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Master of Business Administration-MBA Semester 3

Project Management PM0010 - 4 Credits

(Book ID: 1236)

Assignment Set- 1 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Explain the following

a. Project Vs. Program Vs. Portfolio

b. Project work and Traditional functional work

Ans :Project Vs. Program Vs. Portfolio

Businesses use various terms to represent a range of project management services. Unfortunately theseterms are oftenused interchangeably and inconsistently. This article attempts to clear the confusion and establish acommon definition.

Project ManagementHopefully we all know what a project is. PMBOK defines a project as a temporary endeavor undertakento create aunique product, service or result. In my terms, a project has a specific start and end date with a clearlydefineddeliverable produced. Project management is the application of knowledge, skill, tools, techniques andprocesses toeffectively manage a team towards this final deliverable.In real life this means the management of a specific project (e.g. implementing a new accounting system).This projectwill start on a specific date and end according to our project plan with the delivery of your new accountingsystem.Pretty simple something we can all understand.

Program ManagementThis is where the confusion seems to start. A program is a group of related projects managed together toobtain specificbenefits and controls that would likely not occur if these projects were managed individually. While projectmanagementfocuses on delivering the specific objectives of the project program management is focused onachieving the strategicobjectives and benefits of the integrated program.The implementation of an Enterprise Resource Planning (ERP) system is often performed as a program.The ERPsystem will include several specific individual projects (i.e. Finance, Purchasing, Materials Management,etc.). Each ofthese specific projects should be run by a project manager using a formal project management approach.The overall

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grouping of these related projects will be run by a Program Manager.The Program Manager will be responsible for the rolling up of information from each of the projects andensuring theoverall program is driving towards achieving the business objectives. This requires each of the projectmanagers tomanage their individual projects in a fashion that easily integrates into the overall program plan (easilysaid morechallenging in actual practice).The Program Manager is also responsible for tracking and analyzing across the entire program. Thisinvolves consideringrisk management strategies not only for each individual project but also analyzing the collective riskacross the program.The same goes for quality management, schedule management, cost management, communications, etc.

Portfolio ManagementA portfolio is a collection of projects or programs grouped together to facilitate effective management ofefforts to meetstrategic business objectives. These projects or programs are not necessarily interdependent or directlyrelated. Portfoliomanagement is the centralized management of multiple projects, programs and possibly portfolios. Thistypicallyincludes identifying, prioritizing and authorizing projects and programs to achieve specific strategicbusiness objectives.The group of projects and programs within a specific business division could be an example of a portfolio.This mightinclude the implementation of a Customer Relationship Management (CRM) program Sales DataWarehouse programCommission Tracking project and a project to launch a new product within theSales & Marketing Division. In this casethe Portfolio Manager is managing this broad range of somewhat unrelated programs and projectstowards a specific setof strategic divisional business objectives.The Portfolio Manager will become very involved in the frontendactivities of identifying, prioritizing and initiatingprojects and programs. All of these activities will be within the context of achieving the strategic business

objectives. ThePortfolio Manager will also track these projects/programs to ensure they continue to deliver towards theexpectedstrategic outcome in terms of quality, cost, schedule and scope. They will also be responsible foranalyzing and trackingproject management elements across the entire portfolio looking for ways to leverage economies ofscale, reduce riskand improve the probability of successfully delivering expected business results.

http://www.klr.com/articles/Articles_PM_project_program_portfolio_mgmt.pdf

Project work and Traditional functional work

Project work and traditional work differ in significant ways , and it is important to understandthese differences

Functional Work

Functional work is routine , ongoing work. Each day, secretaries, financial analysts, and car salespeople perform functional work that is routine, even if their activities vary somewhat from day today . A manager assigned to the specific function provides training and supervision and managesthem accordingly to the standards of productivity in terms of typing speeds or sales quotas.

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The following are distinguishing characteristics of functional work

Functional work is ongoing routine work

Managers manage a specific function and provide a technical direction

People and other resources are assigned to the functional department

Functilonal departments are responsible for the approved objectives of the function, suchas technical competency,standards of performance and quality and efficient use of

resource .

Project work :In contrast to ongoing functional work, a project is a temporary endeavor undertaken tocreate a unique product or serviceProjects are temporary because they have a definite beginning and a definite end. Theya reunique because the product or service they create is different in some distinguishing wayfrom similar products or services. The construction of a headquarters building for ABCIndustries is an example of a project. The unique work is defined by the building plans andhas a specific beginning and end . A project manager is responsible for the project , overseeing the contractors and managing the schedule and budget.

The following are distinguishing characteristics of a project wor:

Project work is a unique, temporary endeavor.

A project manager manages a specific project.

Q.2 Compare Operation and project procurement. Also list and explain the project

procurement process.

Project Procurement is where the decision to procure and the funding to pay the invoice comes from a

project budget.

Operational Procurement is where decision to procure and the funding comes from the general budgetas the commodities or services are required for the overall operation.

The method of making the procurement decision can be identical in both cases.

Project Procurement process

Project procurement involves a systematic process of identifying and procuring, through purchase or

acquisition, necessary project services, goods, or results from outside vendors who will carry out the work. It is

usually a function of the projectmanager; however, some organizations choose to select a person other than

the project manager to handle these duties. There are six processes widely recognized by the projectmanagement industry as integral to projectprocurement management.

The first of these processes is planning purchases and acquisitions. In this step, needs that requireoutsourcing

are identified. Sources for obtaining the required goods, services or results are differentiated through a market

analysis. In planning the procurement, project objectives are reviewed to ensure the acquisition does not stray

from the stated objectives. Completion of this step includes identification of the resources necessary for the

acquisition, determination of the contract type needed to secure the acquisition, and preparation of a

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procurement management plan.

Contract planning, requesting seller responses, and selecting the seller are the next three processes that might

be completed. In contract planning, it is necessary to describe in detail the products or services requested.

Requests for proposals and bids should be documented to avoid problems.

When requesting seller responses and proposals, specific vendors are identified and placed on a qualified

sellers list. Selected vendors are considered qualified based on their ability to provide the goods or services

considering the constraints of the project, their interest in providing the goods or services, and the

reasonableness of their bids. Once the prospective sellers have been set apart, the proposals of the selected

sellers are evaluated in order to determine the best vendor to deliver the goods or services. After the sellers are

chosen, contracts are negotiated.

Administering contracts is critical to project procurement duties. Clearly outlining the obligations,

responsibilities, and performance goals is essential to completing this step. Satisfactory performance of the

contract entails tracking the execution of stated goals. At times, the projectprocurement managermay need to

correct processes in order to obtain the desired results. Contract changes should be controlled and documented

to prevent unnecessary legal claims.

Once the contract is complete, the final step is to close the contract. The contract is audited to make certain all

terms of the contract were fulfilled. Contract closure involves evaluating the performance of vendor and

documenting any lessons learned in executing the contract.

Project procurement is not an exact science. Although this process is generally accepted within the industry,

actual execution may differ between organizations. Many courses are available that teach the strategies used by

project procurement managers. Community colleges and extended education departments of universities often

provide classes on this subject.

Q.3 Describe the role of project managers in Human resource management and

communication management.

Q.5 Describe the following quality control tools:

a. Ishikawa diagram

b. Flow chart

c. Pareto chart

d. Scatter diagram

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Ishikawa diagram Also Called: Cause-and-Effect Diagram, Fish Bone Diagram

Variations: cause enumeration diagram, process fishbone, time-delay fishbone, CEDAC (cause-and-effect diagramwith the addition of cards), desired-result fishbone, reverse fishbone diagram

Description

The fishbone diagram identifies many possible causes for an effect or problem. It can be used to structure abrainstorming session. It immediately sorts ideas into useful categories.

When to Use a Fishbone Diagram

When identifying possible causes for a problem. Especially when a teams thinking tends to fall into ruts.

Fishbone Diagram Procedure

Materials needed: flipchart or whiteboard, marking pens.

1. Agree on a problem statement (effect). Write it at the center right of the flipchart or whiteboard. Draw abox around it and draw a horizontal arrow running to it.

2. Brainstorm the major categories of causes of the problem. If this is difficult use generic headings:

o Methodso Machines (equipment)o People (manpower)o Materialso Measuremento Environment

3. Write the categories of causes as branches from the main arrow.4. Brainstorm all the possible causes of the problem. Ask: Why does this happen? As each idea is given,

the facilitator writes it as a branch from the appropriate category. Causes can be written in several placesif they relate to several categories.

5. Again ask why does this happen? about each cause. Write sub-causes branching off the causes.Continue to ask Why? and generate deeper levels of causes. Layers of branches indicate causalrelationships.

6. When the group runs out of ideas, focus attention to places on the chart where ideas are few.

Fishbone Diagram Example

This fishbone diagram was drawn by a manufacturing team to try to understand the source of periodic ironcontamination. The team used the six generic headings to prompt ideas. Layers of branches show thoroughthinking about the causes of the problem.

Fishbone Diagram

Also Called: Cause-and-Effect Diagram, Ishikawa Diagram

Variations: cause enumeration diagram, process fishbone, time-delay fishbone, CEDAC (cause-and-effectdiagram with the addition of cards), desired-result fishbone, reverse fishbone diagram

Description

The fishbone diagram identifies many possible causes for an effect or problem. It can be used to structure abrainstorming session. It immediately sorts ideas into useful categories.

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Fishbone Diagram Example

This fishbone diagram was drawn by a manufacturing team to try to understand the source of periodic ironcontamination. The team used the six generic headings to prompt ideas. Layers of branches show thoroughthinking about the causes of the problem.

Fishbone Diagram Example

For example, under the heading Machines, the idea materials of construction shows four kinds ofequipment and then several specific machine numbers.

Note that some ideas appear in two different places. Calibration shows up under Methods as a factor inthe analytical procedure, and also under Measurement as a cause of lab error. Iron tools can beconsidered a Methods problem when taking samples or a Manpower problem with maintenancepersonnel.

C .Pareto chart

A Pareto chart, also called a Pareto distribution diagram, is a verticalbar graphin which values are

plotted in decreasing order of relative frequency from left to right. Pareto charts are extremely useful

for analyzing what problems need attention first because the taller bars on the chart, which represent

frequency, clearly illustrate which variables have the greatest cumulative effect on a given system.

The Pareto chart gets its name from Vilfredo Pareto, an Italian Economist. In 1906, Pareto notedthat 20% of the population in Italy owned 80% of the property. He proposed that this ratio couldbe found many places in the physical world and theorized it might be a natural law, where 80%

of the outcomes are determined by 20% of the inputs.

In the 1940s, Paretos theory was advanced byDr. Joseph Juran, an American electrical engineer

who is widely credited with being the father ofquality control. It was Dr. Juran who decided to

call the 80/20 ratio the "The Pareto Principle." Applying the Pareto Principle to business metrics

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helps to separate the "vital few" (the 20% that has the most impact) from the "useful many" (the

other 80%). The chart illustrates the Pareto Principle by mapping frequency, with the assumptionthat the more frequently something happens, the more impact it has on outcome.

The Pareto chart is one of the seven basic tools of quality control. Theindependent variableson

the chart are shown on the horizontal axis and thedependent variablesare portrayed as theheights of bars. A point-to-point graph, which shows the cumulative relative frequency, may be

superimposed on the bar graph. Because the values of the statistical variables are placed in orderof relative frequency, the graph clearly reveals which factors have the greatest impact and where

attention is likely to yield the greatest benefit.

A Simple Example

A Pareto chart can be used to quickly identify what business issues need attention. By using hard

data instead of intuition, there can be no question about what problems are influencing theoutcome most. In the example below, XYZ Clothing Store was seeing a steady decline in

business. Before the manager did a customer survey, he assumed the decline was due to

customer dissatisfaction with the clothing line he was selling and he blamed his supply chain forhis problems. After charting the frequency of the answers in his customer survey, however, it

was very clear that the real reasons for the decline of his business had nothing to do with hissupply chain. By collecting data and displaying it in a Pareto chart, the manager could see whichvariables were having the most influence. In this example, parking difficulties, rude sales people

and poor lighting were hurting his business most. Following the Pareto Principle, those are the

areas where he should focus his attention to build his business back up.

SCATTER DIAGRAM

What it is:

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A scatter diagram is a tool for analyzing relationships between two variables. One variable is

plotted on the horizontal axis and the other is plotted on the vertical axis. The pattern of theirintersecting points can graphically show relationship patterns. Most often a scatter diagram is

used

to prove or disprove cause-and-effect relationships. While the diagram shows relationships, it

does not by itself prove that one variable causes the other. In addition to showing possiblecauseand-

effect relationships, a scatter diagram can show that two variables are from a common cause

that is unknown or that one variable can be used as a surrogate for the other.

When to use it:Use a scatter diagram to examine theories about cause-and-effect relationships and to search forroot causes of an identified problem.

Use a scatter diagram to design a control system to ensure that gains from quality improvement

efforts are maintained.

How to use it:Collect data. Gather 50 to 100 paired samples of data that show a possible relationship.

Draw the diagram. Draw roughly equal horizontal and vertical axes of the diagram, creating asquare plotting area. Label the axes in convenient multiples (1, 2, 5, etc.) increasing on the

horizontal axes from left to right and on the vertical axis from bottom to top. Label both axes.

Plot the paired data. Plot the data on the chart, using concentric circles to indicate repeated datapoints.

Title and label the diagram.

Interpret the data. Scatter diagrams will generally show one of six possible correlationsbetween the variables:

Strong Positive Correlation The value of Y clearly increases as the value of X increases.Strong Negative Correlation The value of Y clearly decreases as the value of X increases.Weak Positive Correlation The value of Y increases slightly as the value of X increases.

Weak Negative Correlation The value of Y decreases slightly as the value of X increases.Complex Correlation The value of Y seems to be related to the value of X, but the

relationship is not easily determined.No Correlation There is no demonstrated connection between the two variables.

Scatter Diagram Example

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Weak positive correlation

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Q6 . List the benefits of WBS? Need for risk management in an organisation-comment.

The Work Breakdown Structure (WBS) is defined by A Guide to the Project Management Body

of Knowledge 3rd Edition (PMBOK Guide) as:

"A deliverable-oriented hierarchical decomposition of the work to be executed by the projectteam to accomplish the project objectives and create the required deliverables."

There are three reasons to use a WBS in your projects. The first is that is helps more accurately

and specifically define and organise the scope of the total project. The most common way this isdone is by using a hierarchical tree structure. Each level of this structure breaks the project

deliverables or objectives down to more specific and measurable chunks. The second reason for

using a WBS in your projects is to help with assigning responsibilities, resource allocation,

monitoring the project, and controlling the project. The WBS makes the deliverables more

precise and concrete so that the project team knows exactly what has to be accomplished withineach deliverable. This also allows for better estimating of cost, risk, and time because you can

work from the smaller tasks back up to the level of the entire project. Finally, it allows youdouble check all the deliverables' specifics with the stakeholders and make sure there is nothingmissing or overlapping.

Need for risk management :

Risk is inevitable within business environments. Taking and managing risk is part of whatorganizations must do to create profits and shareholder value.

However, a market study by DeveloperEye.com discovered that many organisations neither

manage risk well nor fully understand the risks they are taking.

The study aims to discuss the level of knowledge about Risk Management amongstorganizations, the management of IT risks, government encouragements towards Risk

Management, and the advantages/disadvantages with Risk Management.

While having a risk management plan is obviously important, if employees and volunteers are

not aware of its existence, it is of little or no use to the organisation. However, not planning for

risk at all can leave an organisation vulnerable to the increasing risks facing them, such as fromfraud, public liability claims and information technology.

Adopting a plan

For organisations that have not yet developed a risk management plan, the following may assist

with the process.Buy-in from management

Over 65 per cent of respondents believed that the CEO or the board was responsible for risk

management, yet 24 per cent thought that there was a lack of understanding at these levels of theimportance of risk management.

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One way to get buy-in from senior levels is to establish a risk committee, where the board and

management can be involved in the risk management process and can gain an understanding ofthe effects that risk can have on the organisation.

Budgetary constraints

With budgetary constraints a concern for 46 per cent of respondents, another reason for buy-in isto ensure that adequate resources can be allocated to the risk management process.

Risk identification

Once the board and senior management agree to the process, it is important to identify thoserisks that are faced by the organisation, as many are known but are not communicated or

documented.

By running workshops among management, employees and volunteers, it is possible to obtain

the input of those who may have a variety of views and be aware of different types of risk.

Creating a risk register

Once risks are identified, organisations need to document how those risks will be dealt with. A

risk register should record information such as the likelihood of the risk occurring, mitigationof the risk, and any residual risk that the organisation cannot mitigate. Once classified, the

organisation can then make a decision about whether to take further steps to reduce risk.

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SET 2

Q.1 Describe the various ways of representing network diagramlogic. .

A Network Diagram is a visual representation of a projects schedule. Well known complements tonetwork diagrams include thePERTandGanttcharts. A network diagram in project management isuseful for planning and tracking the project from beginning to finish. It represents a projects critical pathas well as the scope for the project.A good network diagram will be a clear and concise graphic representation of a project.

Read more:http://www.brighthub.com/office/project-management/articles/12712.aspx#ixzz1ZXABk4x9How do Network Diagrams work?

Fig a: Arrow Diagram

Fig b: Precedence diagram

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There are two types of network diagrams: The Arrow Diagram and the Precedence diagram. The arrowdiagram depicts nodes for events and arrows for activities. The precedence diagram depicts activities inthe order they occur. If you work in IT you will most likely use the arrow diagram, depicted in Fig a.A and B each represents an event node. These event nodes refer to an instant when an activity isstarted or completed. An event node occurs only when all activities entering the node have been

completed. The arrow represents the activity that takes place during the event. Forexample, if a task in a project were research competitions ad campaign, then the event nodes woulddesignate the start and finish of this activity whereas the arrow would designate the activity itself.

Using the arrow and node method, you can depict project dependencies. In the diagram to the right, yousee that Event C depends upon activities from Events A and B to be completed, and Event D dependsupon Event Cs activities to be completed.

Network diagrams are used whenever project management occurs.Because these project management tools are so useful, they can help project management teams tovisualize the planning they have put time and effort into.The diagram gives a quick-glance view of the project. It also demonstrates who is responsible for whichtasks.

Q.2 Explain the following:a. Organizational breakdown structure.b. Cost breakdown structure

The Organizational Breakdown Structure (OBS) is a project organization framework foridentification of responsibility, accountability, management, and approvals of all authorizedwork scope.

A project OBS is a depiction of the project organization arranged to indicate the reportingrelationships within the project context. The OBS reflects the way the project is functionallyorganized. It is a direct representation and description of the hierarchy and organizationsthat will provide resources to plan and perform work identified in the Work Breakdown

Structure (WBS). The OBS helps management focus on establishing the most efficientorganization, by taking into consideration availability and capability of management andtechnical staff including subcontractors, to achieve project objectives. The OBS is depictedon the Responsibility Assignment Matrix (RAM), where it is used to identify theorganization responsible and accountable for every element of the WBS and Scope of Work(SOW).

The project management term organizational breakdown structure refers specifically to a toolthat can be utilized by the project management team and or project management team leaderin a hierarchal manner for the purposes of conducting and creating a thorough and clearlydelineated depiction of the project organization for the purposes of creating an arrangementfor the purposes of establishing a relationship between and among the various project relatedwork packagesas well as between those work packages and the projects pre -defined

performing organizational units. It is important to keep in mind that organizational breakdownstructure is also written and recorded as organization breakdown structure with the samedefinition applied and typically using the same three letter anagram of OBS. Theorganizational breakdown structure should be established at the onset of the activity to helpin the purposes of organization; however, it is possible to conduct this in an ongoing basis

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b.Cost breakdown structure:

In this era of globalization and networking, many companies are facing pressures to

develop their business logic in striving to improve their growth or profitability rate.

The business logic change may take the form of, for instance, increasing emphasis on

pre and after sales services, geographical reorganization of production, or growing

interest toward holistic system supplies. Despite the nature of new business,

however,

it is clear that it is not only revenues (or the potential for revenue) but also the costs of

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goods sold that will be affected during the change process.

Cost structure illustrations have proved to be of significant assistance when

demonstrating the impact of business logic change on organizations. The objective of

the paper is to analyze the use of cost breakdown structure in demonstrating and

therefore also managing a business logic change. The paper is based on an action

research case study in two machine construction companies. The topic seems to be

rather straightforward, but it makes one wonder, why the management of neither of

the case companies have realized the cost effect of the changes in business logic and

why such straightforward cost analyses have not been made in those companies.