PROJECT

MANAGEMENT
Project…
A project is “a unique endeavor to produce a set of
deliverables within clearly specified time, cost and
quality constraints”.
A project is defined as “work that is temporary and
produces a unique product or service.”
"A project is a one-shot, time-limited, goal-directed,
major undertaking, requiring the commitment of
varied skills and resources".
Characteristics of Projects
Objectives n Risk and
Life Cycle Uncertainty
n Change
Defined Time Limit
n Response to
Uniqueness
Environment
Team Work n Rational Choice
Complexity n Optimality

Sub Contracting
n Control Mechanism
Project Management…
Project management is the planning, scheduling, and

controlling of project activities to meet project objectives.

Project management is normally reserved for focused, non-

repetitive, time-limited activities with some degree of risk and

that are beyond the usual scope of operational activities for

which the organization is responsible.

Process Flow of PM
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EVOLUTION
PROJECT MGMT
History of Project
Management
Project management has been practiced since
early civilization.

Until 1900 civil engineering projects were

generally managed by creative architects and
engineers themselves,

It was in the 1950s that organizations started to

systematically apply project management tools
and techniques to complex projects.
As a discipline, Project Management developed
from several fields of application including
construction, engineering, and defense activity.

Two forefathers of project management are

Henry Gantt, called the father of planning and control

techniques, who is famous for his use of the Gantt
chart as a project management tool; and

Henri Fayol for his creation of the management

functions which form the foundation of the body of
knowledge associated with project and program
management.
Both Gantt and Fayol were students of Frederick
Winslow Taylor's theories of scientific management.

His work is the forerunner to modern project

management tools including work breakdown
structure (WBS) and resource allocation.

The 1950s marked the beginning of the modern

Project Management era.

Project management was formally recognized as a

distinct discipline arising from the management
discipline.
In the United States, prior to the 1950s, projects were managed
on an ad hoc basis using mostly Gantt Charts, and informal
techniques and tools.

At that time, two mathematical project-scheduling models were

developed

"Critical Path Method" (CPM)

"Program Evaluation and Review Technique“ (PERT)

At the same time, as project-scheduling models were being

developed.
In 1956, the American Association of Cost Engineers
(now AACE International; the Association for the
Advancement of Cost Engineering) was formed.

The International Project Management Association

(IPMA) was founded in Europe in 1967, as a federation
of several national project management associations.

IPMA maintains its federal structure today and now

includes member associations on every continent
except Antarctica.

In 1969, the Project Management Institute (PMI) was

formed in the USA.
PROJECT
TAXANOMY
Taxonomy of Projects
Based on the Type of Activity

Based on the Location of Project

Based on the Project Completion Time

Based on Ownership

Based on Size

Based on Need
(A) Based on Type of Activity

Industrial Projects

Non Industrial Projects

Ex.: Health Care Projects, Educational

Projects, Irrigation Projects, Soil Conservation
Projects, Pollution Control Projects, Water Supply
Projects, High-way Projects.
(B) Based on the Location of
Project
National Projects

International Projects

Setting up of Fully Owned Subsidiaries Abroad

Setting up of Joint Ventures Abroad

Setting up of Projects abroad by way of Mergers

and Aquisitions
(C) Based on the Project
Completion Time
Normal Projects

(No Constraint on Time)

Crash Projects

(To be completed within a stipulated time, even at

the cost of ending up with a higher project cost)

Ex.: Construction of Canal Lining to be completed

before Monsoon starts
(D) Based on Ownership
Private Sector Projects

(Ownership in the hands of Project Promoters and

Investors……Profit Maximization!)

Public Sector Projects

(Owned by the State……Social Benefit! )

Joint Sector Projects

(Ownership is shared by the Government and by Private

Entrepreneurs)
(E) Based on Size
Small Projects

Medium Projects

Large Projects

As per the Directives of the Government of India, Projects with

investment on Plant and Machinery up to Rs. 1 crore are
categorized as ‘Small Scale Projects’ while those with investment
in Plant and Machinery above Rs. 100 crores are categorized as
‘Large Scale Projects’.
(F) Based on Need
New Project

Expansion Project

Modernization Project

Replacement Project

Diversification Project

Backward Integration Project

Forward Integration Project

PROJECT
LIFE CYCLE
Project Life Cycle
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(A) Project Initiation
(B) Project Plan

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(C) Project Execution
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(D) Project Closure
q 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.
q 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
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FUNCTIONS
PROJECT
MANAGEMENT
Project Management:
Functions
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Selection
Pursuing the correct projects is easily as important
as the effectiveness with which the project is carried
out.

Project selection contains the following activities:

Create a business case for the project.

Align the project’s goals in the organization.

Prioritize the project relative to other projects and

ongoing operations.
Definition
After a project is selected, a project manager is
assigned and goes to work building the foundation
for the project’s success.

Project definition activities include the following:

Identify all stakeholders on the project and document

their goals and involvement.

Develop a relationship with the project sponsor.

Record the goals and constraints of the project using a

statement of work or similar document.
Planning
With a clear goal in place, documented by the
statement of work and business case, the project
manager builds the action plan that describes
the who, what, when, where, and how of
accomplishing the project.
Planning typically includes the following activities:

Develop a detailed description of the work on the project using a

work breakdown structure (WBS).

Analyze the sequence of the tasks.

Estimate the tasks to determine the required skills, effort,

equipment, and materials.

Establish detailed project schedules documenting specific start

and finish dates, responsibilities, and completion criteria for each
task.

Determine the number of people on the team and what skills are
necessary.

Prepare contracts for vendors who are participating in the project.

Control
For project managers, driving the project
includes:

Monitor the progress of the project against the plan.

Communicate with the project team and stakeholders.

Form the project team and attend to its health.

Maintain the cost-schedule-quality equilibrium.

Take corrective action to keep the project on track.

Risk Management
Because every project is unique, every project
includes a high degree of uncertainty.

Risk management is the systematic practice of

identifying and reducing the threats that exist in the
project and the project’s environment.

Planning for risk begins during the development of

the business case and continues through definition
and planning as each successive function provides a
more detailed view of the project.
Quality Management
Practices developed and established within the quality
discipline (as defined by Deming, Crosby, et al.) can
be applied to the project management discipline.

This integration begins as the project is conceived and

carries forward until the outcome of the project is
created and is accepted by the customer.

These practices focus on clearly understanding what

the customer wants and consciously planning to
deliver it, including methods for ensuring the product
will be correctly built.
Close Out
Project completion goes beyond delivery of the
product.

A significant goal of project close out is capturing

the lessons of the project so that they can be
passed on to the organization.
PROJECT
MANAGEMENT
IN TODAY’S
SCENARIO
PROJECT SUCCESS: THE TRIPLE
CONSTRAINT
COST-SCHEDULE-QUALITY Equilibrium or Triple
Constraint.

These three variables define the overall goals of a

project; therefore, any project that is “on time, on
budget, high quality” is declared a success.

Achieving the proper balance of cost, schedule,

and quality is beyond the control of the project
manager alone.
PROJECT MANAGEMENT AS A
STRATEGIC STRENGTH
Project Management has evolved as a Strategic
Strength because of the constant change that comes
from rapidly growing computing power and global
competition, creating an ever-growing web of
change.

This climate of ever-faster change has created new

challenges and new opportunities.

All firms are challenged to keep up with the pace or

risk being left behind.
Project Management is a
Growth Industry
Projects are temporary and produce unique products.

Both of these characteristics make managing projects not

just difficult, but different from managing ongoing
operations.

This discipline is becoming a necessary skill in most

organizations.

The root cause of the growing use of project management

is the increasing rate of change in our economy and our
places of work.
PROJECT MANAGERS MUST BE
LEADERS
Effective project managers are able to:

Communicate a vision.

Motivate and inspire the team.

Build trust within the team.

Influence stakeholders beyond the project team.

Make abstract things concrete.

Demonstrate determination.

Manage and resolve conflict.

Know when to make a decision.

Maintain the big picture perspective while organizing details.

PROJECT
ORGANIZATION
Project Organization
Organization Structure is concerned with the
allocation of task and establishment of Authority-
Responsibility Relationship between the members of
the organization.

Broadly Organizational Structure can be of three

types, viz.

● Functional Organization

● Product Organization

● Matrix Organization
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Functional Organization
MERITS
n Suitable for Smaller Organizations that offer a
limited line of Products.

DEMERITS
n Ineffective Controlling
n Difficulty to fix accountability and difficult to
judge the performance of the members.
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Product Organization
MERITS
n All activities, skills and expertise required to produce
and market a particular product are grouped under a
single head.
n Better Coordination and a higher level of performance

DEMERITS
n Subordination of organizational interest to personal
interest
Matrix Organization
General
Manager

Manager Manager Manager Manager

(Finance) (Production) (Personnel) (R & D)
Functional Responsibility

Project Project Responsibility

Manager ‘A’

Project
Manager ‘B’

Project
Manager ‘C’
Matrix Organization
n Combine merits of Functional and Product
Organization
n Suitable for “Project-driven” Organizations.
n Project Manager has the total responsibility
and accountability for making the project a
success.
n Functional Manager is responsible to maintain
functional excellence in all the projects.
 Success functioning of a Matrix
Organization requires:

n Coordination of Project and Functional

Managers
n Both of Project and Functional Managers
should provide inputs to planning
n The horizontal line of control must be allowed
to operate freely as a separate entity except
for administrative purpose.
MERITS
n Sharing of Authority and Responsibility between
Project Managers and Functional Managers results
in Synergy.
n Optimum Resource Utilization
n Maximum Control of Project Manager over Project
n Top Management can devote more attention for
planning
n Sharing of Knowledge
DEMERITS
n Conflicts and Power Struggle between the Project
Department and Functional Department
n Danger of Dual Reporting
n Duplication of Efforts
n More Discussions than Actions
n Costly to implement Matrix form of Organization
n Greater focus on inter-personnel relationship and
organizational development
Modified Matrix
Organization General
Manager

Director Manager Manager Manager Manager

(Projects) (Finance) (Production) (Personnel) (R & D)
Functional Responsibility

Project Project Responsibility

Manager ‘A’

Project
Manager ‘B’

Project
Manager ‘C’
P● P
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Pure Project Organization
n Project Manager in in total control of all other
departments.
n Suitable if organization has a complex project
whose resource requirements are large.
n Every project is treated as a separate entity.
n Costly affair since separate human and physical
resources are to be assigned and maintained for
each projects.
Selection of Project
Organization Structure
Suitable Organization
Condition
Structure
Project Driven Enterprise Matrix Organization Structure

Stable and Repetitive

Functional Organization Structure
Environments
Departmental Project Management
Non-Routine Projects
Structure
Pure Project Organization Structure,
Labour Intensive Projects
Matrix Organization Structure
Projects involving High
Complexity and requiring Huge Pure Project Organization Structure
Ressourcen
Work
Breakdown
Structure
(WBS)
Work Breakdown Structure (WBS)

n A process by which the whole project is

divided (i.e. broken down) into various sub-
projects, the sub-projects into various tasks,
the tasks into various sub-tasks and finally the
sub-tasks into work-packages.
n The WBS and the constituent work-packages
become the basis for project planning,
scheduling and controlling.
Types of WBS
n Product Oriented WBS

The project is sub-divided in to sub-projects on the basis

of ‘products’. And so on…

n Functionally Oriented WBS

The project is broken down on the basis of functional
departments (or functional tasks). And so on…

q In practice, a combination of product oriented and a

functionally oriented WBS can be used.
Organization Breakdown
Structure
n The project organization can be broken up in
to several groups, sub-groups, individuals etc.
n The breaking down of project organization is
done in such a way that an individual or a
group of individuals can be identified with the
work packages arrived at as per WBS..
(Integrating WBS with OBS)
PM Tools and
Techniques
Project Management Tools and
Techniques
n Matrix key:

B Brainstorming
F Fishbone/Ishikawa Diagrams
C Critical Path Analysis Flow Diagrams
G Gantt Charts

*** Main Tool

** Optional / Secondary Tool
* Sometimes Useful
1. Brainstorming Process

n Define and agree the objective.

n Brainstorm ideas and suggestions having agreed
a time limit.
n Categorize / Condense / Combine / Refine.
n Assess / Analyze effects or results.
n Prioritize Options / Rank list as appropriate.
n Agree action and timescale.
n Control and Monitor follow-up.
2. Fishbone / Ishikawa Diagram
n Ishikawa's diagram became known as a fishbone diagram,
obviously, because it looks like a fishbone.

n Fishbone diagrams are chiefly used in quality management

fault-detection, and in business process improvement.

n The model is also very useful in project management

planning and task management generally.

n Fishbone diagrams are very good for identifying hidden

factors which can be significant in enabling larger activities,
resources areas, or parts of a process.
n Fishbone diagrams are also called 'Cause and Effect
Diagrams' and Ishikawa Diagrams, after Kaoru Ishikawa
(1915-89), a Japanese professor specializing in industrial
quality management and engineering who devised the
technique in the 1960s.
n For each project the main categories of factors are
identified and shown as the main 'bones' leading to the
spine.
n Into each category can be drawn 'primary' elements or
factors (shown as P in the diagram), and into these can be
drawn ‘secondary’ elements or factors (shown as S).
Cause and Effect Diagram
3. Project Critical Path Analysis
(Flow Diagram or Chart)
n 'Critical Path Analysis' sounds very complicated, but
it's a very logical and effective method for planning
and managing complex projects.
n A critical path analysis is normally shown as a flow
diagram, whose format is linear (organized in a line),
and specifically a time-line.
n Critical Path Analysis flow diagrams are very good
for showing interdependent factors whose timings
overlap or coincide.
Example: Critical Path Method
4. Gantt Chart

n Gantt Charts are extremely useful project

management tools.
n The Gantt Chart is named after US engineer and
consultant Henry Gantt (1861-1919) who devised
the technique in the 1910s.
n Gantt charts are excellent models for scheduling
and for budgeting, and for reporting and presenting
and communicating project plans and progress
easily and quickly.
Practical Application

n These charts are generally introduced during the

planning and scheduling stage of projects
n From beginning to the end, the charts force us to:
n Make a realistic assessment of the end-time of the project.
n Sequence our tasks (or phases, or activities) - one after
the other, as well as in parallel.
n Think in terms of task dependencies - which task is
dependent on what.
n Concentrate on the necessary resources, both when and
where, throughout the run of the project.
Example: Gantt Chart
Example: Gantt Chart
5. Run Chart

n A run chart, also known as a Run-sequence plot

is a graph that displays observed data in a time
sequence.
n Often, the data displayed represent some aspect of
the output or performance of a manufacturing or
other business process.
n Run charts are analyzed to find anomalies in data
that suggest shifts in a process over time or special
factors that may be influencing the variability of a
process.
Run Chart: Illustration
Run Chart: Illustration
6. Responsibility Assignment
Matrix
n A Responsibility Assignment Matrix (RAM), (also
known as RACI matrix or Linear Responsibility
Chart (LRC)), describes the participation by various
roles in completing tasks or deliverables for a
project or business process.
n It is especially useful in clarifying roles and
responsibilities in cross-functional/departmental
projects and processes.
RACI Matrix: Illustration
6.A RACI Matrix
n R = Responsible
(People who do the work)

n A = Accountable
(People who make sure the work gets done)

n C = Consulted
(People who provide input before and during the
work)

n I = Informed
(People who are kept informed of progress)
Developing a Responsibility Assignment
Matrix

n Step One : Define Your Deliverables

n Step Two : Identify the People
Involved
n Step Three : Create Your
Responsibility Matrix
n Step Four : Communicate
Step I: Define your Deliverables
Step II: Identify the People Involved
Step III: Create Your Responsibility
Matrix
Identify training Coordinate the Evaluate the
needs training results

Survey Define Prepare Re-

Locate Analyze
current new training survey
resources results
practice practice schedule practices

PM: Kim A A A A

CSM: Ron A R I A R

CEC: Terry R C R R

TC: Nancy I R R

CSS: Reagan R C C R C

CSR: John C C C
Step IV: Communicate

n When Responsibility Assignment Matrix is

complete, communicate it to all stakeholders.

n It’s a good idea to post it in an area where

people will see it.

n Used effectively, the RAM helps people

understand what they should be doing at all
stages of the project.
6.B RACI-VS Matrix 6.C RACIO (CARIO)

n Responsible n Responsible
n Accountable n Accountable
n Consulted n Consulted

n Informed n Informed

n Verifier n Out of the Loop (or

n Signatory Omitted)
6.D DACI 6.E RSI Matrix

n Driver n Responsible
n Approver n Sponsor
n Contributors n Informed

n Informed
6.F PARIS Matrix 6.G PACE Matrix

n Primary n Process Owner

n Assigned (Process Leader)

n Review Required n Approver

n Input Required n Consulted
n Signature Required n Executers
7. Participatory Impact Pathways
Analysis
n Participatory Impact Pathways
Analysis (PIPA) is a project management
approach in which the participants in a
project (project and program are used
synonymously from now on), including
project staff, key stakeholders and the
ultimate beneficiaries, together co-
construct their program theory.
8. Logical Framework Approach

n The Logical Framework Approach (LFA) is a

management tool mainly used in the design,
monitoring and evaluation of international
development projects.
n It is also widely known as Goal Oriented Project
Planning (GOPP) or Objectives Oriented Project
Planning (OOPP).
n The Logical Framework Approach (Rosenberg &
Posner, 1979) was developed by Practical Concepts
Incorporated in 1969 for the United States Agency for
International Development (USAID).
Logical Framework Approach: Illustration

Objectively
Means of
Narrative Verifiable
Verification Assumptions
Description Indicators
(MoV)
(OVIs)

Activities

Outputs

Purpose

Goal
9. Financial Tools

n Types of labour costs to be incurred during the

project
n Items of equipment needed to deliver the
project
n Various materials needed by the project
n Unit costs for labor, equipment and materials
n Other costs types such as administration
n Amount of contingency needed
10. Project Health Check

n Developed by Professor Jaafari.

n A project and or program is subject to continuous
change and evolution.
n The actual performance of the team on a given project
can be assessed through the project health check (PH-
Check).
n The focus of PH-Check is on managerial capabilities and
actual state of practice on a given project at the given

time.
Project Success

Key Concern Area:

n Complexity
n Uncertainty
n Risks

Success depends on:

n Creative – Reflective Skills
n Smart Tools
n Tailored Factors
Focus: Project Health Check
Project Health
Assessment
Framework
(A) Business and Strategic Assessment Criteria

n Customers and Markets

n Stakeholders
n Technology
n Facility Design and Operational Requirements
n Supply Chain System
n Learning and Innovation
n Finance
n Project Delivery

n Risk and Due Diligence

(B) Project Implementation Assessment Criteria

n Governance and Leadership

n Engineering, Detailed Design and Specifications
n Procurement, Transportation and Warehousing
n Planning and Control
n Team Performance
n Information and Communications Management
n Quality Management
n Offsite Management
n Risk Management
Project
Development
Iterative Development
Waterfall Development