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PROJECT MANAGEMENT (PM):- There are powerful environment forces contributed to

the rapid expansion of the projects and project management approaches to the
business problems and opportunities.

A project is defined as a non routine, one time effort limited by time,

resources and performance specification designed to meet customer needs.

One of the distinguish characteristics of PM is that it has both a beginning

and an end and typically consists of four phases: defining, planning, executing and
delivering.

Effective PM begins with selecting and prioritizing projects that support

the firm’s mission and strategy. Project Managers have to plan and budget of projects.

PROJECT LIFE CYCLE:- The project life cycle is an important tool for the project manager.
The project life cycle recognizes that projects have a limited life span and that there are
predictable changes in level of effort and focus over the life of the project.

The project life cycle typically posses sequentially through four stages
defining, planning, executing and delivering. Project effort starts slowly & builds to a
peak and then declines to the delivery of the project to the customer.

1. Defining Stage: - Specification of the projects is defined, project objectives are

established, teams are formed& major responsibilities are assigned.
2. Planning Stage: - The level of effort increases in this stage and plans are
developed to determine when it will be scheduled, whom it will provide benefit,
what quality level should be maintained and what the budget will be.
3. Executing Stage: - A major portion of the project work takes place both physical
and mental. The physical product is produced time; cost and specification
measures are used for control.
4. Delivering Stage: - It includes delivering the project product to the customers.
Delivery of the project might include customer training and transforming
components.
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Defining Planning Executing Delivering

Goals Schedule Status report Train Customers

Specification Budgets Changes Transfer
Tasks Resource Quality
Responsibilities Risks Forecasts
Staffing

ROLE OF PROJECT MANAGEMENT IN ORGANIZATION’S COMPETITIVE STRATEGY:-

Actually Strategy is implemented through project management. Every project manager

has a clear link to the organization’s strategy.

There are too many organization’s in which many managers can not
identify a project priority and link it with the strategic plan. This is not good project
management. Every one should contribute value to the organization’s strategic plan
which is designed to meet the future need of its customers. Ensuring a strategy linkage
between the strategic plan and project is a difficult task that demands constant
attention from top and middle management.

The larger and more diverse organization have not developed a process
that clearly aligns projects selection to the strategic plan. The result is poor utilization of
organization’s resources. People, money, equipment and core competencies. Conversely
organization’s that have good coherent link of project management to the strategy have
more cooperative access the organization.

So it is clear now that project management play a vital role in the organization’s
competitive strategy. The intended outcome are clear organization focus best use of
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source, resources (people, equipment, capital) and improved communication across the
project management and other departments. The following are the causes due to which
project management focusing on organization’s competitive strategy.

Focusing on problems and solutions that have low priority strategically.

Focusing on the immediate customers rather than whole market place and value
chain.
Overemphasizing technology.
Tries to solve customer issues.
Engaging in a never-ending search for perfection.

STANDARD METHODOLOGY FOR MANAGING PROJECTS: - One of the best ways to

meet the needs of customer and major project stakeholders is to use an integrated
project planning and control system that requires selective information. The standard
methodology for managing the projects is consists on following steps.

Step 1:- Defining the project.

I. Defining the project scope.
II. Establishing project priorities.
III. Creating WBS( Work breakdown structure) or PBS( process breakdown structure)
IV. Integrating the WBS with the organization.
V. Coding WBS for the information system.
Step 2: - Estimating project times and costs.
I. Estimating time, cost and resources.
II. Developing budget.
III. Creating database for estimating.
Step 3: - Developing & project planning.
I. Constructing and project network.
II. Using backward and forward pass information.
III. Practical consideration.
Step 4: - Managing Risk.
I. Risk identification.
II. Risk assessment.
III. Risk response control.
Step 5: - Scheduling Resources.
I. Classification of scheduling problem.
II. Resource allocation.
III. Assigning project work.
IV. Multi project resource scheduling.
Step 6: -Reducing Project Duration.
I. Managing project teams.
II. Progress and performance measurement and evaluation.
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DEFINING THE PROJECT: - There are five generic steps for the definition of the projects,
which are necessary for the project planning, scheduling and controlling.

1. Defining the project scope: Defining the project scope sets the stage for
developing project plan which includes
a) project objective ( Answers for 5Ws and 1H)
b) Deliverables (Expected outputs over PLC)
c) Milestones (Rough cut estimates of 4Ms)
d) Technical requirement (To ensure performance)
e) Limits & exclusions
f) Reviews with customer
2. Establishing Project Priorities:- One of the primary job of the project manage the
trade-offs among time, cost and performance. To do so project managers must
defined and understand the nature of priority of the project.

One technique that is useful for this purpose is a project priority matrix
that identifies which criteria is constrained (i-e parameter must be fixed). Which
should be enhanced (i-e adding the value in project), and which can be accepted
(i-e not to meet original parameters) the project priority matrix for the time, cost
and performances is as under:

3. Creating the WBS/PBS: - Once the deliverables have been identified, the work of
project can be divided into smaller and smaller work elements. The outcomes of
this hierarchical process are called WBS/PBS. The WBS/PBS is the map of the
project. Basically WBS/PBS is an outline of the project with different levels of
details. The WBS facilitates evaluation of cost, time and technical performance at
all levels in yje organization over the PLC. For example top management only
deals with major deliverables while first line supervision deals with smaller sub
deliverables and work packages. The difference between WBS and PBS is only,
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WBS is used for tangible project (for e.g equipment design) while PBS is used for
non tangible project (for e.g software development project).

Hierarchical breakdown (HBD) of WBS.

Level HBD Description

01 Project Complete Project

02 Deliverable major deliverable

03 Sub deliverable Support deliverable

04 Lowest sub deliverable lowest management

responsibility level

06 Work Packages Activities

4. Interacting WBS with OBS:- In this stage the WBS of the project will be assigned
to the OBS in order to control the project from cost and performance point of
view.

5. Coding the WBS for the information System:- The codes are used to define
levels and elements in the WBS also budget and cost information.

ESTIMATING PROJECT TIMES AND COSTS:- Estimating is the process of forecasting an

approximating the time and cost of completing project delivered. However, in practice
estimating processes are frequently classified as top-down (Macro) or bottom up
(Micro). Top-down estimates usually derived from analogy, group consensus or
mathematical relationships. Bottom-up estimates are typically based on estimates of
elements found in the work break down structure (WBS).

FACTORS INFLUENCING THE QUALITY OF ESTIMATES:- Past experience is a good

starting point for developing time and cost estimates. Factors related to the uniqueness
of the project will have a strong influence on the accuracy of estimates. Project, people
and external factors all need to be considered to improve quality of estimates for
project times and costs.
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1. Project Duration:- long duration projects increase the uncertainty in the

estimates.

2. People:- The people factor because of staff turnover, skills of the people making
the estimates and also peoples performance to the work affects the estimating
times and cost.

a) Project Structure & organization:- Which project structure is chosen to

manage the project will influence time & cost estimates. If the structure is
“dedicated project term”, the major advantage is speed in the project. This
speed comes at an additional cost of trying up personnel full time.
Conversely if the structure is “matrix”, it may reduce the cost by more
effectively sharing personnel across project but may take longer time to
complete.

3. Planning horizon:- The quality of estimate depends on the planning horizon.

Estimate of current activities are more accurate than more distant activities.

4. Project Priority:- Project priority also influences on time & cost estimation
because of resources assignment.

5. Other Factors:- Non project factors also influence on time cost estimates for
example: equipment downtime, national holidays, vacations etc.

ESTIMATING GUIDELINES FOR TIME, COSTS AND RESOURCES:- As poor estimates are a
major contributor to project that failed . Therefore every effort should be made to see
that initial estimates must be accurate as possible. Even though a project has never
been done before, a manager can follow seven guidelines to develop useful work
packages estimates as under,

1) Responsibility:- At the work package level, estimates should be made by the

person(s) most familiar with task, so first- line supervisors or technicians who are
experiences and familiar with the type of work must be responsible for the other
estimate package.
2) Use Several People to estimate:- It is well known that a cost or time estimates
has a more accuracy when several peoples with relevant experience knowledge
of work package are used.
3) Normal Conditions:- When task times, cost and resource estimates are
determined should be based on normal condition efficient methods and normal
level f resources. For Example: If the normal work day is eight hours, the time
estimate should be based on eight hours a day. Similarly if the normal work day
is two shifts, the estimates should be based on two shifts workday. Also estimate
should be representing normal level of resources, people or equipment.
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4) Time units:- All the task time estimates need consistent time units. For example:-
Calendar days, workdays, work weeks, single shifts, hours, minutes etc.
5) Independence:- Estimates should treat each task as independent of other tasks
that might be integrated by the WBS.
6) Contingencies:- Work packages estimates should not include allowances for
contingencies.
7) Adding risk:- The degree of risk time and cost to task estimates vary from task to
task. So identify the risk and adding accordingly is more important. For Example:
new technology carries more time and cost risks than manpower, material etc.

1. Developing the project network

Project network is the tool used for planning, scheduling and monitoring project
progress. Project network are developed from the WBS. The important networks are as
follows:
1. PERT= program evaluation and review technique

2. CPM= Critical path Method

3. GERT= Graphical evaluation review technique

4. Gantt chart

2. Construction Project Network

Basic rules for constructing project.

1. Network flow typically from left to right.

2. And activity can not begin until all preceding connected activities have been
completed.

3. Arrow on network indicates flow. Arrow can cross each other.

4. Each activity should have a unique identification number.

5. An activity identification number must larger than that of any activities that
precede it.

6. Looping is not allowed.

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Terminologies
ACTIVITY:
It is an element of project which required time. It may or may not require recourse. It is
denoted by arrow.

EVENT:
This term is used to represent a point in time when an activity is started or completed. It
does not consume time. It is denoted by circle.

CRITICAL ACTIVITY:
It is longest path through the network, if an activity on the path is delayed, the project
will be delayed by some amount of time.

SYMBOL:
1. Activity

2. Event

3. Dummy Activity

4. Critical Path

Scheduling techniques
Network Computation Process

Critical Path Method

1. Forward Pass:- To compute forward pass

The computation process used to determine earliest event time such as;
i. How soon can the activity start (i.e. early time ES)

ii. How soon the activity can finish ( i.e. early finish), EFT=EST+D

iii. How soon can the project be finished (i.e. expected time)

Is called forward
Example 1:-
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Example 2:-

2. Backward Pass: - The computation process of CPM used to determine latest finishing event times
such as:

i. How late can the activity finish (i.e. late start – LF)

LFT=LET
ii. How late can the activity start (i.e. LST)

LST=LFT-D
iii. How long can the activity be delayed (i.e. float)

Float= LST-EST
iv. Critical path (i.e. all activities with zero float)

Example 1:-

PERT: - Program Evaluation Review Technique

I. Expected time of an activity
Te = (a+4m+b)/6
Where
Te= expected time of an activity
a= optimistic time of an activity
m= most likely time of an activity
b=pessimistic time of an activity
II. Variance of an activity
a2= {(b-6)/6}

III. Standard deviation of an activity

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IV. Probability of meeting schedule found from statistical table

2
Z= (Ts – Te)/ ( )

Where
Te= critical path duration
Ts= scheduled project duration
Z= probability of meeting schedule
Example:
The planning department of an electronics firms has set up the activities
for developing a production of a new CD player. Given information below

Compute expected time of each activity, variance, standard deviation, also probability of
meeting schedule.

To determine the probability

Z= (Ts – Te) / ( a2 )

= (67-64) / ( 25+9+1+1)

= 3/ 36

=3/6

=0.69

The probability of meeting schedule is = 69%

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Problem 1:-
The project information for business centre (design dept.) is presented
here. Compute the early and late activity times and the float times. Identify the critical
path.

X Y

Solution:-

Activity Duration EST EFT LST LFT Float (LFT- -EST

A 5 0 5 0 5 0
B 15 5 20 5 20 0
C 10 5 15 5 20 5
D 5 5 20 5 20 10
E 15 20 200 20 200 165
F 10 20 30 20 30 0
G 170 30 200 30 200 0
H 35 200 235 200 235 0
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X 0 15 20 20 20 5
Y 0 20 20 20 20 0

Assignment 1
Problem 1:-
The project information for the custom order project of the air contact company
is presented here.

Find
1. All expected activity time’s variances.
2. The critical path & expected completion time.
3. The probability that the project will be done in 23 days.
4. The completion time corresponding to 95% probability.
Problem 2:-
The project information given by J. world project manger of print software is
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presented here.
Find early, late, float times. Also identify critical path.

GERT: - GRAPHICAL EVALUATION AND REVIEW TECHNIQUE

It is a network model developed to deal with more complex situations than can be
handled by PERT/CPM. GERT is combination of signal flow graph theory, probabilistic
network PERT/CPM and decision tree, all in signal framework. Its component consist of
logical nodes, directed arcs (branches) with two parameters, the parameter that the
given arc is taken (or realized) and distribution function describing the time required by
the activity. Evaluation of GERT network yields the probability of each node being
related and elapsed time between all nodes.
At this point it may be useful to compare GERT and PERT/CPM to focused on
what is difficult about GERT.

GERT PERT/CPM
Branching from a node is Branching from a node is
probabilistic deterministic
Flexibility in node realization No Flexibility in node realization
Looping back to earlier event is Looping back is not allowed
acceptable
Difficult to use as a control tool Easy to use for control
Arcs may represent time, cost Arcs represent time only
reliability etc.

There are steps employed in using GERT.

1. Convert the qualitative description of the project action plan into a network. (I.e.
PBS)
2. Collect necessary data to describe the arcs of the network.

Managing Risk:-
Every project manager under stands risks is inherent in projects. In the context of
projects, risk is uncertain condition, that if it occurs, has a positive are negative effect on
project objectives.
Risk Management Process
The chance of risk event occurring (e-g an error in time estimate, cost estimate or design
technology) are greatest in the concept planning and start up phases of project. The cost
impact of risk event in the project is less if the event occurs earlier rather later. So risk
management identifies as many risk events as possible (i-e what can go wrong)
minimizes their impact (I-e when can be done about the event before the project
begins), manager responses to those events that do metalize (I-e contingency plan) and
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provides contingency funds to cover risk events. The following model represents the risk
management process.

RISK IDENTFICATION
Analyze the project to identify sources of
risk.
Known

RISK ASSESSMENT
Assess risks in term of:
Likelihood of occurring
Controllability
Severity of impact

Risks

RISK RESPONSE DEVELOPMENT

Develop the strategy to reduce
possible damage
Develop contingency plan

Risks on it Plan

RISK RESPONSE CONTROL

Implement Risk Strategy
Monitor an adjust plan for new
risks
Change management

Risk Identification
The risk management process begins by trying to generate and list of all possible risks
that could affect the project. During the planning phase project manager pulls to risk
management team that uses brain storming and other process identifying technology to
identify the potential problems. Participants are encouraged to keep an open mind and
generate as much possible risk as possible.
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One common mistake that is made in the risk identification process is to focus on
consequences not on the events. The focus in the begging should be on risks that can
affect the whole project rather than specific section of the project.

Risk Assessment
When list of potential risks available. Note: All of these risks some are trivial and
can be ignored while others are serious to the welfare of the project. So if is the
responsibility of project manager have to develop methods for eliminating trivial risks in
terms of importance and need for attention. Common used techniques are as under.
Scenario Analysis

Probability Analysis

Risk Response Development

When risk event is identified an assessed, a decision must be made concerning
which response is appropriate for the specific event. Responses to risk can be classified
as mitigating, avoiding, transferring, sharing or retaining.
Risk Response Control
The last step in risk management process is risk control. Executing the risk response
strategy, monitoring, triggering, events initiating contingency plans and watching for
new risks. Establishing a change management system to deal with events that requires
formal changes in the scope budget and / or schedule of the project in order risk
response control.
Scheduling Resource:
The network analysis (I-e PER & CPM) are useful only for the allocation of time,
but fail to deal with allocation of recourses I-e 4M’s (man, machine, material & money).
If resources are adequate but the demand varies undelay over the life of the
project it may be desirable to even out resources demand by delaying non critical
activities (by using float) to lower pert demand and increase resources utilization. The
process is called resources leveling or smoothing. On the other hand resources are not
adequate to meet peak demand, the Late Start Time (LST) of activities must be delayed
and the duration of the project must be increased. The process is called resources
constrained scheduling.

Resources Methods
Time- Constrained Project (I-e Something Resources Demand)
Scheduling time-constrained projects focuses utilization. When demand for
specific resources type is erotize. It is difficult to manage and utilization may be very
poor. Practitioners have attacked the utilization problem using recourse leveling
techniques that balance or smooth demand for resources y basically all leveling
techniques delay noncritical activities by using positive sleek to reduce peak demand
and fill in the valleys for the resources.
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Resources- Constrained Projects:

When number of people end/or equipment is not adequate to meet peak demand
requirements and it is impossible to obtain move the project manager falls in resources-
constrained problem. The tried is to specify and allocates resources to minimize project
delay the resources limit or altering the technical network relationship scheduling
activities using following pointing rules.
1. Minimum Float

2. Smallest Duration

3. Lowest Activity identification Number.

In any period when two are more activities require its same resource, the priority
rule applied. Rule one is by the pointing. However, if all activates here the same
sleek, the next rule (I-e smallest duration) would be placed in schedule first. In very
cases when all eligible activities has the same sleek and same duration the priority
should be given to the rule 3 i-e lowest identification number.
Types of Project Constraints
Project constraints impede or delay the start of activity. There project
constraints need to be considered in scheduling.
Technical of Loses Constraints
These Constraints usually address the sequence is which project activity must
occur. The project network deposits technical constraints.
For example.
1. Design

2. Test

3. Technology etc

Physical Constraints
In rare situation there are physical Constraints that cause activities that would
normally occur in parallel to be constrained by contractual or environmental
conditions.
Resource Constraints
Resource is people, equipment and material that can the drawn on to accomplish
something. In project the availability or unavailability of resources will often
influence the way projects are managed.

Critical Chain in Projects:- Critical chain (C-C) was introduced by doldratt in order to
develop the strategies for accelerating the completion of projects, when projects are
constrained by both resource and technical dependencies critical chain refers to longest
string of dependencies that exist in the projects to represent time constrained resource
constrained and technical or logical constrained in the project.
Time Estimates in C-C:- In critical chain the estimate, activity time provide an estimate
that has about on 80-90 % chance of being completed on or before the estimated time.
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Critical Chain in Action:- Critical chain in practice requires time suffering in the schedule
to act as “Shock Absorber” to protect the project completion date.
Critical Chain and multi tasking:- Critical chain has three recommendations that will
help to reduce the impact of multi tasking.
1. Reduce the number of projects so people are not assigned to as many projects
concurrently.
2. Control start dates of projects to accommodate, resource shortages. Do not
start projects until sufficient resources are available to work full time on project.
3. Contract for resources before the project begins.

Critical chain and project performance monitor:- C-C method uses buffers to monitor
project time performance. For monitoring purpose, this buffer is typically divided into
three zones OK; watch (Alarm set off and Act (take corrective actions).
Cost budgeting and cost base line:- cost estimates are not budgets. A cost estimate
becomes a budget when it is time- phased. Time phasing project work is important for
the project cost control.
Perception of costs and budgeting vary depending on their users. The
project manager must be very aware of these differences when setting up the project
budget. The project manager can commit on budgets before the resource is used. This
information is useful to the financial officer of the organization in forecasting future
cash outflow. The project manager is interested in when budgeting cost is expected to
occur, when the budget cost actually is charged (earned) and when actual cost emerges.
Cost Base Line:- The cost baseline serves as an anchor point for measuring performance.
The cost baseline is concrete documentation and commitment; it is the planned cost
and expected schedule performance against which actual cost is measured. It can also
serve as base for developing cash flow and awarding progress payments. Development
of cost baseline is properly part of the planning process. The cost baseline is major input
to the cost/ schedule system to be described.
Rules for placing costs in baseline:- the major reasons for creating a baseline are to
monitor and report process and to estimate cash flow. Costs are placed in the baseline;
exactly as manager expect them to e earned.
Percent complete rule:- this rule is heart of any earned value system. The best method
for assessing costs to baseline under this rule is to evaluate work packages over the
duration of work and assign completion percentages in monetary terms.
Methods of variance analysis:- Generally variance analysis base on two key
computations.
1. Company earned value with the expected schedule value.
2. Company earned value with actual costs.

Earned Value Analysis:- Earned value (EV) for a task is simply the percent complete
times its original budget stated differently, EV is the percent of the original budget that
has been earned by actual work completed.
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Although the percent complete rule is most used method of assessing

budgets to baseline and for coast control, but earned value rules are very useful for
reducing the overhead costs of collecting detailed data on percent complete of
individual work packages. Earned value rules are classified as
1. 0/100 percent rule:- This rule assumes credit is earned for having performance f
the work once it is completed. Hence 100 % of the budget is earned when the
work package is completed. This rule is used for work package having very short
duration.
2. 50/50 Rule:- This approach allows 50 % of the value of the work package budget
to be earned when it is started and 50 % to be earned when the package is
completed. This rule is popular for work packages of short duration and small
total costs.