Project Management PDF

7/28/2019 Project Management PDF

1/51

Introduction toPROJECT MANAGEMENT

By: Prof. Kuldip Chander

24th September 2012


2/51

What is project ?

PM BOOK:

A temporary endeavor undertaken to create a unique product ,service or result.

Oxford English Dictionary:

An individual or collaborative enterprise that is carefullyplanned and designed to achieve a particular aim.

A mission to create a unique product, facility or service withindefined scope, quality, time & cost.


3/51

Project Life Cycle

Project life cycle defines the various phases to be undertaken

to accomplish the project. It defines the beginning andcompletion of the project.

Scope of work, out come along with persons involved in eachphase is well defined each such phase is marked bycompletion of one or more deliverables.

The conclusion of a project phase is generally marked by areview of both key deliverables and project performance todate.

Determine if the project should continue into its nextphase.

Detect and correct errors.


4/51

Project Life Cycle


5/51

Project Management Processes

Initiating processes -Authorizing the project along with

finalizing the outcome of the project. Planning Processes - Defining and refining objectives and

selecting the best of the alternative courses of action to attainthe objectives that the project was undertaken to address.

Execution Processes - Coordinating all resources (Men,Machine & Material) to carry out the plan.

Controlling Processes - Ensuring that project objectives arefulfilled through monitoring and measuring progress regularlyto identify variances from plan so that corrective action can betaken when necessary.

Closing Processes - Formalizing acceptance of the project orphase and bringing it to an orderly end.


6/51

Process Group Links within a Project Phase

Note:- Arrows Depict Information Flows

Initiating

Processes

Planning

Processes

Executing

Processes

Controlling

Processes

Closing

Processes


7/51

Project life cycle


8/51

Core Planning Processes

Scope Planning - Developing a written scope statement

(defining the boundaries) as the basis for future projectdecisions.

Scope Definition - Subdividing the major project deliverablesinto smaller, more manageable components.

Activity Definition - Identifying the specific activities that must

be performed to produce the various project deliverables. Activity Sequencing - Identifying and documenting interactivity

dependencies.

Activity Duration Estimating - Estimating the time periodsrequired to complete individual activities.


9/51

Core Planning Processes

Schedule Development - Analyzing activity sequences,activity durations, and resource requirements to create theproject schedule.

Resource Planning - Determining resources (Men, Machine,Materials, etc.) their respective quantities required along withthe time of procurement of each one to perform projectactivities.

Cost Estimating - Developing an estimate of the costsrequired to accomplish project activities.

Cost Budgeting - Allocating the overall cost estimate toindividual work packages.

Project Plan Development - Taking the results of otherplanning processes and putting them into a consistent,coherent document.


10/51

Planning Facilitating Processes

Quality Planning - Identifying the quality standards relevant tothe project and methodology to attain them.

Organizational Planning - Identifying, documenting, andassigning project roles, responsibilities, and reportingrelationships.

Staff Acquisition - Engaging/ controlling the human resourcesrequired for the project, assigning the tasks to individuals.

Procurement Planning - Determining what to procure, howmuch to procure, and when.

Solicitation Planning - Documenting product requirements andidentifying potential sources.

Communications Planning - Detailing (Who, What, When &How) the information and communications requirement of thestakeholders i.e Information Flow Chart


11/51

Planning Facilitating Processes

Risk Management Planning - Enlisting the risks involved

at each stage and finalizing the plan to mitigate these risksin a project.

Qualitative Risk Analysis - Performing a qualitativeanalysis of risks and conditions to prioritize their effects onproject objectives.

Quantitative Risk Analysis - Measuring the probability andimpact of risks and estimating their implications for projectobjectives.

Risk Response Planning - Developing procedures andtechniques to enhance opportunities and to reduce threatsto the project's objectives from risk.


12/51

Executing Processes

Executing processes include core processes and facilitatingprocesses.

Project Plan Execution - Carrying out the project plan byperforming the activities included therein.

Quality Assurance - Evaluating overall project performanceon a regular basis to provide confidence that the project isadhering to the quality standards defined in planning

process. Team Development - Developing individual and group

skills/ competencies to enhance project performance.

Machine/ Material Management - Defining the source,procurement process (tendering, quotations) &

procurement timings. Information Distribution - Ensuring information flow to

project stakeholders in a timely manner.


13/51

Controlling ProcessesControlling processes include core processes and facilitating

processes.

Integrated change control - Coordinating changes across theentire project.

Scope verification - Formalizing acceptance of the project scope.

Scope Change Control - Controlling changes to project scope.

Schedule Control - Controlling changes to the project schedule. Cost Control - Controlling changes to the project budget.

Quality Control - Monitoring specific project results to determineif they comply with relevant quality standards and identifyingways to eliminate causes of unsatisfactory performance.

Performance Reporting - Collecting and disseminatingperformance information such as status reporting, progressmeasurement, and forecasting.

Risk Monitoring and Control - Keeping track of identified risks,monitoring residual risks and identifying new risks, ensuring the

execution of risk plans, and evaluating their effectiveness inreducing risk.


14/51

Closing Processes

Contract Closeout - Completion and settlement of the contract,

including resolution of any open items. Administrative Closure - Generating, gathering, and

disseminating information to formalize phase or projectcompletion, including evaluating the project and compilinglessons learned for use in planning future projects or phases.


15/51

Project appraisal

Five major aspects for Project Appraisal are as under:-

Economic assessment

Financial assessment

Socio Economic assessment

Environment assessment

Risk and Uncertainty Analysis


16/51

Project appraisal

Economic Assessment

1. Demand And Supply position of the final product.

2. Statutory Compliances and its repercussions on projectimplementation.

3. Law of land

4. Availability of resources


17/51

Project appraisal

Financial Assessment:

1. Credit worthiness of project sponsors

2. Does the project makes the financial sense

3. Methods

A. Cash flow Analysis

B. Internal Rate of Return (IRR)

C. Net Project Value (NPV)

D. Pay Back Method

E. Profitability index


18/51

Financial Assessment

Aspects to be analyzed

I. Capital cost

II. Cash flow statement

III. Working capital required

IV. Loan Repayment schedule

V. Cash Revenue and income schedule

VI. Depreciation schedule

VII. Sensitivity analysis


19/51

Project appraisal

Socio - Economic Assessment

Social Cost Benefit Analysis

Effect on mankind in the vicinity

Environment Assessment

Sustainable Development Method and cost of mitigating the environment effect


20/51

Project appraisal

Risk and uncertainty analysis

What if

i. Capital cost increases by%

ii. Operating cost increases by%

iii. Delay in project implementationiv. Hindrance due to change in Government/local laws

v. Economic slowdown in country

What has greatest impact?

Is project still viable?


21/51

Project Management

The art and science of mobilizing and managing the

resources (Men, Machine & Material)to accomplish the taskwithin the stipulated time ,cost & specified technicalstandards.

Identified knowledge areas:

1. Project Scope Management

2. Project Time Management

3. Project Cost Management

4. Project Quality Management

5. Project Integration Management

6. Project Human Resource Management

7. Project Communications Management

8. Project Risk Management

9. Project Procurement Management


22/51

Project Scope Management

Defines and controls what is included or not included in the

project Processes include

1. Scope planning

2. Scope definition

3. Creation of a Work Breakdown Schedule

4. Scope verification

5. Scope control


23/51

Project Time Management

Includes processes required for the timely completion of a

project Processes include

1. Defining activities

2. Sequencing activities

3. Estimating resource activities

4. Estimating duration of activities

5. Developing the project schedule

6. Controlling the project schedule


24/51

Project Cost Management

Planning, estimating, budgeting and controlling costs to

ensure the project completion within the approved budget Processes include

1. Cost estimating

2. Cost budgeting

3. Cost control


25/51

Project Quality Management

All activities that determine quality policies, objectives and

responsibilities for the project to satisfy the needs for which itwas undertaken

Processes include

1. Quality planning-identifying quality standards that are

relevant to the project (Plan)2. Quality assurance-evaluating overall project

performance to provide confidence that project willsatisfy relevant quality standards (Implement orExecution)

3. Quality control-monitoring specific results to comply withquality standards and eliminating unsatisfactoryperformance causes (Check or Control)


26/51

Project Integration Management

Effective integration of the processes required to accomplish

project objectives

Progress Include

1. Project charter development

2. Preliminary project scope statement development

3. Project management plan development

4. Project execution

5. Monitoring and control of project work


27/51

Project Human Resource Management

Processes that organize and manage the project team

Processes include:

1. Human resource planning

2. Acquiring the project team

3. Developing the project team4. Managing the project team


28/51

Project Communications Management

Activities to ensure project information is timely and

appropriately generated, collected, distributed, stored,retrieved and disposed off

Processes include

1. Communications planning

2. Information distribution

3. Performance reporting

4. Managing stakeholders


29/51

Project Risk Management

Processes to increase the probability and impact of

positive events and decrease the probability and impact ofnegative events

Updated throughout the project

Processes include

1. Risk management planning2. Risk identification

3. Qualitative risk analysis

4. Quantitative risk analysis

5. Risk response planning6. Risk monitoring and control


30/51

Project Procurement Management

Processes to purchase/acquire the products, services or

results needed to perform the project work. Includes contract management and change control

processes to administer contracts or purchase orders.

Processes include:

1. Planning purchases and acquisitions2. Contract planning

3. Requesting seller responses

4. Selecting sellers

5. Contract administration6. Contract closure


31/51

Types of Contract

In construction industry generally following types of

contracts are used1. EPC Engineering, Procurement and construction

contract example all general construction contracts

2. BOT Build Operate and transfer (Expressway

contract)3. BOOT Build Own Operate and Transfer (Yamuna

expressway contract)


32/51

32

Different PPP Models

Degree of Private Sector Involvement

DegreeofPrivate

SectorRisk

Design-Build

Government

Operation / MaintenanceService /License

Design-Build-Operate

Lease-Develop-Operate

Build-Lease-Operate-Transfer

Build-Own-Operate-Transfer

Build-Own-Operate

Buy-Build-Operate

Privatisation


33/51

Project Scheduling Techniques

Gantt Chart (Bar Chart)

LOB (Line of balance technique) CPM (Critical Path Method)

PERT (Program evaluation and review technique)


34/51

CPM & PERT

CPM was developed by Du Pont and the emphasis was on

the trade-off between the cost of the project and its overallcompletion time (e.g. for certain activities it may be possible todecrease their completion times by spending more money -how does this affect the overall completion time of theproject?)

PERT was developed by the US Navy for the planning andcontrol of the Polaris missile program and the emphasis wason completing the program in the shortest possible time. Inaddition PERT had the ability to cope with uncertain activity

completion times (e.g. for a particular activity the most likelycompletion time is 4 weeks but it could be anywhere between3 weeks and 8 weeks).


35/51

Originated by H.L.Gantt in 1918

Gantt chart

Advantages- Gantt charts are quite commonlyused. They provide an easy graphicalrepresentation of when activities(might) take place.

Limitations- Do not clearly indicate detailsregarding the progress of activities

- Do not give a clear indication ofinterrelation ship between the separate

activities

CPM/PERT


36/51

CPM/PERT

These deficiencies can be eliminated to a large extent by

showing the interdependence of various activities bymeans of connecting arrows called network technique.

Overtime CPM and PERT became one technique

ADVANTAGES:

Precedence relationships

large projects

more efficient

C i i l P h


37/51

Critical Path

Is that the sequence of activities and events where there

is no slack i.e.. Zero slack Longest path through a network

minimum project completion time

CRITICAL PATH TAKES 24 WEEKS FOR THE


38/51

CRITICAL PATH TAKES 24 WEEKS FOR THE

COMPLETION OF THE PROJECT

AOA Project Network for House


39/51

darla/smbs/vit 39

AOA Project Network for House

3

2 0

1

3

1 1

11 2 4 6 7

3

5

Lay

foundation

Design house

and obtain

financing

Order and

receive

materials

Dummy

Finish

work

Select

carpet

Select

paint

Build

house

AON Project Network for House

13

22

43

31 5

1

61

71Start

Design house

and obtain

financing

Order and receivematerials Select paint

Select carpet

Lay foundations Build house

Finish work

PERT


40/51

darla/smbs/vit 40

PERT PERT is based on the assumption that an activitys duration

follows a probability distribution instead of being a single value

Three time estimates are required to compute the parametersof an activitys duration distribution:

pessimistic time (tp ) - the time the activity would take ifthings did not go well

most likely time (tm ) - the consensus best estimate of theactivitys duration

optimistic time (to ) - the time the activity would take if thingsdid go well

Mean (expected time): te = tp + 4 tm + to6

Variance: Vt =2 =

tp - to

6

2

P b bilit t ti


41/51

darla/smbs/vit

Probability computation

Determine probability that project is completed within

specified time

Z =x -

where = tp = project mean time = project standard mean time

x = (proposed) specified time

Li f B l


42/51

Line of Balance

St k h ld i P j t


43/51

Stakeholders in Project

Stakeholders are:

Project Managers Customers

Performing Organizations, owners

Sponsor

Team

Internal/External

End User

Society, citizens

Others: owner, funders, supplier, contractor

E d V l A l i


44/51

Earned Value Analysis


Integrates cost, schedule and scope Better that comparing projected vs. actual because

time and cost are analyzed separately

Terms:

BCWS Budgeted Cost of Work Scheduled (howmuch work should be done)

BCWP Budgeted Cost of Work Performed a.k.a.Earned Value (how much work is budgeted, howmuch did we budget)

ACWP Actual Cost of Work Performed (howmuch did the completed work cost)

E d V l A l i


45/51


Terms: BAC Budget at Completion (how much did you

budget for the total job)

EAC Estimate at Completion (what do we expectthe total project to cost)

ETC Estimate to Completion (how much more dowe expect to spend to finish the job)

VAC Variance at Completion (how muchover/under budget do we expect to be)


E d V l A l i


46/51


Formulas Variance (Plan Actual)

Cost Variance (CV): BCWP ACWP; negative isover budget

Schedule Variance (SV): BCWP BCWS; negativeis behind schedule

Cost Performance Index (CPI): BCWP

ACWP

I am only getting x out of every $ BCWPACWP


Earned Val e Anal sis


47/51

Formulas

Schedule Performance Index (SPI): BCWP

BCWS

I am only progressing x % of the planned rate

Estimate at Completion (EAC): BAC

CPI

As of now we expect the total project to cost XRs.

Estimate to Complete (ETC): EAC ACWP; howmuch will it cost from now to completion

Variance at Completion: BAC EAC; when theproject is over how much more or less did we spend(most common way of calculating EVA


S Curve for Earned Value


48/51

S Curve for Earned Value



49/51


3 major processes:

Quality Planning Identifying quality standards that arerelevant to the project (Plan); Project Manager, ProjectOwner

Quality Assurance Evaluating overall projectperformance to provide confidence that project willsatisfy relevant quality standards (Implement or

Execution); Project Team Quality Control Monitoring specific results to comply

with quality standards and eliminating unsatisfactoryperformance causes (Check or Control); ProjectManager, Project Team

Compatible with ISO 9000 and 10000 series Proprietary and non-proprietary approaches (total

quality management

Must address the management of the project andthe product of the project

SOFTWARES FOR PROJECT MANAGEMENT


50/51

SOFTWARES FOR PROJECT MANAGEMENT

MS PROJECT

PRIMAVERA


51/51

Thank you

Documents

Project Management PDF