MB0049 Second Sem - Set 1 Final

7/29/2019 MB0049 Second Sem - Set 1 Final

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Q1. Define Project management. Discuss the need for Project management.

A.1 Project Management It is an art of controlling the cost, time, manpower, and hardwareand software resources involved in a project.

Project management is necessary because it helps an organisation execute a project successfully

by:

a) Preventing Project Failure: A project requires huge investments which should not go waste.A loss in any project would have direct or indirect impact on the society. Project management

helps an organisation prevent failures in projects.

b) Controlling Project Scope: Scope of the project activity may undergo a change. Projectmanagement helps an organisation define and control project scope.

c) Improving understanding: Lack of understanding of the project among the participants leadsto failure. Project management helps participants understand the project and its purpose.

d) Managing Risks: A project is vulnerable to various risks. A project is affected if thetechnology used is changed during the course of project execution. Similarly changes in

economic conditions may affect a project. Project management is very useful in assessing andmitigating such risks.

e) Managing Project Problems: Consequences of ignoring project related problems can be veryserious. Project management helps in identification and communication of problem areas.

Q2. What is meant by risk management? Explain the components of risk management.

A.2 Risks are those events or conditions that may occur and whose occurrence has a harmful ornegative impact on a project. Risk management aims to identify the risks and then take actions tominimise their effect on the project. Risk management entails additional cost. Hence risk

management can be considered cost-effective only if the cost of risk management is considerably

less than the cost incurred if the risk materialises.

2.7.1 Components

Important components in risk management are shown in figure:


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a) Risk Assessment Identify the possible risks and assess the consequences by means of

checklists of possible risks, surveys, meetings and brainstorming and reviews of plans, processes

and products. The project manager can also use the process database to get information about

risks and risk management on similar projects.b) Risk Control Identify the actions needed to minimise the risk consequences. This is alsoknown as risk mitigation. Develop a risk management plan. Focus on the highest prioritisedrisks. Prioritisation requires analysing the possible effects of the risk event in case it actuallyoccurs. This approach requires a quantitative assessment of the risk probability and the risk

consequences. For each risk, determine the rate of its occurrence and indicate whether the risk is

low, medium or of high category. If necessary, assign probability values in the ranges asprescribed based upon experience. If necessary assign a weight on a scale of 1 to 10.

c) Risk Ranking Rank the risk based on the probability and effects on the project; forexample, a high probability, high impact item will have higher rank than a risk item with a

medium probability and high impact. In case of conflict, use judgment.

d) Risk Mitigation Select the top few risk items for mitigation and tracking. Refer to a list ofcommonly used risk mitigation steps for various risks from the previous risk logs maintained by

the project manager and select suitable risk mitigation step. The risk mitigation step must beproperly executed by incorporating them into the project schedule. In addition to monitoring the

progress of the planned risk mitigation steps, periodically revisit the risk perception for the entire

project. The results of this review are reported in each milestone analysis report. To prepare this

report, make fresh risk analysis to determine whether the priorities have changed.

Q3. Discuss the various steps in project monitoring and control.

A.3 Any project aimed at delivering a product or a service has to go through phases in a plannedmanner in order to meet the requirements. It is very important to measure the performance of thecurrent status of the project at anytime against its planned version. This helps to tackle any

unexpected deviation in time, efforts and cost. It is possible to work according to the project plan

only by careful and close monitoring of the project progress.

It requires establishing control factors to keep the project on the track of progress. The results ofany stage in a project, depends on the inputs to that stage. It is therefore necessary to control all

the inputs and the corresponding outputs from a stage. This is achieved through devising proper

controls for every stage.

A project manager may use certain standard tools to keep the project on track. The projectmanager and the team members should be fully aware of the techniques and methods to rectify

the factors influencing delay of the project and its product. It is important for all stakeholders to

know the impact of the changes in any parameters to the overall project. The various steps

involved in monitoring and controlling a project from start to end are shown in figure


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1 Preliminary work

The team members understand the project plans, project stage schedule, progress controls,tracking schedules, summary of the stage cost and related worksheets. All the members have to

understand the tolerances in any change and maintain a change control lo g. They must realise theneed and importance of quality for which they have to strictly follow a quality review schedule

and frequently discuss the quality agendas. They must understand the stage status reports, stage

end reports, stage end approval reports.

2 Project Progress

The members must keep a track of the project progress and communicate the same to otherrelated members of the project. They must monitor and control project progress, through the use

of regular check points, quality charts, and statistical tables; control the quality factors which are

likely to deviate from expected values as any deviation may result in changes to the stageschedule. The project manager ensures that these changes are made smoothly and organises

review meeting with the project management group. Thus all the members are aware about the

progress of the project at all times. This helps them to plan well in advance for any exigency

arising due to deviation from planned schedule.

Stage Control

The manager must establish a project check point cycle. For this, a suitable stage version controlprocedures may be followed. The details are to be documented stage wise. Project files have to

be timely updated with appropriate version control number and revision status should be

maintained for each change. Team members are identified who will exercise controls at various

points of the project.

4 Resources

Plan the resources required for various stage of the project well in advance. Communication isthe key. Brief both the project team and the key resources about the objectives of every stage,


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planned activities, products, organisation, metrics and the project controls. This increases the

visibility into the project performance and hence a quality control can be achieved. Allocating a

right resource at the right place and the right time will significantly enhance the efficiency and

effectiveness of the resource.5 Quality Control

This is very important in any project. It is a tool which helps in tracking the progress of various

parameters at any stage of the project. A project manager may use a standard quality control or

customise according to the requirements. Quality control is possible if the project membersfollow the quality charts and norms very strictly. It is also important for all the project team

members to know the importance of such quality checks and should have a good visibility into

project performance.

6 Schedule Quality Review

Conduct quality reviews at regular intervals. It is recommended that quality review be scheduledat the beginning of the stage and also at the ending of every stage. This helps the project manager

and team members to plan well in advance for any unforeseen deviation.

7 Agenda for Quality Review

Create and distribute a quality review agenda specifying the objective, products, logistics, roles,

responsibilities and time frame. This increases the effectiveness of the review and also reducesthe time gap.

8 Conduct Quality Review

Conduct the quality review in a structured and formal manner. Quality review should focus onproduct development and its quality factors. Focus on whether it meets the prescribed quality

standard.

9 Follow Up

Revise the complete quality review product status from In-progress to QR Complete. Follow

up the actions planned in strict manner which ensures conformity to the standards.

10 Review Quality Control Procedure

Verify that the quality objectives for each product are appropriate and that all participants are

satisfied both with the process and its outcome. This is to ensure that all the stakeholders of the

project are in conformity of control procedures.

Q4. What is Project Manage ment Information System (PMIS)? What are the majoraspects of PMIS?


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A.4 An information system is mainly aimed at providing the management at different levels with

information related to the system of the organisation. It helps in maintaining discipline in the

system.An information system dealing with project management tasks is the project management

information system. It helps in decision making in arriving at optimum allocation of resources.The information system is based on a database of the organisation. A project management

information system also holds schedule, scope changes, risk assessment and actual results.

The information is communicated to managers at different levels of the organisation depending

upon the need. Let us find how a project management information system is used by differentstakeholders.

The four major aspects of a PMIS are

a. Providing information to the major stakeholders.

b. Assisting the team members, stakeholders, managers with necessary information and summaryof the information shared to the higher level managers.

c. Assisting the managers in doing what if analyses about project staffing, proposed staffingchanges and total allocation of resources.

d. Helping organisational learning by helping the members of the organisation learn about

project management.

Q5. What is PERT chart? What are the advantages of PERT chart?

A.5 A number of activities make a project. Due to technological necessities, some activities canbe performed only after some others have been completed. Some activities are independent ofsome other set of activities.

Different activities have different duration for their completion. Some projects are big and a

number of clearly distinguishable stages or milestones are identified. Since some activities runconcurrently, there are possibilities that one set of activities end up early and have to wait for

some other activities to proceed further. This means that there are more paths from the beginning

to the end, and one of them takes more time than the others. We call that critical path. A PERT

chart helps us to follow the critical path. Let us become familiar with the PERT chart.

PERT stands for Program (or Project) Evaluation and Review Technique. It is a popular projectmanagement model designed to analyse and represent the tasks involved in completing a given

project. It also helps in identifying the minimum time required for completing the total project.

A PERT chart is a graphic representation of a projects schedule, showing the sequence of tasks.

It also shows the tasks that can be performed parallely, and the critical path of tasks which has

direct impact on the project schedule. The tasks in the critical path must be completed as per


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schedule in order for the project to meet its completion deadline. The chart can be constructed

with a variety of attributes, such as:

Earliest and latest start dates for each task

Earliest and latest finish dates for each task

Slack time between tasks

Advantages of PERT Chart :

(1) PERT chart explicitly defines and makes visible dependencies (precedence relationships)

between the WBS elements

(2) PERT facilitates identification of the critical path and makes this visible

(3) PERT facilitates identification of early start, late start, and slack for each activity,

(4) PERT provides for potentially reduced project duration due to better understanding of

dependencies leading to improved overlapping of activities and tasks where feasible.

(5) The large amount of project data can be organized & presented in diagram for use in decision

making.

Q6. Write brief notes on the following: (i) Re-engineering and (ii) Re-structuring.

A.6 (i) Re-engineering : - Business process re-engineering is the analysis and design ofworkflows and processes within an organization. According to Davenport (1990) a business

process is a set of logically related tasks performed to achieve a defined business outcome. Re-

engineering is the basis for many recent developments in management. The cross- functional

team, for example, has become popular because of the desire to re-engineer separate functionaltasks into complete cross- functional processes. Also, many recent management information

systems developments aim to integrate a wide number of business functions. Enterprise resourceplanning, supply chain management, knowledge management systems, groupware and

collaborative systems, Human Resource Management Systems and customer relationship

management.

Business process re-engineering is also known as business process redesign, business

transformation, or business process change management.

(ii) Re-structuring :- Restructuring is the corporate management term for the act of reorganizing

the legal, ownership, operational, or other structures of a company for the purpose of making itmore profitable, or better organized for its present needs. Other reasons for restructuring include

a change of ownership or ownership structure, demerger, or a response to a crisis or major

change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also bedescribed as corporate restructuring, debt restructuring and financial restructuring.

Executives involved in restructuring often hire financial and legal advisors to assist in the

transaction details and negotiation. It may also be done by a new CEO hired specifically to make


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the difficult and controversial decisions required to save or reposition the company. It generally

involves financing debt, selling portions of the company to investors, and reorganizing or

reducing operations.The basic nature of restructuring is a zero sum game. Strategic restructuring reduces financiallosses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt

resolution of a distressed situation.

Corporate debt restructuring is the reorganization of companies outstanding liabilities. Itgenerally a mechanism used by companies which are facing difficulties in repaying their debts.

In the process of restructuring, the credit obligations are spread out over longer duration with

smaller payments. This allows companys ability to meet debt obligations. Also, as part of

process, some creditors may agree to exchange debt for some portion of equity. It is based on theprinciple that restructuring facilities available to companies in a timely and transparent matter

goes a long way in ensuring their viability which is sometimes threatened by internal and

external factors. This process tries to resolve the difficulties faced by the corporate sector and

enables them to become viable again.

Steps:

(1) Ensure the company has enough liquidity to operate during implementation of a completerestructuring

(2) Produce accurate working capital forecasts

(3) Provide open and clear lines of communication with creditors who mostly control thecompany's ability to raise financing

(4) Update detailed business plan and considerations

MB0049 Second Sem - Set 1 Final

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