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Introduction to Project ManagementSubject Code PM0010

Assignment Set- 1(Book ID: B1236)

UMESHBABU.B

Reg no: 521137779

MBA Semester III

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Q.1 Describe briefly the characteristics and constraints of a project.

A.1 Characteristics of a ProjectA project has the following characteristics:

Project Initiator: Every project is initiated by an owner an individual,public or Private Sector Company, a joint sector company.

Fixed unique set of objectives: Every project has a unique set of activitiesthat, lead to a unique objective or a set of objectives. For example, toconstruct coal-fired power plants with a capacity if 500 Megawatts, thedesign and construction for each plant is based on variable factors likedifferent site conditions, coal specifications, and plant layouts, designparameters, waste disposal plans infrastructural facilities available to carryout the project and customers requirements.

Pre-specified time of completion (Life Span): Every project has aspecified start date and completion date. This time span is referred to as timeof completion, which should be in line with the requirement of the projectowner.

Pre- estimated budget: Each project has a budget decided prior to start ofproject implementation.

Performance parameters: There are two kinds of performancerequirements that are collectively called specifications.

Functional requirement: It specifies what the deliverables of the project.

Technical requirement: It describes the features and the qualityrequirements of the deliverables.

Logical sequence of activities: Every project has a logical sequence ofactivities that are defined using a detailed planning of technicalrequirements. This helps achieve successful project completion within thespecified timelines.

Coordination between all areas of work expertise: Coordinationbetween different areas of work expertise is required for the successfulcompletion of a project. For example, a commercial building complex requirescontinuous coordination between architectural design, structural design,interior design, electrical facilities design, air conditioning system design,landscaping, construction works, liaison with statutory approval authorities,project funding agencies, electricity supply/water supply departments,sewerage department of government, etc.

Resources: Every project consumes significant amount of resources like:

Time

Money

Manpower

Technology

Temporary project team: A project has a definite start and end date, andthe project team is temporary. Project team members vary from project toproject even if a company is engaged only in project contract execution. Forthe project owners company, the agencies deployed to carry out variousfunctions of the project by the company vary from project to project.

Involvement of a substantial degree of subcontracting: Project workcomprises of work in different areas of expertise, thus it is necessary to

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engage specialised subcontractors for different work packages. For example,in case of a coal fired power plant, the major work packages comprises ofboiler, turbine, generator, coal handling system, cooling water system, ashdisposal system, exhaust chimneys, switchyards and various constructionworks for civil, structural, piping, cabling, and instrumentation fields.

Risk: Risk is defined as the possibility of an outcome different from theexpected outcome i.e. it defines the possibility of what may happen to drivethe plan off course, and what will be done to recover the situation. Everyactivity of a project may be subject to some or the other risk.

Project Constraints

The constraints of a project are P (Performance requirements), C (Cost), T (Time ofcompletion), S (Scope), Resource and Work.

The primary purpose of a project is to deliver a product and/or service to acustomer within a specified time, cost, and detailed scope and performancerequirements, as contracted with the customer.

Cost: The total project cost is the sum of total costs of all the resourcesrequired to complete the activities of the project.

Performance: The process of defining performance requirements of aproject is a major part of project definition.

Time: The time of completion for a project is generally specified by theclient. The cost of a project is inversely related to the specified time.

Scope: Scope refers to the end product or the deliverables required from theproject.

Q.2.a. Explain the various tools and techniques used in project life cycle.

A.2.aThe various tools used during a project life cycle are:

Verifiable objective setting: This tool ensures that all the goals and motivesare measured and verified. It ensures that all the objectives of the project aremet.

Brain Storming: This technique allows solving any queries and problems in acreative manner. It is a technique used in all stages of the project.

Project Evaluation Review Technique (PERT): This tool is used analyse thevarious dependencies of tasks. This technique helps in accomplishing tasks ina cost effective manner.

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Work Breakdown Structure (WBS) provides a clear picture of the scope of a projectin graphical format. The hierarchy of deliverables and services are expressed using

WBS. Critical Path Analysis (CPA): CPA is used in co-ordination with the PERT

analysis. CPA prioritizes tasks as critical, very important and important.Based on the priority of the tasks, the overall duration required to complete aproject is estimated.

Milestone Planning: Milestone planning determines various approachesthat can be adopted to meet the target set of objectives. On completion ofspecified tasks, milestones are reached. It is usually used at senior managerreviews.

The importance of milestone planning is better understood by means of anexample. Imagine, you have planned to holiday in London. You are walking alongthe road and suddenly you see a milestone .It says 20 miles to London. You keep

walking and later find another milestone at some distance which says 10 miles toLondon. By this milestone, you understand that you are moving in the direction youactually wanted to and hence you are able to estimate the distance covered and thedistance remaining. This is the main purpose of using milestone planning.

Accrued Cost and Earned Value Analysis: These measures allow themonitoring of the project in terms of expenses and finance.

Gantt Charts: Gantt charts are also called inventor charts or bar charts. Thesecharts are used to exhibit PERT and CPA outcomes. It makes representation assimple as possible to ensure that the project results are understood in detail byeven those who are not part of the project.

Q.2.b. List the process responsibilities of project manager

A.2.b Process ResponsibilitiesOnce the project begins, the project manager should successfully manage andcontrol the work, which includes:

Project issues identification, tracking, managing and resolving.

Disseminating project information to all the stakeholders proactively.

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Identifying, managing and mitigating of project risk.

Making sure that the solution is of acceptable quality.

Managing scope to make sure that only what was agreed upon is delivered,unless the changes are approved through scope management.

Defining and collecting metrics to make sense about how the project is

progressing and whether the deliverables produced are acceptable. Managing the overall schedule and making sure that the work is assigned and

completed on time and within the budget.This again does not mean that the project managers physically does all of this butthey should make sure that it happens. If the project has problems or scope creepsor faces risks or is not setting up expectations correctly then the project manager isthe person held responsible.

To handle the Project Management processes, a person should be well organized,possess good follow-up skills, be process oriented, be able to multi-task, have alogical thought process, be able to evaluate the root causes, have good analyticalability, be a good estimator and budget manager, and have a good self-discipline.

Q.3.a. Describe the role of project Management in strategy.

A.3.a When we talk of strategy in project management, we must recall thedefinition of a project. Unlike running a business, a project is a non-repetitive andone-time effort, with a set of defined deliverables. It has a definite time period ofcompletion and a specified budget. Projects are conceived as a means to implementthe corporate and business strategies of a company. For instance, computerizationof operations, or expansion of plant capacity, or set up of a downstream productionunit, or set up of a captive power plant are decisions taken at the corporate strategyand business unit strategy levels.

The hierarchy of strategy in project management is as follows:

Organizational strategy (analogous to Corporate strategy)

Project strategy (analogous to Business strategy) Project activities (analogous to Operational strategy)

In the organizational strategy process, the top management makes an aggregateproject plan, which is a list of one or more projects that helps to meet the objectivesof the organization. Only projects which meet the prioritized objectives are initiated.Examples of an initiated project after organizational strategy planning areexpansion of plant capacity, computerization of operations, introducing atechnology innovation in the design or manufacturing of the product to cut cost orto improve quality, deciding to install a captive power plant to serve the electricpower needs of the factory. Thus, the strategic decision-making results in theorganization taking up projects for implementation.Projects also require a good strategy for successful implementation. The initiation ofthe project is, thus, done by the top management and handed to the projectmanager with the project team to develop the strategy for implementation.

Q.3.b. List the benefits that project management process offers to an organization

A.3.b Benefits of Successful Project Management ProcessThe project management process deals with how a project is implemented fromstart to finish. It offers various benefits to the organization which includes:

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Facilitates monitoring of the scheduled costs.

Ensures that the time to market and time to profitability is reduced to anextent as required by the organization.

Monitors resources effectively.

Prioritizes the resources and the tasks allocated.

Facilitates a plan to maintain solutions to anticipated problems. Provides co-ordination for various processes and identifies the various

dependencies of the tasks.Project Management process ensures that efficient work is produced in a minimumamount of time. This is possible by effectively planning the objectives which helps agreat deal in saving time and money and coordinating the resources well.Project Management process ensures that the defined goals are achieved. Itprovides a structure that every member participating in the team has to adhere to.After completion of every phase of the project, it is important to document therequirements gathered in the application. Documenting the assigned tasks mayinclude designing their documents, noting the installation steps, providinginformation of the hardware, grid location of the hardware, providing various

versions of software used. The documentation also facilitates in maintaininginformation of how to support the application and how to keep the applicationsecure by performing various proactive monitoring. Various updates and patchesare also documented to keep the working environment more stable. Back up andretention policies are also documented that ensures that, in case of system crashesor any uncertainties, the data is available for recovery.

The major benefits that an organization can derive from the effective projectManagement Process are:

Efficiency in delivery services:The effective project management processensures that it provides various ways that can be followed by all themembers participating in the team. It provides efficient delivery of thedeliverables by eliminating most of the uncertainties in the project.

Enhanced customer satisfaction: Effective management and delivery ofthe project ensures the clients are satisfied. It requires that the delivery ofthe project is made on the scheduled time and under the budget as fixed bythe company both internally and externally by the clients. It facilitates theenhanced effectiveness in delivering the expected services by adoptingvarious management strategies for implementing the project.

Improved growth and development: It ensures that it motivates themembers of the team to progress in work which facilitate both personal andprofessional growth.

Flexibility: It enables a project to be flexible to various kinds of environmentand situations. It holds good to various kinds and sizes of organization such

as small size organization, mid sized and large organization. Increased risk assessment: A good Project Management regularly

monitors the status of the work. Controlling and reviewing is a major activityof a project management process. This ensures that the risks associated withthe project are analyzed and solved.

Q.4 Which aspects of the organization does a corporate appraisal address inrespect of performing a SWOT analysis?

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A.4 Strength, Weaknesses, Opportunities and Threats (SWOT) analysis is a strategicplanning tool used to evaluate these four concern areas involved in a project or in abusiness venture or in any other situation that require a decision.

Four SWOT concepts are: Strength

Weakness

Opportunities

ThreatsThe SWOT analysis framework is summarized in figure

Strengths (S)Strength of a company is its ability to, create new products, provide high levelcustomer service, have a presence in multiple retail markets and enhance quality ofits managers. It is also being privy to a technological edge in manufacturing ahigher quality product or a cheaper product of the same quality as competitors.

General examples of Strengths are: Patents

Strong brand names

Good reputation among customers

Cost advantages from proprietary know-how

Exclusive access to high grade natural

Favorable access to distribution networksWeaknesses (W)

The absence of certain strength may be viewed as a weakness. For example anoften cited original weakness is that when the business was started by Sunil BhartiMittal over 15 years ago, the business has little knowledge and experience of how acellular telephone system actually worked. So the starting business had tooutsource to industry experts in the field.General examples of weaknesses i.e., the absence of certain strengths is the lack ofstrengths like:

Lack of patent protection

A weak brand name

Poor reputation among customers

High cost structure

Lack of access to the best natural resources

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Lack of access to the key distribution channelsWe should note that in some cases, a company may consider a factor as an S whenit may actually be a W. For example, a large manufacturing capacity compared to acompetitor is consider as S but if that results in the company are being slow inreacting to changes in the strategic environment, it is a W. Hence a practicalevaluation by the company is required here.

Opportunities (O)Opportunities are external elements that prove helpful in achieving the goals set forthe project. Factors of this type can be the positive observation of the company bythe general public, a network of vendors who are ready to work with the companyto achieve success with the project, and market conditions that help to make theproject attractive to the market at large, or a least a significant segment.Availability of internet has provided numerous opportunities for companies toexpand their product sales. General examples of opportunities are:

Arrival of new technologies

Loosening of regulations

Removal of international trade barriersThreats (T)Threats can be an individual, group, or organization outside the company that aimsto reduce the level of the companys performance of the company. For example, Dr.Reddys Laboratories (DRL) started with pharmaceutical specialists, who wereearlier employed with Indian Drugs & Pharmaceuticals Ltd. (IDPL). DRL overtookIDPL very quickly as a drug manufacturing company, resulting in IDPL having toclose its operations.

Q.5 Explain the various tools and techniques uses for Project HR Management

A.5 The project team utilizes various tools and techniques to guide the Human

Resource planning process. Some of them include: Organization charts and position description: Organization charts and

position description clarifies and communicates the roles and responsibilitiesof the team members and ensures that each work package is assignedaccordingly. Organization charts can have three formats such as :

Hierarchical-type organization chart

Matrix-based responsibility chart

Text-oriented format

Hierarchical-type organization chart: The structure of traditional organizationcharts is used to show positions and relationships among team members in agraphic, top-down format.Matrix-based responsibility chart: Responsibility Assignment Matrix (RAM)illustrates the connections between work packages or activities and project teammembers.Text-oriented format:The required detailed descriptions of the responsibilities ofteam members are specified in text-oriented formats. The documents generallyprovide information such as responsibilities, authority, competencies, andqualifications in outline form.

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Networking: Informal communication among co-workers in the organizationis to comprehend the political and interpersonal factors in a productive waythat will affect the organizational relations.

Organizational theory: Organizational theory depicts how people, teams,and organizational units behave.

Stakeholder Analysis: Technique used to identify and assess theimportance of key people, groups of people, or institutions that maysignificantly influence the success of your project. It is used to anticipate thekind of influence; positive or negative, groups will have on your project. It is atechnique that can be used alone or with other team members.

The output of creating a Human Resource (HR) plan is:

Roles and responsibilities: Explanation of roles and responsibilities givesproject team members and idea of their own roles and the responsibilities inthe project. Clarity is always a key constituent of project achievement.

Project organization charts: Organization charts of a project are adiagram of the reporting relationships of project team members.

Staffing management plan: It is an important output of the Human

Resource planning process which establishes the timing and methods formeeting project Human Resource requirements. The components of theStaffing management plan are:

Staff acquisition: Staff acquisition describes how the project will be staffed,where the team will be working and the level of expertise needed.

Timetable: The Timetable shows the timeframes when resources areavailable for the project.

Release criteria: A Release criterion lists the method and timing ofreleasing team member.

Training needs: Training needs is a plan which explains how to train theproject resources.

Recognition and rewards: Recognition and rewards are the criteria forrewarding and promoting the desired team behaviors.

Compliance: Compliance details the strategies for complying withregulations, contracts and Human Resources policies.

Safety: Safety procedures are listed to protect the team members.

Q.6 Explain why determining the technical basis of a project is an irreversibledecision and also explain the parameters which are analyzed in conducting thedetailed financial analysis of a project.

A.6 Technical Analysis

The technical basis of establishing a project is a prime necessity even at the stageof the project conception. A single technical option or choices between multipletechnical options are available for the project. Hence, all other areas of analysis likemarketing, environmental, financial are closely connected with the technicalanalysis of the project.

Technical analysis aims to finalize the most optimal formulation of the project interms of project size, technology, location, plant layout, plant scope, and so on. Thetechnical basis selected determines the capital investment, as well as thesoundness of the plant operations to manufacture the product of desired quality.

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The selection of the technical basis is therefore an irreversible decision. Thetechnical basis also substantially influences the competitiveness of the firm in themarket. Financial criteria have to be considered simultaneously in order to ensurethe financial viability of the project. Hence, finance analysts need to be involved toraise the basic issues of cost and economics during the technical analysis.

The technical analysis is usually carried by an experienced project manager, who

can integrate the financial, as well as other considerations with the technicalconsiderations. The parameters analyzed during technical analysis are broadly asunder:Selection of Technology or Manufacturing ProcessWhile production processes for standard products are usually common for allcompetitors, there are quite a few projects where a comparative evaluation ofalternative technologies available is to be made. For example, a power plant can bebased on use of natural gas or coal or fuel oil; a sea water desalination plant canadopt a membrane process or a mechanical vapour compression process or a multieffect distillation process using steam; cement can be made by the wet process ordry process; steel can be made by the open hearth process or Bessemer process.

Technology selection will involve analysis of several factors like availability of raw

materials near the project site, utilities requirements for the plant (example, water,power, steam etc), assurance of availability of any specialty items required inmanufacture (example. catalysts which can be patented items), plant capacity, costcompetitiveness considering both capital cost and operating cost, environmentalimpact, companys capacity to absorb the technology, possibility of technologicalobsolescence in the near future. If two equally reliable technologies are available,the selection will be based on the one which gives the lowest overall cost ofproduction.Financial AnalysisFinancial analysis refers to an evaluation of the viability, stability and profitability ofa business, sub-business or project.After ascertaining the market and technical feasibility of the project, the financial

viability of the project in the medium and long term needs to be ascertained. Theprimary objective of any firm is to maximize the profits and therefore, the futurerevenues from the project need to be estimated and compared with the costsincurred for capital investment plus all operating expenses to judge the Return onInvestment (ROI).

The projects are considered financially viable only if the ROI meets the expectedvalue. The financial viability determination involves examination of the following:

Cost of project

Means of financing

Estimated sale revenue

Estimated cost of production

Working capital requirement and its financing Projected balance sheets for the years of operation

Projected cash flow statements

Profitability projectionsAny company manufacturing a product or a supplier before supplying goods hasto calculate their costs very carefully.

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