INTRODUCTION

TO
PROJECT MANAGEMENT
Some Snapshots at the Big
picture !...................
 According to visionary thinkers on
management, there are going to be two major
disciplines which would dominate a
substantial part of 21st century.

……..project management and cross functional

team building.
 Why……
It’s a new market out there. Globally More competitive,
More demanding, More uncertain (NANO case) and More
complex.

“Customers want faster service, better

solutions, and higher value for money”.

Projects have therefore , become the critical building

blocks for increasing organisational productivity / innovation.
1. Effective project management skills will be the single
defining measure of tomorrows business leaders,
managers and team members.

2. Of all the processes that influence your competitive

position, none has more importance than your project
management processes. All of your stakeholders are
linked through projects.

3. Forward looking companies are demarcated based on

how well they manage their projects.
• In the Project Management Benchmarking Forum held in USA more than 50%
of the Fortune 500 companies reported having project management offices in
place. Four top priorities identified by the Fortune 500 companies were "Project
Office, Portfolio Management, Risk Management and Financial Returns".
A survey evaluating the merit of project management according to 20 different
IT metrics, showed more than 21% overall improvement when project
management initiatives came into play. (Source: Centre for Business Practices,
USA) .
There are over 180,000 certified project managers globally. In India we only
have about 1000.
In last 5 to 6 years, the certification of project managers has grown
exponentially in matured economies.
In USA and Europe, in both Government Administration and Corporate
Boardrooms, modern project management is considered to be the 'core'
methodology.
In USA, there are over 160 Universities/Institutions awarding
degrees/diplomas in PM. In India there are hardly any.
In China Certification of project managers/team members has grown
exponentially in China. In India we have to catch up with them
Japan has launched their own Project Management Body of Knowledge
(PMBoK) in November 2001. PMA President, Adesh Jain was invited to Chair
this function.
 Is there a lack of management ?
- As per the Standish Group Report, 23% of IT projects are cancelled before completion,
while 49% are adversely affected by cost & time overruns or changes. The average
cost overrun is equal to 63% of the projects original cost estimate.

- For a large number of projects, cost overruns are as high as 190% over the planned
budget and 220% over the planned time estimates.

- 30% of organizational projects end up being cancelled midstream

- Lost opportunity costs are difficult to measure.

A KPMG survey of over 1400 organizations found lack of top management

commitment to be a key factor for failed projects.
- Applied Data Research reported that up to 75% of software projects are cancelled.
- Peat Marwick found that 65% of software/hardware projects fail.
-The META Group found more than half of the IT projects become runaways.
-The Standish Group reports the average success rate for business-critical application
projects is just 9%.
.
 Indian Public sector..

Project Delays Cost PSEs an extra Rs.41,300 cr as of October 2002. Sloppy

project implementation and resultant cost overruns has pushed up the cost
of public sector projects by Rs. 41,300 cr. The dismal statistics of project
management was presented by former Minister Shri S B Mookherjee in
December 2003.

Power and Railways accounted for the bulk of cost overruns - Rs 16, 473.5
crore and Rs 13,034 crore respectively. The slippage was 45% in the case of
the power sector. The Railways out-performed power with a slippage of
50%. Urban development, however, takes the cake. For the eight projects on
hand costing a total of Rs 5,119.4 crore, the revised cost estimate is Rs
9,130 crore, registering a 78% slippage. Petroleum, with projects totaling Rs
34,549 crore at original estimates, have contained cost overruns at Rs 2,452
crore, or 7%.
There has been a mind-boggling growth in the membership of professional
PM associations in matured economies. The total professional membership
is now estimated to be over 130,000.
It is estimated that over 10,000 seminars/workshops related to PM are
being held every year in USA. In India, this number may not exceed 1 or 2
per week.
Tom Peters is singing the glory of 'projectised' culture for corporations.
Rosabeth Moss Kanter of Harvard University says "There are two skills
essential to successful modern management, ...... one is skill in project
management".
It is estimated that 4.5 million people in United States (representing about
3.3 percent of the employed U.S. workshop) may regard project
management as their profession of choice. The size of the profession in the
rest of the world may be more than 12 million.
According to an estimate U.S. public and private sectors spend some 2.3
trillion on projects every year, an amount equivalent to one quarter of the
gross domestic product. It is estimated that the world as a whole spends
nearly $ 10 trillion of the world's $ 40.7 trillion gross product on projects of
all kinds.
Individuals working in project management have an annual median total
compensation of $ 75,000 and an annual average total compensation of $
82,389 in US much higher then the professionals in other sectors.
 EMERGENCE OF PROJECT
MANAGEMENT
1. Exponential expansion of Human Knowledge.

2. Growing demand for a broad range of complex,

sophisticated, customized goods and services.

3. Evolution of world wide competitive markets for

the production and consumption of goods.
• Exponential expansion of Human Knowledge
• Growing demand for a broad range of complex,
sophisticated , customized goods and services
• Evolution of world wide competitive markets for
the production and consumption of goods.

Calls for a high level of coordination and

cooperation between groups of people. Largely
geared to the mass production of simpler goods ,
traditional organization structures and management
systems are simply not adequate to the task .
PROJECT MANAGEMENT IS…………
 PROJECT ARE IMPORTANT…
FOR WHOM ?
• INDIVIDUALS- parallel career paths

• ORGANISATIONS- Value added work

- transition of change

• ECONOMIES
 Why the emphasis on project
management?
• Many tasks do not fit neatly into business-
as-usual.
• Need to assign responsibility and authority
for achievement of organizational goals.
 Projects versus Operations
Organizations perform work - either
– Operations, or
– Projects

Shared characteristics of projects and

operations
– Performed by people
– Constrained by limited resources
– Planned, executed and controlled
 Operations and Projects differ
• Operations are
ongoing and repetitive

• Projects are
temporary and unique
A project is a temporary endeavor
undertaken to create a unique product
or service.”

– temporary - definite beginning and end

– unique - different in some distinguishing
characteristic
A project can create:
• A product that can be either a component of another item, an
enhancement of an item, or an end item in itself;

• A service or a capability to perform a service (e.g., a business function

that supports production or distribution);

• An improvement in the existing product or service lines (e.g., A Six

Sigma project undertaken to reduce defects); or

• A result, such as an outcome or document (e.g., a research project

that develops knowledge that can be used to determine whether a
trend exists or a new process will benefit society).
 Other Definitions of Projects
• Any non-repetitive activity

• A low volume , high variety activity

• A unique set of co- coordinated activities ,

with definite starting and finishing
points,undertaken by individuals or
organization to meet specific performance
objectives within defined schedule, cost
and performance parameters
 Other Common Characteristics
of Projects
• Multidisciplinary
• Complex
• Conflict
• Part of Programs
 So, what is a project………….
• Single, definable purpose , end-item, or
result usually specified in terms of cost,
schedule and performance requirements
• Unique
• Temporary activities
• Cut across organizational lines
• Unfamiliarity
• Uncertainty and risk
• Project lifecycle
 Examples of projects
• Developing a new product or service
• Effecting a change in structure, staffing, or
style of an organization
• Designing a new transportation vehicle
• Constructing a building or facility
• Running a campaign for political office
• Implementing a new business procedure
or process
Federation of Indian Chambers of Commerce and Industry
( FICCI) jointly with the Project Management Institute (PMI)
submitted a three point agenda on project management to
the Indian government at the conference

1. setting up a project management office structure for the

country,
2. institutionalizing a project management maturity
framework for India, and
3. making project management training mandatory for
personnel deployed on large projects
What is Project Management

Project management is the application of

knowledge, skills, tools, and techniques to
project activities in order to meet or
exceed stakeholder needs and
expectations from a project
• Girish Wagh, Head, Small Car Project
"Our biggest challenge was to keep the balance between cost and performance. The
brief was that the vehicle should be attractive to customers without any compromises
on quality and performance. Mr Tata set the internal benchmarks. The company has
done a lot of innovations to bring the cost down.
In such a project there are more failures than successes but never at any point did
we think that we will fail. Mr Tata was completely involved with the project as was Mr
Ravi Kant who was extremely supportive and participative. They were an integral part
of the team along with other senior managers. They created an environment in which
people never had a fear of failure; in which they had the chance to use their creativity
to a maximum. And the team responded magnificently. They were convinced and
passionately involved with the project.
The focus was always on taking the project forward. Our suppliers also put in all
efforts and were very involved with the project. The next phase is to have the variants
of the Nano; there are lots of exciting possibilities in the development of the car."
 Where is Project management
appropriate….JMN
Cleland and King suggest the five general
criteria to help decide when to use PM
Techniques
– Unfamiliarity
– Magnitude of Effort (people, capital and
equipment )
– Changing Environment
– Interrelatedness (lateral and external links)
– Reputation of the organization
 The Project Management
Challenge
Meeting or exceeding stakeholder
expectations.
But,…….needs and expectations invariably
involves balancing competing demands
among:
• Scope, time, cost, and quality
• Stakeholders with differing needs and
expectations
• Identified needs and unidentified
expectations
 DD Mishra, Former Head - IT, Governance & Outsourcing
at Vodafone

Stakeholders & Sponsor – The stakeholder management is extremely

important and if you have managed it well, you will have all the support
and buy in for your project and you may have created a half of your
success story. If ignored, it may cause failure even though the project is
managed properly. Similar is the sponsor who should be identified and
made responsible for sponsoring early. Understanding stakeholders
outside the fence who are negatively or positively impacted can help you
in success. For example, ignoring social activist in construction of large
dams can delay the timelines. I suggest a separate stakeholder
management plan for large and risky projects
 Vodafone targets rural markets through online teaching tool

• Vodafone Group Plc has developed a low-cost mobile Internet teaching tool that
the British telecom major plans to roll out across 1,000 government schools in
India's rural interiors.

• Vodafone's move to tap into the growing education market in the country's
hinterlands comes at a time when its local unit is shifting its focus from a
somewhat saturated urban market to rural areas. The tool, called WebBox, is an
Internet enabled smartphone, which is repackaged as a keyboard with a 600 MHz
processor that runs on an Android 2.1 OS platform and can be plugged to a
television for delivering online digital education content.

• The device is equipped with an application that contains state curriculum-based

content in mathematics, science, English and Hindi for students of sixth and
seventh classes. Vodafone had recently concluded a successful WebBox
deployment pilot with Pearson Education, a senior company executive said.
Commercial models are also being explored, the executive said, though he
declined to share details.

• "Roughly 15 million learners in India required skills training annually, but the NSDC
(National Skills Development Corporation) manages to train merely 75,000 a year
due to access constraints. Accordingly, hybrid course offerings, combining
classroom and online learning will help education service providers reach out to
more students," the Vodafone presentation said.
 Trends
• “India is a grossly underserved country with respect to infrastructure,” says
P Srinivasan, retired senior project manager from Larsen & Toubro. “Ninety
per cent of our growth story is yet to be built and that will call for big
investments in infrastructure and a massive number of projects, not just in
2014 but way beyond.”

• Manoj Thomas, Senior project manager, Thomson Reuters

Traditionally civil engineering and IT have more certified project managers
working on related projects. I foresee this trend to expand and encompass
financial Services and automobile engineering sectors as well even as
these adopt formal project management practices. There will definitely be a
growing need for qualified project managers as many more industries adopt
project management as core functionality within their organisations.
Three Project Objectives

• Performance
• Cost
• Time
 Why do you need project
management techniques?
The reason for organizing an assignment
as a project is to FOCUS the
responsibility, authority, and scheduling of
the project in order to meet defined goals.”
– schedule
– cost
– performance (quality)
 Other major reasons to use PM
techniques
• Clear work descriptions minimize surprises
and conflicts
• Responsibilities and assignments for
specific tasks are easily identified
• Reduces need for continuous reporting
• Progress can be measured against a plan
• Time limits for task completion are more
easily specified
Why Project Management?

Plus Minus

• Responsive to client • Organizational

and environment complexity
• Fast problem • Policy violations
resolution • Lower personnel
• Quick decision utilization
making
• No sub optimization
 The two types of project
management activities
• Project planning and definition activities

• Project implementation and control

activities

More simply
– Deciding, and
– Doing
 Success factors in project
management
• Appropriately skilled project manager
• Clear authority for the PM to act
• Commitment to the PM methodology
• A skilled PM team agreed to the project goals
• A complete project plan that is understood by all
participants
• Objectives that contribute to the larger goals of
the organization
• Workable tracking and monitoring methods
 Bottom line
• What project management will do is provide a
system for planning, documenting, organizing, and
communicating.

• It provides a basis for better decisions

• Ultimately, it is the people who will make things

happen and make things work, not the methodology
• Mr. Gurjot Bhatia, senior executive director, project management group,
CBRE India, said, “We offer project management as a service to our clients
across India. We have seen that whenever project management techniques
are used, cost, time, quality, safety, and project communication are handled
effectively. Project management is a necessity, not a choice.
We have used project management techniques for all our projects, totalling
100 million sq ft of industrial, commercial, retail, hospitality, and residential
space.

• Dell ICC Expansion, Sriperumbudur Industrial Belt, Tamil Nadu, C B Richard Ellis
• PMI India Best Project of the Year (short duration: less than one year
 The Relationships Among Portfolios, Programs, and Projects
A portfolio refers to a collection of projects, programs, subportfolios, and operations
managed as a group to achieve strategic objectives.

Programs are larger initiatives that are broken up into a set of smaller projects and
subprograms and then coordinated centrally in support of the portfolio. The projects in a
program are related to each other.

For example, an anonymous automobile company manufactures different types of cars. The
design and manufacturing of one particular type of car would be called a program and of the
parts like bonnet, panel, or engine would be a project. The integration of all the parts
(projects) would make a complete automobile (program).

Although the projects or programs within the portfolio may not necessarily be interdependent
or directly related, they are linked to the organization’s strategic plan by means of the
organization’s portfolio.

As Figure 1-1 illustrates, organizational strategies and priorities are linked and have
relationships between portfolios and programs, and between programs and individual
projects. Organizational planning impacts the projects by means of project prioritization
based on risk, funding, and other considerations relevant to the organization’s strategic plan.

Organizational planning can direct the management of resources, and support for the
component projects on the basis of risk categories, specific lines of business, or general
types of projects, such as infrastructure and process improvement.