Project management

Project management is a methodical approach to planning and guiding processes from start to finish. It requires getting things done properly, through people, on time and on budget. It can be applied to almost any type of project or task regardless of its size or value within a business. The processes of project management are guided through five stages involving:

initiation

planning

execution

control

closing

Principles of project management

Things Project objective (identification of need) Properly Lay down proper standards and codes as well as reporting and control systems (reviews and audits) for an adequate execution of the projects

Initiate

project

Plan

project

Control

project

Execute

project

Close project

Through people Specify who are the people in the project team and define their responsibilities On time (planning) Establishment of a realistic project schedule through adequate planning On budget Draw up a financial plan for the project and ensure that work objectives can be met within that plan Involves economic analysis and budgetary control; which are only valid if they are based on a realistic estimate of the expenditure required to achieve the objective

Planning techniques Use of precedence network in management planning to:

i. determine the earliest start times and latest finish times for each activities

ii. determine the time available for each of the activities iii. calculate the activity float iv. identify the critical path

Figure 1: Precedence Network

3 3

1 2

2 1

4 3 2

7 6

7 6

3

5 3

3 5

1 2

2 1 5 5

Cost, Time & Resource (CTR) Reference

Earliest Finish

Earliest Start

Duration

X Y

Latest Finish

Latest Start

A B

C D

Description

Contract types in a negotiated or competitive bidding

Lump sum The contractor is given a defined starting and finishing points and undertakes to perform the whole specified work at a fixed price. The contractor has the financial responsibility for managing the work. Maximum incentive for timely completion of the project

It requires the following:

Clear and good definition of the scope of work, based on a complete design

A reasonable split of the risk between the contractor and the client

Minimum changes

Timely availability of company supplied information, materials and equipment

Payments could be made either as a series of milestones or as a single payment on completion. Milestone payment is however preferred.

Bills of quantities Lump sum contracts with detailed bills of quantities forming a precise definition of the scope of work Bills of quantities require considerable administrative effort by the company in quantifying the work before, during and after the contract. Payment may be on a monthly basis against a measured quantities or a series of milestones. Milestone payment is however preferred. Schedule of rates The amount that is payable to the contractor is calculated by applying an agreed schedule of rates to the quantity of work that is actually performed. If the rates are for work input, e.g. materials, man-hour, machine time etc., the contractor may be tempted to maximise the quantity of work rather than to minimise the time taken. There is a pre-agreed scope of work; the work described in the design, and no further direction is required to establish the scope of work It requires close monitoring of work input (e.g. timesheet, plant lists) and company participation in the execution and management of the work.

Reimbursable cost plus profit fee This is usually required where a significant variation to the scope of work or specification can be expected. It can be adopted where the company must directly manage the work for operational, logistical or safety reasons. It can also be applied when significant variations to the scope of work or specification can be expected or when it would be uneconomical for the contractor to execute

Management contracting strategies Direct project management Company staff manage the project without any management contracting It involves a lot of company involvement with extensive use of company procedures and systems Project services contractor The contractor supplies certain staff to the project management team Contractor procedures and systems may be employed but the company staff remain in control Managing contractor The contractor assumes responsibility for the administration of most of the major contracts The contractor has a wide but defined discretion in the execution of the project Turnkey contractor This is an arrangement in which a project is delivered in a completed state The contractor has responsibility for the design, execution and management of the project It requires complete definition of the project from the outset