INTRODUCTION TO PROJECT MANAGEMENT

DEFINING PROJECT

• A project is a set of related tasks that are coordinated to achieve a

specific objective in a given time limit”

• A Guide to the Project Management Body of Knowledge (PMBOK)

defines a project as “a temporary endeavor undertaken to create a
unique product of service

• the project is an economic activity with well-defined objectives and

having a specific beginning and end.
OBJECTIVES OF A PROJECT

3 Project Objectives:

• Performance
• Time
• Cost
THREE PROJECT OBJECTIVES

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 PROJECT LIFE CYCLE

Stages of a Conventional Project

• Slow beginning
• Buildup
• Peak
• Begin a decline
• Termination

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PROJECT LIFE CYCLE

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PROJECT LIFE CYCLE

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 PROJECT MANAGEMENT

The supervision and control of the work required to

complete the project vision. The project team carries out the
work needed to complete the project, while the project
manager schedules, monitors, and controls the various
project tasks. Projects, being temporary and unique things
that they are, require the project manager to be actively
involved with the project implementation
 PROJECT PROCESS GROUPS

Project initiation
● Selection of the best project given resource limits
● Recognizing the benefits of the project
● Preparation of the documents to sanction the project
● Assigning of the project manager
Project planning
● Definition of the work requirements
● Definition of the quality and quantity of work
● Definition of the resources needed
● Scheduling the activities
● Evaluation of the various risks
paperwork
 PROJECT PROCESS GROUPS

Project execution
● Negotiating for the project team members
● Directing and managing the work
● Working with the team members to help them improve
Project monitoring and control
● Tracking progress
● Comparing actual outcome to predicted outcome
● Analyzing variances and impacts
● Making adjustments
Project closure
● Verifying that all of the work has been accomplished
● Contractual closure of the contract
● Financial closure of the charge numbers
● Administrative closure of the project
PROJECT PLANNING
WORK BREAKDOWN STRUCTURE

Project
Construction of
building

Level 1 Identifying the Designing the Material

contractor building procurement

Seeking Evaluating Selecting

Level 2 tenders tenders contractor

Development Preparing Identifying

of building tender prospective Inviting bids
Level 3 specifications documents contractors
 WORK BREAKDOWN STRUCTURE

• The structure of WBS resembles the organization

chart. However it is entirely different from

organization chart.

• The organization chart depicts the hierarchy of the

personnel whereas the WBS is a technique of grouping

the tasks needed for a project.

 WORK BREAKDOWN STRUCTURE

A set of work packages when completed, complete a

higher level task in the hierarchy. A set of level 3 tasks

when completed, complete a level 2 task and so on.

Project is completed when all level 1 tasks are

completed.
 WORK BREAKDOWN STRUCTURE

Project Scheduling - network

development
 DEVELOPING PROJECT NETWORK

Basic rules

1. Network typically flows from left to right

2. An activity can not begin unless all preceding
connected activities are completed
3. Looping is not allowed
4. Conditional activities are not allowed
5. An activity is represented by a single arrow
6. A pair of events can not be connected by more
than one activity
7. There must be a single start and single end
 DEVELOPING PROJECT NETWORK

Terminology

1. Activity : a homogeneous element of work

consuming some resources and requiring some
amount of time for its completion

2. Event : start or end of an activity

• Simple event
• Merge event
• Burst event
• Combined merge and burst event
 DEVELOPING PROJECT NETWORK
Activity A is predecessor to Activity B and
Activity A is predecessor to Activity B Activity C

This is a simple event

This is a burst event.

Activity A and B are predecessor to

Activity C and Activity D
Activity A and B are predecessor to Activity C

This is a merge event

This is a hybrid event

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 DEVELOPING PROJECT NETWORK

Activity Predecessor Activity time

A -- 3

B -- 5

C -- 7

D C 3

E A, B 7

F E, D 3

G D 2

H F, G 2
DEVELOPING PROJECT NETWORK
DEVELOPING PROJECT NETWORK

A3
E7
B5 F3
H2

C7
G2

D3

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 DEVELOPING PROJECT NETWORK
Activity Immediate predecessor

A -

B A

C A

D B

E B

F B, C

G D, E

H F

I G, H
WORK BREAKDOWN STRUCTURE

PROJECT SCHEDULING - CPM

 CRITICAL PATH METHOD

•Draw the project network

•Identify the paths leading from start to finish
•Calculate the total time along each path
•The path with longest total time is the critical path
•The activities on the critical path are critical activities
CRITICAL PATH METHOD

A3
B5 E7
F3
H2

C7 G2
D3

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 CRITICAL PATH METHOD

ES EF LS LF
A 0 3 2 5
B 0 5 0 5
C 0 7 2 9
D 7 10 9 12
E 5 12 5 12
F 12 15 12 15
G 10 12 13 15
H 15 17 15 17
 SLACK

Total Slack
Amount of time an activity can be delayed beyond its earliest possible
start time if other activities take their estimated duration
The difference between late finish and early finish of an activity
Free Slack
Amount of time by which an activity can be delayed without delaying early
start of its successor activity
Early start of succeeding activity - Early finish of activity
Independent Slack
Amount of time by which an activity can be delayed maintaining late finish
of preceding and early start of succeeding activity
Early start of succeeding activity – late finish of preceding activity –
activity time
 SLACK

A3
B5 E7 F3
H2

C7 G2
D3

ES EF LS LF
A 0 3 2 5
B 0 5 0 5
C 0 7 2 9
D 7 10 9 12
E 5 12 5 12
F 12 15 12 15
G 10 12 13 15
H 15 17 15 17

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 SLACK

Project evaluation and review technique

PERT
 Time Estimates in PERT

Most likely time

The time which is taken most frequently by the activity
Optimistic time
The time by which activity can be completed, if everything went well
Pessimistic time
The time by which activity will get completed even under adverse
conditions

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 Time Estimates in PERT

Expected time of completion TE

= TO + 4TM + TP
6

Standard deviation = TP -TO

6
Variance = TP -TO 2

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 Time Estimates in PERT

ACTIVITY PREDECESSOR ACTIVITY TIME

To Tm Tp
A -- 1 2 9
B -- 2 4 12
C -- 4 6 14
D C 1 3 5
E A, B 1 8 9
F E, D 2 3 4
G D 1 2 3
H F, G 1 2 3
 Time Estimates in PERT

A3
B5 E7 F3
H2

C7 G2
D3

A–E–F–H 15 Activity To Tm Tp Te SD Variance

B–E–F–H 17 A 1 2 9 3 8/6 64/36

C–D–G–H 14 B 2 4 12 5 10/6 100/36

C–D–F–H 15 C 4 6 14 7 10/6 100/36

D 1 3 5 3 4/6 16/36

BEFH is the critical path E 1 8 9 7 8/6 64/36

Expected Project completion time is 17 days F 2 3 4 3 2/6 4/36

G 1 2 3 2 2/6 4/36

H 1 2 3 2 2/6 4/36
 Time Estimates in PERT

Project variance

100/36 + 64/36 + 4/36 +4/36 = 172/36

Project standard deviation

√ (172/36) = 2.19
 Area under normal curve

0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09
0.0 0.0000 0.0040 0.0080 0.0120 0.0160 0.0199 0.0239 0.0279 0.0319 0.0359
0.1 0.0398 0.0438 0.0478 0.0517 0.0557 0.0596 0.0636 0.0675 0.0714 0.0753
0.2 0.0793 0.0832 0.0871 0.0910 0.0948 0.0987 0.1026 0.1064 0.1103 0.1141
0.3 0.1179 0.1217 0.1255 0.1293 0.1331 0.1368 0.1406 0.1443 0.1480 0.1517
0.4 0.1554 0.1591 0.1628 0.1664 0.1700 0.1736 0.1772 0.1808 0.1844 0.1879
0.5 0.1915 0.1950 0.1985 0.2019 0.2054 0.2088 0.2123 0.2157 0.2190 0.2224
0.6 0.2257 0.2291 0.2324 0.2357 0.2389 0.2422 0.2454 0.2486 0.2517 0.2549
0.7 0.2580 0.2611 0.2642 0.2673 0.2704 0.2734 0.2764 0.2794 0.2823 0.2852
0.8 0.2881 0.2910 0.2939 0.2967 0.2995 0.3023 0.3051 0.3078 0.3106 0.3133
0.9 0.3159 0.3186 0.3212 0.3238 0.3264 0.3289 0.3315 0.3340 0.3365 0.3389
1.0 0.3413 0.3438 0.3461 0.3485 0.3508 0.3531 0.3554 0.3577 0.3599 0.3621
1.1 0.3643 0.3665 0.3686 0.3708 0.3729 0.3749 0.3770 0.3790 0.3810 0.3830
1.2 0.3849 0.3869 0.3888 0.3907 0.3925 0.3944 0.3962 0.3980 0.3997 0.4015
1.3 0.4032 0.4049 0.4066 0.4082 0.4099 0.4115 0.4131 0.4147 0.4162 0.4177
1.4 0.4192 0.4207 0.4222 0.4236 0.4251 0.4265 0.4279 0.4292 0.4306 0.4319
1.5 0.4332 0.4345 0.4357 0.4370 0.4382 0.4394 0.4406 0.4418 0.4429 0.4441
1.6 0.4452 0.4463 0.4474 0.4484 0.4495 0.4505 0.4515 0.4525 0.4535 0.4545
1.7 0.4554 0.4564 0.4573 0.4582 0.4591 0.4599 0.4608 0.4616 0.4625 0.4633
1.8 0.4641 0.4649 0.4656 0.4664 0.4671 0.4678 0.4686 0.4693 0.4699 0.4706
1.9 0.4713 0.4719 0.4726 0.4732 0.4738 0.4744 0.4750 0.4756 0.4761 0.4767
2.0 0.4772 0.4778 0.4783 0.4788 0.4793 0.4798 0.4803 0.4808 0.4812 0.4817
2.1 0.4821 0.4826 0.4830 0.4834 0.4838 0.4842 0.4846 0.4850 0.4854 0.4857
2.2 0.4861 0.4864 0.4868 0.4871 0.4875 0.4878 0.4881 0.4884 0.4887 0.4890
2.3 0.4893 0.4896 0.4898 0.4901 0.4904 0.4906 0.4909 0.4911 0.4913 0.4916
2.4 0.4918 0.4920 0.4922 0.4925 0.4927 0.4929 0.4931 0.4932 0.4934 0.4936
2.5 0.4938 0.4940 0.4941 0.4943 0.4945 0.4946 0.4948 0.4949 0.4951 0.4952
2.6 0.4953 0.4955 0.4956 0.4957 0.4959 0.4960 0.4961 0.4962 0.4963 0.4964
2.7 0.4965 0.4966 0.4967 0.4968 0.4969 0.4970 0.4971 0.4972 0.4973 0.4974
2.8 0.4974 0.4975 0.4976 0.4977 0.4977 0.4978 0.4979 0.4979 0.4980 0.4981
2.9 0.4981 0.4982 0.4982 0.4983 0.4984 0.4984 0.4985 0.4985 0.4986 0.4986
3.0 0.4987 0.4987 0.4987 0.4988 0.4988 0.4989 0.4989 0.4989 0.4990 0.4990
Project crashing
 TIME COST RELATIONSHIP

Crash cost
cost

Normal cost

Crash Normal
time time

Time
 PROJECT CRASHING

•Compute crash cost per unit time for each activity

= crash cost - normal cost
normal time - crash time
•Identify all critical paths
•Select one activity on each critical path such that the total cost
of crashing these activities by one unit time is minimum among
all combinations
•Activities should be such that their current activity time is
higher than crash time
•Repeat the process until crashing is possible
Activity Predecessor Normal time Crash time Normal cost Crash cost

A - 12 11 4000 4400

B A 6 4 2500 3500

C A 3 2 600 900

D A 5 4 1600 1950

E C, D 4 2 3400 3800

F B, E 8 5 1000 2800

G D 4 2 1200 2800

H F, G 7 5 1800 4000

B6 F8 A–B–F–H 33 Days
A 12 E4 A–C–E–F–H 34 Days
C3 H7
A–D–E–F–H 36 Days
A–D–G–H 28 Days

D5 G4
 Crash cost per day Possible number of
Activity Normal time Crash time Normal cost Crash cost crash days

400 1
A 12 11 4000 4400
500 2
B 6 4 2500 3500
300 1
C 3 2 600 900
350 1
D 5 4 1600 1950
200 2
E 4 2 3400 3800
600 1
F 8 7 1000 1600
800 2
G 4 2 1200 2800
1100 2
H 7 5 1800 4000
 Activities that can be Crashed project
Project completion time Critical path Activity crashed Cost of crashing
Paths crashed completion time
ABFH 33
ACEFH 34
36 ADEFH 36 ADEFH A, D, E, F, H E 200 35
ADGH 28

ABFH 33
ACEFH 33
35 ADEFH 35 ADEFH A, D, E, F, H E 200 34
ADGH 28

ABFH 33
ACEFH 32
34 ADEFH 34 ADEFH A, D, F, H D 350 33
ADGH 28

ABFH 33
ACEFH 32 ADEFH A, F, H
33 ADEFH 33 A 400 32
ABFH A, B, F, H
ADGH 27

ABFH 32
ACEFH 31 ADEFH F, H
32 ADEFH 32 F 600 31
ABFH B, F, H
ADGH 26

ABFH 31
ACEFH 30 ADEFH H
31 ADEFH 31 H 1100 30
ABFH B, H
ADGH 26

ABFH 30
ACEFH 29 ADEFH H
30 ADEFH 30 H 1100 29
ABFH B, H
ADGH 25

ABFH 29
ACEFH 28 ADEFH None Further crashing is not possible because on one of the critical path, no activity
29 ADEFH 29 ABFH B can be further crashed.
ADGH 24
Activity Normal Crash Normal Crash Immediate
Time Time Cost Cost Predecessor

A 4 3 2,000 2,600 -
B 2 1 2,200 2,800 A
C 3 3 500 500 A
D 8 4 2,300 2,600 A
E 6 3 900 1,200 B, D
F 3 2 3,000 4,200 C, E
G 4 2 1,400 2,000 F
Activity Normal Crash Normal Crash Immediate
Time Time Cost Cost Predecessor

A 10 10 5000 5000 --
B 8 8 4000 4000 A
C 8 8 4500 4500 A
D 4 4 6000 6000 C
E 7 5 5500 6500 B
F 9 4 3750 13750 B
G 8 1 2000 4800 D
H 15 12 6500 14900 E, F, G
I 10 10 5000 5000 H

• Calculate slack for all activities

• What is the additional cost for completing project in 52 days?
 SLACK
Total Slack
Amount of time an activity can be delayed beyond its earliest
possible start time if other activities take their estimated duration
The difference between late finish and early finish of an activity
Free Slack
Amount of time by which an activity can be delayed without
delaying early start of its successor activity
Early start of succeeding activity - Early finish of activity
Independent Slack
Amount of time by which an activity can be delayed maintaining late
finish of preceding and early start of succeeding activity
Early start of succeeding activity – late finish of preceding activity –
activity time
S. No. Task Task code Predecessors Time (in days)

1 Specification development A - 20

2 Process mapping B - 15

3 Developing software for process C A, B 90

components

4 Testing of software D C 5

5 Developing hardware specifications E B 5

6 Procurement of hardware F E 25

7 Integration of software components G C 30

8 Installation of software on hardware H F, G 10

9 Pilot test I H 10

10 Training of users J I 30
 C 90

D5
A 20

G 30

J 30
B 15 I 10

H 10
E5 F 25
 Free Slack Independent Slack
S. No. Task code ES EF LS LF
Total Slack ESs EF IS = ESs – LFp – t

1 A 0 20 0 20 0–0=0 20 – 20 = 0 20 – 0 – 20 = 0

2 B 0 15 5 20 5–0=5 15 – 15 = 0 15 – 0 – 15 =0

3 C 20 110 20 110 20 – 20 = 0 110 – 110 = 0 110 – 20 – 90 = 0

4 D 110 115 165 170 165 – 110 = 55 170 – 115 = 55 170 – 110 – 5 = 55

5 E 15 20 110 115 110 – 15 = 95 20 – 20 = 0 20 – 20 – 5 = -5

6 F 20 45 115 140 115 – 20 = 95 140 -45 = 95 140 – 115 – 25 = 0

7 G 110 140 110 140 110 – 110 = 0 140 – 140 = 0 140 – 110 – 30 = 0

8 H 140 150 140 150 140 – 140 = 0 150 – 150 = 0 150 – 140 – 10 = 0

9 I 150 160 150 160 150 – 150 = 0 160 – 160 = 0 160 – 150 – 10 = 0

10 J 160 170 160 170 160 – 160 = 0 170 – 170 = 0 170 – 160 – 30 = -20
GANTT CHART
 Gantt Chart

• Developed by H L Gantt in 1917

• Shows planned and actual progress against a

horizontal time scale

• Helpful in expediting, sequencing and resource

allocation of projects

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 Base line Gantt chart

Predecessor Time

A Design specs - 2
B Shell and A 2
power
C Memory / A 1
software
D Zoom system A 2
E Assemble B, C, D 2
F test E 2
Create a baseline Gantt chart for the following project
.

Activity A B C D E F G H

Predecessor - A A A C,D B,E D F,G

Time 12 6 3 5 4 8 4 3

E
F
G H

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

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 Develop the Gantt chart for the following network

G H

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

A3
F2
D5
H1
B4 C5

G7
E8

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Stakeholders
A stakeholder is an individual, group, or organization that may affect, be affected by, or perceive itself
to be affected by a decision, activity, or outcome of a project
Stakeholder Analysis
Defining Engagement Levels
UPES – The Nation Builders University

Project Audit
UPES – The Nation Builders University

Project evaluation needs to be conducted

• As a whole when it is completed

• At various points during project life cycle

Project audit is the tool for project evaluation

UPES – The Nation Builders University

The result is a set of recommendations that can

help both ongoing and future projects to

• Identify problems earlier

• Clarify performance time and cost relationship
• Reduce cost
• Accelerate the achievement of results
• Identify and correct mistakes
• Provide information to client
UPES – The Nation Builders University

The project audit is a thorough examination of the

management of project, its methodology and
procedures, its records, its budgets and
expenditures and degree of completion

The outcome should indicate

• Current status of project

• Future status
• Risk assessment
• Information pertinent to other projects
• Limitations of audit
UPES – The Nation Builders University

Depth of audit

Time and money limit the depth of audit

Three levels of audit may be used

• General audit
• Detailed audit
• Technical audit
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Audit report

• Introduction
• Description of project
• Framework of project
• Project objectives
• Current status
• Cost
• Schedule
• Progress
• Quality
• Future project status
• Critical management issues
• Risk analysis
• Limitations and assumptions
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Responsibilities of project auditor

• Assemble a team of experts

• Familiarize the team with project requirements
• Audit the project
• Debrief project’s management
• Produce a written report
• Distribute the report to all concerned
• Follow up for recommendations
UPES – The Nation Builders University
Project audit
termination

Audit report
PROJECT AUDIT LIFE CYCLE preparation

Preliminary
analysis of project

Establishing
audit data base

Project Baseline
definition

Project audit
initiation
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Project audit life cycle

Step 1 Project audit initiation

• Starting the audit process

• Defining the purpose and scope
• Determine audit methodology
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Project audit life cycle

Step 2 Project baseline definition

• Identify performance areas under evaluation

• Establish performance standards
• Ascertaining management performance
expectations
• Developing audit program / schedule
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Project audit life cycle

Step 3 Establishing audit data base

• Create data base for use by audit team

• Data base includes information on past
and current project status
• Schedule performance
• Cost performance
• Output quality
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Project audit life cycle

Step 4 Preliminary analysis of project

• Analysis of data
• Judgement on the performance of project
• Communication of analysis and judgement to
project manager

The purpose of audit is to improve the project and

not to embarrass the project team
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Project audit life cycle

Step 5 Audit report preparation

• Preparing audit reports

• Set of recommendations
• Plan for implementing recommendations
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Project audit life cycle

Step 6 Project audit termination

• Release of final report and recommendations

• Review of audit process
• Identifying scope of improvement in audit
process
• Audit team is disbanded
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Qualities of audit leader

• No direct involvement or direct interest in project

• Perceived as impartial and fair by all stakeholders
• Willingness to listen
• Independence and authority
• Broad based experience in the industry
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Audit team

Audit team may comprise of members from

• Project itself
• Accounting department
• Technical experts
• Customer
• Marketing department
• Senior management
• Purchase department
• Personnel department
• Legal department
UPES – The Nation Builders University

Guidelines for conducting project audit

• Project audit is not a fault finding mission

• There should be no comments about individuals. Keep
to project issues not what happened or by whom
• Be sensitive to human emotions and reactions
• Accuracy of data should be verifiable
• Friendliness and objectivity encourage cooperation and
reduce anxiety
• Audit should be completed as quickly as reasonable
UPES – The Nation Builders University

PROJECT TERMINATION
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Project is said to be terminated when

• Work on the substance of project has ceased

(Normal or failed project)
• Work has slowed down to the point that further
progress is not possible (premature)
• Project has been indefinitely delayed
(Perpetual)
• Resources have been deployed to other projects
(Changed priority)
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Ways to close a project

• Extinction
• Addition
• Integration
• starvation
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Termination by extinction

• Project is stopped because it has been successful and

achieved its objectives
• Output handed over to client
Or
• Project has been stopped because it has been
unsuccessful and has been superseded

o All activity on the project substance ceases

o Property, equipment and materials of the project are
disbursed
o Project final report is prepared
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Termination by addition

• In case of projects for use in parent

organization
• Institutionalizing the project as a formal part
of parent organization
• For some time lives in protected status
• Project assets are transferred from project to
the new created division
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Termination by integration

• The property of project and personnel are

distributed among the existing elements of
organization

• The output becomes standard part of the operating

system
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Termination by starvation

• Slow starvation by budget decrement

• Sometimes budget decrements used to

mask project termination
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THE TERMINATION PROCESS

Step 1 Decision

• Based on the degree to which the project

meets goals and objectives set for it

• Factor scoring or weighted factor scoring or

delphi or a combination may be used for
making decision
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Information Information Information
system system system
finance marketing production

Information Information Information

system system system
project internal external
environment environment
Criteria
database
Global database

Delphi
database Scoring
model

Termination
rule set

Uncertain Sensitivity
Continue NO Termination
analysis
project decision

Yes
Terminate
project
UPES – The Nation Builders University
THE TERMINATION PROCESS
Step 2 Implementation

• Ensure completion of work including tasks performed by sub

contractors
• Notify the client of project completion. Acceptance of project
must be acknowledged by client
• Ensure that documentation is complete
• Including project final report
• Clear for final billings and invoices
• Redistribute resources including personnel
• Ascertain product support requirements
• Oversee the closing of project book