Introduction to Project Management

Soumitra Chakraborty

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What exactly is a project?PM 1 – I’m in charge of the construction of a retail development in the centre of a large town. There are 26 retail units and a super market in the complex. My main responsibilities are to co-ordinate the work of the various contractors to ensure that the project is completed to specification, within budget and on time.PM 2 – I am directing a team of research scientists. We are running trials on a new analgesic drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments and make sure that proper scientific and legal procedures are followed, so that our results can be subjected to independent statistical analysis.

PM 3- The international aid agency which employs me is sending me to New Delhi to organize the introduction of multimedia resources at a teachers’ training college. My role is quite complex. I have to make sure that appropriate resources are purchased- and in some cases developed within the college. I also have to encourage the acceptance of these resources by lecturers and students within the college.

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PM 2 – I am directing a team of research scientists. We are running trials on a new analgesic drug on behalf of a pharmaceutical company. It is my responsibility to design the experiments and make sure that proper scientific and legal procedures are followed, so that our results can be subjected to independent statistical analysis.

A new drugPM 3- The international aid agency which employs me is sending me to New Delhi to organize the introduction of multimedia resources at a teachers’ training college. My role is quite complex. I have to make sure that appropriate resources are purchased- and in some cases developed within the college. I also have to encourage the acceptance of these resources by lecturers and students within the college.

A new method of teaching students

PM 1 – I’m in charge of the construction of a retail development in the centre of a large town. There are 26 retail units and a super market in the complex. My main responsibilities are to co-ordinate the work of the various contractors to ensure that the project is completed to specification, within budget and on time.

A shopping complex

Project is not defined by the type of outcome it is set up to achieve

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Basic Definition of ProjectHave a specific and finite tasks to be accomplished,

whether large or small scales, long or short run

A Project is “a temporary endeavor undertaken to create a unique product, service, or result``.

Characteristics of a Project

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PurposeProject

usually a one-time activity with a set of desired end result

can be divided into subtasks, which required coordination & control

Life Cycle Project life cycle

slow beginning progress to a buildup of size peak begin decline finally must terminate

Characteristics of a Project

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Interdependencies Projects interact with other project being carried out simultaneously by

parent org., but always interacts with the parent’s standard, ongoing operations, etc.

The patterns of interaction between functional dept. may change. e.g:

Project mgr- keep these interactions clear & maintain

Marketing

FinanceManufacturing

Finance

Marketing

Beginning of project

Intermediate of project End of project

Definition and Characteristics of a ProjectUniqueness Every project are unique – no two projects are the sameSome degree of customization is thereConflict Project mgr. – full of conflict; projects compete with

functional dept. for resources & peopleProject members – conflicting for project’s resources &

leadership roles in solving problems; deal with clients & org.

Individual’s conflict – two bosses at the same time; different objectives & priorities

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Difference between project management and production management

Project management Production management

Quantity Only one project at a

time

Large numbers (mass production)

Product No two projects are the

same

Similar but with variety (e.g;consumer goods-

cars,household,computers,etc)

Input to the process

Brought to the ‘site’(e.g; equipments, man,

material)

Put together in a facility (factory)

but based on product

No of process

and activities

Most activities carried out once

Carried out repetitively/more

than once8

AspectMgmt

Four different typesof projects . . .

Shaft sinking at an Australian nickel mine

1 Civil or chemical engineering and construction projects- construction- land reclamation- tunnels and bridges- mining and quarrying- petrochemical plant- oil and gas

2 Manufacturing projects(the outcome is a

product)- new product

development- equipment

manufacture- shipbuilding- heavy engineering- aircraft construction- pharmaceuticals

- food processingIngersoll milling machine

3 Management projects (often in-house)

- organize an exhibition or stage play- relocate a company- quality improvement project- marketing project- new production or IT facility- disaster recovery

4 4 Projects for pure scientific researchProjects for pure scientific research

- high risk of failure- also possibility of high

rewards- possible public

apprehension - outcome often unpredictable

Why Project Management?

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Project manager expected to coordinate & integrate all activities to reach project’s goals

Project – allows the mgr to be responsive to the client & environ, to identify & correct problems, make timely decisions, ensure mgrs at separate tasks do not sub-optimize

Advantages of project mgmt;Better control & better customer relationsShorter development times, lower costs, higher quality &

reliability, higher profit marginsSharper orientation towards results, better interdepartmental

coordination & higher worker morale

Some disadvantages of project mgmt

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Increased organizational complexity Increase the likelihood that organizational policy being

violated – project mgr being autonomousHigher costs, management difficulties, low personnel

utilizationPM is difficult even when everything goes well - what

more if things go badly Project organization is the only feasible way to

accomplish certain goals - literally not possible to design & build a major weapon system in a timely & economically acceptable manner, except through project organization – i.e. applying PM tools

The Triple Constraint of Project Management

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The Quadruple Constrains of Project Management

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Project Management Framework

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Project Life Cycle

Phases of the Project Life Cycle 1The 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).

Phases of the Project Life Cycle 2

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).

Phases of the Project Life Cycle 3 The third phase is performing the

project.Different types of resources are utilizedResults in the accomplishment of the project

objective

Phases of the Project Life Cycle 4

The final phase is terminating the project.Perform close-out activitiesEvaluate performanceInvite customer feedback

Project Life Cycle

5. Requirements

Project Management Maturity

Organizational Project Management PerformanceProject management maturity is a widely accepted term when discussing the extent that an organization has adopted project management processes.

PM Maturity can be identified through key project related areas (i.e organizational structure, processes, etc…).

The Benefits Of Being Mature!Manage all projects undertaken effectively.

Continually improve the performance of all projects undertaken.

Create an organization-wide ability for managing projects.

Define roles and responsibilities for carrying out all project-related activities.

Achieve strategic goals.

Project Management Maturity Model(PMMM)

PM Maturity is ranked into 1 of 5 maturity levels.

Integrated multi-project Planning and Control

Ad-hocLevel1

PlannedLevel 2

ManagedLevel 3

IntegratedLevel 4

SustainedLevel 5

Basic PM Processes

Individual Project Planning

Systematic Project Planning and Control

Continuous PM Process Improvement

Level 1

Level 1 :Common LanguageRecognize the needAcquire knowledge

Ad-hocLevel1

Common Language

Level 2

Level 2: Common processes: Common processes defined

Success can be repeated

Ad-hocLevel1

PlannedLevel 2

Common Language

Common Processes

Level 3

Singular Methodology :combining all corporate methodology into singular methodology

Ad-hocLevel1

PlannedLevel 2

ManagedLevel 3

Common Language

Common Process

Singular Methodology

Level 4

Process Improvement

Best PracticesBenchmarking

Ad-hocLevel1

PlannedLevel 2

ManagedLevel 3

IntegratedLevel 4

Common Language

Common Processes

Singular Methodology

Level 5

Concept of qualityDecision of

benchmarking

Benchmarking

Ad-hocLevel1

PlannedLevel 2

ManagedLevel 3

IntegratedLevel 4

SustainedLevel 5

Common Language

Common Processes

Singular Methodology

Continuous Process Improvement

PM Maturity Model in PracticeOverlap of processes.

Overlap level 1 & 2Overlap level 3 & 4Overlap level 4 & 5

Project Selection

Project SelectionProject selection is the process of evaluating

individual projects or groups of projects, and then choosing to implement some set of them so that the objectives of the parent organization will be achieved

Managers often use decision-aiding models to extract the relevant issues of a problem from the details in which the problem is embedded

Models represent the problem’s structure and can be useful in selecting and evaluating projects

Criteria for Project Selection ModelsRealism - reality of manager’s decisionCapability- able to simulate different scenarios and

optimize the decisionFlexibility - provide valid results within the range of

conditionsEase of Use - reasonably convenient, easy execution,

and easily understoodCost - Data gathering and modeling costs should be low

relative to the cost of the project1Easy Computerization - must be easy and

convenient to gather, store and manipulate data in the model

Nature of Project Selection Models

2 Basic Types of ModelsNumericNonnumeric

Two Critical Facts:Models do not make decisions - People

do!All models, however sophisticated, are

only partial representations of the reality the are meant to reflect

Nonnumeric ModelsSacred Cow - project is suggested by a senior and

powerful official in the organizationOperating Necessity - the project is required to keep

the system runningCompetitive Necessity - project is necessary to

sustain a competitive positionProduct Line Extension - projects are judged on

how they fit with current product line, fill a gap, strengthen a weak link, or extend the line in a new desirable way.

Comparative Benefit Model - several projects are considered and the one with the most benefit to the firm is selected

Numeric Models: Profit/Profitability

Payback period - initial fixed investment/estimated annual cash inflows from the project

Average Rate of Return - average annual profit/average investment

Discounted Cash Flow - Present Value Method Internal Rate of Return - Finds rate of return

that equates present value of inflows and outflowsProfitability Index - NPV of all future expected

cash flows/initial cash investment