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- 1. Chapter 1 Project Management Concepts
- 2. WHAT IS A PROJECT? • “A temporary endeavor undertaken to create a unique product or service” (PMI – Project Management Institute, 2000) • It is any undertaking that has definite, final objectives representing specified values to be used in the satisfaction of some need or desire. (Ralph Currier Davis)
- 3. 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. • It simplifies the control
- 4. What projects do? • A project consists of a combination of organizational resources pulled together to create something that did not previously exist & that will provide a performance capability in the design & execution of organizational strategies. • Projects have a distinct life cycle, starting with an idea & progressing through design, engineering & manufacturing or construction, through use by a project owner.
- 5. Characteristics of Projects • Unique • Specific Deliverable • Specific Due Date (temporary) • Might be a part of broader program • Undertaken at all levels of management or at cross organizational levels • Often used as a means of implementing strategy. • Complexity
- 6. Key considerations involved in projects – Three goals • What will it cost? • What time is required? • What technical performance capability will it provide? • How will the project results fit into the design and execution of organizational strategies?
- 7. Figure 1-1: Performance, Cost, and Time Project Targets
- 8. Definition of Project Management • The art of directing and co-ordination of human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participant satisfaction. (PMI)
- 9. Scope of Project Management • Time management • Risk management • Cost management • Procurement • Quality management management • Human resource • Integration management management • Communication • Scope management management
- 10. Skills Required for Effective Project Management • Conflict Resolution • Creativity and Flexibility • Ability to Adjust to Change • Good Planning • Negotiation – win-win versus win-lose
- 11. Formalization of liaison devices in project management • Individual liaison • Standing committees • Product managers • Managerial liaison • Task forces • Project engineer • Liaison position • Teams
- 12. Effects of project management • Decline in midlevel positions • Emergence of a new class – project managers • It is about managing change in organizations • Elusive job security • Pressure on project managers
- 13. Project Management vs. General Management Project Management General Management • Specific cost, schedule & • Strategic management of technical performance enterprise • Matrix organizational design • Vertical organizational design • Ad hoc in nature • Ongoing enterprise • Focal point for financial & • Seeks enterprise efficiency & enterprise interfaces effectiveness • Concerned with product, • Concerned with enterprise service & project mission, objectives, goals, stakeholders stakeholders • Supports organizational • Integrates functional & strategies product activities
- 14. Activities under Project Management • Planning • Organizing • Motivation • Directing • Control
- 15. Project Processes • Project management process groups – – Initiating processes – Planning processes – Executing processes – Controlling processes – Closing processes • Product oriented process Both the processes are essential and complimentary for any project.
- 16. PHASES OF LIFE CYCLE OF A PROJECT • Idea – generate an idea • Research – have a quick look • Design – have a closure look • Development – do it • Marketing – try it • Production – use it • Post sales service – post implementation review
- 17. Figure 1-2 The Project Life Cycle
- 18. Figure 1-3 An Alternate Project Life Cycle
- 19. Criteria to be applied for use of project management • Size of the undertaking • Unfamiliarity • Market change • Interdependence • Resource sharing • Importance of the project • Organizational reputation
- 20. Reasons for failure of project management start-up strategies • Failure to design & implement a well- designed & developed strategy for the introduction of project management • Project management is viewed as the fad of the month and is not taken seriously • Project management is viewed as a separate entity in the organization and not as building block in the management of change in the enterprise.
- 21. Types of projects • Closed projects or painting by numbers • Semi-closed project or going on a quest • Semi-open project or making movies • Open project or walking in the fog
- 22. Representation of types of projects Don’t Know know how how Know Quest Pairs by what number Don’t know Fog Movie what
- 23. Applications of project types Project Type of change it Applications Type helps create or manage Painting by Evolutionary Improving your continuing numbers business operations Going on a Revolutionary Proactively exploring outside quest current operations and way of working Making a Evolutionary Leveraging existing capabilities movie Lost in a fog Revolutionary Solve problem or explore area outside your current operations and way of working
- 24. Total Project Management Life Cycle • Conceptualization • Formulation – Technical – Organizational – Commercial – Financial – Economic • Evaluation MEM 612 Project Management
- 25. Total Project Management Life Cycle Cont… • Feasibility studies report • Investment report • Environmental clearance • Administrative council • Engagement of consultants • Detailed project report • Technical specification • Financial closure • Contracts finalization MEM 612 Project Management
- 26. Total Project Management Life Cycle Cont… • Execution of contracts/ project • Monitoring & control • Completion of construction • Commissioning of project • Performance guarantee test • Handing over to operation • Closure of contracts • Completion cost & capitalization • Post project evaluation and report MEM 612 Project Management
- 27. Characteristics of investment in projects • High investment cost • Long implementation schedules • Long gestation period • Dynamic domestic and international market • Government priorities and policies • Development in the technologies • Substantial delays in the past • High cost of capital MEM 612 Project Management
- 28. Factors to be considered for new investments • Objectives and benefits of investment in projects to be clearly spell out • Adoption of technologies keeping in view the developing technologies & our needs • Exercising care while adopting new technologies • Selection of consultant • Selection of proven suppliers/ turnkey contractors MEM 612 Project Management
- 29. Factors to be considered for new investments Cont.. • Detailed micro plans and strategy of implementation • Faster decision making required • Technology and know-how transfer • Project mix after investment in projects • Continuous up-gradation of technology • Manpower planning and training MEM 612 Project Management
- 30. Diagnosis of delays in projects • Project ownership between operation & project authorities in dilemma • Delayed response for corrective measures • Lack of involvement in planning stage • Over dependence on consultants • Contracting agencies competence • Increase in quantities of work with reference to original estimates • Inadequate planning for structural fabrication • Delays in indigenous equipment supplies MEM 612 Project Management
- 31. Consequences of Delays in Projects • Interest loss • Higher capital cost due to inflation & change in foreign exchange parity • Loss of profit as envisaged due to deferment of benefits • Risk of outdated technology • Project remains unprofitable throughout its life • Production loss • National loss of resources • Loss of production incentive (in financial terms) to workers MEM 612 Project Management
- 32. Types of investment • Additions – To sustain present level of production; To give incremental output/ productivity • Modification – For ease of operation/ maintenance; Technological up-gradation • Replacement – Expansion; Diversification – new products • New Technology – New facility; retrofitting with old facilities • Quality improvement – Customer satisfaction • Pollution Control - Statutory MEM 612 Project Management
- 33. Types of Expenditure • Capital Expenditure • Revenue Expenditure MEM 612 Project Management
- 34. Confronting Uncertainty – The Management of Risk
- 35. What uncertainties are encountered in project management? • Time required to complete a project • Availability of key resources • Cost of resources • Timing of solutions to technological problems • Actions taken by competitors
- 36. Can uncertainty surrounding projects ever be eliminated? • No, but it can be managed