Notes on PM for reference

(you can use any other sources also, these are in addition to notes already shared)

I. Importance, Definition

Project Management is the art of managing all the aspects of a project from inception to closure using a
scientific and structured methodology. The term project may be used to define any endeavor that is
temporary in nature and with a beginning or an end. The project must create something unique whether
it is a product, service or result and must be progressively elaborated. As the definition implies, not every
task can be considered a project. Program Management is defined as a department that centralizes the
management of projects. PMO or the Project Management Office is a repository of all the projects that
are being executed in an organization. Program Management serves the CIO (Chief Information Officer)
by providing him or her with regular status updates regarding the progress of all the projects in the
company. The PMO’s role is to ensure that the projects are financially viable and to raise an alert
whenever there is a possibility or occurrence of a cost overrun. The PMO’s function is to oversee the
projects coming under its domain and act as a kind of monitoring agency for them. The Project Manager’s
role is to ensure that the overall objectives of the project are achieved with the participation of each
individual member.

According to the PMBOK (Project Management Body of Knowledge) 3rd edition, A project is defined
as a “temporary endeavor with a beginning and an end and it must be used to create a unique product,
service or result”. Further, it is progressively elaborated. What this definition of a project means is that
projects are those activities that cannot go on indefinitely and must have a defined purpose.

A project is an activity to meet the creation of a unique product or service and thus activities that are
undertaken to accomplish routine activities cannot be considered projects. For instance, if your project
is less than three months old and has fewer than 20 people working on it, you may not be working in
what is called a project according to the definition of the term.

It has to be remembered that the term temporary does not apply to the result or service that is generated
by the project. The project may be finite but not the result. For instance, a project to build a monument
would be of fixed duration whereas the result that is the monument may be for an indefinite period in
time. A project is an activity to create something unique. Of course, many of the office buildings that are
built are similar in many respects but each individual facility is unique in its own way.

Finally, a project must be progressively elaborated. This means that the project progresses in steps and
continues by increments. This also means that the definition of the project is refined at each step and
ultimately the purpose of the progress is enunciated. This means that a project is first defined initially
and then as the project progresses, the definition is revisited and more clarity is added to the scope of the
project as well as the underlying assumptions about the project.

II. Basic phases of a project and their purposes

The phases of a project make up the project life cycle. It is convenient for the project managers to divide
the project into phases for control and tracking purposes. Each milestone at each stage is then elaborated
and tracked for completion. The basic phases of a project are dependent on the kind of project that is
being carried out. For instance, a software project may have requirement, design, build, test,
implementation phases whereas a project to build a metro or a building may have different names for
each phase.
Thus, the naming of the phases of a project depends on the kind of deliverables that is sought at each
phase. For the purpose of definition, the phases may be divided into initial charter, scope statement, plan,
baseline, progress, acceptance, approval and handover. This classification is according to the PMBOK.
Thus, the phases of a project are closely correlated with that of the project cycle.

The purpose of each phase of the project is a set of deliverables that are agreed upon before the project
starts. For instance, in a software project, the requirement phase needs to generate the requirement
documents, the design phase the design document etc. The build phase in a project delivers the completed
code whereas the test phase is about the completed testing for the deliverables.

Each phase of the project is associated with a certain milestone and the set of deliverables that each phase
is expected to deliver is then tracked for compliance and closure. The Project Life Cycle consists of the
initiating, executing, controlling and closing processes of the framework as described in the PMBOK.
Each of these processes is necessary to ensure that the project stays on track and is completed according
to the specifications.

III. Project Characteristics

A project is not normal day to day activity undertaken by organization rather it is specific, non-routine
activity of varying time frame and impact viability of the business in the long run. A typical project has
following characteristics:

1. Timeline: A project has a definite timeline with measurable starting and end point.

2. Resources: A project has limited resource of capital and manpower.

3. Tools: Special type of tools and techniques are used for project management (Gantt Charts,
etc.)

4. Team: Project management requires diverse team stretching across departments and functions.

IV. Project Life Cycle

A typical project is divided into following phases. Each phase of the project has its own importance and
impact on overall success of the project.

1. Initiation Phase: In this phase of the project, feedback received from customers is analyzed
and brainstorming is done as to develop new product or modify existing product to meet the new
demands.

2. Project Definition Phase: In this phase of the project efforts are made to define the solution
for the problem posed by customers.

3. Feasibility Study: In this phase, planning of the project is made and definite milestones are
established.

4. Project Execution: In this phase all activities and milestones established in the earlier phase
are executed in a timely and orderly manner. This phase utilizes maximum of all resources.

5. Project Conclusion: This is the last phase of the project. In this phase, final product or service
is handed over to the operations team for commercial production.
V. Project Management Activities

Project management activities are mainly divided into three main categories Planning, Scheduling and
Controlling.

1.Planning: Planning activities include defining project objective, resource planning, etc.

2.Scheduling: Scheduling activities include developing detailed milestones and guidelines for
the project. These activities are performed typically before actual initiation of the project.

3.Controlling: Controlling activities include developing budget and finance control points,
measuring of scheduled tasks are performed.

VI. Project Management Techniques

There are several techniques utilized for project management. Some of the techniques are as follows, and
they are mainly used for project scheduling.

1. Gantt Charts: These charts are used to depict the project tasks against time. It monitors
progress of individual project tasks and also highlights dependency if any between those project
tasks.

2. Network Planning Techniques: These techniques show the relationship between project
activities, project duration, critical path, constraints of non-critical activities and resource
utilization. There are two types of network planning techniques Critical Path Method (CPM) and
Program Evaluation and Review Technique (PERT).

VII. Advantages of PM

1. Efficient Goal Setting - Most projects fail simply because managers lack a clear goal. In 2013,
less than a third of all projects were delivered on time and within the allocated budget. For this reason,
setting SMART goals is paramount. SMART goals are specific, measurable, attainable, realistic and
time-bound. That's what the acronym SMART stands for. SMART goals will ensure that your projects
are delivered on time without exceeding the budget. Professional project managers have the expertise
and tools needed to create forecasts, manage project costs and determine the risks across an entire project
life cycle.

2. Improved Communication - Project management allows for more efficient communication

between leaders and other employees involved in the project. Experienced project managers are effective
at managing stakeholders who are critical to project success. Project managers maintain team cohesion,
facilitate meetings, solicit subject matter experts, brainstorm ideas and monitor feedback in real-time.
Communication is easily the most critical aspect of any project, and is a necessary skill for every project
professional.

3. Greater Customer Satisfaction - Projects can deliver new features and open up new services or
products to delight customers, or projects can contribute to reducing costs for customers. Since project
management methodologies prioritize quality factors, such as features that customers want, companies
with successful project management experience greater customer satisfaction. This translates into more
revenue and business growth. Your organization will be known for delivering excellent results.

4. High Level of Expertise - By hiring a project manager or outsourcing projects, your company will
benefit from a high level of expertise. The people within your organization will learn new things and
gain a new perspective that will contribute to their professional growth. Additionally, project
management will free up your time so you'll be able to focus on the core aspects of your business. An
experienced project manager will be able to articulate the project process and manage all areas of the
project including personnel and compliance.

5. Accurate Risk Assessment - Over 75 percent of companies lack confidence in project success.
Excessive rework, scope creep, poor communication and unclear objectives are often the culprits. Project
management allows you to take calculated risks and allocate resources more efficiently. You will identify
what the risks are before even getting started. This way, you can plan for any problems in the early stages
and make smarter decisions as risks arise throughout the project life cycle. Effective

risk management also allows one to seize on positive risks or opportunities when they arise.
VIII. Disadvantages of PM

1. High Costs - If you're hiring a project manager, expect to invest in specialty software. These
programs can be costly and difficult to implement. Since your team will use them too, they may need
training. Depending on your needs, you may also have to hire subject matter experts or specialists to help
with a project. Often, there will be a push from stakeholders to include features that were not initially
planned. All of these issues can quickly add up the cost of a project.

2. Increased Complexity - Project management is a complex process with multiple stages. Some
experts have a tendency to complicate every process, which may confuse your team and cause delays in
project delivery. They can also become rigid or precise in their plans, creating a stressful environment
within the organization. Typically, projects with a large scope will be more complex to deliver, especially
if there is not a team dedicated solely to working on the project. Cross-functional team members might
fall behind on their daily work, adding a further layer of complexity.

3. Communication Overhead - When you hire a project management team, new employees join your
company. This adds an extra layer of communication and may not always match your organizational
culture. That's why experts recommend keeping your team as small as possible. The larger a team is, the
higher the communication overhead. Sometimes, a large team is required for a project, so it is important
to find project managers who have strong communication skills across a diversity of people.

4. Lack of Creativity - Sometimes, project management leaves little or no room for creativity. Team
leaders either focus excessively on the management processes or set tight deadlines, forcing their staff to
work within strict parameters. This can discourage creative thinking and hamper innovation that might
benefit the project. It is important for a project manager to know when to inspire creativity and when to
strictly follow the project plan.
IX. Difference between functional manager and project manager
Functional Manager
1.He/she is in-charge of a firm’s functional depts. Such as marketing, engg., or finance.
2.They are more skilled at analysis. Such heads are specialists in certain areas only.
3.They are analytical in approach (breaking the system into smaller and smaller elements) and they know
something abt. The operation for which they are responsible.
4.In case of any difficulty, they know how to analyze and attack it.
5.They are administratively responsible for deciding how something will be done, who is going to do it,
and what resources will be devoted to accomplish a task.
6.He is a direct, technical supervisor
7.He should have knowledge in the technology of the process being managed.
8.The FM cannot allow the PM in taking control of the technical decisions in the functional areas or to
control the assignment of the functional area personnel.
Project Manager
1.A PM starts his career as a specialist in some field, later on being promoted to some higher post.
2.He is required to be more skilled at synthesis.
3.The PM uses a system approach i.e. understanding the organizational problem, for which the project is
a part, the organization for which the program exists, as well as the environment of the organization.
4.The PM is a facilitator and generalist.
5.He should be competent in the science of project along with having the technical competence in some
aspects.
6. He is responsible for organizing, planning, budgeting, directing, planning and controlling the project

difference between Project Management and Functional Management

Project Management vs Functional Management
Project management is the process ofFunctional management is managing the routing activities in
initiating, planning, executing, controlling,the organization relating to various functions such as
and closing the work of a project to achieveproduction, sales, and marketing, finance etc. in order to
a specific objective. achieve the overall objective of the organization.
Nature
Project management is unique and the
Functional management is a continuous and repetitive
project is terminated once the objective is
process.
achieved.
Time Frame
Project management is a onetime activity
Functional management is an ongoing activity.
with a specified time span.

The key difference between project management and functional management is that project management
is the process of initiating, planning, executing, controlling, and closing the work of a project to achieve
a specific objective whereas functional management is managing the routing activities in the organization
relating to various functions such as production, sales, and marketing, finance etc. in order to achieve the
overall objective of the organization. Managing functional tasks are done from the inception to the end
of a business organization. On the other hand, projects are carried out based on a specific need.

X. Project selection (for numeric and non-numeric models of project selection refer the PDF book)
Project selection is the process of evaluating and choosing projects that both align with an organization’s
objectives and maximize its performance. Prioritization refers to ranking or scoring projects, based on
certain criteria, to determine the order of execution. However, the terms “prioritization” and “selection”
are often used interchangeably, as the two processes are intertwined.
Selection and prioritization are important elements of project portfolio management (PPM), an approach
that connects the execution of projects with high-level business strategy. As per the 2017 PMI report,
37% of project failures are attributed to a lack of clearly defined objectives and discipline when
implementing strategy. PPM implementation can be time consuming, which is why establishing a project
management office (PMO) that works on selection and prioritization can be extremely beneficial.

1. Profitability: The most commonly used metric to select projects is their profitability. Some
entrepreneur would like to use the rate of return or the discounted cash flows as their criteria of choice.
Many others prefer to use the payback period as the metric to compare projects. Entrepreneurs feel that
the short horizon of a payback period tends to minimize the uncertainties associated with longer periods
of time. Many of this profitability calculations account for the uncertainties associated with the cash
flows. Another major advantage is that it provides a common quantifiable measure to judge diverse
projects. The major disadvantage of using measures of profitability is that other than risk, all other non-
monetary factors are ignored. Also, the uncertainties around cash flows may not be accurately captured.

2. Competitive Necessity: This is the priority when the project is chosen based on what seems most
essential to maintain the company’s competitive position in the market. The entrepreneur might think
that the full impact of the project may not be revealed in a mere profitability analysis.
3. Operating Necessity: Sometimes, a project has to be undertaken because it is vital to continue the
business operations of the company. For example, if supply of electricity to a unit stops, then alternative
arrangements such as a generator have to be immediately put in place.

An operating necessity will take precedence over a competitive necessity in most situations.
4. Scoring: To overcome the shortcomings of using just profitability for selecting a project, a number of
decision criteria are taken into account in a scoring model. Scoring models can vary in their complexity
and information requirements. A model can have weighted or unweighted factors.

It is very simple to come up with a scoring model. Just put down the criteria important for you in selecting

a project, assign weights depending on the importance of the factors and find an appropriate way to assign

score. These models will allow easy sensitivity analysis and trade-offs between criteria can be easily

observed.

The important step after selecting projects is to sort them in order of priority. That is quite easy if these

are done on the basis of a scoring model or with simple profitability analysis. It does become slightly

complex when you factor in the effect of delaying a project. For example, some projects might be grossly

affected if they are delayed and some others would not be impacted at all. So, when ordering projects, it

is important to factor in the effect of delays too.

XI. Criteria for selection of projects

1) Ensure that the project aligns with your organizational strategy.

2) Identify a project champion/owner

One of the most crucial factors in a project’s success is its having a designated champion or owner.
Without a clear assignment of responsibility and advocacy, a project can falter. But with a properly
identified champion, you can make sure everything proceeds as smoothly and efficiently as possible.

The individual who serves as project champion should have a role at the highest level of the organization.
They should also, of course, carry a commitment to seeing the project through. The champion’s job is to
support the project, communicate its progress to the team at large, and tear down any barriers that might
hinder the project’s success.

3) Conduct an organizational or environmental assessment.

How broad and intensive an effort will this project be for your organization? In order to find out, you
should conduct an organizational or environmental assessment. This is key for better understanding the
context in which you will undertake your project. This assessment helps you both scope and coordinate
the project, while anticipating future needs.

4) Assess your resources.

Speaking of future needs, the next step is to evaluate the resources you have at hand to accomplish the
project ahead. In this case, resources may mean people, time, or budget. This should be a key
consideration in selecting your project. Projects for which you do not have sufficient resources may stall
and become an ongoing drain on your organization, while less ambitious projects may help you reach a
position from which you can more easily accomplish more expensive or time-consuming goals.

5) Identify your parameters for success.

As you set out on your undertaking, identify and fix your parameters for completing the project,
particularly the time frame. As you consider time frames, you should also decide on the metrics by which
you will measure success. This helps to track not only results, but also progress along the way.

XII. Project Management – Risk and Uncertainties

Risk

Risk management activities seek to assess what factors and events stand in the way of future project

success and to find ways to mitigate them. A simple way to avoid confusing project management

uncertainty vs risk is to recognize that risk primarily deals with future events that can be foreseen and

their probabilities calculated while uncertainty deals with the present. The fundamentals of project risk

management consist of three important activities: identifying risks, assessing the severity of threats, and

responding appropriately in ways that prevent risks from derailing the project. Because of the

significance of risk, every project manager must have arisk management plan in place that will preserve

the project from internal and external threats. The collection of data concerning risk may vary depending

on the nature and scope of a project, so addressing risk in the planning stage is essential to achieving

desirable outcomes.

Uncertainties

Although they present grave threats to the project as do risks, uncertainties – unlike project risks – stem

from factors that cannot be anticipated or measured. Uncertainties are introduced into project
management when some present factors are not properly understood and therefore are not as easily

prepared to be dealt with by team members. Project managers are cautioned to guard against

preoccupation with performing risk assessments because uncertainties are equally important. A statement

of uncertainties along with a statement of risks must be included in the project plan to keep stakeholders

properly informed. Some examples of uncertainties include (but are not limited to) unforeseen tasks,

unexpected resource requirements, and faulty allocations of time. These factors affect the project in the

present and – if not rapidly and effectively addressed – can derail the project before any of the assessed

risks come into play. Risk is a known or an unknown event which must be taken care of, very carefully

throughout the life cycle of a project. Risk mitigation can be planned, if it is a known risk. But in case of

unknown risk the mitigation cannot be planned, so the traditional approach is to carry a level of

contingency. If there is no uncertainty, it’s an issue. As far as failure or success of a project is concerned,

how much of it could be attributed to the decision-making power of a project manager.

Risk is a part and parcel of every project. It comes very discretely and is unpredictable sometimes,
however any project can face failure if project team fails to address any risk meticulously. Risk occur
due to the uncertainty due to the gap between project document or operational management with actual
action and execution. Proactive planning and strong will power with efficient management of financial
obligations could be very helpful in addressing risk management. Risk and uncertainty are definitely two
separate areas. A risk event can be identified and described and a decision made about what action, if
any, can be taken to manage it – either the event or the effect. The short-hand definition of risk as the
‘known unknown’.

Uncertainty is the ‘unknown unknown’. The fact that there is uncertainty is why we create projects and
implement project management processes. Some sponsors predict the future of the project as soon as the
project manager presents the project plan to him. But do you know anyone who can predict the future?
So of course you are correct to say that we can’t ‘know’ that our estimates about future events are
complete, certain and representative of all possible outcomes. So ‘project management’ exists to create
a plan to achieve the desired future state that recognizes the uncertain environment. Then you make,
validate and document assumptions as one way of ‘managing’ the uncertainty. The risk itself by
definition contains element of uncertainty and they should not be separated. Whether we know more/little
about possible event (unknown), as long as it may impact the project (known), it’s a risk.

Risk management Plan includes:

 Contingency plans – This amount is allocated for predefined actions of identified risks.

 Management reserves – This amount is kept for unknown and unidentified risks, if the risks occur.

The other category of risk is the “unknown unknown”, for example the chances of terrorist attack in my
town is unknown and whether the attack may impact my house construction project ( also unknown), is
difficult to manage. Some organizations prepare reserve funds for such non-quantifiable risk. Do not
assume that unknown unknowns are normally managed via scope change. There are very few sponsors
who do not have problem with decreasing scope in light of a positive risk but getting a scope change for
negative risk is more commercially challenging. Though risk and uncertainty are two separate areas but
there is a dotted line between the two and neither can be a subset of either. Uncertainty management is
just big part of risk management.

XIII. Project life cycle

The project life cycle describes the stages a project goes through as it progresses from start to finish. A
well-defined life cycle brings order and structure to the project. A project life cycle is the sequence of
phases that a project goes through from its initiation to its closure. The number and sequence of the cycle
are determined by the management and various other factors like needs of the organization involved in
the project, the nature of the project, and its area of application. The phases have a definite start, end, and
control point and are constrained by time. The project lifecycle can be defined and modified as per the
needs and aspects of the organization. Even though every project has a definite start and end, the
particular objectives, deliverables, and activities vary widely. The lifecycle provides the basic foundation
of the actions that has to be performed in the project, irrespective of the specific work involved. Project
life cycles can range from predictive or plan-driven approaches to adaptive or change-driven approaches.
In a predictive life cycle, the specifics are defined at the start of the project, and any alterations to scope
are carefully addressed. In an adaptive life cycle, the product is developed over multiple iterations, and
detailed scope is defined for iteration only as the iteration begins.

Characteristics of the Project Life Cycle

Although projects are unique and highly unpredictable, their standard framework consists of same
generic lifecycle structure, consisting of following phases:
 1.The Initiation Phase: Starting of the project

2.The Planning Phase: Organizing and Preparing

3.The Execution Phase: Carrying out the project

4.The Termination Phase: Closing the project

The Initiation Phase: The initiation phase aims to define and authorize the project. The project manager
takes the given information and creates a Project Charter. The Project Charter authorizes the project and
documents the primary requirements for the project. It includes information such as:

Project’s purpose, vision, and mission

Measurable objectives and success criteria

Elaborated project description, conditions, and risks

Name and authority of the project sponsor

Concerned stakeholders

2.The Planning Phase: The purpose of this phase is to lay down a detailed strategy of how the
project has to be performed and how to make it a success.

Project Planning consists of two parts:

Strategic Planning

Implementation Planning

In strategic planning, the overall approach to the project is developed. In implementation

planning, the ways to apply those decisions are sought.

3.The Execution Phase: In this phase, the decisions and activities defined during the planning
phase are implemented. During this phase, the project manager has to supervise the project and
prevent any errors from taking place. This process is also termed as monitoring and controlling.
After satisfaction from the customer, sponsor, and stakeholder’s end, he takes the process to the
next step.
 4.The Termination Phase: This is the last phase of any project, and it marks the official closure
of the project.

This general lifecycle structure is used when dealing with upper management or other people less familiar
with the project. Some people might confuse it with the project management process groups, but the
latter contains activities specific to the project. The project lifecycle, on the other hand, is independent
of the life cycle of the particular outcome of the project. However, it is beneficial to take the current life-
cycle phase of the product into account. It can provide a common frame of reference for comparing
different projects

The generic life cycle structure commonly exhibits the following characteristics:

At the start, cost and staffing levels are low and reach a peak when the work is in progress. It again
starts to drop rapidly as the project begins to halt.

The typical cost and staffing curve does not apply to all projects. Considerable expenses are required to
secure essential resources early in its life cycle.

Risk and uncertainty are at their peak at the beginning of the project. These factors drop over the
lifecycle of the project as decisions are reached, and deliverables are accepted.

The ability to affect the final product of the project without impacting the cost drastically is highest at
the start of the project and decreases as the project advances towards completion. It is clear from the
following figure that the cost of making new changes and rectifying errors increases as the project
approaches completion.
These features are present almost in all kinds of project lifecycles but in different ways or to different
degrees. Adaptive life cycles are developed particularly with the intent of keeping stakeholder influences
higher and the costs of changes lower all through the life cycle than in predictive life cycles.

XIV. Project Portfolio Process

The project portfolio process is a method which can maximize the output potential of all projects
undertaken by your organization at a given time, subject to limited resource constraints. Before beginning
your project portfolio management efforts, establish an environment of understanding and cooperation
among key decision makers in your organization. The project portfolio process may include terminating
current projects that may be successful and timely in favor of projects that have a larger economic or
strategic impact on your operations. It is important that managers understand this concept to avoid any
feelings of resentment when this happens. Foster a team-based attitude toward project selection instead
of identifying small groups of employees with specific projects. This will avoid feelings of rejection
arising in project teams that are re-assigned or split between new projects.
Project portfolio management is the process of selecting the projects that best meet the organization's
goals with the resources available to perform these projects. A successful project portfolio management
process must be described very well so that everyone in the organization understands the process. Project
portfolio management (PPM) has become a key component in organizations as they look to enhance their
ability to manage multiple projects in an efficient and effective way. Project portfolio management
process is the key to success with PPM, because it defines how an organization approaches project
prioritization, resource allocation, budgeting, scheduling, and other major project components. PPM is
defined as the centralized management of processes, methods, and technologies used by project
management teams to oversee and evaluate existing or proposed projects, based on several criteria. The
goal of PPM is to find the best possible combination of resources to help an enterprise achieve its
objectives, and it takes into account such factors as external market conditions, customer demands,
competitive environment, and government regulations.

Managing project portfolios ensures that an organization can leverage its project selection and execution
success, according to the Project Management Institute (PMI), an organization that supports project
management professionals worldwide through collaboration, education and research. The organization’s
research has shown that PPM is a way to bridge the gap between strategy and implementation. The need
for PPM is driven by the fact that all projects require funding, time, and staff to be completed
successfully. But often the resources needed are in limited supply. At the same time, it’s clear that not
all projects are of equal value to an organization. As a result, stakeholders need a way to manage projects
and resources to ensure that the most strategically important projects will receive the attention and
resources to ensure success.

Ultimately, PPM helps keep projects aligned with organizational goals and strategy, including the
prioritization of resources based on the importance of projects.