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Office : Phone : F-126, (Lower Basement), Katwaria Sarai, New Delhi-110016 011-26522064Mobile : E-mail:
Web : 8130909220, 9711853908 [email protected], [email protected]
iesmasterpublications.com, iesmaster.org
New Patternfor
UPSC ESE Exam
Basics ofProject Management
First Edition : 2016
Second Edition (Revised) : 2017
Typeset at : IES Master Publication, New Delhi-110016
IES MASTER PUBLICATIONF-126, (Lower Basement), Katwaria Sarai, New Delhi-110016
Phone : 011-26522064, Mobile : 8130909220, 9711853908
E-mail : [email protected], [email protected]
Web : iesmasterpublications.com, iesmaster.org
All rights reserved.
Copyright © 2017, by IES MASTER Publications. No part of this booklet may bereproduced, or distributed in any form or by any means, electronic, mechanical,photocopying, recording, or otherwise or stored in a database or retrieval system withoutthe prior permission of IES MASTER, New Delhi. Violates are liable to be legallyprosecuted.
IES Master PublicationNew Delhi, 2017
Project management is a logical and proven method to plan and guide the project process right from thebeginning till the end. In another words, we can say the project starts from definition of project and endswith goal achievement. It can be art or science or may be considered as both. The science consists ofa systematic approach using a standard methodology. The art consists of “soft skills” including leadership,trust, credibility, problem solving, and managing expectations. This scientific technique helps in smoothand error less execution of the project.
The book “Basics of Project Management” has been written to address the need of students appearingfor UPSC Engineering Services Exam (ESE). Most of the books on this subject have been written tooextensively and with a particular branch of engineering in focus, which makes most of the part of the bookirrelevant for the exam. In this book we have tried to cover all the relevant topics pertinent to the examand have introduced important informations in boxes to attract special attention and to clarify importantconcepts. Objective questions have been introduced at the end for practice and to discover the extent ofstudents knowledge.
IES Master Publication is thankful to Mr. Ankit Sharma for his extensive contribution in generating,shaping, editing and production of this book. We also thank the staff at IES Master Publication and allthose who have assisted by providing informations on the topics and advice in the production of the Book.
PREFACE
Preface (iii)
Chapter 1 FUNDAMENTALS OF PROJECT MANAGEMENT 01 – 34
1.1 INTRODUCTION …(1)
1.2 WHAT IS PROJECT? …(2)
1.3 PROJECT MANAGEMENT ORGANISATIONS AND THEIR BOOKS OF KNOWLEDGE …(3)
1.4 TYPES OF PROJECTS …(3)
1.5 CHARACTERISTICS/FEATURES OF PROJECTS …(4)
1.6 OPERATIONS …(5)
1.7 STAKEHOLDERS …(5)
1.8 PROJECT CONSTRAINTS …(6)
1.9 WHY PROJECT MANAGEMENT IS NEEDED? …(7)
1.10 WHAT IS PROJECT MANAGEMENT? …(7)
1.11 OBJECTIVES OF PROJECT MANAGEMENT …(8)
1.12 PROJECT MANAGEMENT MATURITY …(8)
1.13 PROJECT MANAGEMENT OFFICE …(9)
1.14 FUNCTIONS OF PROJECT MANAGEMENT …(9)
1.15 PROJECT, PROGRAM AND PORTFOLIO …(10)
1.16 PROJECT LIFE CYCLE …(11)
1.17 PHASES OF PROJECT LIFE CYCLE …(12)
1.18 PROJECT MANAGER …(13)
1.19 ORGANIZATIONAL STRUCTURES …(14)
1.20 POWERS OF PROJECT MANAGER …(17)
1.21 PHASE TO PHASE RELATIONSHIP …(18)
1.22 TYPES OF PROJECTS LIFE CYCLES …(18)
1.23 PROJECT SUCCESS …(20)
1.24 SOURCES OF CONFLICT IN PROJECTS …(20)
1.25 CONFLICT RESOLUTION TECHNIQUES …(20)
Chapter 2 PROCESS GROUP AND KNOWLEDGE AREAS 35 – 48
2.1 INTRODUCTION …(35)
2.2 WHAT IS “PROCESS GROUPS”? …(36)
2.3 WHAT IS “KNOWLEDGE AREAS”? …(36)
2.4 PROCESS GROUPS …(37)
2.5 KNOWLEDGE AREAS …(38)
CONTENTS
Contents (v)
Chapter 3 PROJECT INITIATION 49 – 79
3.1 INTRODUCTION …(49)
3.2 PROJECT IDENTIFICATION …(50)
3.3 PRE-FEASIBILITY STUDIES …(50)
3.4 PROJECT FEASIBILITY OR FORMULATION STUDIES …(51)
3.5 MARKET FEASIBILITY …(51)
3.6 FINANCIAL FEASIBILITY …(55)
3.7 TECHNICAL FEASIBILITY …(63)
3.8 SOCIO-ECONOMIC FEASIBILITY …(65)
3.9 ENVIRONMENTAL/ECOLOGICAL FEASIBILITY …(67)
3.10 DETAILED PROJECT REPORT …(68)
3.11 PROJECT APPRAISAL/EVALUATION …(68)
3.12 PROJECT SELECTION/DECISION …(68)
3.13 PROJECT CHARTER …(70)
Chapter 4 PROJECT PLANNING 80 – 119
4.1 PROJECT PLANNING …(80)
4.2 STEPS OF PROJECT PLANNING …(80)
4.3 PROJECT KICKOFF MEETING …(81)
4.4 DEFINING SCOPE OF WORK …(81)
4.5 WORK BREAKDOWN STRUCTURE (WBS) …(81)
4.6 ROLE ASSIGNMENT …(82)
4.7 PROJECT SCHEDULING …(82)
4.8 NETWORK ANALYSIS TECHNIQUE …(4.8)
4.9 PERT ANALYSIS …(85)
4.10 CPM ANALYSIS …(92)
4.11 GERT …(95)
4.12 ACTIVITY ON NODE NETWORK SYSTEM …(95)
4.13 ESTIMATION OF PROJECT COST …(96)
4.14 BUDGET PLANNING …(99)
4.15 RESOURCE ALLOCATION …(99)
4.16 PROJECT SUPPORT PLANS …(100)
Chapter 5 RISK MANAGEMENT 120 – 138
5.1 INTRODUCTION …(120)
5.2 SOURCES OF RISK …(121)
5.3 STEPS OF RISK MANAGEMENT …(122)
5.4 RISK MANAGEMENT PLANNING …(122)
5.5 RISK IDENTIFICATION …(123)
5.6 RISK ANALYSIS …(124)
5.7 RISK RESPONSE PLANNING …(128)
5.8 RISK MONITORING AND CONTROLLING …(129)
5.9 REVIEW …(129)
(vi) Contents
Chapter 6 PROJECT EXECUTION 139 – 147
6.1 INTRODUCTION …(139)
6.2 OBJECTIVES OF EXECUTION PHASE …(140)
6.3 APPROACHES TO PROJECT EXECUTION …(140)
6.4 MANAGING PROJECT EXECUTION …(140)
6.5 TOOLS REQUIRED FOR EXECUTION …(141)
6.6 ORGANISING SYSTEMS AND PROCEDURES FOR PROJECT EXECUTION …(141)
6.7 SYSTEMS REQUIRED FOR THE EXECUTION OF A PROJECT …(141)
6.8 PROJECT CONTROL PROCESS …(142)
6.9 ISSUES IN PROJECT EXECUTION …(143)
6.10 FACTORS AFFECTING PROJECT EXECUTION …(143)
6.11 FACTORS LEADING TO POOR EXECUTION …(143)
Chapter 7 PROJECT MONITORING AND CONTROL 148 – 167
7.1 INTRODUCTION …(148)
7.2 PROJECT MONITORING …(148)
7.3 TOOLS AND TECHNIQUES FOR MONITORING …(149)
7.4 PROJECT MANAGEMENT INFORMATION SYSTEM (PMIS) …(153)
7.5 PROJECT CONTROL …(153)
7.6 PURPOSE OF CONTROL …(154)
7.7 ELEMENT OF CONTROL IN PROJECT …(154)
7.8 TYPE OF CONTROL SYSTEMS …(155)
Chapter 8 PROJECT CLOSURE AND REVIEW 168 – 180
8.1 INTRODUCTION …(168)
8.2 OBJECTIVES/BENEFITS OF PROJECT CLOSING …(168)
8.3 STEPS PROJECT CLOSING …(169)
8.4 ENSURING PHYSICAL COMPLETION …(169)
8.5 CLOSING PROCUREMENT OR OTHER CONTRACTS …(169)
8.6 HANDING OVER OF OUTPUT AND OBTAINING FORMAL ACCEPTANCE …(169)
8.7 DOCUMENTING PROJECT RECORDS …(169)
8.8 PERFORMING FINANCIAL CLOSURE …(169)
8.9 DOCUMENTING LESSONS LEARNED …(170)
8.10 RELEASING/REDISTRIBUTION OF RESOURCES …(170)
8.11 PERFORMING POST IMPLEMENTATION REVIEW …(170)
8.12 ARCHIVING PROJECT RECORDS …(171)
8.13 PROJECT AUDIT …(171)
8.14 TYPES FOR PROJECT CLOSING AND TERMINATION …(172)
8.15 CHALLENGES IN PROJECT CLOSING …(174)
APPENDIX - I 181-182
APPENDIX - II 183-184
GLOSSARY 185-190
FUNDAMENTALS OF PROJECT MANAGEMENT | 21
1. During project planning in a matrix organization,the project manager determines that additionalhuman resources are needed. From whom wouldhe request these resources?
(a) Project manager
(b) Functional manager
(c) Team
(d) Project scope
2. Which of the following statements describes therelationship between project phases and theproject life cycle?
(a) The project lifecycle contains the iterativeincremental elements inside a projectphase.
(b) Collectively, the project phases are knownas the project life cycle
(c) The project lifecycle is regarded as asequence of project activities while phasesare defined to control the overlapping ofactivities.
(d) The project lifecycle contains the repetitiveelements inside a project phase
3. Which is true regarding projects?
(a) A project is a unique service undertaken tocreate a temporary product
(b) A project is a unique endeavor undertakento create a temporary service
(c) A project is a temporary endeavor undertakento create a unique product or service.
(d) A project is a temporary product undertakento create a unique endeavor or service
4. At what stage in the project life cycle would costsbe the lowest?
(a) Concept (b) Development
(c) Implementation (d) Close out
5. Project Managers have least power in whichorganization structure
(a) Matrix (b) Functional
(c) Projectized (d) Balanced
6. An example of a project is:
(a) Billing customers
(b) Managing an organization
(c) Constructing a building or facility
(d) Providing technical support
7. The project manager should be assigned duringwhat phase
(a) Initiation (b) Project planning
(c) Scope planning (d) Scope definition
8. Which of the following is most important in virtualteam environment.
(a) Requirements planning
(b) Formal procurements
(c) Network diagramming
(d) Communication planning
9. What is triple constraints of project according tothe Dr. Martin Barne’s _______
(a) Quality, performance, time
(b) Performance, cost, time
(c) Performance, people, time
(d) Quality, cost, time
10. According to the Diusmare the second and fourthlevel of the project maturity are
(a) Initial Repeatable
(b) Repeatable Define
(c) Repeatable Managed
(d) Optimizing Managed
11. Quasi-Project are manage through which tool–
(a) Gantt chart; cost/benefit ratio, rolling wave
(b) Network diagram, Gantt chart prototyping
(c) Prototyping, phase-getting, Rolling wave,agile Produce management
(d) Cost/Benefit Ratio, phase getting prototyping
12. The example of quasi project are–
(a) Construction/Machine design
(b) equipment installation/software development
(c) making high rise building/website design
(d) Website design/Architecture design
Questions
22 | BASICS OF PROJECT MANAGEMENT
13. Functional manager use ____ approach andProject manager use ____ approach.
(a) Analytical, systematic
(b) Systematic, analytical
(c) Analytical, Analytical
(d) Systematic, Systematic
14. Analytical approach follow which type of process_____
(a) Working on whole project
(b) Work break down system
(c) Understand the whole component of theproject at a time
(d) Consider the environment of the project
15. In a weak matrix organisation the
(a) Most of the power belongs to functionalmanager
(b) Most of the power belongs to projectmanager
(c) Both have equal power
(d) No one have power
16. Which type of power comes under the categoryof positional power ______
(a) Reward power, coercive power, expertpower
(b) Expert power, Referent power Rewardpower
(c) Legitimate power, Reward power, Coercivepower
(d) expert power, legitimate power, coercivepower
17. For ongoing operations which type of organisationstructure is most suitable _____
(a) Projectised organisation
(b) Functional organisation
(c) Matrix organisation
(d) All
18. Which organisation violets the principal of unity
(a) Projectised organisation
(b) Functional organisation
(c) Matrix organisation
(d) None
19. Which of the following is not a organisationalprocess assets
(a) knowledge bases
(b) project management methodology
(c) Project management software
(d) Financial control and reporting structure
20. What is primary role of portfolio manager
(a) To deliver unique product, service, or resultof the project
(b) to provide project governance and sponsorship
(c) To directly manage people assigned toseveral different projects
(d) To assess all potential projects againstknown organizational strategic goals.
21. What is best role for a project management officewith low level of project management maturity?
(a) Directive (b) Controlling
(c) Supporting (d) Enabling
22. What is name for group of related projectsmanaged in a coordinated way to obtain asynergy between them which is not found bymanaging them individually
(a) Multi project (b) Portfolio
(c) Program (d) Strategy
23. Which of the following can be included underancillary goals
1. Achieving performance target
2. Improving organisation project managementcompetency and methods
3. Gaining a Foot hold in a new market
4. Improving managerial Experiences throughproject management
(a) 1 and 2 (b) 2 and 3
(c) 2, 3 and 4 (d) All of above
24. Match the following levels of project managementmaturity level with explanation
(A) 1st level (Initial)
(B) 2nd level (Repeatable)
(C) 3rd level (Defined)
(D) 4th level (managed)
(E) 5th level (optimized)
FUNDAMENTALS OF PROJECT MANAGEMENT | 31
1. (b)
2. (b)
3. (c)
4. (a)
5. (b)
6. (c)
7. (a)
8. (d)
9. (d)
10. (c)
11. (c)
12. (d)
13. (a)
14. (b)
15. (a)
16. (c)
17. (b)
18. (c)
19. (c)
20. (d)
21. (c)
22. (c)
23. (c)
24. (c)
25. (d)
26. (a)
27. (b)
28. (d)
29. (a)
30. (c)
31. (b)
32. (b)
33. (c)
34. (c)
35. (d)
36. (d)
37. (c)
38. (c)
39. (b)
40. (d)
41. (a)
42. (b)
43. (d)
44. (a)
45. (b)
46. (a)
47. (c)
48. (d)
49. (d)
50. (c)
51. (d)
52. (c)
53. (c)
54. (d)
55. (a)
56. (d)
57. (c)
58. (d)
59. (c)
60. (d)
61. (b)
62. (a)
63. (a)
64. (d)
65. (b)
66. (c)
67. (c)
68. (c)
69. (a)
70. (c)
71. (c)
72. (d)
73. (c)
74. (b)
75. (c)
76. (b)
77. (a)
78. (c)
79. (d)
80. (c)
81. (c)
82. (d)
83. (d)
84. (c)
85. (a)
ANSWER KEY
EXPLANATIONS
1. (b)
Functional manager is in charge of firmsfunctional department such as marketing,engineering, HR, finance etc. so resources arerequested from functional manager.
2. (b)
Project life cycle generally consist of four phases
(i) Initiation (ii) Planning
(iii) Execution (iv) Closing
3. (c)
PMBOK definition of project says a project is atemporary endeavor undertaken to create aunique project, service or result.
4. (a)
Cost and staffing level are low at the start of theproject it increases progressively during planningreaches to peak in execution phase a finally itdrops rapidly in closing phase.
Project Management
Plan
Project Charter
Project Time
AcceptedDeliverables
ArchivedProject
Documents
Cos
t and
Sta
ffing
Lev
el
Initiation phase
Planning Phase
ExecutionPhase
ClosingPhase
86. (b)
87. (b)
88. (b)
89. (d)
90. (b)
91. (a)
92. (d)
93. (a)
94. (d)
95. (b)
96. (b)
97. (b)
98. (b)
99. (b)
32 | BASICS OF PROJECT MANAGEMENT
5. (b)Matrix organization has power distributedbetween project managers and functionalmangers.Depending on type of matrix.Stronger matrix – Most power is in the hands ofPMBalance matrix equal distribution between FMand PMWeak matrix – Most power is in hands of FMIn projectized organization all powers belongs toPMIn functional organizations all power belongs tofunctional managers.
6. (c)Definition of project says a project is a temporaryendeavor undertaken to create a unique productservice or result. Clearly constructing a buildingor facility is temporary endeavor and it give aunique product building.
7. (a)Project Manager is formally authorized by projectcharter in initial phase.
8. (d)The base of v irtual team is effectivecommunication as team member are at differentplaces may be different countries.
10. (c)According to diusmare project managementmaturity level are:Level 1 – initialLevel 2 – structured process and standardsLevel 3 – organizational standards andinstitutionalized processesLevel 4 – Managed processLevel 5 – Optimized process
11. (c)Quasi-Project are without specific targets ordeliverables.These don’t have a well defined project scope.So they require iterative approach, rolling wavetechniques to accommodate changing nature ofprojects and prototyping for validating theproduct.
12. (d)Construction/machine design, equipmentinstallation, software development, meeting highrise building has well defined project and productscope while website design or architecturedesign don’t have well defined scope.
13. (a)Systems Approach: System approachconsiders organisation as a dynamic and interrelated set of parts. Each part represents adepartment or a sub-system. Each sub part hasits components further each components hasits elements continuous and effective interactionof sub parts, components and elements help toattain goals of larger system.Project manager use systematic approachedand functional manager uses analytic approach.
14. (b)Analytic Approach: Analytic approach is useof an appropriate process to break down aproblem in necessary smaller pieces to solve it.Each piece becomes smaller and easier problemto solve.
15. (a)Weak matrix organization has most features offunctional organization FM has most of powerscompared to PM in weak matrix.
16. (c)Positional power comes the hierarchical positionof that person in any organization.It is of following subtypes(i) Legitimate power(ii) Reward power(iii) Coercive power
18. (c)Principal of command of unity say that no personneed to report more than one boss.
19. (c)PMS is generally considered to be an enterpriseenvironmental factor because it is usuallylicensed rather than owned.
20. (d)A portfolio manager is a person or group ofpeople responsible for investment in a mutual,exchange – traded or closed end fund’s assets,implementing its investment strategy andmanaging dry – to day portfolio trading.or, He is a person who manages financialinstitutions assets and labilities and are ultimatelyresponsible for establishing or investmentstrategy, selecting appropriate investments andallocating each investment properly for aninvestment fund or assets management vehicle.
21. (c)Directive PMO are best in organisation with highlevel of project management maturity.
