CHAPTER 12:
PROJECT
MANAGEMENT
INTRODUCTION
Project management consists of the process of defining, performing, and
monitoring specific work, bounded by a timeline, a defined scope, and goals. It is
often performed by a team and given a budget to work with. Organization initiate
and fund projects because they support strategic goal and can lead to new
products, systems, or major infrastructure. However, large projects budgets also
create financial risk and opportunity costs when project fail. Internal auditors add
value by helping establish requirements for planning, execution, documentation,
and performance monitoring, ensuring discipline and consistency throughout the
project.
PROJECT MANAGEMENT
The PMI defines a project as a temporary and unique endeavor designed to
produce a specific product, service, or result. projects are:
Unique
Projects are unique because, although some may share common activities, such as
construction task or IT development steps and each one differ in outcomes, stakeholders,
resources, constraints, and ways of execution.
Temporary
They are temporary because every project has a clear beginning and end, unlike ongoing
business operations that repeat continuously. This temporary nature requires different
controls, skills, and management practices, as well as strict attention to timelines and
constraints, since delays or failures can have significant consequence.
Projects follows five phases: initiation,
planning, executing, closing, and monitoring
and controlling. The PMI and IIA approaches
PROJECT align, as internal auditors also work through
PHASE planning, fieldwork, and reporting. Initiation
and planning match the planning phase,
executing aligns with fieldwork, and closing
corresponds to reporting, supervision, and
documenting the project’s completion.
INITIATION
The initiation phase establishes the foundation of a project by defining clear goals,
understanding, stakeholders expectations, and ensure alignment from the start. During
this phase the tiple constraint are identified, this are SCOPE, TIME, and COST, this must
remain in balance to maintain quality and avoid scope creep.
Key activities includes conducting feasibility and market studies, performing gap and
financial analyses, and completing a stakeholder analysis to understand user and
support needs.
A PROJECT CHARTER, is developed to formalized the projects purpose, authority,
responsibilities, and required resources.
INITIATION
Effective communication, flowing both upward and downward, is critical to align
expectations and avoid misunderstanding that lead to delays or cost overruns.
The phase also involves selecting qualified PROJECT MANAGER with strong
leadership, communication, negotiation, and coaching skills, as well as
assembling a capable and motivated project team. together, these elements set the
strategic direction and ensure a strong start for successful project execution.
PLANNING
The Planning Phase focuses on defining how the project’s goals
will be achieved by outlining the specific tasks, resources, costs,
and timelines required. In this phase, the project scope is refined
from a broad concept to detailed, actionable steps. A clear plan is
created to identify required activities, determine their proper
sequence, and estimate the time and resources needed, while
allowing for contingencies.
PLANNING
Tools such as the Work Breakdown Structure (WBS), Gantt
Charts, CPM, and PERT help establish task dependencies,
calculate realistic timelines, and determine the critical path,
which dictates the earliest possible project completion date.
Accurate cost estimation is essential, as every activity
consumes resources and poor budgeting can lead to overruns or
intentional manipulation of costs to influence approvals.
THE CRITICAL PATH METHOD AND THE PROGRAM
EVALUATION AND REVIEW
TECHNIQUE (PERT)
These tools help determine the critical path, the longest sequence
of dependent tasks with zero slack, meaning any delay in these
tasks delays the entire project. By identifying earliest and latest
start and finish times, CPM and PERT provide clarity on scheduling
priorities, highlight where flexibility exists, and guide managers in
allocating resources and monitoring potential delays effectively.
THE CRITICAL PATH METHOD AND THE PROGRAM
EVALUATION AND REVIEW
TECHNIQUE (PERT)
This are essential planning tools used to identify the sequence of
activities that determines the earliest possible completion date of a
project. Both methods map tasks using networks of arrows and nodes
to show activity dependencies and connections. CPM uses a single
time estimate per task, while PERT incorporates three estimates,
optimistic, most likely, and pessimistic, to calculate a weighted
average and account for uncertainty.
THE CRITICAL PATH METHOD AND THE PROGRAM
EVALUATION AND REVIEW
TECHNIQUE (PERT)
It is fairly common for the duration of an activity to have a range of
values due to multiple estimates, so manager may want to
establish:
An Optimistic Estimates
A pessimistic Estimates
A most likely scenario
PLANNING
The phase also includes securing plan approval and establishing
a project plan freeze, which locks in the scope, schedule, and
resources to serve as a baseline for monitoring progress.
Without proper planning, sequencing, costing, and approval,
projects risk delays, inefficiencies, and misalignment among
stakeholders.
EXECUTION
The Executing Phase is where the planned work is carried out, and the focus is on
keeping the project on track by meeting quality requirements, staying within the
timeline, and using resources efficiently. The project manager leads and
coordinates the team, ensures smooth operations, and maintains strong
communication with all stakeholders to prevent delays and resolve issues
quickly. Some of the most important activities during this phase include:
▪ Leading and managing the team
▪ Meeting with the team members
▪ Communicating with stakeholders
EXECUTION
Effective communication is critical to prevent delays, resolve quality
issues quickly, and ensure materials and support arrive on time. The PM
must also address conflicts promptly, as unresolved issues can harm
performance and team morale. Securing needed resources, anticipating
risks, and using progress reports with key performance indicators help
detect problems early and keep the project moving toward successful
completion.
CLOSING
The Closing Phase marks the completion of the project, during which
the final products, services, or outcomes are formally delivered to the
client. All connections with external organizations—such as the host,
suppliers, and contractors—are closed out, and the project team is
disbanded. A final report is usually prepared to summarize the
project’s accomplishments, any remaining actions needed, and
arrangements for ongoing maintenance.
CLOSING
This phase may also involve making necessary
accounting adjustments and disposing of unneeded
assets. Since workers are often reassigned after project
completion, having accurate performance evaluations
from the execution phase helps ensure team members are
placed in roles where they can continue to be most
productive.
MONITORING AND CONTROLLING
The Monitoring and Controlling Phase ensures that project
work is carried out correctly, by the appropriate people, and at
the right pace while staying within cost, quality, and
stakeholder expectations. It also identifies tasks that should
be happening but are not, preventing unmet deliverables and
scope problems later. Monitoring must occur throughout the
entire project life cycle—not only during execution.
MONITORING AND CONTROLLING
In the Initiating Phase, leaders must confirm that
project goals align with strategic, operational, and
financial objectives. In the Planning Phase, tasks,
schedules, contracts, and communication protocols
must be clearly defined and properly approved.
MONITORING AND CONTROLLING
Continuous monitoring allows internal auditors to provide
early guidance, especially during initiation and planning, to
ensure that:
▪ A project management methodology is in place
▪ Feasibility studies are competent and comprehensive
▪ The right stakeholders are summoned to provide input
▪ The right stakeholders are approving decisions
MONITORING AND CONTROLLING
Projects are aligned with strategic and other priorities
with a sound business case
Business requirements are identified and agreed upon
A risk assessment is performed
A comprehensive contract or binding agreement is in
place
MONITORING AND CONTROLLING
Late or end-of-project reviews are often ineffective because
key decisions, commitments, and expenses have already been
made. According to PMI’s Pulse of the Profession (2014), only
56% of strategic initiatives meet their original goals, causing
organizations to lose $109 million for every $1 billion invested
—highlighting the necessity of strong monitoring and control
practices.
KEY SUCCESS AND REASONS IT PROFECTS FAIL
Many organizations invest millions of dollars annually in IT projects, yet
many of this initiatives still experience partial or complete failure.
Although IT system, serve as essential strategic and operational enablers,
they also pose significant risks. In most organization, other than those
that primarily build or sell technology, IT functions as the backbone that
supports data flow within and beyond the company, enable the delivery of
updates and instructions, facilitates performance reporting, and support
the management of people, materials, and costs. Despite its importance, IT
project failure remains common
The reason are numerous, and while the following list is
comprehensive, it is not exhaustive; however, it captures the majority
of the causes behind IT project failures.
[Link] backwards from a drop-dead completion due
[Link] technical leader
[Link] off-the-shelf package and over-customizing it
[Link] data model
[Link] using a specific methodology- the following are system development
methodologies that is not suitable or recommended for all types of project.
Waterfall
Prototyping
Rapid Application development (RAD)
6. Using an inappropriate software tool
[Link] data mitigation
[Link] or insufficient testing- examples of a specific type of attribute, that can
be used for testing
Graphical users interface (GUI) Penetration testing
Availability testing
Usability testing
Regression testing
Performance testing
Nonrepudiation testing
Compatibility Compatibility testing
Security testing
9. Scoop creep 17. Lack of top management
[Link] of user involvement commitment
11. Poorly defined, unclear, or 18. Unrealistic expectations
no requirements 19. Inadequate traning
12. Long-time schedule 20. Failure to commit PMO
13. Stakeholder conflicts 21. Employee turnover
14. Poor cost and schedule
estimation
15. Communication breakdowns
16. Poor failure warning signals
PROJECT SELECTION
STRATEGIC PLAN. Project may be chosen because they support the organization’s long-term goals and
carry major financial, reputational, or competitive impact if they fail.
VISION/MISSION. Some projects are essential to fulfilling the organization’s mission and future vision;
failure may affect support from investor, regulators, and stakeholders.
MARKET ANALYSIS. Market conditions may show the need to start a project to meet customer or
industry demand.
PRIORITIZING PROJECTS. Organization compare options, considering limited resources and competing
priorities, to choose the most beneficial project.
EFFORT-IMPACT ANALYSIS. Project are selected based on which option delivers the highest impact with
the most reasonable effort.
PROJECT METRICS
A performance metric measures how an organization, program, or
process is performing. Metrics should meet the needs of internal and
external stakeholders. While often financial, metrics can also be
operational, strategic, or compliance-related. Project management
metrics may include safety, time, cost, resources, scope, quality, and
activities. Call center metrics may include calls answered, calls
abandoned, and wait or call duration times. Metrics should be meaningful
and used for decision-making, not collected just because data is
available. Key considerations include:
PROJECT METRICS
Data is easy to collect.
Measurement is understood and uses consistent units.
Data is collected regularly but not excessively.
Data collected supports decisions, improvements, and stakeholder
satisfaction.
Metrics are balanced so that improving one does not harm another.
Goals should be reasonable to prevent people from manipulating or
falsifying results.
PROJECT SOFTWARE
Many software tools exist to support project teams. When selecting
project software, key features to consider include:
Collaborative
Issue tracking
Scheduling
Resource management
Document management
Platform
SUMMARY
Project requirements often differ from what stakeholders expect,
and what is documented does not always reflect what is
ultimately built—leading to costly gaps. Confusion between
needs and wants can also result in deliverables that miss
expectations. Effective project management depends on clearly
identifying and managing stakeholder expectations while
controlling scope, time, resources, and quality. Internal auditors
help ensure that project investments stay aligned with goals and
deliver their intended benefits.
THANK
YOU