Chapter Five
PROJECT MANAGEMENT
5.1 INTRODUCTION TO PROJECT AND PROJECT MANAGEMENT
A project is a [temporary] sequence of unique, complex, and connected activities having
one goal or purpose and that must be completed by specific time, within budget, and
according to specification. Project management is the process of scoping, planning,
staffing, organizing, directing, and controlling the development of an acceptable system at
a minimum cost within a specified time frame.
Examples of projects
1. Personal projects:
obtain education certificate
write a report
plan a wedding
plant a garden
Build a house extension
2. Industrial projects:
construct a building, factories
provide a gas supply to an industrial estate
build a motorway
design a new car
3. Business projects:
develop a new course
develop a computer system
introduce a new product
prepare an annual report
set up a new office
Characteristics of a project
A unique, one-time operational activity or effort
Requires the completion of a large number of interrelated activities
Established to achieve specific objective
Resources, such as time and/or money, are limited
Typically has its own management structure
Need leadership
Measures of Project Success
The resulting product is acceptable to the customer.
The system was delivered “on time.”
The system was delivered “within budget.”
The system development process had a minimal impact on ongoing business
operations.
Causes of Project Failure
Failure to establish upper-management commitment to the project
Lack of organization’s commitment to the system development methodology
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Taking shortcuts through or around the system development methodology
Poor expectations management
Premature commitment to a fixed budget and schedule
Poor estimating techniques
Over optimism
The mythical man-month)
Inadequate people management skills
Failure to adapt to business change
Insufficient resources
Failure to “manage to the plan”
Project Management Functions
Scoping
Planning
Estimating
Scheduling
Organizing
Directing
Controlling
Closing
5.2 PROJECT MANAGEMENT TOOLS
1. Gantt Chart: Graph or bar chart with a bar for each project activity that shows passage of
time
2. Critical Path Method (CPM)
a. Deterministic task times
b. Activity-on-node network construction
c. Repetitive nature of jobs
3. Project Evaluation and Review Technique (PERT)
a. Multiple task time estimates (probabilistic nature)
b. Activity-on-arrow network construction
c. Non-repetitive jobs (R & D work)
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PROJECT NETWORK
• Event
– Signals the beginning or ending of an activity
– Designates a point in time
– Represented by a circle (node)
• Network
Shows the sequential relationships among activities using nodes and arrow
Activity-on-arrow (AOA) arrows represent activities and nodes are events for points in
time
Lay 3 Dumm
foundati 2 0 y Build Finis
1 3 on 2 1 4 house 6 h 1 7
Design Order 3
Select 1 1 Selectwork
house and and
obtain receive paint 5 carpet
financing materia
ls
Activity-on-node (AON) nodes represent activities, and arrows show precedence
relationships
Lay Build house
foundations
2 4 Finish work
2 3
1 7
Sta 3 1
rt Design 3 6
house and 1 5 1
obtain Order and
1 Select carpet
Select paint
financing receive
materials
Situations in network diagram
A must finish before either B or C can start
A B
C
Both A and B must finish before C can start
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A C
B
Both A and C must finish before either of B or D can start
A C
B D
A must finish before B can start both A and C must finish before D can start
A B
Du
C mmD
y
Concurrent Activities
Lay foundation 3
Lay Dummy
foundation
2 3 2 0
2 1 4
Order material
Order material
(a) Incorrect (b) Correct
precedence precedence
relationship relationship
CPM calculation
Path: A connected sequence of activities leading from the starting event to the ending
event
Critical Path: The longest path (time); determines the project duration
Critical Activities: All of the activities that make up the critical path
Forward Pass & Backward Pass
• Earliest Start Time (ES)
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– earliest time an activity can start
– ES = maximum EF of immediate predecessors
• Earliest finish time (EF)
– earliest time an activity can finish
– earliest start time plus activity time
Backward Pass
Latest Start Time (LS): Latest time an activity can start without delaying critical path time
LS= LF - t
Latest finish time (LF): latest time an activity can be completed without delaying critical
path time
LS = minimum LS of immediate predecessors
CPM Analysis
• Draw the CPM network
• Analyze the paths through the network
• Determine the float for each activity
– Compute the activity’s float
float = LS - ES = LF - EF
– Float is the maximum amount of time that this activity can be delay in its
completion before it becomes a critical activity, i.e., delays completion of
the project
• Find the critical path is that the sequence of activities and events where there is no
“slack” i.e.. Zero slack
– Longest path through a network
• Find the project duration is minimum project completion time
CPM Example:
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f, 15
g, 17 h, 9
a, 6
i, 6
b, 8
d, 13 j, 12
c, 5
e, 9
PERT
• PERT is based on the assumption that an activity’s duration follows a probability
distribution instead of being a single value
• Three time estimates are required to compute the parameters of an activity’s duration
distribution:
– pessimistic time (tp ) - the time the activity would take if things did not go well
– most likely time (tm ) - the consensus best estimate of the activity’s duration
– optimistic time (to ) - the time the activity would take if things did go well
tp + 4 tm + to
Mean (expected time): te =
6
2
Variance: Vt =2 =p
t - to
6
PERT analysis
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• Draw the network.
• Analyze the paths through the network and find the critical path.
• The length of the critical path is the mean of the project duration probability
distribution which is assumed to be normal
• The standard deviation of the project duration probability distribution is computed
by adding the variances of the critical activities (all of the activities that make up
the critical path) and taking the square root of that sum
• Probability computations can now be made using the normal distribution table.
Probability computation
Determine probability that project is completed within specified time
x-
Z=
where = tp = project mean time
= project standard mean time
x = (proposed ) specified time
Normal Distribution of Project Time
Probability
Z
= x Tim
tp e
Cost consideration in project
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• Project managers may have the option or requirement to crash the project, or
accelerate the completion of the project.
• This is accomplished by reducing the length of the critical path(s).
• The length of the critical path is reduced by reducing the duration of the activities
on the critical path.
• If each activity requires the expenditure of an amount of money to reduce its
duration by one unit of time, then the project manager selects the least cost
critical activity, reduces it by one time unit, and traces that change through the
remainder of the network.
• As a result of a reduction in an activity’s time, a new critical path may be created.
• When there is more than one critical path, each of the critical paths must be
reduced.
• If the length of the project needs to be reduced further, the process is repeated.
Project Crashing
• Crashing
– reducing project time by expending additional resources
• Crash time
– an amount of time an activity is reduced
• Crash cost
– cost of reducing activity time
• Goal
– reduce project duration at minimum cost
Activity crashing
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Work breakdown structure
• A method of breaking down a project into individual elements ( components,
subcomponents, activities and tasks) in a hierarchical structure which can be
scheduled and cost
• It defines tasks that can be completed independently of other tasks, facilitating
resource allocation, assignment of responsibilities and measurement and control
of the project
• It is foundation of project planning
• It is developed before identification of dependencies and estimation of activity
durations
• It can be used to identify the tasks in the CPM and PERT
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