needed to manage

projects is unique to PM

However, project managers must also have

knowledge and experience in

General management

The application area of the project

Project managers must focus on meeting

specific project objectives


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Project Management and Other

Disciplines


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PROJECT MANAGEMENT V/S

GENERAL MANAGEMENT

PROJECT MANAGEMENT

Long term, usually much morethan one year.

More strategic thinking involved.

PROCESS: Has to be developed& designed new each time.Considerable uncertainty andmany unknown factors

New multi-disciplinary team tobe created usually from ofpersonnel from other

departments. Projects are initiated to bring

about change. Substantially Large

GM/MANUFACTURING

Short & medium term, usuallywithin one year.

Focus on minor day-to day issues

Stabilised over a period of timedue to experience, minimumuncertainty.

Plant & personnel already exist.

Direct control over personnel.

Minimal change is expected in setroutine.

Comparatively smaller


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The Project Management Profession

A 1996 Fortune article called project

management the number one career choice.

Other authors, like Tom Peters and ThomasStewart, stress that projects are what add

value to organizations.

Professional societies like the Project

Management Institute have grown

tremendously.


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Project Management Certification

PMI provides certification as a Project

Management Professional (PMP)

A PMP has documented sufficient project

experience, agreed to follow a code of ethics,

and passed the PMP examination.

The number of people earning PMP

certification is increasing quickly.


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QUESTION PAPER PATTERN

Question paper is of 100 MARKS and DURATION will beTHREE HOURS. Earlier it used to be 4 hours.

ANY FIVE questions from usually 7 to 9 will have to beattempted.

Each question will be of 20 marks. Question paper will usually have two theory (descriptive)

questions. The contents of these questions is more or lessstandardized!! There would normally be a choice (any fourout of six sub-questions) total 40 marks for these two

questions. Last year there was only one theory question. Remaining questions would usually be a blend of theory and

numerical problem. Numerical may have higher weight ofmarks in these questions usually 12 or 14 leaving the

balance for theory.


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QUESTION PAPER PATTERN (contd.)

NUMERICAL problems are mainly on the followingtopics:

1. Market forecasting (three types of standard numerical

problems),2. Project evaluation techniques (Financial appraisal /discounting techniques, etc.),Break even analysis, etc.

3. Probability Theory and decision tree techniques, risk

management4. Cash Flows

5. Gantt charts, Work Flow, PERT, CPM or networkingtechniques, Cost and Schedule Performance Analysis, etc.


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Numerical problems on PERT,

CPM, CPI, SPI ..

TYPE I on three time estimates

Sequence of activities and three time estimates of duration ofeach activity are given. You will have to draw PERT network,

compute slack for each activity, show CP and estimate thetime required for completion.

You will be expected to make use of z tables and estimate theprobability that the project will be completed in specificnumber of days. Or

Time required for completion with given level of certainty /probability (e.g. what would be the duration for completion ofthe project with 84.1 % probability?)


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CPM, CPI, SPI ..

TYPE II: Gantt chart,Resource constraints,

leveling, float calculation

Sequence of activities

,normal time required andresource (manpower or budget) requirement are given

You will have to draw Gantt chart, resource graph,

find out free float and total float, total time for

completion, days of over allocation of resourcesgiven maximum availability of the resource.

Rearrange activities suitably for leveling resources.


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CPM, CPI, SPI ..

TYPE III: AoA and AoN network diagrams

Activities, their sequence and duration are given.

You will have to draw AoA and AoN diagrams, findout total time for project completion, identify critical

path and estimate total floats available on various

non critical activities.


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CPM, CPI, SPI ..

TYPE IV: Crashing activity.

List of activities, their duration and normal costs are given.

Costs of crashing (per day) the activities are given along with

indirect costs (per day). You are expected to find out theoptimum duration and associated minimum cost of completing

the project by crashing activities.

In 2009, this was a numerical of 20 marks!!

Specific deadline for achieving the project completion will bementioned. You will have to crash the activities and find out

additional optimum cost and identify critical activities after

crashing.


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CPM, CPI, SPI ..

TYPE V: CPI, SPI.

Total budgeted cost and duration of a project are given. Youwill be asked to take a review of the progress of the projectafter a specific number of days / moths given the followingdata:

Earned Value (BCWP), Actual Expenses incurred (ACWP)and scheduled earned value (BCWS).

You will have to estimate CPI and SPI and estimated time

and cost to completion. This question will usually be liked with theory on S curve

and concept of earned value (fairly descriptive question)


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Numerical problems on

project evaluation / appraisal

TYPE I: (Discounting techniques)

A list of three / four projects will be given along with

their initial investments, project life and expected

annual cash flows.

You will have to rank the projects based on their

NPV, Pay back period,IRRetc. when the companys

cost of capital is given. You may be asked to select a

combination of projects within the overall budget

restriction given.


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Numerical problems on

project evaluation / appraisal TYPE II: (Discounting techniques)

Cash flows for a period of five to seven years for aproject may be given (or you will have to prepare thembased on a set of data provided) along with its initialand periodical investment/s. Given the cost of capitalfor the company, you would be asked to comment onwhether the project should be accepted forimplementation or not.

NPV for the project will have to be estimated. PositiveNPV will mean acceptance and negative would meanthat you have to reject the project.


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Numerical problems on discounting

or NPV / IRR calculations.

TYPE III: (Discounting techniques)

Quotes or initial costs / investments for two machines

/ plants are given along with their operating and

maintenance costs. Machine / plant Life period of

each of the machines is also mentioned.

Given the marginal cost of capital for the company,you are asked to select one of the machines / plants.


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Review Questions on Introduction

Give three examples of activities that are projects and three examplesof activities that are not projects. What distinguishes them from

projects? Which activities are difficult to classify one way or theother?

What are the basic functions of a Project Manager? What qualities,qualifications and experience would you recommend for an effectiveProject Manager? (2000)

Discuss Human Aspects of Project Management in relation toAuthority, Personnel Orientation, Motivation and Team Building.(2000)

How does project management differ from the management of othertypes of manufacturing activities? (2001)

How is Managing a project different from Managing a Factory?(2006)


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Review Questions (contd.)

Write short note on main features and advantages ofMatrix type organisation for projects. (2001)

Define Project. What are the main characteristics

that identify and differentiate projects? Do youthink that the specialised project managementtechniques can be applied effectively to non-engineering areas of organizational functions?Explain your answer with suitable examples. (2002)

Define Project Management. What are the maincriteria for assessing success of projects? (2003)


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Review Questions (contd.)

How is project management different from generalmanagement?

Describe the nine areas of project management identified inPMBOK.

Define Project Management. State the scope of ProjectManagement. (2006)

Write a note on Computerized Project Management. (2006)

ASSIGNMENT:

Different types / structures of organization that can be used forproject management, advantages and drawbacks of each typeof organization structure.


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REFERENCES

1. Projects - Planning, Analysis,Selection,Implementation & reviewby Prasanna Chandra: Tata Mc.Grow-Hill, New Delhi.

2. Project Management forBusiness & Technology by John M.

Nicholas: Prentice HallIndia

,New Delhi3. Project Management the Managerial Process by Clifford Gray &

Erik W. Larson Third Edition by McGraw Hill

4. Financial Management by M.Y. Khan & Jain, Tata Mc.Grow-Hill,

New Delhi.

5. Project Management Harvey Maylor: Macmillan Publication(India)

6. A management Guide to PERT/CPM by Jerome D. Wiest,

Ferdinend K. Levy : Prentice Hall India Pvt. Ltd.


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REFERENCES contd.

7. Handbook of Project Management by Dennis Lock: JaicoPublishing House,Bombay

8. Project Management - A Systems Approach to Planning,Scheduling & Controlling By Harold Kerzner: Van NostrandReinhold, New York

9. Project Management using Network Analysis by H. R. Hoare:McGraw Hill Book Company (UK) Ltd.

10. AMA Handbook of Project Management Editor: Paul C.

Dinsmore11. Global Project Management Handbook by Cleland, David,

Gareis & Roland

12. Project Management - A Managerial Approach by JackR.Meredith,Samuel J. & Mantel Jr.

l1 introduction to pm

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