MB 0049.

Project Management
Question 1. Discuss the various steps of PMIS Planning. Answer. The success of a PMIS depends on its effective planning. The planning of PMIS includes the following steps: 1. Identify the information needed. 2. Capture data 3. Process data into information and store it 4. Communicate information to stakeholders 1. Identify the information needed Identification of the information that is needed is necessary for improving the decision making and the structure of the PMIS. Information requirements of project stakeholders include the recipients of information, the type of information that is needed, which includes format, contents, and level of details, the time the information is required and how will it be communicated to them. Who needs information? Recipients of information may include any stakeholder of a project. Different Stakeholders in a PMIS Primary stakeholders Organisational Managers - Customers, suppliers, and contractors - Local, state and central agencies. - Union, shareholders, creditors, and employees. Secondary Stakeholders - Social and political organisations - Environmentalists - Competitors What type of information is needed? The information need of various stakeholders differ in contents and time of need. A comprehensive list of information needed during the various phases of a project is explained as follows: Selection Phase The selection phase includes the following components: - Organisational guidance and support information. - Information from other projects. - Statutory approvals and clearances. Planning Phase 1

The planning phase comprises of the following: - Project scope - Project cost - Details of activites which include descriptions, time, cost etc. - Project schedule and budget Execution and control phase It includes: - Project organisation - Project reporting - Resource requirement When information is needed? 2. Capture Data: Term Capture data is used to state a process of preparing and collecting data i.e. as element of a process improvement or similar projects. Data can come from actual observation or from records. Data collected from direct observation is called Primary Data. Data collected from records is known as secondary data. 3. Process data into information An organisation, to achieve its aims, needs to process the data collected into meaningful information. It should be presented in its most useful formats. Data must be processed in a context to give it meaning. 4. Communicate information to stakeholders Communication is the process by which information is exchanged between individuals through a common system of symbols, signs, or behaviour. -------------------------------------------------------------------------------------------------------------------------

Question2. What are the different phases of contract management? Answer. Contract management is the management of contracts which is entered with clients, sellers, partners, or employees. It comprises of negotiating the terms and conditions and ensuring the compliance with the terms and conditions, with documenting and approving on any changes or amendments that may occur during its implementation or execution. Contracting has three phases: They are - Contract planning. - Contract negotiations - Contract administration 1. Contract Planning. Contract planning should be done at the project schedule stage. The process of contract planning includes the preparation of resource plans. The following points should be considered for preparing the contract planning: - Work break down and packaging - Requirement of resources, mainly equipment and manpower for various work packages. - Type and numbers of contracts to be awarded and approximate to whom. - Technical, Financial and operational capabilities of the contractor. - Scope of work for each contractual job. - Obligations of both parties should be reasonable. 2. Contract negotiations. The negotiator brings the buyer and the seller face to face. The following aspects should be kept in mind at the time of contract negotiations: Price-related terms: Price could be fixed or adjustable during contract period. Fixed price is generally applicable under stable market conditions and in case of firm specifications and product schedule. Payment terms: Any of the payment terms which include advance, credit for specific period, cash on delivery, and retiring document through bank may be select mutually. Retiring a document through bank is adopted b the supplier to obviate any delay in payment after receipt of the consignment. Delivery conditions: These may include which mode to be used, how much quantity to be delivered, and when. Agency for inspections: It is to be agreed whether inspection is to be done by a third party or by buyers or suppliers own inspection. Cancellation. Cancellation of contract may be done due to default by the vendor in failing to perform as agreed in contract while making deliveries, convenience of the buyers, or mutual consent. Quantity. Quantity may be fixed or variable in case of variable quantity, the lower and upper bound needs to be specified. 3. Contract administration. Various problems may arise during the execution of the contract such as: - Extra work including excess quantities of work - Deleted work including lower quantities of work - Non-compliance with specifications - Delay in time schedule 3

- Taking over of completed works - Warranties - Contract close out. --------------------------------------------------------------------------------------------------------------------------

Question 3. Describe the process of project performance evaluation. Answer. It is very useful tool to find out the reasons behind a failure to achieve intended outcomes. The modifications that need to be made to a project can be determined by following the below steps: Project identification Identifications of appropriate projects is the first and the most important stage in project management. This is done through appropriate typr of opportunity studies. Opportunity studies are indicative rather than detailed ones and are based on macro parameters and rough estimates. Pre-feasibility studies After the identification stage, the project ideas are screened through pre-feasibility studies. Prefeasibility studies are the intermediate studies between the opportunity studies and detailed project report. This is basically carried out to check for the viability of the project and have a rough estimate of the cost of project and profitability. An outline of a pre-feasibility study is given below: Executive Summary - About the project - Project sponsors background and history - Location and site, for example, the report recommends the location and site along with essential related activities and their cost estimates - Requirement of raw material and their sources - Requirement of utilities and auxiliary services such as power, water, steam, compressed air - Selection of the conversion process - Fixation of overall plant capacity based on technology selected - Selection of plant equipment and machinery based on capacity proposed - An outline of the production process and plant layout - Capital cost estimate - Production cost - Profitability analysis - Construction schedule - General layout and flow sheets Detailed project report Techno-economic feasibility study Preparation of Detailed project report is a further step in examining the feasibility of the project from all angles: Technical, financial, economical, managerial, and also the Environmental impact Analysis. This is a major proposal and is necessary as per government directives and is considered as a backbone report based on which banks can advance loans. Appraisal and evaluation Appraisal and evaluation are essential parts of good financial management. The general principles should apply to any proposal-whether project, programme, or policy relate- with implications for expenditure/use of resources. The effort that should go into them and the details to the considered, however, is a matter of judgement. For example, the proposals involving modest expenditure/use of resources may merit less detailed appraisal and evaluation. 5

The major techniques for financial appraisal criteria re: - Pay back period - Net present value - Internal rate of return - Accounting rate of return - Cost-benefit ratio - Cash flow considerations ----------------------------------------------------------------------------------------------------------------------

Question4. Discuss the various elements of project control. Answer. Control of the project is exercised through formal and informal processes exercised by the project manager, project team, and stakeholders. The process of conducting reviews and monitoring reports exerts a degree of control over the projects. The system of project control includes: Identify output and performance objective There are three basic performance objectives/standards for a project which a manager is expected to control. These include time schedule, project cost, and conformance to design specifications which ensure quality. Two common methods to evaluate these objectives are variance analysis and earned value method. However, variance and earned value analysis are not applied to the objective, quality, as there is difficulty in qualifying it. Performance monitoring for schedule and cost This tells who is monitor the information and at what frequency. Normally, for a moderate size project, a separate project monitoring cell is created for collecting, analysing, and reporting information to all concerned for the purpose of information and controlling the project. The task of the group may include: a. Monitor performance b. Calculate variance/earned value. c. Prepare variance/earned value report and other reports and send them to all concerned. d. Present the report in review meeting. e. Compile the measures arrived at in the meeting to deal with variances. f. Follow up the implementation of suggested measures. Cost and schedule performance measure- Earned Value Method(EVM) The earned value method is a useful tool that allows the calculations of cost and schedule performance measures including cost variance, schedule variance, cost and time over-runs for a project. EVM uses the following parameters to calculate these measures: Cost and schedule performance measure- Earned Value Method(EVM) The earned value method is a useful tool that allows the calculations of cost and schedule performance measures including cost variance, schedule variance, cost and time over-runs for a project. EVM uses the following parameters to calculate these measures: Budgeted Cost of Work Schedule(BCWS) : This is the budgeted cost of work scheduled up to status date and calculated as: BCWS= (Budgeted cost of work/dayX Scheduled days of work up to status date for each activity) Budgeted Cost of Work Performed BCWP= (Budgeted cost of an activity X proportion of it actually accomplished up to status date) Actual Cost of Work Performed (ACWP)= ( Actual cost of work performed for each activity up to status date)

Choose/implement corrective measures The findings about variance and forecast are compiled in the form of report. The report is circulated to all concerned and discussed in a review meeting. Various options including replanning, reallocating resources or changing the way the project is managed, etc are discussed to resolve the variances. ------------------------------------------------------------------------------------------------------------------------

Question 5a. What could be the reasons for project termination? Answer. Project termination is one of the most serious decisions of a project management team and its control board. The decision of project termination affects all the stakeholders of the project and can put some negative impact on the organisations growth. The following are the key reasons to terminate a project: Technological reasons Result of project requirements or specifications are not clear or impractical Fundamental change in project requirements or specifications, so that the underlying contract cannot be changed accordingly. Lack of project planning, especially risk management. The planned result or product of the project turn to obsolete, is not any longer needed. Sufficient human resources, tools, or material are not accessible The increase in project cost leads lower profits than expected The parent organisations do not exist longer The change in strategy of parent organisation, leads towards the project does not support the new strategy. Essential conditions disappear Lack of management support Insufficient customer support

5 b. Write a note on project follow up. Answer. Traditionally, this stage is considered as a part of project completion phase but now it is considered as a separate phase of project life cycle. This is particularly so in very political environments, and/or where project benefits have relatively low visibility and meaning to stakeholders (staff, customers, investors, etc), especially if the project also has very high costs. For example, ICT (Information and communication Technology) projects often are like this- low visibility of benefits but very high costs, and also very high stress and risk levels too. After delivery or completion of the project, the staff performance has to be evaluated. The tasks involved in this phase are: - Documentary the lessons learnt from the project - Analysing project feedback - Preparing project execution report - Analysing the problems encountered during the projects. ----------------------------------------------------------------------------------------------------------------------

Question 6. Discuss the advantage of using PM software package. What are the common features available in PM software package. Answer. The following are the key advantages of using project management software: Speed, effort, and accuracy. For a large project, manually carrying out activities like drawing a network, carrying out time analysis, reporting project progress, generation of various types of reports, updating network, and maintaining records is quite time and effort consuming. Using of the software package greatly reduces the time and effort needed for these activities and the same time enhances accuracy. - Ability to carry out special functions. The software has the ability to carry out some special functions like resource scheduling, what if experiment, and export and import of data with ease and within reasonable time. - Affordability. The price of PC-based software is under$500 which is affordable for an organisation. - Easy to use. Over the years, the project management software packages have became easy to use. - Maintenance of records. A project generates a lot of data, reports, documents, etc. Manually archiving and retrieving these are time and effort consuming. The software package can handle these functions with relatively less time, effort and cost. The generic features include: - Data entry features Project data and calendar Human resources Labour cost Human resource available Cost of construction materials Activity identifier Activity descriptions Precedence relationship Data entry error - Graphics. For a project involving a large number of activities, drawing a correct network, manually takes a lot of time and effort. One of the important features of PM sortware is its ability to generate a variety of charts including network diagram, activity-linked gantt chart quickly. - Time analysis. If there is unlimited and flexible resource or if resource can be outsourced, the network may be prepared at the earliest start time of activities. In the real world, many projects are managed on this basis. - Resource Scheduling. Resources scheduling problems are of two types: Resource levelling where unlimited and flexible resources are available. Resource allocation problem where resources are limited - Output reports. Most PM software packages have extensive report generation capabilities. They can generate a range a reports in various forms. ---------------------------------------------------------------------------------------------------------------------10 -