Introduction to Project Management

Subject Code PM0010

Assignment Set- 1 (Book ID: B1236)

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

A.1 Characteristics of a Project A 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 activities that, lead to a unique objective or a set of objectives. For example, to construct coal-fired power plants with a capacity if 500 Megawatts, the design and construction for each plant is based on variable factors like different site conditions, coal specifications, and plant layouts, design parameters, waste disposal plans infrastructural facilities available to carry out the project and customers requirements. Pre-specified time of completion (Life Span): Every project has a specified start date and completion date. This time span is referred to as time of completion, which should be in line with the requirement of the project owner. Pre- estimated budget: Each project has a budget decided prior to start of project implementation. Performance parameters: There are two kinds of performance requirements that are collectively called specifications. Functional requirement: It specifies what the deliverables of the project. Technical requirement: It describes the features and the quality requirements of the deliverables. Logical sequence of activities: Every project has a logical sequence of activities that are defined using a detailed planning of technical requirements. This helps achieve successful project completion within the specified timelines. Coordination between all areas of work expertise: Coordination between different areas of work expertise is required for the successful completion of a project. For example, a commercial building complex requires continuous 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, and the project team is temporary. Project team members vary from project to project even if a company is engaged only in project contract execution. For the project owners company, the agencies deployed to carry out various functions of the project by the company vary from project to project.

 Involvement of a substantial degree of subcontracting: Project work

comprises of work in different areas of expertise, thus it is necessary to engage specialised subcontractors for different work packages. For example, in case of a coal fired power plant, the major work packages comprises of boiler, turbine, generator, coal handling system, cooling water system, ash disposal system, exhaust chimneys, switchyards and various construction works for civil, structural, piping, cabling, and instrumentation fields. Risk: Risk is defined as the possibility of an outcome different from the expected outcome i.e. it defines the possibility of what may happen to drive the plan off course, and what will be done to recover the situation. Every activity 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 of completion), S (Scope), Resource and Work. The primary purpose of a project is to deliver a product and/or service to a customer within a specified time, cost, and detailed scope and performance requirements, as contracted with the customer.

Cost: The total project cost is the sum of total costs of all the resources
required to complete the activities of the project. Performance: The process of defining performance requirements of a project is a major part of project definition. Time: The time of completion for a project is generally specified by the client. The cost of a project is inversely related to the specified time. Scope: Scope refers to the end product or the deliverables required from the project.

Q.2.a. Explain the various tools and techniques used in project life cycle. A.2.a The various tools used during a project life cycle are: Verifiable objective setting: This tool ensures that all the goals and motives are measured and verified. It ensures that all the objectives of the project are met. Brain Storming: This technique allows solving any queries and problems in a creative manner. It is a technique used in all stages of the project. Project Evaluation Review Technique (PERT): This tool is used analyse the various dependencies of tasks. This technique helps in accomplishing tasks in a cost effective manner.

Work Breakdown Structure (WBS) provides a clear picture of the scope of a project in 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 a project is estimated. Milestone Planning: Milestone planning determines various approaches that can be adopted to meet the target set of objectives. On completion of specified tasks, milestones are reached. It is usually used at senior manager reviews. The importance of milestone planning is better understood by means of an example. Imagine, you have planned to holiday in London. You are walking along the 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 to London. By this milestone, you understand that you are moving in the direction you actually wanted to and hence you are able to estimate the distance covered and the distance remaining. This is the main purpose of using milestone planning. Accrued Cost and Earned Value Analysis: These measures allow the monitoring of the project in terms of expenses and finance. Gantt Charts: Gantt charts are also called inventor charts or bar charts. These charts are used to exhibit PERT and CPA outcomes. It makes representation as simple as possible to ensure that the project results are understood in detail by even those who are not part of the project. Q.2.b. List the process responsibilities of project manager A.2.b Process Responsibilities Once the project begins, the project manager should successfully manage and control the work, which includes: Project issues identification, tracking, managing and resolving. Disseminating project information to all the stakeholders proactively.

 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 but they should make sure that it happens. If the project has problems or scope creeps or faces risks or is not setting up expectations correctly then the project manager is the 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 a logical thought process, be able to evaluate the root causes, have good analytical ability, 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 the definition of a project. Unlike running a business, a project is a non-repetitive and one-time effort, with a set of defined deliverables. It has a definite time period of completion and a specified budget. Projects are conceived as a means to implement the corporate and business strategies of a company. For instance, computerization of operations, or expansion of plant capacity, or set up of a downstream production unit, or set up of a captive power plant are decisions taken at the corporate strategy and 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 aggregate project plan, which is a list of one or more projects that helps to meet the objectives of the organization. Only projects which meet the prioritized objectives are initiated. Examples of an initiated project after organizational strategy planning are expansion of plant capacity, computerization of operations, introducing a technology innovation in the design or manufacturing of the product to cut cost or to improve quality, deciding to install a captive power plant to serve the electric power needs of the factory. Thus, the strategic decision-making results in the organization taking up projects for implementation. Projects also require a good strategy for successful implementation. The initiation of the project is, thus, done by the top management and handed to the project manager 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 Process The project management process deals with how a project is implemented from start to finish. It offers various benefits to the organization which includes:

 Facilitates monitoring of the scheduled costs. Ensures that the time to market and time to profitability is reduced to an extent 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 minimum amount of time. This is possible by effectively planning the objectives which helps a great deal in saving time and money and coordinating the resources well. Project Management process ensures that the defined goals are achieved. It provides 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 the requirements gathered in the application. Documenting the assigned tasks may include designing their documents, noting the installation steps, providing information of the hardware, grid location of the hardware, providing various versions of software used. The documentation also facilitates in maintaining information of how to support the application and how to keep the application secure by performing various proactive monitoring. Various updates and patches are also documented to keep the working environment more stable. Back up and retention policies are also documented that ensures that, in case of system crashes or any uncertainties, the data is available for recovery. The major benefits that an organization can derive from the effective project Management Process are: Efficiency in delivery services: The effective project management process ensures that it provides various ways that can be followed by all the members participating in the team. It provides efficient delivery of the deliverables by eliminating most of the uncertainties in the project. Enhanced customer satisfaction: Effective management and delivery of the project ensures the clients are satisfied. It requires that the delivery of the project is made on the scheduled time and under the budget as fixed by the company both internally and externally by the clients. It facilitates the enhanced effectiveness in delivering the expected services by adopting various management strategies for implementing the project. Improved growth and development: It ensures that it motivates the members of the team to progress in work which facilitate both personal and professional growth. Flexibility: It enables a project to be flexible to various kinds of environment and 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 activity of a project management process. This ensures that the risks associated with the project are analyzed and solved. Q.4 Which aspects of the organization does a corporate appraisal address in respect of performing a SWOT analysis?

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

Four SWOT concepts are: Strength Weakness Opportunities Threats The SWOT analysis framework is summarized in figure

Strengths (S) Strength of a company is its ability to, create new products, provide high level customer service, have a presence in multiple retail markets and enhance quality of its managers. It is also being privy to a technological edge in manufacturing a higher 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 networks Weaknesses (W) The absence of certain strength may be viewed as a weakness. For example an often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the starting business had to outsource to industry experts in the field. General examples of weaknesses i.e., the absence of certain strengths is the lack of strengths like: Lack of patent protection A weak brand name Poor reputation among customers High cost structure Lack of access to the best natural resources

 Lack of access to the key distribution channels We should note that in some cases, a company may consider a factor as an S when it may actually be a W. For example, a large manufacturing capacity compared to a competitor is consider as S but if that results in the company are being slow in reacting to changes in the strategic environment, it is a W. Hence a practical evaluation by the company is required here. Opportunities (O) Opportunities are external elements that prove helpful in achieving the goals set for the project. Factors of this type can be the positive observation of the company by the general public, a network of vendors who are ready to work with the company to achieve success with the project, and market conditions that help to make the project attractive to the market at large, or a least a significant segment. Availability of internet has provided numerous opportunities for companies to expand their product sales. General examples of opportunities are: Arrival of new technologies Loosening of regulations Removal of international trade barriers Threats (T) Threats can be an individual, group, or organization outside the company that aims to reduce the level of the companys performance of the company. For example, Dr. Reddys Laboratories (DRL) started with pharmaceutical specialists, who were earlier employed with Indian Drugs & Pharmaceuticals Ltd. (IDPL). DRL overtook IDPL very quickly as a drug manufacturing company, resulting in IDPL having to close 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 responsibilities of the team members and ensures that each work package is assigned accordingly. 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 organization charts is used to show positions and relationships among team members in a graphic, top-down format. Matrix-based responsibility chart: Responsibility Assignment Matrix (RAM) illustrates the connections between work packages or activities and project team members. Text-oriented format: The required detailed descriptions of the responsibilities of team members are specified in text-oriented formats. The documents generally provide information such as responsibilities, authority, competencies, and qualifications in outline form.

 Networking: Informal communication among co-workers in the organization

is to comprehend the political and interpersonal factors in a productive way that 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 the importance of key people, groups of people, or institutions that may significantly influence the success of your project. It is used to anticipate the kind of influence; positive or negative, groups will have on your project. It is a technique 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 gives project team members and idea of their own roles and the responsibilities in the project. Clarity is always a key constituent of project achievement. Project organization charts: Organization charts of a project are a diagram 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 for meeting project Human Resource requirements. The components of the Staffing 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 are available for the project. Release criteria: A Release criterion lists the method and timing of releasing team member. Training needs: Training needs is a plan which explains how to train the project resources. Recognition and rewards: Recognition and rewards are the criteria for rewarding and promoting the desired team behaviors. Compliance: Compliance details the strategies for complying with regulations, 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 irreversible decision and also explain the parameters which are analyzed in conducting the detailed financial analysis of a project. A.6 Technical Analysis The technical basis of establishing a project is a prime necessity even at the stage of the project conception. A single technical option or choices between multiple technical options are available for the project. Hence, all other areas of analysis like marketing, environmental, financial are closely connected with the technical analysis of the project. Technical analysis aims to finalize the most optimal formulation of the project in terms of project size, technology, location, plant layout, plant scope, and so on. The technical basis selected determines the capital investment, as well as the soundness of the plant operations to manufacture the product of desired quality.

The selection of the technical basis is therefore an irreversible decision. The technical basis also substantially influences the competitiveness of the firm in the market. Financial criteria have to be considered simultaneously in order to ensure the financial viability of the project. Hence, finance analysts need to be involved to raise 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 technical considerations. The parameters analyzed during technical analysis are broadly as under: Selection of Technology or Manufacturing Process While production processes for standard products are usually common for all competitors, there are quite a few projects where a comparative evaluation of alternative technologies available is to be made. For example, a power plant can be based on use of natural gas or coal or fuel oil; a sea water desalination plant can adopt a membrane process or a mechanical vapour compression process or a multi effect distillation process using steam; cement can be made by the wet process or dry 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 in manufacture (example. catalysts which can be patented items), plant capacity, cost competitiveness considering both capital cost and operating cost, environmental impact, companys capacity to absorb the technology, possibility of technological obsolescence 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 of production. Financial Analysis Financial analysis refers to an evaluation of the viability, stability and profitability of a 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. The primary objective of any firm is to maximize the profits and therefore, the future revenues from the project need to be estimated and compared with the costs incurred for capital investment plus all operating expenses to judge the Return on Investment (ROI). The projects are considered financially viable only if the ROI meets the expected value. 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 projections Any company manufacturing a product or a supplier before supplying goods has to calculate their costs very carefully.

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