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VELTECH PMF

SUBJECT NAME: PROJECT MANAGEMENT AND FINANCE CREDITS: 3


SUBJECT CODE: 1150MG101 HOURS: 3
SYLLABUS
UNIT – I: BASICS OF PROJECT MANAGEMENT
Nature- Need for Project Management – types of projects – Project Management Knowledge
areas and processes – Project skills – The role of Project Manager – Project Management
Processes – Impact of Delays in Project Completions – Essential of Project Management
Philosophy – Project Management Principles

UNIT – II: PROJECT FEASIBILITY STUDIES:


Opportunity studies – General opportunity studies – specific opportunity studies – pre-feasibility
studies – functional studies or support studies – feasibility study components of project
feasibility studies – Managing project resources flow – Project Life Cycle - Project constrains.

UNIT – III: IDENTIFICATION AND FORMATION


Project environment – Identification of investment opportunities – Project screening – Project
selection – Project formulation – Stages in project formulation – Project report preparation

UNIT – IV: PURCHASING, CONTRACTING, NETWORK MODELS


Introduction – Purchase cycle – Contract Management – Procurement process – Development of
Project Network – Time estimation, Determination of the critical path – PERT Model –
Measures of variability – CPM Model – Network cost system

UNIT – V: PROJECT EVALUATION UNDER CERTINITY


Objectives, essential of a project methodology – Market appraisal – Technical appraisal –
Financial appraisal – Capital budgeting – Capital budgeting process – Techniques of project
appraisal and their applications – NPV – IRR – Pay Back period – Make or buy decisions –
Lease or buy decisions – Socio-economic appraisal – Management appraisal
TEXT:
 R.Paneerselvam and P.Senthilkumar “Project Management” PHI Learning India Pvt Ltd.,
 S.Choudharay “Project Management” TATA McGraw Hill Co.,
 Operations Research – S. Bhaskar

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UNIT – I: BASICS OF PROJECT MANAGEMENT


Nature- Need for Project Management – types of projects – Project Management Knowledge
areas and processes – Project skills – The role of Project Manager – Project Management
Processes – Impact of Delays in Project Completions – Essential of Project Management
Philosophy – Project Management Principles.

Introduction
 A farmer taking up crop cultivation
 A construction company constructing a bridge
 Indian Railways changing the meter gauge railway track to broad gauge
 An FMCG company introducing its products into a new virgin market
 A company hiring fresh graduates
 A student pursuing MBA

What is common to all these? All these are projects.

A project is not merely establishing an industry or constructing a building. It is just


something new, something unique, planned and executed for good.

MEANING: PROJECT:

Project is defined as a planned set of interrelated tasks to be executed over a fixed period and
within certain cost and other limitations.

PROJECT MANAGEMENT:

Project management, then, is the application of knowledge, skills, tools, and techniques to
project (execute) activities to meet the project requirements.

Example: The development of software for an improved business process, the construction of a
building or bridge, the relief effort after a natural disaster, the expansion of sales into a new
geographic market — all are projects.

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And all must be expertly managed to deliver the on-time, on-budget results, learning and
integration that organizations need.

NATURE OF PROJECT:

A project is temporary in that it has a defined beginning and end in time, and therefore defined
scope and resources.

Project is unique in that it is not a routine operation, but a specific set of operations designed to
accomplish a singular goal. So a project team often includes people who don’t usually work
together – sometimes from different organizations and across multiple geographies.

Integrative is defined as bringing separate things together. Unification could be another term.
Project management is integrative in nature because of the need to bring many different
principles together for it to work. Project management needs to have every aspect of the project
aligned in order for the project to be successful. Each portion or knowledge area works in
harmony with each other. If a knowledge area is out of balance or not completed as needed, the
project could fail.

NEED FOR PROJECT MANAGEMENT:

The project environment is very different from that of typical day to day operations or a regular
team that performs similar activities on a day to day basis.

1. Provide vision and direction – the project manager identifies the aims and vision of the
project and gives it purpose and direction. They also provide the point of contact for the project.
They are responsible for all communication between stakeholders, customers and the project
team, which decreases confusion and increases accuracy.

2. Increase efficiency – the project manager works with the project team to define the tasks
which need to be undertaken in order to complete the project, and in what order they should
occur. This ensures that they are completed efficiently.

3. Control scope – The scope of the project is comprised of what has to be delivered (the project
deliverables) and what work has to be done to deliver the project deliverables. The project

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manager will continually address scope management throughout the life of the project by regular
monitoring and controlling. This in turn saves effort and cost.

4. Manage costs – Delivering on time and within budget are two constraints of any project. The
project manager controls not only monetary costs but also the people resources, both internal and
external, and the equipment costs as well.

5. Manage time – time is arguably the biggest challenge of any project. The project manager
must control the project schedule by examining milestones, key dates and the critical path
throughout the project life cycle. These are the needs of project management.

Project Characteristics

Fixed set of objectives: project management objectives are the successful development of the
project's procedures of initiation, planning, execution, regulation and closure as well as the
guidance of the project team's operations towards achieving all the agreed upon goals within the
set scope, time, quality and budget standards.

Tenure: Tenure is the act or length of time that something is held or the achieved status of
having one's employment position become permanent. An example of tenure is holding a piece
of property in your possession only until death as part of a real estate agreement.

Team work: Co-operation between those who are working on a task. Teamwork is generally
understood as the willingness of a group of people to work together to achieve a common aim.
For example we often use the phrase:” he or she is a good team player”.

Unique: It requires the doing of something different, something that was not done previously.
Even in what are often called “routine” projects such as home construction, the variables such as
terrain, access, zoning laws, labour market, public services and local utilities make each project
different. A project is a one-time, once-off activity, never to be repeated exactly the same way
again.

Life cycle: Dividing your project management efforts into these five phases can help give your
efforts structure and simplify them into a series of logical and manageable steps.

 Project Initiation. ...


 Project Planning. ...
 Project Execution. ...
 Project Monitoring and Control. ...
 Project Closure.

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Made to order: Produced or prepared specifically when someone requests the item, so that the
item can be customized as desired by the person who requested it.

Single entity: A single entity can be a standalone business or a segment, department, or


operating unit within a business. ... A multi-entity business may be a parent company, holding
business, or conglomerate with various subsidiaries, affiliates, and associates.

Multi-skilled staff: Multi-skilled workers have training and skills in more than one area of a
business. ... Such accommodations allows a firm to move workers where they're needed from
one moment to another. Companies cross-train employees to increase productivity and reduce
labor costs.

Subcontracting: Subcontracting is the practice of assigning part of the obligations and tasks
under a contract to another party known as a subcontractor. Subcontracting is especially
prevalent in areas where complex projects are the norm, such as construction and information
technology.

Risk and uncertainty: A project risk is an uncertainty that can be a negative or positive factor
and it can affect the achievable performance to a significant extent. ... Getting used to
uncertainty in project management means learning how to manage risks — coping
with uncertainty factors and reducing them.

TYPES OF PROJECT:

CLASSIFICATION OF PROJECT
Every Project is different. Projects can be classified on several different points. The classification
of projects in project management varies according to a number of different factors such as
complexity, source of capital, its content, those involved and its purpose. Projects can be
classified on the following factors.

According to complexity:
Easy: A project is classified as easy when the relationships between tasks are basic and detailed
planning or organizations are not required. A small work team and few external stakeholders and
collaborators are common in this case.
Complicated: The project network is broad and complicated. There are many task
interdependencies. With these projects, simplification where possible is everything. Cloud-based

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apps such as Sinnaps will immensely help to simplify complicated projects by automatically
calculating the project’s best work path and updating any changes introduced through its use of
different types of project management tools.

According to source of capital:


Public: Financing comes from Governmental institutions.
Private: Financing comes from businesses or private incentives.
Mixed: Financing comes from a mixed source of both public and private funding.

According to project content:


Construction: These are projects that have anything to do with the construction of a civil or
architectural work. Predictive methods are used along with agile techniques which will be
explained later on.
IT: Any project to do with software development, IT system etc. The types of project
management information systems vary across the board, but in today’s world are very common.
Business: These projects are involved with the development of a business, management of a
work team, cost management, etc., and usually follow a commercial strategy.
Service or product production: Projects that involve themselves with the development of an
innovative product or service, design of a new product, etc. They are often used in the R & D
department.

According to those involved:


Departmental: When a certain department or area of an organisation is involved.
Internal: When a whole company itself is involved in the project’s development.
Matriarchal: When there is a combination of departments involved.
External: When a company outsources external project manager or teams to execute the project.
This is common in digital transformations, process improvements and strategy changes.

According to its objective:


Production: Oriented at the production of a product or service taking into consideration a
certain determined objective.

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Social: Oriented at the improvement of the quality of life of people.


Educational: Oriented at the education of others.
Community: Oriented at people too, however with their involvement.
Research: Oriented at innovation and the gaining of knowledge.
Classification based on risk
 Greenfield project: Greenfield project is a totally new venture by a fresh entrepreneur. It
is also known as grass-root projects. Such projects are fresh and are exposed to very high
risk due to lack of expertise of entrepreneur and infrastructure
 Brown field project: an existing promoter company or existing project goes for addition
of product/capacity
1. Expansion project
2. Vertical integration project
3. Diversification project
 Divestment project: Divestment is a form of retrenchment strategy used by
businesses when they downsize the scope of their business
activities. Divestment usually involves eliminating a portion of a business. Firms may
elect to sell, close, or spin-off astrategic business unit, major operating division, or
product line.
 Modernization or replacement project: In recent times, technology up gradation has
been very rapid. Only those organizations can survive which cope up with the ongoing
technological changes. Firms need to upgrade their technology. Such projects up
gradation of technology may need capital investments and are called modernization
projects
EXAMPLE:

 Construction projects produce artefacts.


 Research projects produce knowledge.
 Reengineering projects produce change.
 Procurement projects produce business relationships.
 Business implementation projects produce working processes.

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Some projects are difficult to classify under this scheme.

National symbolic programmes:

 Putting a man on the moon by the end of the decade.

Large medical programmes:

 Creating an artificial heart.


 Mass inoculation programmes.

Other hybrid or interdisciplinary projects

 Pilot projects
 Moving offices

In most cases, this difficulty arises from an ambiguity about the primary purpose of the project.
Are we doing this pilot for its own sake, or merely as an experiment? Are we doing this drug trial
to benefit current patients, or to create knowledge that will benefit future patients? What’s the
real political agenda? Of course, we must be able to handle hybrid projects - but we may need to
surface the underlying ambiguity.

PROJECT MANAGEMENT KNOWLEDGE AREAS AND PROCESSES:

First let’s start with the Knowledge Areas. There are ten of them. In the order that they appear in
the PMBOK® Guide they are:

1. Project Integration Management


2. Project Scope Management
3. Project Time Management
4. Project Cost Management
5. Project Quality Management
6. Project Human Resource Management
7. Project Communications Management
8. Project Risk Management
9. Project Procurement Management
10. Project Stakeholder Management.

Processes of Project Management

The PM Guide defines a process as “a set of interrelated actions and activities performed to
create a pre-specified product, service or result.” It goes on to say that “project management

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processes ensure the effective flow of the project throughout its life cycle.” Processes get things
done.

PROJECT MANAGER SKILLS:

Project management is not an easy job. In fact, it’s several not-easy jobs, including the initiation,
planning, executing, controlling, and closing of a project. Even more difficult, that project is
delegated to a team of your choosing, given specific goals to achieve over a defined timeline for
a determined budget.

Below we’ve collected the top 10 skills every project manager should have. There are certainly
more than just the following 10

1. Leadership
We have to start with the big daddy of them all – leadership. It’s a bit of a slippery skill in that
some believe you’re born with leadership skills and that they can’t be taught. But we think
everyone has the potential to learn how to apply proven leadership skills and techniques. After
all, what’s the alternative? As a project manager you’re responsible not only for seeing the
project through to a successful completion, but you’re leading a team to achieve that goal. This
requires you to motivate and mediate when necessary. Remember that project leadership comes
in different styles, one of which will suit your personality. It’s more than managing tasks, it’s
managing people.

2. Communication
Communications really goes hand-in-glove with leadership. You can’t be an effective leader if
you’re not able to articulate what it is you need your team to do. But you’re not only going to be
communicating with your team, you’ll need to have clear communications with everyone
associated with the project, from vendors and contractors to stakeholders and customers.
Whether that’s through reporting tools or fostering collaboration with chat, file sharing, and
other means to tag discussions at the task level, you’re going to need both systems in place to
facilitate communications. These tools also help connect people one-to-one and in group settings,
such as meetings and presentations.

3. Scheduling
Now we’re starting to get into some of the hard skill sets required of project managers, and few
are as essential as know how to create a project schedule. The only way to achieve the goals of
the project within the timeframe that has been decided on is to breakdown that goal into tasks
on a timeline. That’s scheduling, and it’s the heart of what a project manager does: setting up a
realistic schedule and then managing the resources to keep on track so the project can be
successfully concluded on time. There are many tools that can help with this process, chief

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among them an online Gantt chart, which provides a visual of the schedule with tasks, durations
of those tasks, dependencies, and milestones.

4. Risk Management
Doing anything is a risk. Planning a project, big or small, is inherent with risk. It’s part of your
job to see those issues before they become problems. Therefore, before executing the project,
you have to put in the work to identify, assess, and control risk. The more you can manage risk,
the more likely your project is going to succeed. Of course, you can’t anticipate everything that
might happen over the life cycle of your project. There will be unanticipated issues that arise, so
you need to have a process in place to handle those when they come up.

5. Cost Management

You can’t do anything without the money to pay for it. You have created a budget. Your first job
is to make sure that budget is realistic and can meet the financial needs of the project, and,
secondly, controlling those costs through the execution of the project. This is easier said than
done. Unless you are lucky and work for an organization with unlimited funds, you’re going to
have certain financial constraints, and more likely, be given a very tight budget. It takes a great
deal of skill to figure out how to squeeze every cent out of those limited funds.

6. Negotiating
Being good at negotiation is sort of a subset of communications, but it deserves its own space
here. Negotiation isn’t merely haggling for the best price from a vendor or contractor, though
that’s certainly part of it. Leading a project means you’re in constant negotiations. For example,
you’ll likely get demands from stakeholders that can impact the scope of a project. You’ll have
to give them pushback, but diplomatically, so all parties concerned feel they’re getting what they
want. Then there’s the inevitable conflicts that will arise among team members or other people
involved in the project. If you’ve got strong negotiating skills you can resolve these disputes
before they blow up and threaten the project.

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7. Critical Thinking
Project managers aren’t the only ones who could benefit from this skill. Most of us are not
thinking, but reacting and following a series of responses that we’ve either been told or learned.
It’s not such a bad thing. You can sometimes be on autopilot, but you better know how to switch
it off. Critical thinking is simply being as objective as you can in analyzing and evaluating an
issue or situation, so that you can form an unbiased judgement. It pulls you out of acting on
emotions or from received knowledge, and isn’t that what a project manager must do? You’re
faced with problems every day you’re working on a project, and you want your decisions to
be impartial. The only thing guiding your decision should be what’s best for the project.

8. Task Management
Here’s another one of those technical skills that should be stamped onto the DNA of every
project leader. If scheduling is bedrock to project management, than tasks are mortar that
holds everything together. There are going to be tons of these pesky little jobs for you to create,
assign, and manage – some of which will be dependent on others, meaning that mismanagement
of this process can severely impact the success of your project. You can look at this as making a
super to-do list, which is not entirely wrong, but as you add complexity you’ll also want to add
the tools to help you manage these tasks more efficiently. You’ll want features in your task
management tool that foster collaboration with your team, help you prioritize and give you
instant status updates when tasks have been completed or are running behind.

9. Quality Management
Most of these skills are obvious, right? Well, they are the top 10 project management skills. But
quality management is one that is often overlooked by project leaders, and it’s one that needs to
get more attention. Quality management is overseeing the activities and tasks that are required to
deliver a product or service at the stated level indicated in the project paperwork. Sound
familiar? It’s basically a part of your job that you might never have given a name to or worse,
you’ve been neglecting in favor of meeting deadlines. Staying on schedule is important, but that
schedule is pointless if it produces something that is subpar.

10. A Sense of Humor


No, really. You don’t have to be a comedian, and certainly there’s a time and a place for humor,
but a sense of humor might be one of the most essential of the skills on our list. That’s because a
sense of humor is really about having a different perspective. It allows you to see a problem
differently. Humor relieves stress for you and your team, and only when tensions are lifted
can smarter actions and ideas show themselves. A sense of humor also helps with morale.
You’re going to work as hard as your team, but that doesn’t mean the environment you’re
working in should be stifling. You can set or at least influence the culture of the workplace, and a
lighter mood rising all ships.

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You can have all the skills in the world, but without the right tools you’ll still be working at a
disadvantage. Luckily, there are tools that enhance your skillset and make you even more
efficient and productive.

THE ROLE OF PROJECT MANAGER:

The Project Manager is responsible for delivering the project, with authority and responsibility
from the Project Board to run the project on a day-to-day basis.

ROLE OF THE PROJECT MANAGER & PROJECT MANAGEMENT TEAM:


Project managers and project management team both play an important role in the success of the
project. If we look at the project management life-cycle, there are many people and groups
involved in designing, developing and delivering a flawless project to the client.

Listed below are some of the important duties (role) and responsibilities of a project manager:

Planning

Planning is a key responsibility of a project manager. In this phase, the project manager defines
the project scope and accordingly develops a project plan and schedule. They have to
develop efficient procedures and policies so that the project is delivered to the customer within
specified time and within a given budget. If required the project managers have to change the
plans or design a new backup plan if the situation demands.

Organizing

Organizing is the next phase where project managers focus. In this phase, the project managers
concentrate on organizing project team structure. While organizing, the project managers also
have to take care about the existing structure in the organization. After this, they have to
identify the roles and positions that have to be assigned to the team members.

Leading

One of the most demanding roles of being a project manager is to lead the project team in an
efficient manner. The project manager has to take the lead right from the word go. The project
manager must coordinate with different levels of the organization in order to ensure that the
project goes smoothly. They have to always motivate team members and keep a regular
check on the developments and ensure that the project team members are meeting all the
specified deadlines and following the guidelines mentioned in the project plan.

Control

Project managers have to ensure that the project is heading in the right track and will be
completed by the team members within the time-frame. Project managers use a three-step
controlling process and they are:

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 Measure: Keep a strict vigil on the progress of the project


 Evaluate: They have to determine the root causes of deviations
 Correcting: Make appropriate corrections to address the issue of deviation

Communication

One of the important responsibility of the project manager is to communicate with the senior
management and other top tier officials. They have the responsibility to provide status reports,
risk management issues, issues relating to the budget, and also get approvals of deliverables from
the project sponsors and stakeholders.

The role of the project manager encompasses many activities including:


 Planning and Defining Scope
 Activity Planning and Sequencing
 Resource Planning
 Developing Schedules
 Time Estimating
 Cost Estimating
 Developing a Budget
 Documentation
 Creating Charts and Schedules
 Risk Analysis
 Managing Risks and Issues
 Monitoring and Reporting Progress
 Team Leadership
 Strategic Influencing
 Business Partnering
 Working with Vendors
 Scalability, Interoperability and Portability Analysis
 Controlling Quality
 Benefits Realisation
Finally, senior management must give a project manager support and authority if he or she is
going to be successful.

PROJECT MANAGEMENT PROCESSES:

Most management models identify three basic


management processes that serve to organize the ongoing activity of the enterprise:

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THE FIVE BASIC PROJECT MANAGEMENT PROCESSES ARE AS FOLLOWS:


• Initiating—a description of the product of the project, initial documentation of project
objectives, and assignment of a project manager
• Planning—a documented project plan and documented updates to the plan as the project
progresses
• Executing—verifiably completed project deliverables
• Controlling—periodic measurements of progress vs. plan, corrective action when needed, and
identification of when the project is done
• Closing-documented acceptance of the results of the project
These outcomes provide a direct link between the processes—the output from one becomes an
input to another. Each project management process can then be described in terms of its:
• Inputs—documents (e.g., a scope statement) or documentable items (e.g., task dependencies)
that will be acted upon
• Tools and techniques—mechanisms (e.g., earned value computations) applied to the inputs
(e.g., task results) to create the outputs (e.g., a progress report)
• Outputs—documents or documentable items that are the result of the process
In addition, these processes are not discrete, one-time events; they are iterative and repetitive and
occur at varying levels of intensity throughout the project.
DETAILED PROCESS INTERACTIONS:

INITIATING:
This basic process includes only one detail process:
• Concept development—describing the product of the project, documenting initial project
objectives, and assigning a project manager.

PLANNING:
Planning is of major importance on a project—you are doing something unique and you only get
one chance to get it right. As a result, there are relatively more detail processes in this section.
The dependent planning processes include:
• Scope definition-developing a written scope statement that includes the project justification, the
major deliverables, and the project objectives
• Project definition—decomposing the major deliverables into more granular deliverables to
provide better control (the top levels of the Work Breakdown Structure)
• Task definition—identifying the tasks that will be performed in order to produce the project's
deliverables (the lower levels of the WBS)
• Task sequencing—identifying dependencies among tasks

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• Duration estimating—estimating the probable duration of individually schedulable tasks and


activities
• Schedule development—determining and documenting specific dates for tasks
• Cost estimating—developing initial estimates of the overall project cost
• Cost budgeting—developing detail estimates of the cost of individual tasks
• Plan integration—creating and documenting a coherent project plan from the outputs of the
other planning processes
Quality planning—determining how to ensure that the project quality objectives will be met
• Role and responsibility definition—determining the broad outlines of project responsibilities
• Organization planning—deciding how the project will be organized, establishing reporting
relationships
• Project staffing—deciding who will fill what positions and assume which roles and
responsibilities over time
• Communications planning—determinng who needs what information, when they will need it,
and how it will be given to them
• Risk identification—determining which risks are likely to affect the project
• Risk assessment—quantifying and evaluating the probability of risk occurrence and risk impact
• Solution development—defining deflection and mitigation steps for downside risk and
enhancement steps for opportunities
• Procurement planning—deciding what items will be obtained under contract and how such
contracts will be defined and awarded
• Solicitation—identifying possible sources for contractual services and obtaining responses
from them
• Procurement—negotiating and contracting for outside products and services

EXECUTING:
This basic process includes the following detail processes:
• Plan execution—carrying out the project plan by performing the tasks identified therein and
managing the various technical and organizational interfaces
• Contract administration—managing the contractual aspects of the procured products and
services
 Progress measurement and reporting—collecting and disseminating progress information

CONTROLLING:
• Scope change management—documenting and controlling changes to project scope
• Quality control—measuring project deliverables and activities to assess whether quality
objectives are being met
• Quality improvement—evaluating project performance on a regular basis to determine how to
improve project quality
• Time/schedule control—controlling and responding to schedule changes

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• Cost control—controlling and responding to cost changes


• Risk control—responding to changes in risk over the course of the project

CLOSING:
This basic process includes the following detail processes:
• Scope verification-ensuring that the project deliverables have been completed satisfactorily
• Contract close-out—resolution of any outstanding administrative matters and archiving of
contract documentation
• Project closure—gathering and disseminating information to formalize project completion

IMPACT OF DELAYS IN PROJECT COMPLETIONS:

Projects are considered delayed when their stipulated completion durations have not been
achieved

Project Delay is an unplanned and unexpected deferment of a project because of some event or
occurrence that impedes the project’s commencement or continuation. It is the length of time that
extends the project duration and causes a disruption in the delivery of project goals and
objectives.

 Project delays are often caused by circumstances that create barriers to launch and further
implementation of project activities.
 When projects are delayed, contractors, consultants and clients could put their public
reputations at risk
 Disputes can lead to court cases for resolution especially when large penalties are at
stake.
 When project delays are unexpected, they are uncontrollable and have rather a negative
impact on project activities and results.
 An unexpected delay extends the overall duration of project activities and entails an
increase in project costs.
 It generates time-associated cost effects that increase resource consumption and require
more time for reaching project success.
 Delays can instigate negative effects such as increased costs, loss of productivity and
revenue many lawsuits between owners and contractors and contract termination.

 In order to prevent the negative impact of project delays, it is reasonable to establish


delay allowance at the very beginning of a project. Delay allowance is the length of
time included in the project schedule in advance to cover unpredictable contingencies and
expected minor delays. It is a mechanism of increasing project safety through preventing
activity disruptions and creating time buffers.

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Table 1 Causes of Project Delays

1.Clients’ related Description


issues
Insufficient funding Funds are not adequately released during relevant phases of projects’
execution. Milestones payments are not made on time due to
organizational lapses or bureaucracy. Inadequate cash flow leads to
delay in delivery of materials and equipment to the site and delay in
payment of workers’ salaries.
Interference with Top management staff of the Client’s establishment could interfere in
project project execution because of vested interest. For instance, some scope
performance could be introduced without due authorization. This happens mostly, if
the management staff were instrumental in the appointment of the
vendor.
Delay or non- This happens when agreed milestones for payment are not followed or
payment for when there is no cash flow projection in the project implementation
Completed works plan. For Public sector projects, a delay in passage of the year’s
appropriation bill by the National Assembly could lead to delay in
payment to Contractors and Consultants.
Impractical allocation Funds, manpower, materials, equipment are inadequate to complete the
of project because project owners or clients have not properly assessed
resources whether they have the required resources to complete such projects.
Unrealistic contract duration This could be caused by wrong packaging
of the contract document, political interference or
unprofessional/inexperienced client’s staff. Where the stated
completion duration is impracticable, the onus lies on the stakeholders
to review the initial expected completion time and make amends where
necessary.
Wrong choice of Clients select Consultants and Contractors as their vendors. If the
Consultants & selection process is faulty, unqualified vendors will be engaged. This
contractors could lead to faulty works and frequent rework and delay in project
completion Slow decision making Clients are the project Owners. When
they do not make decisions on time regarding project matters, they slow
down activities at the project sites. Slow decision making could be
caused by an organization’s internal bureaucracy or wrong channels of
communication.
Design alterations & Change in specifications and scope which were not considered
change
17 originally or changes of design to address some omissions that were
orders vital to project functionality. Alterations may require temporary
stoppages that delay overall project completion.
2.Contractor related Description
issues
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Poor coordination of Some aspects of construction works are subcontracted to nominated


subcontractors specialized subcontractors. These subcontractors must be properly
coordinated by the Prime contractor to ensure timely delivery of
assigned aspects of works. Contractors must therefore ensure that each
subcontractor delivers at the stipulated time expected and to
specifications.
Inappropriate Construction activities are required to be carried out using best practices
construction and tools. When the procedures are not followed, errors occur, leading
methods to rework and delays.
Inadequate planning Contractors appoint Project Managers who are expected to draw up
workable project plans and modalities for their implementation. A faulty
plan will lead to delay in project completion. Most Local Contractors
rarely have practicable work programs at the initial stage of project
planning. Lack of appropriate work programs impairs monitoring of
project progress against the stipulated time.
Inadequate A contractor who does not possess requisite experience usually makes
experience construction errors. These errors lead to rework and delays in activities.
Mistakes during Inexperienced contractors usually make errors during construction.
construction Sometimes contractors employ low skilled staff in order to make more
stage profit by paying them lower salaries. Tendencies of errors are, thus,
higher. Rework of an already executed aspect of a scope slows down
project progress. This has serious impact if it involves execution of
critical tasks.
Incompetent site Contractor’s employees that are not skilled in project management are
management. not able to manage their project site appropriately, thus, culminating in
faulty work, reworks and delay in completion of tasks
Wrong choice of Banks provide funds for most projects. Their actions and inactions
Bankers directly impact on a contractor’s ability to execute the project as
scheduled. Some Banks’ internal processes could hinder timely release
of funds. This happens especially when a contractor requires facilities
such as loans to finance the project. It is a major challenge in Nigeria
where the banking industry is in a developing stage.
3. Labour and Description
equipment related
issues
Unskilled site Employment of unskilled personnel at the project sites impedes
manpower execution of work to specification and leads to error or mistakes during
construction. Time is then spent on alterations and corrections.
Improper equipment The use of the incorrect equipment extends tasks while faulty equipment
selection & Faulty leads to delay due to the time spent to repair.
equipment
Labour disputes Labour disputes such as strikes slow down construction as time is spent
on negotiation and settlement of grievances.
4. Materials-related Description
issues
Poor quality materials Poor quality materials lead to poor quality workmanship, thus an

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unacceptable product. Most often, the project owners insist that


correction be made or that parts of work be completely redone.
Material shortages This results in slowed activities and sometimes temporary abandonment
of sites.
5. Consultant- Description
related issues
Inappropriate design Improper design stalls project execution because of the time it takes for
such design to be reviewed, amended and accepted for construction
works. When errors are observed in the design, works are temporary
suspended until such errors are removed. This is predominant in
organisations where selection processes of vendors are compromised.
Poor contract Most projects have consultants as the contract managers. They liaise
management between the client and the contractor. Projects get delayed when the
required management principles are not utilised during projects’
execution.

Late identification & Projects are required to be completed on schedule, within budget and
resolution of according to specification. If consultants do not identify errors and
drawings & omissions in the working drawings early enough, already completed
specification errors & activities may require alterations when such errors and omissions are
omissions discovered after project commencement.
Late preparation of Drawings and other contract documents such as Bill of Engineering
drawings and other Measurement and Evaluation (BEME) are required for a smooth
contract documents execution of any project. Therefore, delay in their release stalls project
activities.
Improper contract Clients usually outsource packaging/delivery of contracts to the
packaging/delivery consultants who are professionals. Errors in this task hinder the overall
strategy project performance because issues not properly captured must be
addressed before project activities can progress otherwise, issue may
arise that lead to legal redress.
Over inspection Inspectors are required to track performance of the project through
periodical monitoring. Too frequent inspection becomes a distraction to
the contractors, and hence could impede contractors’ progress.
Long waiting time for Certain aspects of projects require inspection and testing before further
inspection & testing. activities could be carried out. Usually, Consultants and Clients’ staff
are tasked with the responsibility of coordinating such exercises. Delays
in these impede project progress
Inappropriate If projects issues or contractor’s requests are not addressed timeously
coordination of and information is not effectively managed, project activities can be
information egatively affected. There must be a good communication management
plan in place so that site information is properly channelled and
coordinated. Lack of coordination of information fosters
misunderstanding, potentially causing
conflicts that require resolution time.
6. Community Description
related issues

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Lack of community Local communities are stakeholders in public sector projects that are
buy-in carried out to improve socio-economic conditions. Proper needs
assessments are important as communities usually partner with projects
they know will address their needs. It is therefore appropriate to ensure a
buy-in from expected beneficiaries of projects so that they could
cooperate with the Construction Companies during execution.
Delay or Non- At times people in the community are required to relinquish their
payment of properties for demolition to achieve project objectives. In contracts,
Compensation provisions are made for payment of compensation. Delay in making
these payments or non payments may stall project execution because,
the affected owners of such properties resist attempts for their properties
to be demolished without provision for replacement.
Youth unrest, These issues are peculiar to the Niger Delta region. They were included
Militancy & by the researcher, Unwana Jacob, in view of his experience in project
communal crises delivery in the region. Recently, there has been frequent unrest in the
region due to agitation by the youth protesting that their region has been
deprived of basic socioeconomic amenities despite huge oil and gas
explorations. They have threatened to take oil and other construction
workers hostage as well as some elites in the region to express their
grievances. This poses a major challenge in projects execution in the
region. Community unrest results in a non- conducive environment for
project execution, resulting in a slower pace of project work and
sometimes total abandonment of project sites.
7. Contractual Description
relationship related
issues
Lack of adequate Poor or inadequate communication between parties leads to
communication misunderstanding and misrepresentation of facts. This could breed
between the parties conflicts and consequently hinders smooth progress of activities.
Major disputes & Major disputes and negotiations between parties in project impede
negotiations progress of work as aggrieved parties wait until grievances are resolved
before they continue.
Wrong organizational Organisational structures affect project performance [8].There are
structure certain projects that cannot be managed by certain types of
linking to the project organisational structures. For instance, it is difficult to execute quick
impact projects in a functional organisational structure because of the
slow decision making processes and bureaucracies associated with such
a structure.
8. External issues Description
Weather conditions In areas where there is frequent rainfall, inexperienced
contractor/consultants do not account for weather projections in their
project implementation plan.
Change in Certain projects are stalled and abandoned when political leadership that
government's initiated them change. Sometimes, change in government policies such
leadership & policies. as monetary and fiscal policies could lead to an increase in the cost of
construction materials and equipment. Contractors will not be able to

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continue with the project as scheduled because of the time they need to
spend on approvals for price fluctuations and contract revision
Natural disasters (e.g. There are areas that usually experience natural disasters such as floods.
floods, lightning These disasters are generally unpredictable. However, well established
strikes) project management organisations possess requisite skills to manage
natural disasters.
Interference by This is usually experienced in Public sector projects. Some political
political leaders have vested interest in particular projects. They interfere by
leaders requesting additional scope requirements not captured in the original
design or by imposing unqualified contractors/ subcontractors on the
client. The above
action leads to poor project performance especially in terms of time.

Table 2 Effects of project delays

Effect Description
Time overrun When the stipulated completion time is pushed forward, the project is said
to have experienced time overrun.
Budget overrun When a project is completed at a cost higher than what was budgeted, it is
said to experience a budget overrun.
Poor quality As highlighted in the previous section inferior workmanship and/or inferior
completed project quality materials, can lead to issues of project quality
Bad Public When projects are delayed, contractors, consultants and clients could put
Relations their public reputations at risk
Litigation Disputes can lead to court cases for resolution especially when large
penalties are at stake
Arbitration The cost and time related to the engagement of professional arbitrators
Disputes and Disputes and claims arise against for the losses incurred through delays
claims
Total abandonment Delays in project execution could lead to total abandonment if issues
leading to the delays are not resolved timeously

PREVENTION OF DELAYS:

 Plan/Analyze the requirements in detail.


 Map available resources
 Perform training and knowledge transfer
 Identify risks.
 Estimate and allocate
 Modularize work
 Escalate issues.

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Beneficiaries of project delays

 48.2% of the overall respondents perceived contractors as beneficiaries of delays


 28.9% of the overall respondents perceived consultants as beneficiaries of delays
 20.5% of respondents perceived projects’ host communities as beneficiaries of delays
 9.6% of respondents perceived sponsors/clients as beneficiaries of delays

PROJECT TRIPLE CONSTRAINTS:

It has been given many names – the Project Management Triangle, Iron Triangle and
Project Triangle – which should give you an idea of how important the Triple Constraint is
when managing a project. If you’re managing a project, then you’re working with the Triple
Constraint.

It is defined as a model of the constraints inherent in managing a project. Those constraints are
threefold:

1. Cost: The financial constraints of a project, also known as the project budget Time

2. Scope: The tasks required to fulfill the project’s goals


Quality
3. Time: The schedule for the project to reach completion Cost Scope

Basically, the Triple Constraint states that the success of the project is impacted by its budget,
deadlines and features. As a manager of that project, you can trade between these three
constraints; however, changing the constraints of one means that the other two will suffer to
some extent.

While it’s true that the Triple Constraint is an important part of any successful project, it doesn’t
determine success. Projects are made from many parts, more than the three, albeit major ones,
that make up the Triple Constraint. Sometimes you can’t play around with the Triple Constraint,
but those three factors are always at play in the project.

COST
The financial commitment of the project is dependent on several variables. There are the
resources involved, from materials to people, which include labor costs. There are other outside
forces that can impact a project, which must be considered in the cost of the work.

SCOPE
As mentioned, project scope deals with the specific requirements or tasks necessary to complete
the project. Scope is important to manage on any project, whether agile software projects or
well-planned waterfall projects, because if you can’t control the scope of the project, you’re not
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likely to deliver it on time or under budget. When managing scope its critical that you prioritize
your tasks, enabling you to plan and assign resources effectively. Without creating a sense of
order, it’s easy to become overwhelmed, enabling scope creep. Make sure that you knock out
prerequisite tasks so your project can develop smoothly without hangups.

TIME

At its basic, the schedule is the estimated amount of time allotted to complete the project, or
producing the deliverable. Usually, this is figured out by first noting all the tasks necessary to
move from the start to the finish of the project.

A Work Breakdown Structure (WBS) is used to take the large project goal and break it down
into a series of more manageable tasks. These tasks are then prioritized, dependencies are linked,
and then placed on a timeline.

A Gantt chart is one way to visualize the project schedule, with each task a point on that
timeline, with task dependencies linked, and durations determined. Having historic data can help
make more accurate estimates.

ESSENTIAL OF PROJECT MANAGEMENT PHILOSOPHY


Project management is the art and science of making things happen.
 The term philosophy is a bit misleading here. A philosophy is how to live one’s life. It
does not apply to project management.
 Project management is first an art. There is no one correct way to accomplish any project.
It often call project management the art of creating order out of chaos. Often we walk
into a chaotic situation, and bring order and direction to move away from the chaos.
 It is a science, PMI has studied project management and put forth the PMBOK, and it
outlines how to accomplish the project. This is an art, because not all of the PMBOK
applies.
 Then you add in the debate between agile project management and traditional task based
project management. It will be interesting to see the scientific research in this debate.
 Therefore, the philosophy of project management is getting things to done.

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PROJECT MANAGEMENT PRINCIPLES: SIX PRINCIPLES:

Principle 1: Vision and Mission

In order to be successfully executed, every project or initiative should begin with the end in
mind. This is effectively accomplished by articulating the Vision and Mission of the project so it
is crystal-clear to everyone. Creating a vision and mission for the project helps clarify the
expected outcome or desired state, and how it will be accomplished.

Principle 2: Business Objectives

The next step is to establish two to three goals or objectives for the project. Is it being
implemented to increase sales and profit, customer loyalty, employee productivity and morale, or
product/service quality? Also, it's important to specifically quantify the amount of improvement
that is expected, instead of being vague.

Principle 3: Standards of Engagement

Simply put, this means establishing who will be part of the project team? What will be the
frequency of meetings? What are the meeting ground rules? Who is the project owner? Who is
designated to take notes, and distribute project meeting minutes and action steps? This goes
along with any other meeting protocol that needs to be clarified.

Principle 4: Intervention and Execution Strategy

This is the meat of the project and includes using a gap analysis process to determine the most
suited intervention (solution) to resolve the issue you are working on. There are many quality
management concepts that can be applied ranging from a comprehensive "root cause analysis" to
simply "5 why’s." Once the best possible intervention has been identified to resolve the issue,
then we must map out our execution strategy for implementing the intervention. This includes
identifying who will do what, when, how, and why?

Principle 5: Organisational Alignment

To ensure the success and sustainability of the new initiative or process brought on by this
project, everyone it will directly impact must be onboard. To achieve organisational alignment
(or buy-in), ongoing communication must be employed in-person during team meetings,
electronically via email and e-learning (if applicable), and through training. The message
must include the WIIFM "what's in it for me" at every level; otherwise most stakeholders
will not be interested or engaged around the new initiative.

Principle 6: Measurement and Accountability

And last, how will we determine success? Well, a simple project scorecard that is visually
interesting is a great way to keep everyone updated and engaged. A scorecard is an excellent

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resource for holding employees, teams, and leaders accountable for the implementation,
refinement, and sustainability of the new initiative or project. Accountability means that
consistently, top performers will be rewarded and recognised; while those needing improvement
will be coached with specific expectations and consequences clearly outlined.

The Work Breakdown Structure (WBS) is a grouping of the work involved in a project
oriented towards the deliverables that defines the total scope of the project. The WBS can be
imagined as a roadmap of the project which breaks down the total work required for the project
into separate tasks and helps group them into a logical hierarchy (see example fig. ). Different
levels of detail assure the project managers that all products and work tasks are identified in
order to integrate the project with the current organisation and to establish a basis for control.
Furthermore, the WBS organizes and divides the work into logical parts based on how the work
will be performed. This is important as usually a lot of people are involved in a project and many
different deliverables are set to reach one main objective to fulfill the project.

In addition to this, the WBS serves as a framework for tracking cost and work performance
because every element which is defined and described in it can be estimated with reference to its
costs and time needed. Consequently, the WBS enables the project managers to make a solid
estimation of costs, time, and technical performance at all levels in the organisation through all
phases of the project life-cycle.

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