MBP1123|Scope, Time & Cost Management Prepared by Dr. Zohreh

Lecture 1

The Project Environment

MBH1123 | Project Scope, Time and Cost ManagementPrepared by Dr Khairul Anuar

The Project Environment

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• Understanding the concept of project

• Relate project outcomes to organizational strategy

• Project Management Body of Knowledge

• Project Life Cycle and Stakeholders

• Project Phases

What is a project?

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A project is a temporary endeavour undertaken to create a

unique product, service, or result.

Project is :

• A specific, finite task to be accomplished

• Can be of a long or short term duration

• Can be large or small task

Projects Vary in Size and Scope

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• NASA shuttle launch

• Building a boat

• Building a hospital

• Building renovation and & space modification

• Planning a party or wedding

• Organizing the Olympic games

• Developing a new software program

• Building a new gas pipeline

• Company mergers

Project Characteristics

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1. Temporary

– Temporary nature : definite beginning and definite end

– Temporary Market Window

– Temporary project team

2. Unique products, services or results

– A quantifiable end item or component item

– Different owner, different design, different location, different

contractors …

3. Progressive elaboration

4. Multi –Disciplinary: Involvement of different experts from

different disciplines.

5. Dynamic: In a project always unexpected issues are happening.

6. High Risk : High probabilities of over-running cost and time

Project Environment

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All projects are planned and implemented in a social, economic, and

environmental context.

Therefore, the project team should consider the project contexts

containing:

• Cultural and social environment: How project affect people and how

people affect project?

• International and political environment: Need to be familiar with

applicable international, national, regional and local laws.

• Physical environment: need to have knowledge about the local ecology

and physical geography

Organizational Influences on Projects

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There are 5 key aspects of organization which influence the project:

1. Organizational systems

2. Organizational culture and styles

3. Organizational Structure

4. The Role of Project Management Office in Organizational structure

5. Project Management System

Organizational Influences on Projects -

Organizational systems

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Project-based organizations : Organizations that derive their

revenue primarily from performing projects for others under contract

firms OR adopted management by projects.

Non-project-based organizations : These kind of organizations lack

management systems to support projects.

8

Organizations have developed unique and describable cultures in

numerous factors such as:

• Shared valued, norms, beliefs and expectations

• Policies and procedures

• View of authority

• Work ethic and work hours

Organizational Influences on Projects -

Organizational systems

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The structure of organization constrains the availability of resources

in a spectrum from functional to projectized, with a variety of matrix

structure in between.

Major types of organizational structures are :

• Functional organization

• Projectized organization

• Matrix organization

• Composite organization

Organizational Influences on Projects -

Organizational systems

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Functional Structure

Organizational Influences on Projects -

Organizational systems

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Projetized Structure

Organizational Influences on Projects -

Organizational systems

12

Matrix Structure

Organizational Influences on Projects -

Organizational systems

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Functional Structure

Organizational Influences on Projects -

Organizational systems

Project and Strategic Planning

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There are some strategic considerations for organizations such as:

market demand, organizational need, customer request, technological advances

Projects are a means of organizing activities that can not be addressed within

the organization’s normal activities such as Strategic Plans.

To this goal,

organizations employ project teams or a contractors to achieve a strategic plan.

Examples of Organization’s Strategic Considerations

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• Market demand: authorizing a project to build a new library for

campus in response to growing number new incoming students.

• Organizational need: authorizing a project to train staff to utilize

automation software

• Customer request: authorizing a project for launching a new food

product line in response to changing customer tastes.

• Technological advance: authorizing a project to purchase and

installation of new software for monitoring construction projects.

• Legal requirements: authorizing a project to inspect company’s

current status in response to new rules in the construction industry

What is Project Management?

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Project Management is the application of knowledge, skills, tools and techniques

to meet project requirements.

Project management is accomplished through the application and integration of

project management processes of :

• Initiating,

• Planning,

• Executing,

• Monitoring,

• Controlling, and

• Closing.

Who is a Project Manager?

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Project Manager is the person responsible for accomplishing the project

objectives.

Project managers concern about triple constraint :

• Scope,

• Time, and

• Cost.

Project quality is affected by balancing abovementioned three factors.

Project Management Body of Knowledge (PMBOK)

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PMBOK describes knowledge unique to the project management field and

overlaps other management disciplines.

The knowledge of project management described in PMBOK guide

consists of:

• Project life cycle definition

• Five project management process groups

• Nine knowledge area

Project Life Cycle

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• Projects are divided into phases to provide better management

control with appropriate links to the ongoing operations of the

performing organization.

• These phases are known as the project life cycle.

Project Life Cycle Definition

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Projects life cycle generally define :

• What technical work to do in each step

• When the deliverables are to be generated and how it is

reviewed, verified and validated.

• Who is involved in each phase

• How to control and approve each phase

Project Life Cycle Common Characteristics - 1

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• Phases are generally sequential and are defined by some form

of technical information transfer

Project Life Cycle Common Characteristics - 2

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• Level of uncertainty and hence risk of failing is highest at the start of

the project.

• Cost and staffing levels are low at the start, peak during the

intermediate phases, and drop rapidly as the project draws to a

conclusion.

Project Life Cycle Common Characteristics - 3

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• The ability of the stakeholders to influence the financial

characteristic of the project’s product and the final cost is highest

at the start.

Project Stakeholders

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• Stakeholders are individuals and organizations that are actively involved

in the project.

• Stakeholders’ interests may be affected as a result of project execution or

project completion.

• Stakeholders may exert influence over the project’s objectives and

outcomes.

Note:

Project management team must identify the stakeholders, determine their

requirements, expectations and to the extend possible manage their

influence in relation to the requirements to ensure a successful project.

Key Stakeholders

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• Project Manager

• Internal & External Customers

• The Performing Organization

• The Management

• The Project Sponsor

• Owners & Funders

• All the suppliers & Sub-contractors

• Team Members & their families

• Government Agencies & Media Outlets

• Individual Citizens affected by the project

• The society-at-large

Project Phases

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• The project life cycle defines the phases that connect the beginning of

the project to its end.

• The completion and approval of one or more deliverables characterizes a

project phase.

• Projects can have four or five phases, but some others may have nine or

more.

• Example : One organization’s software development life cycle can have

a single design phase, while another can have separate phases for

architectural and detailed design.

Project Phases

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Definition Planning Execution Delivery

Lev

el

of

effo

rt

1. Goals

2. Specifications

3. Tasks

4. Responsibilities

5. Teams

1. Schedules

2. Budgets

3. Resources

4. Risks

5. Staffing

1. Status reports

2. Changes

3. Quality

4. Forecasts

1. Train customer

2. Transfer documents

3. Release resources

4. Reassign staff

5. Lessons learned

Project Life Cycle – Phase 1

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The first phase involves the identification of a need, problem, or

opportunity.

– The need and requirements are usually written by the

customer into a document called a request for proposal

(RFP).

Project Life Cycle- Phase 2

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The second phase is the development of a proposed

solution to the need or problem.

– This phase results in the submission of a proposal.

– The customer and the winning contractor negotiate

and sign a contract (agreement).

Project Life Cycle- Phase 3 and 4

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The third phase is performing the project.

– Different types of resources are utilized

– Results in the accomplishment of the project objective

The final phase is terminating the project.

– Perform close-out activities

– Evaluate performance

– Invite customer feedback