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CHAPTER 1 PROJECT MANAGEMENT

Introduction:

To understand what project management is ,we must first understand what a project is .We
hear of cement projects ,power projects refinery projects fertilizer projects The idea of a
project was conceived in the following manner .Due to the growth and outburst of Industries
and business settings ,it is constantly on the lookout for good business ideas for the existing
lines of business or for diversifications but the idea must be technically feasible, economically
viable, politically suitable and socially acceptable and once the idea passes these three tests an
investment proposal is made .when the investment proposal is approved then the project
commences.
A project is thus initiated to achieve a mission .As soon as the mission is accomplished the
project is said to have been completed.
The project Management Institute USA defines it as a one shot, time limited goal oriented
,major undertaking requiring the commitment of varied skills and resources The successful
completion of a project is thus limited to four important factorsScope ,Cost ,Schedule and
Customer satisfaction

A project therefore can be considered to be series of activities and tasks that

y Have a specific objective to be completed within certain specifications
y Have defined start and end dates
y Having funding limits
y Consume resources(money people an equipment)
y Combination of human and non human resources pooled together

Characteristics of a project are as follows:
1. Objective It has a fixed objective to be accomplished
2. Life Span It cannot continue endlessly
3. Single entity One entity but the participants are many
4. Team Work team belonging to different countries, organizations etc.
5. Life cycle life cycle reflected by growth maturity and decay.
6. Uniqueness no two projects are alike
7. Change change is inherent in a project.
8. Successive principle dependant activities ,interrelated ,inter dependant
9. Made to order fulfilling the customer demand
10. Unity in diversity diverse jobs, people and activities yet unity prevails
11. Risk and uncertainty part and parcel of every project
12. Interdependent Activities Set of activities tht are varied yet interrelated



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CATEGORIES OF A PROJECT

NATIONAL INTERNATIONAL



CONVENTIONAL TECHNOLOGICAL



MAJOR MINOR











Steps involved in a PROJECT






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Examples of projects:
Construction of a nuclear plant
Research and Development
Construction of an Overbridge
Elections
Education for the underprivileged
Nutritional programme for the masses
CONSTRUCTION OF A MULTI STORIED BUILDING
COMMISSIONING OF A FACTORY
CONSTRUCTION OF A DAM
CONDUCTING an election
Manufacturing railway coaches
Launching a satellite
New product launch
State level professional course admission process


TYPES OF PROJECTS:

Based on nature of work Based on time Based on Size
Tangible Craft Project long term projects Large projects
Tangible Intellect Project short term projects minor Projects
Intangible Craft Project mid term projects
Intangible Intellect Project

Based on applications Based on Technology Based on Purpose
Construction Projects Conventional Grass Root
Research Projects Technological Expansion
Reengineering Projects Modification
Procurement Projects
Business Implementation Projects



TYPES OF PROJECT DELAYS

1.EXTERNAL DELAYS :

Delay due to political instability
Market imperfections
Demand and supply factors
Natural factors/disasters
Natural resources like un availability of water and electricity
Procedural defects such as delay in obtaining no objections from pollution control
Board,Municipality,Government etc.

2. INTERNAL FACTORS



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Management of labor turnover
Strikes lockouts etc
Delay due to managerial strife
Shortage of funds ,
Major setbacks in equipments and machinery
Environmental calamities like floods rainstorm etc

INTRODUCTION TO PROJECT MANAGEMENT:
Definition: The planning monitoring and control of all the aspects of the project and the
motivation of all those involved in it to achieve the project objectives on time and to the
specified cost quality and performance.
Project management is the application of knowledge, skills, tools, and techniques
to project activities to meet project requirements Project management Institute PMI

Project Management is the complete set of tasks techniques and tools applied during Project
Execution according toGerman Organization for Standardization
Project management is a carefully planned and organized effort to accomplish a successful
project.

A project is a one-time effort that produces a specific result, for example, a building or a major
new computer system. This is in contrast to a program, which an ongoing process, such as a
quality control program, or an activity to manage a series of multiple projects together.
Project management includes developing a project plan, which includes defining and confirming
the project goals and objectives, identifying tasks and how goals will be achieved, quantifying
the resources needed, and determining budgets and timelines for completion. It also includes
managing the implementation of the project plan, along with operating regular 'controls' to
ensure that there is accurate and objective information on 'performance' relative to the plan,
and the mechanisms to implement recovery actions where necessary.
Projects usually follow major phases or stages (with various titles for these), including
feasibility, definition, project planning, implementation, evaluation and support/maintenance.
Project management is often summarized in a triangle. The three most important factors are
time, cost and scope, commonly called the triple constraint. These form the vertices with quality
as a central theme.




IMPLICATIONS
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y Projects must be delivered on time.
y Projects must be within cost.
y Projects must be within scope.
y Projects must meet customer quality requirements.
More recently, this has given way to a project management diamond, with time, cost, scope and
quality the four vertices and customer expectations as a central theme. No two customers'
expectations are the same so you must ask what their expectations are.





ELEMENTS OF project management




A project goes through six phases during its life:/PROJECT MANAGEMENT APPROACH

Project Definition: Defining the goals, objectives and critical success factors for the project.
Project Initiation: Everything that is needed to set-up the project before work can start.
Project Planning: Detailed plans of how the work will be carried out including time, cost and
resource estimates.
Project Execution: Doing the work to deliver the product, service or desired outcome.
Project Monitoring & Control: Ensuring that a project stays on track and taking corrective
action to ensure it does.
Project Closure: Formal acceptance of the deliverables and disbanding of all the elements that
were required to run the project.



PROJECT MANAGEMENT APPROACH:





Men
Money
Material
Machinery
Methods


PROCESS


GOODS
SEVICES
CUSTOMER
SATISFACTION
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Phases/Steps/Process of Project Management



NEED FOR PROJECT MANAGEMENT :

1. Increasing size and complexity of projects
2. Urgency for early completion
3. Growing amount of statutory regulations
4. Increased sophistication of technology
5. Financial controls
6. Timely nature of contracts
7. Cost control
8. Scope of the projects
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9. Customer expectation and quality control



Benefits of Project Management
y Projects can be completed on time .
y Cost control and avoidance of wasteful expenditure
y Improving efficiency
y Identification of project delays
y Early identification of problems in order to take corrective action
y Removing complexities
y Managing the risks
y Customer satisfaction
y Measurement of deviations from plans
y Organized activities
y Forecast and budgeting
y Co ordination and co operation of interdependent and independent activities.
y Effective communication
y Removal of hindrances
y Adequate planning
y Quality Output
y Optimum Utilization of Productive resources


ESSENTIALS OF A GOOD PROJECT MANAGEMENT SYSTEM

The system should be flexible enough to accommodate necessary changes
Focus on optimization of the entire flow of work is essential
Effective communication systems
Co operation and co ordination among different factors of Production
The system should be simple

PROJECT MANAGER:

In spite of computers and sophisticated software packages we still need a project manager to
make the projects a success. Project manager is the person responsible for accomplishing the
stated project objectives. He is responsible for execution of the project and his job may run
across many functions Key project management responsibilities include creating clear and
attainable project objectives, building the project requirements, and managing the triple
constraint for projects, which are cost, time, and quality.He generally works with uncertainities.
A project manager is often a client representative and has to determine and implement the exact
needs of the client, based on knowledge of the firm they are representing. The term and title
'project manager' has come to be used generically to describe anyone given responsibility to
complete a project. If a person does not have high levels of both responsibility and authority
then they are better described as a project administrator, coordinator, facilitator or expeditor.
According to CHARLES MARTIN:A project Manager is given license to cut across several
organization lines .His activities therefore take on a flavor of general management and must be
done well


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The functions of a project manager can be studied under the below mentioned areas


y Integration Management
y Scope Management
y Time Management
y Cost Management
y Quality Management
y Human Resource Management
y Communications Management
y Risk Management
y Procurement Management




Functions performed by the Project Manager: The role of the Project manager is distinct and
demands superior performance. Following are few of the functions performed by a Project
manager/Project management.

y Effective planning
y Work Breakdown Structure
y Staffing
y Co ordination and co operation
y Motivating and Directing the subordinates
y Communicative and interpersonal skills
y Problem solving and Decision Making
y Adaptability to changes
y Conflicts handling
y Budgeting
y Managing Risks and Uncertainties
y Anticipate Problems and hardships and plan remedial actions
y Interpersonal skills
y Research and Development Activity
y Be a visionary
y Surviving Organizational restraints
y Forecasts Identifiable variables
y Managing Risks
y Change monitoring and adaptabilities
y Supervision
y Ability to deal with Engineers ,Vendors and Contractors
y Balanced approach using Intuition Problem Solving ,logic and Intution.
y

SKILLS REQUIRED BY A PROJECT MANAGER:
1. TEAM BUILDING SKILLS
2. NEGOTIATING SKILLS
3. ENTREPRENEURIAL SKILLS
4. PLANNING SKILLS
5. ORGANISATIONAL SKILLS
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6. DIRECTIONAL SKILLS
7. MOTIVATIONAL SKILLS
8. RESOURCE ALLOCATION SKILLS
9. LEADERSHIP SKILLS
10. REPORTING SKILLS
11. PROBLEM SOLVING SKILLS
12. ANALYTICAL SKILLS
13. ADMINISTRATIVE SKILLS
14. TECHNICAL SKILLS
15. COMMUNICATION SKILLS
16. DECION MAKING SKILLS
17. SPONTANEITY
18. LOGICAL SKILLS
19. VISIONARY SKILLS
20. BUDGETING SKILLS


7S FRAMEWORK DESIGNED BY THE CONSULTINF FIRM MCKINSEY COMPANY
during the 70s helps to diagnose the causes of Problems and to formulate programs for
Improvement.

























PROJECT MANAGEMENT VS PRODUCT MANAGEMENT

Project management is the discipline of planning, organizing, securing
SYSTEM
STRATEGY
STRUCTURE
STAKEHOLDER
SUPER
ORDINATE
STYLE
SKILL
S
STAFF
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and managing resources to bring about the successful completion of specific project goals and
objectives.
A project is a temporary endeavor, having a defined beginning and end (usually constrained by
date, undertaken to meet unique goals and objectives, usually to bring about beneficial change
or added value. The temporary nature of projects stands in contrast to business as usual (or
operations), which are repetitive, permanent or semi-permanent functional work to produce
products or services
The primary challenge of project management is to achieve all of the project goals and
objectives while honoring the preconceived project constraints. Typical constraints
are scope, time, and budget. The secondaryand more ambitiouschallenge is to optimize the
allocation and integration of inputs necessary to meet pre-defined objectives.

PRODUCT MANAGEMENT: The organizational structure within a business that
manages the development, marketing and sale of a product or set of products throughout
the product life cycle. It encompasses the broad set of activities required to get the product
to market and to support it thereafter. Following are the difference between Product
Management and Project Management.



DIFFERENCES:
PROJECT MANAGEMENT
1.One time endeavor with a goal
2.no two projects are alike
3.Includes Product and Project Scope
4.wider scope of operations
5.roles focused on completion of the project
6.Managed by a Project Manager
7.end result-tangible or Intangible
8.Personnel Strategy
9.Project Life Cycle
10.Prjt mgmt acts as a MIDWIFE
11.Market Risk Management
12.Every Project results in product /Service

1.Continous Process
2.two products however could be alike
3.Includes Product scope
4.Limited scope as compared to projects
5.Roles focused on Product management
6.Managed by a Product Manager
7.End result generally tangible
8.Product Strategy
9.Product Life Cycle
10. Acts s a Mother.
11. Delivery Risk Management
12.Every product is generally backed by a
Project
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Differences between a Project manager and a Product Manager:
1.deals with Projects completions
2.Objective:Completion on time
3.May deal with fewer projects
4.Project life cycle
5.Wider Scope
6.leads to Project Management
7.Intangible or tangible
8.the role comes to an end

Deals with Produt formations
Emerging a product in the market
May deal with multiple products
Product Life Cycle
Limited Scope
Leads to Product Management
Tangible
Continuous process









Project manager ,line manager/Functional manager and Staff manager: TYPES OF AUTHORITY:
3 main types of authority can exist within an organization:
1. Line Authority
2. Staff Authority
3. Functional Authority
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Line Manager: The jobs have to be differentiated depending on the nature of activity. Each group is
termed as departments such as Marketing, finance, advertising, personnel etc. There is a well defined
authority structure such as Finance President, Finance VP finance manager etc.
The purpose of such an organization is to achieve optimization of resources and achievement of the
common goal. The responsibility of each department is limited to their own functional area and to the
staff working in the department. The most fundamental authority within an organization reflects existing
superior-subordinate relationships. It consists of the right to make decisions and to give order concerning
the production, sales or finance related behavior of subordinates. People directly responsible for these
areas within the organization are delegated line authority to assist them in performing their obligatory
activities.
In general, line authority pertains to matters directly involving management system production, sales,
finance etc., and as a result with the attainment of objectives.











Staff Manager: The Staff manager supports and co ordinates the actions and decisions of the Line
manager either directly in terms of expert analysis or on the recommendations or indirectly through
products and services that enable the effectiveness of the entire operation. Staff authority consists of the
right to advise or assist those who possess line authority as well as other staff personnel. Staff authority
enables those responsible for improving the effectiveness of line personnel to perform their required
tasks.
Line and Staff personnel must work together closely to maintain the efficiency and effectiveness of the
organization. To ensure that line and staff personnel do work together productively, management must
make sure both groups understand the organizational mission, have specific objectives, and realize that
they are partners in helping the organization reach its objectives.
Size is perhaps the most significant factor in determining whether or not an organization will have staff
personnel. The larger the organization, the greater the need and ability to employ staff personnel.
As an organization expands, it usually needs employees with expertise in diversified areas. Although
small organizations may also require this kind of diverse expertise, they often find it more practical to hire
part time consultants to provide it is as needed rather than to hire full time staff personnel, who may not
always be kept busy.

LINE STAFF RELATIONSHIPS :
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e.g. A plant manager has line authority over each immediate subordinate, human resource manager, the
production manager and the sales manager.
However, the human resource manager has staff authority in relation to the plant manger, meaning the
human resource manager has staff authority in relation to the plant manager, meaning the human resource
manager possesses the right to advise the plant manager on human resource matters.
Still final decisions concerning human resource matters are in the hands of the plant manager, the person
holding the line authority.
ROLE OF STAFF PERSONNEL:
Harold Stieglitz has pinpointed 3 roles that staff personnel typically perform to assist line personnel:
1. The Advisory or Counseling Role: In this role, staff personnel use their professional expertise to
solve organizational problems. The staff personnel are, in effect, internal consultants whose
relationship with line personnel is similar to that of a professional and a client.
2. The Service Role: Staff personnel in this role provide services that can more efficiently and
effectively be provided by a single centralized staff group than by many individuals scattered
throughout the organization. This role can probably best be understood if staff personnel are
viewed as suppliers and line personnel as customers.
3. The Control Role: Staff personnel help establish a mechanism for evaluating the effectiveness of
organizational plans.
The role of staff in any organization should be specifically designed to best meet the needs of that
organization.


CONFLICT IN LINE STAFF RELATIONSHIP:
From the view point of line personnel, conflict is created because staff personnel tend to
y Assume Line Authority
y Do not give Sound Advice
y Steal Credit for Success
y Fail to Keep line personnel informed of their activities
y Do not see the whole picture.
From the view point of Staff Personnel, conflict is created because line personnel do not make proper use
of staff personnel, resist new ideas and refuse to give staff personnel enough authority to do their jobs.
Staff Personnel can often avert line-staff conflicts if they strive to emphasize the objectives of the
organization as a whole, encourage and educate line personnel in the appropriate use of staff personnel,
obtain any necessary skills they do not already possess, and deal intelligently with the resistance to
change rather than view it as an immovable barrier.
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FUNCTIONAL AUTHORITY:
Functional authority consists of the right to give orders within a segment of the organization in which this
right is normally nonexistent. This authority is usually assigned to individuals to complement the line or
staff authority they already possess. Functional Authority generally covers only specific task areas and is
operational only for designated amounts of time. It is given to individuals who, in order to meet
responsibilities in their own areas, must be able to exercise some control over organization members in
other areas.
PROGRAMS AND PROJECTS: Projects and Programs are different! Unfortunately, this difference has
been ignored or confused by many people for too long. Project management is focused on the efficient
creation of a known deliverable; project managers should be seeking to minimize unnecessary change to
create their specified deliverable as efficiently as possible. Program management focuses on the
coordination of a number of related projects over time to deliver benefits to the organization; program
managers should be actively seeking to adapt future effort to maximize benefits as the situation unfolds.
The key difference between a project and a program of works can be described as:
y A project is a temporary entity established to deliver specific (often tangible) outputs in line
with predefined time, cost and quality constraints. A project should always be defined and
executed and evaluated relative to an (Executive) approved business case which balances the
costs, benefits and risks of the project. The project business case should be managed under
change control.
A program is a portfolio comprised of multiple projects that are managed and coordinated as
one unit with the objective of achieving (often intangible) outcomes and benefits for the
organization. .
Difference between a Project and a Program
The following table summarizes the main areas of difference between a project and a
program.
Project Program
Objectives
Outputs tangible;
relatively easy to describe,
define and measure; tending
towards objective.
Outcomes often intangible;
difficult to quantify; benefits often
based on changes to organizational
culture and behaviors; introducing
new capabilities into the
organization; tending towards
subjective.
Scope
Strictly limited; tightly
defined; not subject to
change during the life of the
project.
Not tightly defined or bounded;
likely to change during the life
cycle of the program.
Duration
Relatively short term;
typically three to six
months.
Relatively long term typically
eighteen months to three years.
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Risk profile
Project risk is relatively
easy to identify and
manage. The project failure
would result in relatively
limited impact on the
organization relative to
program risk.
Program risk is more complex and
potentially the impact on the
organization if a risk materializes
will be greater relative to project
risk. Programme failure could
result in material financial,
reputational or operational loss.
Nature of the
problem
Clearly defined.
Ill-defined; often disagreement
between key stakeholders on the
nature and definition of the
problem.
Nature of the
solution
A relatively limited number
of potential solutions.
A significant number of potential
solutions with disagreement
between stakeholders as to the
preferred solution.
Stakeholders
A relatively limited number
of potential solutions.
A significant number of potential
solutions with disagreement
between stakeholders as to the
preferred solution.
Relationship to
environment
Environment within which
the project takes place is
understood and relatively
stable.
Environment is dynamic; and
programme objectives need to be
managed in the context of the
changing environment within
which the organization operates.
Resources
Resources to deliver the
project can be reasonably
estimated in advance.
Resources are constrained and
limited; there is competition for
resources between projects.



EXAMPLE:NEWS
World Bank, India to sign loan agreement for cleaning Ganga
PTI Jun 13, 2011, 08.09pm IST
y World Bank
NEW DELHI: World Bank, the multilateral lending agency, and the government of India will sign a loan
agreement worth Rs 7,000 crore for the National Ganga River Basin Project (NGRBA) for cleaning the
river on Tuesday.
"The Rs 7,000 crore National Ganga River Basin Project, including $199 million interest-free IDA credit
and $801 million low-interest IBRD loan from World Bank, will be signed tomorrow between the
government of India and World Bank," an official statement issued on Tuesday said.
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The Project will help the NGRBA set up a state-of-the-art Ganga Knowledge Centre to act as a repository
for the conservation of the Ganga.
Here the program would mean Pollution Control
The project will mean Ganga Project




THE PROJECT LIFE CYCLE:
The project manager and project team have one shared goal: to carry out the work of the project for the
purpose of meeting the projects objectives. Every project has beginnings, a middle period during which
activities move the project toward completion, and an ending (either successful or unsuccessful). A
standard project typically has the following four major phases (each with its own agenda of tasks and
issues): initiation, planning, execution, and closure. Taken together, these phases represent the path a
project takes from the beginning to its end and are generally referred to as the project life cycle

Figure 1: The four phase of the project life cycle. Adapted
from J. Westland, The Project Management Lifecycle,
Initiation phase
During the first of these phases, the initiation phase, the project objective or need is identified; this can be a
business problem or opportunity. An appropriate response to the need is documented in a business case with
recommended solution options. A feasibility study is conducted to investigate whether each option addresses the
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project objective and a final recommended solution is determined. Issues of feasibility (can we do the project?) and
justification (should we do the project?) are addressed.
Planning phase
The next phase, the planning phase, In this step, the team identifies all of the work to be done. The projects tasks
and resource requirements are identified, along with the strategy for producing them. This is also referred to as
scope management. A project plan is created outlining the activities, tasks, dependencies and timeframes. The
project manager coordinates the preparation of a project budget; by providing cost estimates for the labor,
equipment and materials costs. The budget is used to monitor and control cost expenditures during project
execution.
This is also an excellent time for risk management. In risk management, high-threat potential problems are
identified along with the action that is to be taken on each high threat potential problem, either to reduce the
probability that the problem will occur or to reduce the impact on the project if it does
Execution phase
During the third phase, the execution phase, the project plan is put into motion and performs the work of the
project. It is important to maintain control and communicate as needed during execution. Progress is continuously
monitored and appropriate adjustments are made and recorded as variances from the original plan. In any project a
project manager will spend most of their time in this step. During project execution, people are carrying out the tasks
and progress information is being reported through regular team meetings. The project manager uses this
information to maintain control over the direction of the project by measuring the performance of the project
activities comparing the results with the project plan and takes corrective action as needed. The first course of action
should always be to bring the project back on course, i.e., to return it to the original plan. If that cannot happen, the
team should record variations from the original plan and record and publish modifications to the plan. Throughout
this step, project sponsors and other key stakeholders should be kept informed of project status according to the
agreed upon frequency and format. The plan should be updated and published on a regular basis
Status reports should always emphasize the anticipated end point in terms of cost, schedule and quality of
deliverables. Each project deliverable produced should be reviewed for quality and measured against the acceptance
criteria. Once all of the deliverables have been produced and the customer has accepted the final solution, the
project is ready for closure.
Closure phase
During the final closure, or closeout phase, the emphasis is on releasing the final deliverables to the customer,
handing over project documentation to the business, terminating supplier contracts, releasing project resources and
communicating the closure of the project to all stakeholders. The last remaining step is to conduct lessons learned
studies; to examine what went well and what didnt or evaluate.Through this type of analysis the wisdom of
experience is transferred back to the project organization, which will help future project teams.




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Project Management Cycle:

velihoo ds of poor rural people and boost the rural economy.













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2. NETWORK ANALYSIS=====PERT AND CPM
INTRODUCTION
MEANING OF NETWORK ANALYSIS:
y IS A TECHNIQUE FOR ADMINISTRATION AND MANAGEMENT OF THE PROJECT
y IT CONSISTS OF SEVERAL ACTIVITIES HAVING INTER RELATIONSHIPS
y EACH ACTIVITY IS IDENTIFIED BY MEANS OF A START EVENT AND AN END EVENT
y A TECHNIQUE FOR PLANNING AND DECISION MAKING
y A TOOL FOR MANAGEMENT CONTROL
y AIDS DECISION MAKING
y HELPS MANAGERS TO ALLOCATE RESOURCES SO THAT THE TASKS CAN BE CARRIED OUT WITHIN
THE SCHEDULE
y HELPS TO MONITOR THE PROGRESS OF ALL THE ACTIVITIES
y HELPS TO IDENTIFY THE DELAYS
y HELPS IN ASCERTAINING THE COSTS
y ASCERTAIN THE NORMAL DURATION OF EACH ACTIVITY
y HELPS TO MINIMISE COSTS BY MARSHALLING OF RESOURCES
y DISCLOSES CRITICAL PATHS AND ACTIVITIES
THE TWO COMMONLY USED TOOLS FOR NETWORK ANALYSIS ARE
PERT WHICH STANDS FOR PROGRAM EVALUATION AND REVIEW TECHNIQUES
CPM WHICH STANDS FOR CRITICAL PATH METHOD

STAGES IN NETWORK ANALYSIS ARE AS FOLLOWS:
1. DRAW UP A LIST OF ACTIVITIES THAT MAKE UP A PROJECT
2. IDENTIFY PREDECESSOR AND SUCCESSOR ACTIVITIES
3. ESTIMATE THE DURATION FOR EACH ACTIVITY
4. SETTING UP THE ACTIVITY SCHEDULE
5. IDENTIFICATION OF MILE STONES
6. RE SCHEDULE OF ACTIVITIES OR REALLOCATION OF FUNDS FOR BETTER PERFORMANCE

DEFINITIONS:

ACTIVITY:

A PROJECT CONSISTS OF A SET OF ACTIVITIES. It is a set of tasks. Activities are represented by arrows.
The tail of the arrow represents the start of the activity and the head of the arrow represents the finish
of the activity
THE WORK BREAKDOWN STRUCTURE aims at listing out the different kinds of activities .An activity have
a preceding and a successive event. The activities may be interlinked with each other in various ways
Activities can be of the following types:
PREDECESSOR ACTIVITY: An activity that must be completed before starting the activity under
consideration is called Predecessor activity.
SUCCESSOR ACTIVITY: The activities that follow the activity under consideration are known as successor
activities.
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CON CURRENT ACTIVITIES: Activities which can be accomplished simultaneously are known as con
current activities.
DUMMY ACTIVITIES: Also known as a zero Time activity. It does not consume any resources and time. It
is an imaginary activity. It is represented by means of dotted lines in order to show the inter connection
between activities.

EVENT:
The beginning and end points of an activity are known as events. An Event can be termed as a
Milestone achieved. The events in a network are represented by means of circles called Nodes.
It marks the compliment o certain tasks. An event should be numbered and the same number should
not be used for more than one event. The following are the different types of nodes:
1. MERGE NODE:










A number of activities may lead to an event.

2. BURST NODE














3. INITIAL NODE : The first node is known as the Initial Node.




Final Node

Initial Node

1
2
3
4
1
2
3
4
1 2
3
4
5
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4. END NODE :The last node in a network diagram is termed as the End Node.


========================================================================

WHAT IS A NETWORK?
It is a diagrammatic representation of the sequence of activities and events contained in a PROJECT.
Activities and events are shown connected logically and sequentially which serves as an excellent tool
for the management to take decisions and plan. Refer Diagram

PATH:
An unbroken chain of activities between two events is called a Path.
Refer Diagram. Example ABD and ACE are the two paths.


B D

A

C E





ABD AND ACE are the two paths

====================================================================================

ERRORS IN NETWORK DIAGRAMS:

LOOPING:
1. THEY ARE ALSO KNOWN AS CYCLING ERRORS
2. IT CREATES AN IMPOSSIBLE SITUATION
3. APPEARS THAT NONE OF THE ACTIVITIES ARE COMPLETE.






A B




C
1 2
4
3
5
1 2
3
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DANGLING:
WHEN A PROJECT NETWORK INCLUDES AN ACTIVITY WHICH DOES NOT FIT INTO THE END
OBJECTIVE AND IS CARRIED OUT WITHOUT ANY RESULT IT IS KNOWN AS DANGLING ERRORS.


A B C

D



1. INTRODUCTION PERT

Complex projects require a series of activities, some of which must be performed sequentially
and others that can be performed in parallel with other activities. This collection of series and
parallel tasks can be modeled as a network.
In 1957 the Critical Path Method (CPM) was developed as a network model for project
management. CPM is a deterministic method that uses a fixed time estimate for each activity.
While CPM is easy to understand and use, it does not consider the time variations that can have a
great impact on the completion time of a complex project.
The Program Evaluation and Review Technique (PERT) is a network model that allows for
randomness in activity completion times. PERT was developed in the late 1950's for the U.S.
Navy's Polaris project having thousands of contractors. It has the potential to reduce both the
time and cost required to complete a project.
The Network Diagram
In a project, an activity is a task that must be performed and an event is a milestone marking the
completion of one or more activities. Before an activity can begin, all of its predecessor activities
must be completed. Project network models represent activities and milestones by arcs and
nodes. PERT originally was an activity on arc network, in which the activities are represented on
the lines and milestones on the nodes. Over time, some people began to use PERT as an activity
on node network. For this discussion, we will use the original form of activity on arc.
1 2
3
4
23 | P a g e

The PERT chart may have multiple pages with many sub-tasks. The following is a very simple
example of a PERT diagram:
PERT Chart

The milestones generally are numbered so that the ending node of an activity has a higher
number than the beginning node. Incrementing the numbers by 10 allows for new ones to be
inserted without modifying the numbering of the entire diagram. The activities in the above
diagram are labeled with letters along with the expected time required to complete the activity.
Basically, CPM (Critical Path Method) and PERT (Program/Project Evaluation Review
Technique) are project management techniques, which have been created out of the need of
Western industrial and military establishments to plan, schedule and control complex projects.
1.1 Brief History of CPM/PERT
CPM/PERT or Network Analysis as the technique is sometimes called, developed along two
parallel streams, one industrial and the other military.
CPM was the discovery of M.R.Walker of E.I.Du Pont de Nemours & Co. and J.E.Kelly of
Remington Rand, circa 1957. The computation was designed for the UNIVAC-I computer. The
first test was made in 1958, when CPM was applied to the construction of a new chemical plant.
In March 1959, the method was applied to maintenance shut-down at the Du Pont works in
Louisville, Kentucky. Unproductive time was reduced from 125 to 93 hours.
PERT was devised in 1958 for the POLARIS missile program by the Program Evaluation Branch
of the Special Projects office of the U.S.Navy, helped by the Lockheed Missile Systems division
and the Consultant firm of Booz-Allen & Hamilton. The calculations were so arranged so that
they could be carried out on the IBM Naval Ordinance Research Computer (NORC) at Dahlgren,
Virginia.
1.2 Planning, Scheduling & Control
Planning, Scheduling (or organizing) and Control are considered to be basic Managerial
functions, and CPM/PERT has been rightfully accorded due importance in the literature on
Operations Research and Quantitative Analysis.
24 | P a g e

Far more than the technical benefits, it was found that PERT/CPM provided a focus around
which managers could brain-storm and put their ideas together. It proved to be a great
communication medium by which thinkers and planners at one level could communicate their
ideas, their doubts and fears to another level. Most important, it became a useful tool for
evaluating the performance of individuals and teams.
There are many variations of CPM/PERT which have been useful in planning costs, scheduling
manpower and machine time. CPM/PERT can answer the following important questions:
How long will the entire project take to be completed? What are the risks involved?
Which are the critical activities or tasks in the project which could delay the entire project if they
were not completed on time?
Is the project on schedule, behind schedule or ahead of schedule?
If the project has to be finished earlier than planned, what is the best way to do this at the least
cost?
1.3 The Framework for PERT and CPM
Essentially, there are six steps which are common to both the techniques. The procedure is listed
below:
1. Define the Project and all of its significant activities or tasks. The Project (made up of
several tasks) should have only a single start activity and a single finish activity.
2. Develop the relationships among the activities. Decide which activities must precede and
which must follow others.
3. Draw the "Network" connecting all the activities. Each Activity should have unique event
numbers. Dummy arrows are used where required to avoid giving the same numbering to
two activities.
4. Assign time and/or cost estimates to each activity
5. Compute the longest time path through the network. This is called the critical path.
6. Use the Network to help plan, schedule, and monitor and control the project.
The Key Concept used by CPM/PERT is that a small set of activities, which make up the longest
path through the activity network control the entire project. If these "critical" activities could be
identified and assigned to responsible persons, management resources could be optimally used
by concentrating on the few activities which determine the fate of the entire project.
25 | P a g e

Non-critical activities can be re-planned, rescheduled and resources for them can be reallocated
flexibly, without affecting the whole project.
Five useful questions to ask when preparing an activity network are:
Is this a Start Activity?
Is this a Finish Activity?
What Activity Precedes this?
What Activity Follows this?
What Activity is Concurrent with this?

.


These techniques facilitate planning and Scheduling of Activities. Some of the potential benefits of
these techniques are as follows:
(a) Clearly reveals the inter dependencies and problem areas which are well defined under the
conventional planning techniques.
(b) Provides a stimuli for Long Term Planning
(c) Provides a device for Logical Thinking thereby facilitating the scheduled activities
(d) Provides a Scientific allocation and utilization of resources to achieve the objectives within the
time and cost constraints
(e) These techniques can be applied to any type of organizations.
(f) Helps in effective decision making and Control
(g) Allows management to concentrate only on those areas which require most judicious
allocation of Resources
(h) Helps in timely completion of activities
(i) Helps in the elimination of wastages
(j) Is a powerful tool against uncertainties
(k) Initiates Effective planning and Decision Making
(l) Helps in preventing Cost overruns
(m) Helps in preventing Slippages.
(n) It is the most popular and tested methods of Project Evaluation
(o) It is also suitable for Research and Development Projects.






PERT HAS SEVERAL DISTINGUISHING CHARACTERISTICS:
(a) It forms the basis for all Planning and Predicting
(b) It Provides management with the ability to plan for the best possible use of resources to
achieve the objective within time and cost limitations.
(c) It provides visibility and enables management to control and co-ordinate different activities in
a project.
26 | P a g e

(d) It provides a basis for reporting information.
(e) It provides a checklist to the management for timely conduct of activities
(f) Helps management to handle uncertainties in the course of activities and take diversions if
necessary.
(g) It lays emphasis on Critical activities and critical paths and also identifies the Slack activities
which serves as a tool for Re scheduling of activities to avoid delays
(h) Useful for planning and exercising control
(i) Minimizing interruptions and delays caused by lack of clarity and apprehensions regarding the
scheduling of activities.
(j) Is the most popular tried and tested methods of Project management.
Etc .......(form ur points on these lines)

CRITICAL PATH:
The path through the network with the longest duration. A network could have more than one Critical
Path. The critical path indicates the time required to complete a project .The longest path in the
Network is known as Critical Path.
The activities and jobs on the critical path are known as critical activities .Therefore care should be
taken to initialize and avoid delays .
Useful to formulate a time frame for a project in order to determine where potential changes or
delays are most likely to take place.
It provides the user with higher visibility of potential bottlenecks throughout the course of a project.
It was designed in the 1950s for tracking and organizing the numerous activities regarding the
POLARIS MISSILE DEFENCE PROGRAM.
CPM makes the planning and scheduling of activities easier.
Activities on the critical path should be started and completed on time, otherwise the project Tim will
be extended or delayed.
In 1957 Du Pont developed a project management Method designed to address the challenge of
shutting down chemical plants for maintenance and then restarting the plants after repairs and
Maintenance. Due to the complexity of the projects, CPM was developed in order to deal with the
complexity of the projects.
WHY SHOULD SPECIAL ATTENTION BE GIVEN TO CRITICAL ACTIVITIES?
y It is important as the length of time determines the time required to complete the Project.
y It consists o the activities that should be completed on time in order to avoid delays
y Advance planning and improvement along the critical path may cause another path to
become critical.
y Critical path highlights those activities that must be completed more rapidly for the purpose
of attaining stipulated project completion time.
y Critical path can be identified by determining four parameters for each activity
Earliest Start Time
Latest Start Time
Early Finish Time
Early Start Time
Slack Time

Advantages of CPM:

(a) Helpful for scheduling Monitoring and controlling Projects
27 | P a g e

(b) A project manager can determine dates for each activity and schedule the activities
accordingly
(c) The activities and their outcome can be shown as a network
(d) Displays dependencies to help scheduling of activities
(e) Evaluates which activities can run parallel
(f) Determines Slack and Float Times.
(g) Widely used in Industries
(h) Can define multiple equally critical jobs and paths
(i) It determines the Project duration which minimizes the sum of Direct and Indirect costs

DISADVANTAGES OF USING A CPM:

CPM can be complicated and complexity increases for larger projects
Does not handle the scheduling of personnel and allocation of resources
The critical path is not always clear and needs to be calculated carefully
Estimating Activity completion times can be difficult
However despite all the drawbacks CPM still stands out as an effective tools for planning and decision
making.


Drawing the CPM/PERT Network
Each activity (or sub-project) in a PERT/CPM Network is represented by an arrow symbol. Each
activity is preceded and succeeded by an event, represented as a circle and numbered.



At Event 3, we have to evaluate two predecessor activities - Activity 1-3 and Activity 2-3, both
of which are predecessor activities. Activity 1-3 gives us an Earliest Start of 3 weeks at Event 3.
28 | P a g e

However, Activity 2-3 also has to be completed before Event 3 can begin. Along this route, the
Earliest Start would be 4+0=4. The rule is to take the longer (bigger) of the two Earliest Starts.
So the Earliest Start at event 3 is 4.
Similarly, at Event 4, we find we have to evaluate two predecessor activities - Activity 2-4 and
Activity 3-4. Along Activity 2-4, the Earliest Start at Event 4 would be 10 wks, but along
Activity 3-4, the Earliest Start at Event 4 would be 11 wks. Since 11 wks is larger than 10 wks,
we select it as the Earliest Start at Event 4.We have now found the longest path through the
network. It will take 11 weeks along activities 1-2, 2-3 and 3-4. This is the Critical Path.




SIMILARITIES BETWEEN PERT AND CPM:
(a) Both follow the same steps and use network diagrams
(b) Both are used to plan the scheduling of individual activities that make up a project
(c) They can be used to determine the Earliest and latest start for each activity


Differences between PERT AND CPM


1. PROBABLISTIC 1. DETERMINISTIC AND REALISTIC

2. EVENT ORIENTED 2. ACTIVITY ORIENTED

3. GENERALLY USED IN AREAS LIKE RESEARCH 3. GENERALLY USED FOR CONSTRUCTION
AND DEVELOPMENT PROJECTS

4. PAST EXPERIENCES ARE NT CONSIDERED 4. RELIES ON PAST EXPERIENCE

5. EMPHASIS ON SHORTENING DURATION 5. EMPHASIS ON COST CUTTING

6. PERT STANDS FOR PROJECT EVALUATION 6. STANDS FOR CRITICAL PATH METHOD
AND REVIEW TECHNIQUE

7. CONSIDERS UNCERTAINITY IN TIME 7. DOES NOT CONSIDER UNCERTAINITYTIME

8. EMPHASIS ON EVENT COMPLETION 8. EMPHASIS ON CRITICAL JOBS /PATHS

9. DOES NOT LAY EMPHASIS ON COSTS 9. BRINGS OUT A RELATION BETWEEN TIME&
COSTS.
10. IT STATES THAT A CUT IN DURATION WILLS 10. INVOLVES COST CUTTING
NATURALLY BRING DOWN THE COSTS

11. DEVELOPED IN 1990S 11.DEVELOPED IN 1958
29 | P a g e


12. ORIGIN IS MILITARY (NAVAL) 12. ORIGIN IS INDUSTRIAL

13.IT HAS THREE TIME ESTIMATES 13.SINGLE ESTIMATE OF TIME AS EMPHASIS IS
IS ON COST
14. MORE USEFUL IN REPETITIVE PROJECTS 14. MORE USEFUL IN SINGLE UNIQUE PROJECT
15 DOES NOT DIFFERENTIATE BETWEEN CRITICAL 15. IT IS ABOUT CRITICAL PATH AND
ACTIVITIES
AND NON CRITICAL ACTIVITIES



16. CONCEPT OF CRASHING NOT APPLIED 16. CONCEPT OF CRASHING APPLICABLE





DEFINITIONS:
TIME AND DURATION: IT IS THE BASIC ELEMENT INNETWORK ANALYSIS AND IS USUALLY EXPRESSED
IN CALENDAR WEEKS.THE THREE ESTIMATES EMPLOYED UNDER THIS METHOD ARE:
1. OPTIMISTIC TIME=
2. PESSIMISTIC TIME
3. MOST LIKELY TIME
4. CRASH TIME:
IT IS THE MINIMUM POSSIBLE TIME IN WHICH THE ACTIVITY CAN BE COMPLETED AND THE
COST ASSOCIATED WITH THIS TIME IS KNOWN AS THE CRASH COSTS.
FOR EXAMPLE: IF THE PROJECT DURATION IS 18 WEEKS AND THE PROJECT NEEDS TO BE
COMPLETED IN 15 WEEKS THEN THE ACTIVITIES ARE CRASHED IN ORDER TO FINISH BY THE
END OF 15 WEEKS AND IT ALSO INVOLVES ADDITIONAL COSTS SO THAT THE ACTIVITIES ARE
SPEEDED UP TO COMPLETE THE PROJECT IN THE STIPULATED TIME.
5. NORMAL COSTS:
IT IS THE COST INCURRED WHEN ACTIVITY IS COMPLETED IN ITS NORMAL STIPULATED AND
SCHEDULED TIME.
6. SLACK :
IT IS THE DIFFERENCE BETWEEN THE LATEST START AND THE EARLIEST START OF AN ACTIVITY
AS WELL AS THE DIFFERENCE BETWEEN THE EARLIEST FINISH AND THE LATEST FINISH OF AN
ACTIVITY.
7. EARLY START AND EARLY FINISH TIME= IT IS THE EARLIEST TIMES THAT THE ACTIVITY CAN
START AND END.
8. LATE FINISH AND LATE FINISH:= IT IS THE LATEST TIME TAKEN BY AN ACTIVITY TO START AND
FINISH.
9. VARIANCES
IT IS CALCULATED BY THE FORMULA= {TO-TP}2
6
10. EXPECTED TIME=CALCULATED BY THE FORMULA= TO + 4 TM +TP
6
30 | P a g e




DUMMY ACTIVITY
ACTIVITY A B C D E
PRECEEEDING
ACTIVITY
- - A B,C B


SOLUTION:

C
A D

DUMMY
B E




CONSIDER THE FOLLOWING ACTIVITY EVENT RELATONSHIP:
ACTIVITY SEQUENCE DURATION
A 0-1 2
B 1-2 3
C 1-3 4
D 2-4 6
E 3-4 7
F 4-5 5
1
4
2
3
5
31 | P a g e


SOLUTION




B=3 D=6
A=2 F=5

C=4 E=7


ACTIVITY SEQUENCE ET EF LS LF SLACK
A 0-1 0 2 0 2 0
B 1-2 2 5 4 7 2
C 1-3 2 6 2 6 0
D 2-4 5 11 7 13 2
E 3-4 6 13 6 13 0
F 4-5 13 18 13 18 0

CRITICAL PATH = 0-1,1-3,3-4,4-5=18 DAYS
A C E F IS THE CRITICAL PATH.



ILLUSTRATION:

EVENT NORMAL CRASH NORMAL COSTS CRASH COSTS
0-1 2 1 200 240
1-2 3 2 450 500
1-3 4 2 500 700
2-4 6 5 300 350
3-4 7 6 700 900
4-5 5 4 1000 1200


5 0 1
3
2
4
32 | P a g e



SOLUTION





3 6

2 5




4 7





CRITICAL PATH:0-1,1-3,3-4,4-5=18 WEEKS
LETS SAY WE WISH TO COMPLETE THE PROJECT IN 15 WEEKS


EVENT NORMAL CRASH COSTS INCREASE/DECREASE
NORMAL CRASH
0-1 2 1 200 240 40
1-2 3 2 450 500 50
1-3 4 2 500 700 200
2-4 6 5 300 350 50
3-4 7 6 700 900 200
4-5 5 4 1000 1200 200


EVENTS time crash days short days increase in cost

0-1 2 1 1 40
1-3 4 2 2 200
3-4 7 6 1 200
4-5 5 4 1 200

Therefore we need to crash 3 days

The management can meet the deadline by crashing the event sequence 0-1 and 1-3.



0 1
3
2
4 5
33 | P a g e


Events time(incl. Of crash) cost
0-1 1 200+40
1-2 3 450
1-3 2 500+200
2-4 6 300
3-4 7 700
4-5 5 1000
3390


Normal costs for 18 WEEKS =3150Rs.
Crash Costs for 15 WEEKS = 3390 Rs.


EVENT SEQUENCE = 1+3+6+5=15 WEEKS
EVENT SEQUENCE=1+2+7+5=185 WEEKS

===============================================================================


A PROJECT HAS THE FOLLOWING

ACTIVITY MOST OPTIMISTIC MOST PESSIMISTIC MOST LIKELY TIME` EXPECTED

1-2 1 5 1.5 2
2-3 1 3 2 2
2-4 1 5 3 3
3-5 3 5 4 4
4-5 2 4 3 3
4-6 3 7 5 5
5-7 4 6 5 5
6-7 6 8 7 7
7-8 2 6 4 4
7-9 5 8 6 6 1/6
8-10 1 3 2 2
9-10 3 7 5 5



Solution


FORMULAE:

EXPECTED DURATION = TO+4TM + TP
6

34 | P a g e

VARIANCE = (TP-TO)2
6






SOLUTION:

ACIVITY DURATION ES EF LS LF SLACK

1-2 2 0 2 0 2
2-3 4 2 4 6 8
2-4 3 2 5 2 5
3-5 4 4 8 8 12
4-5 3 5 8 9 10
4-6 5 5 10 5 17
5-7 5 8 13 12 17
6-7 7 10 17 10 26 1/6
7-8 4 17 21 22 23 1/6

7-9 6 1/6 17 23 1/6 17 23 1/6
8-10 2 21 23 26 1/6 28 1/6
9-10 5 23 1/6 28 1/6 23 28 1/6



The PERT (Probabilistic) Approach
So far we have talked about projects, where there is high certainty about the outcomes of
activities. In other words, the cause-effect logic is well known. This is particularly the case in
engineering projects.
However, in Research & Development projects, or in Social Projects which are defined as
"Process Projects", where learning is an important outcome, the cause-effect relationship is not
so well established.
In such situations, the PERT approach is useful, because it can accommodate the variation in
event completion times, based on an experts or an expert committees estimates.
For each activity, three time estimates are taken
The Most Optimistic
35 | P a g e

The Most Likely
The Most Pessimistic
The Duration of an activity is calculated using the following formula:
Where t
e
is the Expected time, t
o
is the Optimistic time, t
m
is the most
probable activity time and t
p
is the Pessimistic time.
It is not necessary to go into the theory behind the formula. It is enough to know that the weights
are based on an approximation of the Beta distribution.
The Standard Deviation, which is a good measure of the variability of each activity is calculated
by the rather simplified formula:
The Variance is the Square of the Standard Deviation.





=====================================================================================






REFER T0 NETW0RK BIAuRANS ANB 0TBER N0TES F0R
TBIS CBAPTER IN TBE CLASSR00N N0TES










36 | P a g e

Unit 2 :PROJECT PLANNING
A project plan, is a
"...a formal, approved document used to guide both project execution and project control.
The primary uses of the project plan are to document planning assumptions and
decisions, facilitate communication among stakeholders, and document approved scope,
cost, and schedule baselines. A project plan may be summarized or detailed.
[


"...a statement of how and when a project's objectives are to be achieved, by showing the
major products, milestones, activities and resources required on the project."
.
Therefore, a project plan answers basic questions about the project:
y Why? - What is the problem or value proposition addressed by the project? Why is it
being sponsored?
y What? - What is the work that will be performed on the project? What are the major
products/?
y Who? - Who will be involved and what will be their responsibilities? How will they be
organized?
y When? - What is the project timeline and when will particularly meaningful points,
referred to milestones, be complete?
NEED OF PROJECT PLANNING:
y It necessitates right co-ordination of different people,
y Competition
y Cost and time related expenditure.
y Optimal use of scarce resources
y Increasing Complexities in the market
y Completion of Projects on time
y Allocation of Resources needs careful Planning
y Division of Labor has to be done with utmost care for a successful Project
y Involves huge amount of resources ie Money materials and men.
y Managing Changes and Uncertainties
y Risks Involved
y Changing Business climate




37 | P a g e

A modern, demanding business environment requires proper management of projects. An
unplanned work is itself a mess apart from hindering the growth and efficiency of the
business. Successful and effective Project management should, therefore include Project
Planning starts with,

o A thorough understanding and appreciation of the fundamental principles and concepts
o Disciplined, rigorous application of methods like the Critical Path Method
o A practical and fluent use of available software tools like Mind Mapping.
It may be optimized to achieve the appropriate balance between resource usage and
project duration to comply with the project objectives.


The Planning Process

This Mind Map gives an overview of the four main phases of planning - firstly the informal but
structured brainstorming process, where the ideas are generated and fitted together, then culling
and scoping where you remove the outrageous ideas first, then narrow the scope to what you can
fit in your time and monetary budget. Then is the action planning where you refine the objectives
to make sure you have the right resources available at the right time, and finally the tracking of
the project as you run it.



38 | P a g e



KEY VARIABLES IN PROJECT PLANNING:








SCOPE
1. Defining the Project Boundaries
2. Eliminate ambiguity of goals and objectives
3. Project Outcome and success criteria
4. Plan Resource availability
5. Infrastructure
6. Scope of Markets
7. Scope of Authority
8. Technical Structure
QUALITY: Quality can be ascertained by the following factors:

1. Completion on Time
2. Within Budgets
3. Customer Satisfaction
4. Territory Covered
5. Technology used
6. Qualitative Performance

Schedule: Listing out activities to be performed.
Benefits are:
1. Activities can be started and ended on time
2. Reduction for inventory
3. Labor load leveling
4. Accurate delivery date
PEOPLE
SCOPE
QUALITY
RESOURCE
COST
SCHEDULE
39 | P a g e

People management:
1. Development of HR PLAN
2. Development of Infrastructure
3. Development of Authority Structure
4. Conflict Resolution
5. Division of Labor
Project Cost-Resource
1. Cost reduction
2. Inventory Management
3. Procurement Plan
4. Minimizing Wastages
5. Transportation Costs
6. Storage costs


IDENTIFICATION OF PROJECT STRATEGIC VARIABLES







CONSEQUENCES OF POOR PLANNING:
1. Projects cannot be completed on time
2. Costs cannot be controlled
3. Deviation from Targets
4. Low Motivational levels
5. Hap Hazard Structure
6. Unfinished Projects
7. Unable to manage Uncertainties
8. Non achievement of Project Objectives
9. Inability to manage Risks


OPERATING
VARIABLES
ECONOMIC
VARIABLES
POLITICAL
VARIABLES
SOCIAL
VARIABLES
MARKET
VARIABLE
S
EVIRONMENT
VARIABLES
40 | P a g e

Components of Planning:
y Objective-Goal or target to be achieved
y Program-The strategy to be followed
y Schedule-A plan showing start and end of activities
y Budget-Planning expenditure
y Forecast-Projections of what may happen in the future
y Organization-Hierarchy, Assigning Duties and Responsibilities
y Policy Procedure-a general guide of decision making and actions
y Standard-acceptable levels of quality and Performance.


STEPs/TYPES IN PROJECT PLANNING:
y CREATING A PROJECT PLAN
y CREATINGA RESOURCE PLAN
y CREATING A FINANCIAL PLAN
y CREATING A QUALITY PLAN
y CREATING A RISK PLAN
y CREATING AN ACCEPTANCE PLAN
y CREATING A PROCUREMENT PLAN
y CREATING A MARKET PLAN
y CREATING A SUPPLY CHAIN
y CREATING A MILESTONE PLAN
y CREATING A PLAN FOR ASSETS
y CREATING A COMMUNICATION PLAN
y CREATING A TARGET PLAN
y CREATING AN AUTHORITY STRUCTURE PLAN
y CREATING A PLAN FOR AVOIDING WASTAGES
y CREATING A PLAN FOR SUPPLIERS, REPAYMENT SCHEDULE ETC.


SOW - STATEMENT OF WORK
A statement of work (SOW) is a formal document that captures and defines the work
activities, DELIVERABLES and timeline a vendor will execute against in performance of
specified work for a client. Detailed requirements and pricing are usually included in the
Statement of Work, along with standard regulatory and governance terms and conditions.
Large and complex systems require that detailed work requirements need to be written containing "what
is to be done" in definitive and precise language and terminology.
The purpose of a SOW is to detail the work requirements for projects and programs that have deliverables
and/or services performed.

The SOW covers the work requirements and in conjunction with applicable performance/design
41 | P a g e

requirements contained in specification is used for contractual agreements.
Any proposed supplier can submit a proposal based on his perception of the needs as defined by the
SOW. Thus enabling a fair price for goods and/or services to be provided.

Purpose.
Most contracts, for large and complex systems will require a SOW which will form the basis for
successful performance by the contractor or developer.
A well-written SOW will serves as the standard for determining if the supplier meets the stated
performance requirements.
Areas that are typically addressed by a SOW are as follows:
y Purpose: Why are we doing this project? This is the question that the purpose statement
attempts to answer.
y Scope of Work: This describes roughly the work to be done in detail and specifies the
hardware and software involved and the exact nature of the work to be done.
y Work: This describes where the work is to be performed. This also specifies the location
of hardware and software and where people will meet to perform the work.
y Period of Performance: This specifies the allowable time for projects, such as start and
finish time, number of hours that can be billed per week or month, where work is to be
performed and anything else that relates to scheduling.
y Deliverables Schedule: This part lists the specific deliverables, describing what is due
and when.
y Applicable Standards: This describes any industry specific standards that need to be
adhered to in fulfilling the contract.
y Acceptance Criteria: This specifies how the buyer or receiver of goods will determine if
the product or service is acceptable, what objective criteria will be used to state the work
is acceptable.
y Special Requirements: This specifies any special hardware or software, specialized
workforce requirements, such as degrees or certifications for personnel, travel
requirements, and anything else not covered in the contract specifics.
y Type of Contract/Payment Schedule: The project acceptance will depend on if the
budget available will be enough to cover the work required. Therefore payments
breakdown whether up front or phased will be negotiated very early at this stage.
y Miscellaneous: There are many items that do not form part of the main negotiations but
are nonetheless very important to the project. They seem minor but being overlooked or
forgotten could pose problems for the project. SOWs serve as project blueprints,
providing key information required for executives to approve the Professional Services
contract. Well defined SOWs help in the following areas:
y Accurate Estimates. Properly defined SOWs allow the Consulting organization to submit
refined pricing proposals. Accurate estimates reduce the number of change requests and
allow executives to finalize the budget process.
y Payment. Acceptance criteria and deliverables often drive the payment plan.
42 | P a g e

y Communications Plan may include weekly updated Microsoft Project Plans, project
dashboard updates, and status reports.
y Milestones for the project
y Change Management: Managing change, the elements prone to change, methods of
adaptability etc.
Essentials of an Effective SOW
y Flexibility
y Completeness
y Match with funds availability
y Reliability
y Practicality
y Clarity
y Avoid misrepresentations
y Precise
y Avoid repetitions
y Agreement.
Types of SOWS
y PROPOSAL SOW
y CONTRACT SOW

===============================================================

PROJECT SPECIFICATIONS
A specification is the definition of your project: a statement of the problem, not the solution.
Normally, the specification contains errors, ambiguities, misunderstandings and enough rope to
hang you and your entire team. The agreement upon a written specification has several benefits:
y the clarity will reveal misunderstandings
y the completeness will remove contradictory assumptions
y Serves as a useful aid in decision making
y
. Once the project is underway, changes cost time (and money). The existence of a demonstrably-
agreed specification enables you to resist or to charge for (possibly in terms of extra time) such
43 | P a g e

changes. Further, people tend to forget what they originally thought; you may need proof that
you have been working as instructed.
Essential/Process involved in Effective Planning:
1. Prepare Environment analysis
2. Identify strategic variables/key variables
3. Set objectives
4. Prepare Forecasts
5. List alternative Strategies
6. List threats and opportunities SWOT Analysis
7. Prepare Action Programs
8. Monitor and Control
Dos and Donts
y The functional Manager should be given the freedom to perform his tasks
y Establish Goals before u plan
y Set achievable and feasible goals
y Stay flexible
y Accommodate and invite changes
y Do not focus on todays problems
y Have a macro approach to Planning
y Periodically monitor and control and Communicate
y Keep a balanced outlook
y Conflict resolution
y Manage funds resources time and change
y Highlight the risk involves and means to tackle them
y Avoid Ambiguity
CHARACTERISTICS OF SPECIFICATIONS
y Since it is a statement of the problem ;it takes into account the errors,
misunderstandings ,hindrances etc that are most likely to take place
y It is the very step to quality assurance
y It involves encountering the problems at the very beginning.
y It may be prepared separately and sometimes also forms part of the Sow Statement
y Small changes in SOW could lead to large cost overruns
y Specifications could be prepared for labor, equipments, materials etc.



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IMPORTANT POINTS TO BE CONSIDERED I N A SPECIFICATION:
MACRO VIEW: Since different activities are handled by different persons the Project Manager
should be able to study the specification of the Project in a macro aspect rather than at a micro
level.
Structuring time: The Project Manager should be able to specify the time requirements
for each activity with reasonable accuracy.
CO-ORDINATING/INTERFACE: The Project Manager should not assume that the inter
related activities will go on according to the specification. He should take necessary measures to
see that the units work in perfect co-ordination and managed so that it ensures smooth flow of
operations.
Project specifications in a Project are:
FINANCE AND ACCOUNTS SYSTEM:
y Creating Books of accounts
y Preparing Budgets
y Cash balance
y Overdraft limits
y Generating different reports for planning and evaluation

HUMAN RESOURCE SYSTEM:
y RECRUITMENT PROCESS
y CONFIRMATIONS
y OVERTIME
y INCENTIVES
y PERFORMANCE REPORTS
y APPRAISAL
y DISCIPLINARY RECORDS
y ATTENDANCE REGISTERS
y SALARY REGISTERS

INVENTORY SYSTEMS: Quotations, inviting tenders, issues, purchases supplier selection etc
ADMINISTRATION: Medical reimbursements welfare Schemes, Transportations.etc
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PROJECT MANAGEMENT: Monitoring, control, Documentation, monitoring, evaluations etc

PMS(Project Milestone Schedule)
As we proceed along the project goals we come across sign posts which are known as
Milestones.
Milestones give us an idea of the progress of work
Important events covered reflects that the project is going on smoothly
Milestones refer to ear marked phases representing Deliverables
It means accomplishment of tasks and Events.
An assessment of the Milestones will also show us the deviation from the targeted lines
The accomplishment of Milestones reflects the progress in activities and the efficiency of work
accomplished.
It aids in Planning appropriately.
Examples of Milestones are review meets .Prototypes, Sanctions, Joint Ventures etc
Milestone is an event with zero duration.
It is a schedule which lists out the Milestones
It serves as a Backbone to the scope of the project .
It also serves as a measuring yardstick to measure the progress of the project.
PROCESS OF MILESTONE INVOLVES:
y Identification of the key dates.
y Identification of Constraints-Plant Breakdown..Shutdowns..Price rise etc.
y Recording Interim Progress/Milestones
y Furtherance of activity towards the attainment and achievement of Milestones


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Major Milestones of Reliance India Limited as published in the official website are as follows
2010
y During the year, RIL and BP announced a strategic partnership in the oil and gas
business. This partnership comprises BP taking 30 per cent stake in 23 oil and gas
production sharing contracts that Reliance operates in India, including the KG-D6 block,
and the formation of a joint venture (50:50) for sourcing and marketing gas in India.
y During the year, the Company took a significant step by entering into partnerships in the
United States of America with Atlas Energy, Pioneer Natural Resources and Carrizo Oil
& Gas through three distinctive joint venture agreements. It has also entered into a
separate joint venture with Pioneer Natural Resources aimed at addressing the mid-
stream opportunity in gas evacuation and transportation.
y During the year, RIL and Russia's SIBUR announced a joint venture for the setting up of
a facility for producing 100,000 tonnes of butyl rubber in India.
y During the year, RIL acquired a 95% stake in Infotel Broadband Services Limited, which
emerged as a successful bidder in all the 22 circles of the auction for Broadband Wireless
Access (BWA) spectrum conducted by the Department of Telecommunication,
Government of India. RIL has invested Rs. 4,201.64 crore by way of subscription to
equity capital issued by Infotel Broadband.
WORK BREAKDOWN STRUCTURE:
y WBS stands for work Breakdown Structure.
y It is a useful tool for PROJECT Planning
y It involves preparation of a structure like that of a Family Tree.
y Gives a detailed description of the work to be undertaken.
y It records schedule of activities to be undertaken
y It identifies the tasks subtasks as well as units of work to be performed
y It assists in planning
y Provides a breakup of tasks works, and the path to be followed.
y Helps in the preparation of Cost structure
y It provides a hierarchy for Staffing
y Aids planning of Resources
y Identifies the key variables and the key elements
y It is contained in the Sow Statement



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DefinitionThe WBS- The WBS is a powerful tool for expressing the scope or extent of a
project in simple graphic terms. It is a tool used to define and group a project discrete work
elements in a way that helps organize and define the total work scope.

History The concept of Work Breakdown Structure developed with the Program Evaluation and Review
Technique (PERT) in the United States Department of Defense (DoD). PERT was introduced by the U.S.
Navy in 1957 to support the development of its Polaris missile program.
It was standardized b y the Department of Finance in 1968.

Meaning:
1. Resembles a flow chart and a family tree
2. WBS is tree structure which shows the sub division of effort required to achieve an
objective
3. It provides the necessary framework for preparing cost estimates.
4. Dynamic tool which can be revised and upgraded as needed by the Project manager.
5. It forms the basis for Staff Organization and Reporting.
6. A dominant pre-requisite for successful planning and integration of project activities
7. Acts as a map for executing the project
8. Facilitates budgeting
9. Delegation of Responsibility and authority.
10. It is sued to determine the Critical path and record deviations
11. Helps in the allocation of resources and funds
12. It uses a hierarchical approach to plan and integrate the various parts of the project.
13. A dominant pre requisite for successful integration and control of the Project

PURPOSES /REASONS:
1. Managing complex Projects
2. Assisting with staff Organizations
3. Planning Resources
4. Planning the Funds
5. Estimation of Cost Risk and Time
6. Explanation to stakeholders
7. Reveals Areas to be controlled
8. Identification of Critical Areas
9. Milestones

ADVANTGES:
Effective Planning due to division of work
Helps in preparing cost estimates effectively
Aids staffing
Identification of Authority Structure Responsibility
Provides a framework for Hierchical Structure
Indicates Scheduled Start and end dates
Helps in identifying delays
Avoidance of wasteful Expenditure
Identification of Fund requirements
Identification of Resource Requirements and Allocations
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Control of Time Money and People
Integration of Work
Affords Simplicity and Clarity due to Graphical Representations
Development of Control and Information Systems
Change Management
Milestones Achievement
Helpful in preparation of Budgets
Ease In Monitoring Progress
Timely Actions Taken
Mechanism for Performance Measurement and Control
Allows mapping of Activities
Reduces the likelihood of Errors
Variance Analysis
Defines the scope of Activities
Indicates Critical activities and Jobs
Effective Direction
Reporting



III Benefits of Work Breakdown Structure
y WBS, as noted above, involves decomposing a major complex task or deliverable into its
component parts, and by doing so, it makes clear the inter-relationships between those parts.
y A prime benefit of WBS is its effective aid in the planning process. As WBS evolves, it becomes
easier to revise and update plans.
y Responsibilities can be assigned at different points of the WBS hierarchical tree, both managerial
and technological.
y , entire work packages can be assigned to appropriate skill groups, and for the project manager,
the work-package/skill-group becomes a black box, which makes it easier to macro-manage.
y This wholesale assignment also facilitates en block assignment of resources to the work-
package. Such an approach is especially useful if the work-package has to be outsourced to
contractors; and also when the same work-package is being replicated in other tasks/locations.
y tracking of progress at work-package level aids in more accurate fine-tuning of the progress of
each task as a whole.
y In fact, well-developed WBSs can be archived and reused for future projects, too
Work Breakdown Structure comes into picture when the project is large and complex. So, as a project
manager, if your project happens to be erecting an additional glass panel in the office lobby; then a plain
Gantt chart will suffice.
However, if your project happens to be overseeing the construction and occupation of a chain of offices
across the country, with material to be sourced from a combination of regional-level and local building-
material suppliers, manpower to be sourced from local subcontractors, and a final delivery schedule of 6
months; then the WBS comes to your rescue.
Enormous projects often threaten to overwhelm the best of project managers. Therefore preparing a WBS
needs a birds eye insight into the activities involves in the Project.
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=====================================================================
management control

Definition
A management function aimed at achieving defined goals within an
established timetable, and usually understood to have three components: (1) setting
standards, (2) measuring actual performance, and (3) taking corrective action.
A typical process for management control includes the following steps: (1) actual
performance is compared with planned performance, (2) the difference between the
two is measured, (3) causes contributing to the difference are identified, and (4)
corrective action is taken to eliminate or minimize the difference.
Management control means the following:
y Supervision of all the activities
y Management of activities
y Monitoring the activities
y Standards for performance are set
y Working within the scope
y Ensuring smooth flow of operations
y Ensures minimization of wastages
y Ensure activities are completed on time
y co-ordinate efforts

CONTROL PROCESS:
It involves the following:
1. ESTABLISHING STANDARDS FO PERFORMANCE
2. MEASURING ACTUAL PERFORMANCE
3. COMPARISON WITH THE BUDGETS
4. RECORDING DEVIATIONS
5. TAKING CORRECTIVE ACTIONS

VARIOUS TYPES OF CONTROLS ARE AS FOLLOWS:
1. TIME CONTROLS
2. FINANCIAL CONTROLS
3. BUDGETARY CONTROL
4. COST CONTROL
5. MANAGEMENT CONTROL
6. PRICE CONTROL
7. OPERATIONAL CONTROL
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8. QUALITATIVE CONTROL
9. MATERIALS CONTROL
10. EQUIPMANT CONTROL
11. INVENTORY CONTROLS
12. PROCESS CONTROLS

WHAT DO U UNDERSTAND BY EXCEPTION REPORTING?

1.A process of issuing a warning message to decision-makers when something unexpected
is happening: for example, when expenditure against a budget is higher than it should be.
2. An exception report refers to a very important and critically significant piece of documentation that is
essential to the proper and effective functioning of a project in that it documents not what has gone
right, but rather, what has gone wrong.
In the course of a project, there will exists mountains upon mountains of paperwork that is meant to
provide every bit of detail as to what was done, how it was done, who did it, what it cost, etc, in relation
to a project. There are many purposes for this, but accountability and budgeting are more than likely
numbers one and two.
However, the exception report actually itemizes and documents the major mistakes, goofs, or mishaps.
Essentially the things that went wrong. This is in reality a critical document for many reasons. First, it
provides a carefully written documentation of the mistakes for look back at a later point within the life
of a project in hopes of avoiding making the same mistakes again; however, it is also important because,
for future projects, it can help the project team learn from its mistakes made this time around.

For example, you might forecast a spend of 400$ per month on something with a variation of 20%. On
the report generated by your computer system you could have the data within the 'normal' range
displayed in black whereas an exception above or below the normal range could be displayed in red.
Alternatively you could have the report program provide you with information that was outwith your
normal expectations. In other words you only get told about a spend when it is exceeding or likely to
exceed your forecast. This principle can be applied to many situations to alert managers about a
situation that they need to corrective action on.








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MANAGEMENT FUNCTIONS
INTRODUCTION:
The Success of the Project depends on the efficiency of the Project Manager in managing the projects. It
is always the Endeavour of any dynamic and progressive organization that the project is completed
within the given constraints of time, cost and resources as well as performance parameters.
The project manager too measures his success by how well he can negotiate with the management
{upper middle and top} to handle and motivate them to reach to the objective.
The complexity of operations, the magnitude of modern industrial ventures and technological
advancements also demand that here is no project slippage at any stage on any account.
Project manager is involved with Planning, Organising, Directing,Co-ordination and Team Building..The
Project Manager is responsible for the successful execution of the project. This unit deals with the
following functions of the PROJECT MANAGER.
1. CONTROL
2. DIRECTION
3. TEAM BUILDING
4. COMMUNICATION
5. LEADERSHIP


CONTROL:
Introduction: Control is an attempt to keep the day to day work and activities on track. The word control
often refers to power, authority, command or domination. It also refers to guiding a course of action in
order to meet certain objectives. It involves a regular comparison of the actual performance with the
budgeted figures.
It serves two major functions {a} It ensures regular monitoring of performance.
{b} It motivates project personnel to strive for achieving project objectives.
It means to organize the activities of project towards the right direction.
DEFINITIONACCORDING TO HENRY FAYOL---In an undertaking control consists in verifying whether
everything occurs in conformity with the plan adopted, the instructions issued and principles
established
Robert Anthony Management control is the process by which managers assure that the resources are
obtained and used effectively and efficiently in the accomplishment of the organizations objectives
NEED OF CONTROL:
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y ENSURE THAT THE PROJECT IS COMPLETED ON TIME
y ENSURE THAT THE COSTS DO NOT EXCEED THE BUDGETS
y PERFORMANCE WITHIN THE PARAMETERS SET.
y DUE TO COMPLEXITY IN THE OPERATIONS IT IS NECSSARY TO INITIATE CONTROL
y DUE TO MAGNITUDE OF MODERN BUSINESS VENTURES
y DUE TO TECHNOLOGICAL ADVANCEMENTS
y IN ORDER TO AVOID SLIPPAGES
y CONTROL IS NEEDED FOR EFFICIENCY ETC.


MEANING/OBJECTIVES,/REASONS/ FOR EXERCISING CONTROL:
1. It is one of the important functions of management
2. Monitor Progress of the events and activities.
3. Manage the activities.
4. Ensure that the work goes on as per schedule
5. To keep the project on track
6. Measuring the performance of activities
7. Comparison with the budgets to record deviations
8. Ensuring that the objectives are achieved
9. Identification of roadblocks
10. Aimed at the smooth flow of operations
11. Timely start and Completion of activities
12. Follow up of Instructions Directives and guidelines set up for project performance
13. Pointing out errors and Deviations and prevention of recurrences.

PROCESS OF CONTROL:
1. ESTABLISHING STANDARDS OF PERFORMANCE
2. COMPARISON WITH THE BUDGETED
3. MEASURING PERFORMANCES
4. RECORDING DEVIATIONS
5. CORRECTIVE ACTION PLANS
6. FOLLOW UP PROGRAMS.

ESSENTIALS OF EFFECTIVE CONTROLS:
1. ESTABLISH STANDARDS FOR PERFORMANCE
2. CONTROL- A GROUP EFFORT
3. MONITOR OR MEASURE PERFORMANCE
4. PREPARATION OF FORECASTS
5. QUANTIFY VARIATIONS AND DEVIATIONS
6. ANALYSIS OF RESULTS
7. ALTERNATIVE OR CORRECTIVE PLANS AND ACTIONS
8. FOLLOW UP PLANS
9. TEAM SPIRIT
10. TRAINED PERSONNEL
11. TIME INTERVAL OF MEASURING PROGRESS
12. CONTROL SCOPE-ALL CRITICAL AREAS

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CONTROL TECHNIQUES
A PROJECT CONTROL SYSTEM SHOULD BE DEVISED TO EVALUATE THE PERFORMANCE OF VAIOUS
SEGMENTS OF THE ORGANISATION. Every organization has its own methods to exercise control and
some of the tools and techniques used in the exercise of control in organizations are as follows:
1. Traditional control techniques
2. Modern Control Techniques








1
2
3
4
5
6
7






Traditional
Budgetary controls
Cost controls
Inventory controls
Break even analysis
Profit and loss account
Statistical Data Analysis
Production planning and control








1
2
3
4
5








Modern
Return on Investments
PERT
CPM
MANAGEMENT AUDIT
Management infor. systems






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PARAMETERS OF CONTROL:
y Progress control
y Performance Control
y Schedule control
y Cost Control
Cost control is not only monitoring the costs and recording of costs but also analyzing
the data in order to take corrective actions. Cost control implies Cost management
which includes the following:
Cost estimations
Cost accounting
Project cash flows
Direct labor testing
Overhead Rate Costing etc.
No matter how good the cost control system is, problems can occur .Below are some of the problems
of costs despite Cost control
1. Poor cost estimates which results in unrealistic budgets
2. Inadequate work breakdown structure
3. Poor work definition at lower levels of management
4. Unforeseen technical problems
5. Material escalation factors
6. Schedule delays caused by idle time
7. Lack of efficient management
8. No management policy on Reports and control practices
9. Risk and uncertainty
10. Inadequate formal planning
11. Market conditions
12. Political conditions
13. Abnormal factors ,uncontrollable factors








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DIRECTION:
Definition:
Earnest Dale Direction is telling people what to do and seeing that they do it to the best of
their ability. It includes making assignments explaining procedures seeing that mistakes are
corrected, providing on this job and instruction sand issuing order.
Definition-according to Massie Directing concerns the total manner in which a manager
influences the action of sub ordinates .It is the final action of the manager in getting others to
act after all preparations have been completed
According to Himann Directing consists of the process and techniques utilizing in issuing
instructions and making certain that the operations are carried out as originally planned
From the above it is clear that initiation involves the following:
y Establishing effective work processes.
y Creating standards that align with sound instructional design practices
y Ensuring continuity of operations
y Conducting team meetings
y Communication of orderly progress made.
y Delegation of responsibility
y Involves Encouragement of Staff
y Readdress of Grievances
y Involves Motivational Duties
Meaning:
1. Providing guidance and inspiration to people at work in order to acrry out assigned
duties and responsibilities
2. Telling people what to do
3. Motivating the people and telling them what to do .
4. Assignments of jobs ,
5. Explaining Policies and procedures
6. Issuance of guidelines ,orders, directives, for performing their tasks
7. Division of labor
8. Building up the right attitude among staff
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9. Setting individual goals and targets
10. Influencing he employees and getting the jobs done.
It involves the following aspects:
y Communications
y Motivations
y Staffing
y Supervision
y Co-ordination
y Delegation
y Training
y Leadership-setting up a role model
y Decision Making
y Planning for Change
y Counseling
Characteristics:
It is a dynamic function
It involved initiating Action
It is a Universal Function
Concerned with the Human aspects-Encouragement, Positive Thinking, Attitudinal Changes etc.
PHASES OF DIRECTION:
1. Direction during the Initial Stages-Project kick off Meetings
2. Direction during the Production Stages
3. Direction during the Final stages
Project kick off Meetings:
It is the first meeting with the Project team members to discuss the project and the work that
will be completed. It is the meeting in which presentation regarding the scope performance
objectives schedules and the budget can clarify the project clearly. The project proposal must
be distributes to the team members prior to the meeting, The meeting introduces the members
of the project team and provides the opportunity to discuss the role of each team members in
the project work. The purpose of the meeting is as follows:
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1. Introducing the project team members
2. Discuss the project in general and raise questions
3. Discuss schedule communication plan and budgets
4. Scope definition and objectives
5. Key customers and stakeholders
6. Activities events and milestones to be achieved.
7. Challenges to be dealt with
8. Define the parameters of the project work .
9. Project Quality Plan
10. Identification of Constraints
11. Project Key Staff.
PROJECT REVIEW MEETING:- Appraisal of performance
y Evaluation of activities
y Analysis of Activities
y Feedback control follow ups
y Identification of problems
y Study of the problems faced
y Incorporation of changes required
y Re- enforcement plans
y Action plans
y Sorting out issues
y Pitfalls in planning and development
y Inadequacy of Resources


These meetings are necessary to convince key personnel that orderly progress is being made on
a project. The main objectives of the meeting are as follows:-
y Identification of the potential problems
y Action oriented Corrective Action to be ascertained.
y Involvement of key personnel
y Comparison of the actual with the budgets
y Progress achieved during the review period.
y Implementation of policy and procedures

FOR A DESCRIPTIVE ANSWER U CAN OPT FOR THE BELOW MENTIONED DETAILS
Post Project Review Meeting Process
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Objectives
Post project review is of great importance as it helps the project team to analyze different trends
and lessons learned to improve the overall working in next projects. This meeting also provides
vital data at organizational level to grow and improve.
Tasks
1. On project completion, a post project review meeting is conducted by the Project
Manager
2. Project Manager collects data required for the preparation of Post Project Review
meeting. Required data includes:
o Measurement data against defined measures
o Data of customer feedback
3. Project Manager with the coordination of Development Team lead and Quality Assurance
Team Lead consolidates measurements results and customer feedbacks and prepares the
Post Project Review
4. Project Manager presents the measurement results and customer feedbacks before the
meeting participants.
5. Meeting participants perform analysis of measurement results against measurement
objectives and targets as defined in Project Plan/Organization
6. Measurement Specification; and identify appropriate corrective/preventive actions or
improvements.
7. Project Manager asks for the other issues and lessons learned during the course of project
as well as suggestions for future improvement.
8. Meeting participants present their issues, lessons learned and improvement suggestions
9. Meeting participants perform the root cause analysis for the issues required corrective
and preventive actions and assign action items to the relevant stakeholders.
10. Project Manager logs the issues in the relative issue management systems (e.g. Help
desks) for tracking and updates the status of issues in Post Project Review Report.
Guidelines for Post Project Review Meeting
1. Usually meeting agenda includes the following points, however others points may also be
included as required:
o Review of measurement results against defined measures.
o Review of customer feedback.
o Issues faced by project team and other stakeholders during milestone.
o Improvement Suggestions.
o Lessons Learned.
2. Usually following are the meeting participants, however others stakeholders may also be
invited as required:
o Development Manager
o Quality Assurance Manager
o Process Engineering Lead
o Configuration Controller
o Project Team (Quality Assurance and Development)
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3. Project Manager will first log the identified issues and action items in Post project review
report and then transfer the issues to concerned persons/departments by logging them in
the related Helpdesk systems or issue management systems for tracking purpose.
Following Helpdesks are usually used for logging and tracking issues:
o Process Improvement Helpdesk for Process related issues.
o Networks/IT Helpdesk for hardware, software, networking or other infrastructure
facilities related issues.
o Management Helpdesk for issues related to project teams coordination, resource
assignment, trainings, customer, technology, configuration management or
Quality Assurance/System Testing.

LEADERSHIP:
INTRODUCTION: Project leaders are more than just project managers; they are talented
individuals that have mastered the leadership skills necessary to build a high-performing project
team, leverage the collective intelligence of the group, manage it through the process of
completing a project, and exercise influence without authority to ensure superior results.
The most successful project managers and leaders need to know what it takes to make project or
cross-functional teams perform at the highest level and understand that they need to be able to
manage the uncertainty inherent in todays complex projects. They know that the true success
factors of high-performance project management are the leadership and interpersonal skills
which enable them to get team members to work collaboratively and perform at the highest level.
They undertake the following:
y Manage the uncertainty inherent in projects
y Manage projects in matrix organizations
y Build a cohesive project team
y Leverage the collective intelligence of the team
y Understand and prevent the issues that can fragment and undermine team performance
y Monitor and control team performance
y Motivate team members to perform and achieve objectives
y Exercise political and personal influence when you dont have the formal authority to
mandate action
y Mitigate and resolve conflict to ensure the success of the project
According to Koontz and ODonnell Leadership is the ability of a manger to induce
subordinates to work with confidence and zeal.
According to Alford and Beaty Leadership is the ability to secure desirable actions from a
group of followers voluntarily , without the use of coercion
Characteristics of Leadership:
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y A personal quality
y Communicators
FUNCTIONS OF A LEADER:
1. Setting of goals
2. Organizing
3. Initiating Action
4. Co-ordination
5. Direction and Motivation
6. Link between Management and Workers
7. Team Building
8. Information Transfer
9. Far sightedness
10. Problem Solving
11. Direction
12. Counselor and Mentor
13. Unbiased Opinion Formation
14. Firm Determined and Optimistic
15. Training and Guidance
16. Listening Skills
17. Preparing for uncertainties
18. Training and Recruitments
19. Managing People money and materials
20. Negotiation Skills

ADVANTAGES OF EXERCISING EFFECTIVE LEADERSHIP:
y Effective Planning
y Fulfillment of Objectives
y Sense of responsibility
y Co ordinate efforts
y Unified systems
y Timely Completion of projects
y Quality Outputs
y Standardization
y Optimum utilization of resources
y Elimination of wastages
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y Problem Solving leading to Team Building
y Effective Communications leading to Effective Work Standards
y Optimization on Visions and goals
y Change management
y Profitability
y Reduction of Costs
y Ability to handle crisis
y Unity and Joint efforts among staff
y Invoking sense of responsibility
PROJECT REVIEW MEETINGS:
It is a meeting held for discussing the issues related to the project. It aims at a review of the activities in
progress.
Project review meeting is the most practiced method for identification of problems and providing
directions
The feedback gained during these meetings provides re enforcement for good skills and behavior and a
path for change where improvement is required. These meetings could be held at different levels of
project management hierarchy and accordingly the agenda and frequency and also the participants
would be different.

It is the first step towards evaluation and appraisal and provides information flow in both directions in
the organization.
It means monitoring the activities and evaluation thereafter.
Feedback co ordination control follows up and review is the elements of monitoring system.
It involves the following:-
y Progress achieved during the review period
y Problems faced.
y Remedial measures to be taken
y Status of id
y Implementation of the decisions taken in the previous meeting
y Agreed action plans
y Deviations from the standards
y The issues faced by the staff
y Challenges to be faced
y Course of action Way forward
y Overview of the progress of work
y Review of slippages
y Review of failures
y Review of Performance f the staff
y Appraisal and review of personnel
y Standards of quality
y Strategic and procedural changes
y Involvement of key
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y Progress target up to the next review date etc.



COMMUNICATIONS:

Communication is the intercourse by words letters or messages, an intercourse of thoughts and
opinions.
It is the act of making ones ideas and opinions known to others. It constitutes an important function of
Project management. The essence of communication is getting the receiver and sender tuned together
for a particular message. Communication does not merely mean written or oral messages but
movement of lips ...wink of an eye, or waving of hand may convey more meaning than even written or
spoken words.

Definition: According to Fred G Meyer Communication is the intercourse by words letters or messages,
intercourse of thoughts or opinions. It is the act of making ones ideas and opinions known to others
According to Loins Allen Communication is the sum of all the things, one person does when he wants to
create understanding in the mind of another. It involves a systematic process of telling listening and
understanding

y from the above it is clear that Communication does not merely mean sending or receiving the
messages .It also concludes proper understanding of the message .In the broader sense
Communication refers to the whole process of mans life in relation to the group and includes an
exchange for information. Therefore communication would mean the following:-
y Intercourse by words letters or messages
y Human interchange of facts info and opinion
y A very important function i Project management
y Transfer of information from on person to another
y Exchange of ideas
y Transmission of Information thru a system of symbols signs behavior speech.


BASIC ELEMENTS IN COMMUNICATION

1. SENDER OR COMMUNICATOR
2. MESSAGE OR CONTENT
3. ENCODING
4. CHANNELS OF COMMUNICATION
5. DECODING
6. RECEIVER
7. FEEDACK





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PROCESS OF COMMUNICATION
















CLASSIFICATION OF COMMUNICATION:
BASED ON RELATIONSHIPS:
y FORMAL
y INFORMAL
BASED ON MEDIA/EXPRESSION
y ORAL
y GESTURES
BASED ON FLOW OF INFORMATION
y HORIZONTAL
y DIAGONAL
SENDER
ENCODING
MESSAGES
RECEIVER
DECODING
ACTION
FEEDBACK
S
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y UPWARD
y DOWNWARD

FEATURES OF EFFECTIVE COMMUNICATION:
1. CLARITY AND COMPLETENESS
2. SIMPLICITY
3. LANGUAGE
4. FEEDBACK OR RESPONSE
5. CONSISTENCY
6. TIMELY
7. FORMATS
8. PRECISE AND CONCISE
9. NO AMBIGUITY
10. CONTENTS ETC......

MANAGEMENT POLICIES AND PROCEDURES:
A big part of management profession is creating and enforcing policies and procedures. These
policies and procedures are standing or repeated use plans i e can be used over and over again.
Policies are general statements which are formulated by an organization for the guidance of its
personnel. The objectives are first formulated then policies are planned to achieve them.
Generally formulated by the top management. They are the general guidelines set by the management
for achievement of objectives. They conform that the activities conform to the expectations of the
organization. Policies are a mode of thought.
It is the definitive position of an organization on a specific issue. A policy provides a basis for consistent
and appropriate decisions making and defines authority and accountability within the organization.
Management policies are the principles upon which the governance of an organization is based or a
general statement of the manner in which the activities to be conducted .It is considered as a guiding
principle, typically establishes by senior management.

Purpose of management Policies:
The policies are formulated for the following purposes
1. The main purpose of policy is to ensure that there is no deviation from the planned course of
action.
2. Policies ensure that the broad guides for actions are adhered to.
3. They ensure consistency of actions
4. They are helpful for future planning also.
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5. It ensures proper delegation of authority.
6. Policies and Procedures aim at successful completion of objectives
7. They aim at adherence to management systems and objectives.
Factors to be considered for Policy formulation:
y Organizational Goals
y Group Participations
y Reflecting Business environments
y Consistency
y Effective communication
y Achievable policies
y Structured
y Describe authority structure delegations
Policy types:
y Major policies
y Supportive policies
y Minor policies
y Composite policies

PROCEDURES:
It refers to the details of action for achievement of the business objectives. It
gives details of how jobs have to be executed.
It can be defined in a number of ways as follows:
y A precise method of performing a task
y Particular course of action
y A set of prescribed steps for accomplishing a specified activity or task
y A way of achieving something
y A series of steps designed to achieve a definite purpose
y A traditional or established way of doing things
y A procedure is a series of related tasks that make up the chronological
sequence and the established way of performing the work to be
accomplished.
Procedures and Project management go hand in hand. The formalization of ways i
which the project work is done has become an important part of discipline of
project management.
1. It provides the framework for control of projects
2. They govern the way in which information flows in the various departments
3. They form the main interface control mechanism.
4. They are amended to suit changing circumstances and procedures that do
not work well.
5. It is a guide to action
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6. They serve as guidelines for initiating action.
7. They are essential for smooth functioning of the organization.
Example: a procedure for procuring materials will be as follows:
y A purchase requisition is first sent to the purchase department giving
proper specifications
y The purchase department passes an order after compilation of all the
requisitions from various departments and also after scrutinizing each
requisition.
y The order is then placed after inviting tenders from vendors
y Receiving and recording the receipt of goods and also check that the goods
are as per the specifications.
y After inspection of goods received the purchase department forwards the
bill to the accounts department for making payments.
y Accounting department checks the bill and makes payment to the vendor
after authorizations.





















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FEASIBILITY STUDY
:INTRODUCTION
As the name implies, a feasibility study is an analysis of the viability of an idea. The
feasibility study focuses on helping answer the essential question of should we proceed
with the proposed project idea? All activities of the study are directed toward helping
answer this question.
Feasibility studies can be used in many ways but primarily focus on proposed business
ventures. Managers should conduct a feasibility study to determine the viability of their
idea before proceeding with the development of a business.
A feasible business venture is one where the business will generate adequate cash-flow and
profits, withstand the risks it will encounter, remain viable in the long-term and meet the
goals of the founders.
Features of a Project Feasibility Report:
1. A necessity before start up operations
2. Provides an environment t to revise, make changes, and suggest alternatives where necessary
3. Helps in taking Reliable decisions
4. Studies the pros and cons of activating a Project.
Reasons for the Feasibility Study:
y Projects require huge sums of money. Therefore an analysis of the Functionalities is an
important task under Feasibility study
y Helpful in Planning out the future course of action
y Aids decision making
y Helps preparing forecasts
y Utility for alternative approach.
y Helps in determining the costs
y Engineering and Design Analysis
y Job and Process Analysis
y Demand Analysis.......
KINDS OF FEASIBILITY STUDY:
y TECHNICAL FEASIBILTY
y MARKETING FEASIBILITY
y SOCIO ECONOMIC FEASIBILITY
y MANAGERIAL FEASIBILTY
y FINANCIAL FEASIBILITY
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DIFFERENCE BETWEEN BUSINESS PLAN AND FEASIBILITY REPORT
FEASIBILITY BUSINESS PLAN
1. Investigation function Initiating Function
2. Done before the business plan done after the feasible report
3. Provides a road map provides a Blue Print
4. Helps in preparing the plan Plan depends on the feasibility report
===================================================================================


TECHNICAL FEASIBILITY:
1. Analysis of the technical needs of the Project
2. Economic Viability of the Technology in the long run and its alternatives
3. Transportation
4. Capacity Utilization
5. Recruitments and Training
6. Plant Layout and Designing
7. Estimation of the cost of Erections of the Proposed Buildings
8. Waste Disposal Techniques
9. Foreign Collaborations
10. Scale of Operations
11. Cost of Start up and Maintenance
12. Technical Engineering Services
13. Technological Need of the proposed Project
14. Availability of Raw Materials and Resources for Production
15. Probability of Technological Innovation in the Product
16. The analysis of such study includes the following questions
Whether techno. Utilizes the capacity
Whether it is in harmony with the economic conditions of the market
Whether it caters to the needs of the organization
Whether it achieves the capability ,that it is intended to achieve


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MARKETING FEASIBILTY

1. Ability of the product to be marketed
2. Defining the customers
3. Study of the cost of accessing the market
4. Sales Organization and management
5. A competition in the market
6. Market determinants
7. Price Regulations or SUPPLY AND Demand
8. Export Markets
9. Changing trends of the customers
10. Scope of market-national, international
11. Distribution Channels-agents, dealers, middlemen etc
12. Govt Policies affecting the market
13. Market Imperfections
14.
15. Marketing plans or alternatives
16. Cost of penetrating into the market-advertisements
17. Category of customers
18. Influences of market and SWOT Analysis
19. Market Penetration Strategy
20. Growth Strategy
21. Accommodating feedbacks
22. Forecasts.
SOCIO ECONOMIC FEASIBILITY
y Beneficial of Harmful to the society
y Cultural Feasibility
y Social causes such as building a bridge to tackle the traffic menace
y Environment Safeguards
y Benefit to Public at large
y Should lead to social and economic Development
y Identification of status symbols with regard to society
y Safeguarding the religious sentiments of the society
y Environment Protection
y Political considerations

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MANAGERIAL FEASIBILTY
y Management Support Systems
y Employees Involvement and Commitment
y Identification of Skilled and Experienced Business Managers
y Outline of the Governance and Authority Structure Relationships
y Analysis of Skills
y Delegation Of Authority
y Managerial Efficiency on Previous Projects
y Staffing and Delegation of work
y Communication Systems
y Diversification of Labor Force
y Recording or Analyzing the track Record of Previous Projects
y Efficiency of the Organization for Completion of the Project
y Ability for Change Management
y Stress Levels and address of Grievances
y SWOT Analysis
y Managerial Capacity and Capability
y Management Bottlenecks
y Equitable Distribution of Rewards
y Management Disputes and Welfare
y Division of Labor
y Management Control

FINANCIAL FEASIBILTY:
y Cost of the Project
y Working Capital Management
y Management of Debt and Capital-Means
y Breakeven point
y Ratio Analysis
y Projected Cash Flow Statement
y Return on Investments
y Liquidity
MEANS OF FINANCING
y SHORT TERM FINNACING
y MEDIUM TERM CREDIT
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y LONG TERM FINANCING

SHORT TERM FINANCING:
1. BANK CREDIT :
2. TRADE CREDIT:
3. CUSTOMER ADVANCES
4. DEFFERRED INCOMES
5. COMMERCIAL PAPER
6. INSTALLMENT CREDIT
MEDIUM TERM CREDIT
1. ISSUE OF DEBENTURES
2. ISSUE OF PREFERENCE SHARES
3. PUBLIC DEPOSITS
LONG TERM FINANCING:
1. ISSUE OF EQUITY SHARES
2. PLOUGHING BACK OF PROFITS
3. LONG TERM LOANS FROM SPECIFIED INSTITUTIONS
OTHER LONG TERM FINACIAL INSTITUTIONS{
1.IFCI=Industrial Finance Corporation of India
1. SFC=State Financial Corporation of INDIA
2. SIDC=State Industrial Development Corporation
3. IDBI=Industrial Development Bank of INDIA
4. UTI=Unit Trust of India
5. SIDBI=Small Industries Development Bank of India
6. LIC=Life Insurance Corporation
7. EXIM=Export Import BANK
8. NABARD=National Bank for Agricultural and Rural Development
9. RCTC=Risk Capital and Technology Finance Corporation
10. SICICI=Shipping Credit and Investment Company of India Limited
11. GIC=General Insurance Company
12. IRBI=Industrial Reconstruction Bank of India
13. Others:
14. Venture Capital
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y Seed Capital
y Mutual Funds
y Debt Equity Ratios
y Lease Finance
{EXPLANATION OF THESE TERMS GIVES IN CLASS.REFER UR NOTEBOOKS}

Project appraisal:
y A lending financial Institution makes an independent and objective assessment of various
elements involved in a project
y Financial Viability of the project is analyzed
y Decision whether to lend or not
y Analysis of the risk factors
y Appraises the technological, Financial, Market, Political, Economic, Social Viability of the
project
y Ability of the company to repay is studied
y Assessment of the project in terms of its economic, social and technological viability.
y Critical analysis of the project
y Scanning o the project
y Emphasis largely on cash flows ,financial viability and Liquidity
y Assessing their Suitability in granting the loans



Definition
Systematic and comprehensive review of the economic, environmental, financial, social, technical and
other such aspects of a project to determine if it will meet its objectives is termed as Project Appraisal.

SCOPE OF APPRAISAL:
y Choice of technology
y Skills and efficiency of management
y Size and scale of operations
y Previous Years Performance
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y Cost Benefit Analysis
y Plant Layout and Factory Building
y Govt Grants approvals and Sanctions
y Determination of profitability
y Profit Estimations
y Competitions
y Risk Management
y Ability to endure and handle market conditions and uncertainities
y Profitability Projections and Cost estimates
y Technical Collaborations and knowhow
y Liquidity and Creditability
y Location Aspects of the Project
y Infrastructure
TYPES/STAGES /STEPS IN PROJECT APPRAISAL


ECONOMIC TECHNICAL MARKET
Location technical Collaborations Demand/Supply
Raw Material supplies Location Distribution channels
Transport Cost of Technology price
Power and fuel Capacity of the project Market survey
Water maintenance costs Competitors
Climate Up gradation Costs Market Strategy
Taxes Plant Layout Market Penetration
Incentives
Proximity to markets




ORGANISATIONAL MANAGERIAL POLITICAL
Efficiency of Staff Competency of mgmt. Policies of the govt
Division of labor Mgmt control Govt Grants
Incentives Plans Govt Restrictions
Recruitments Forecasts Govt Policies
Training Reports Political environment
Disputes Management Budgets




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ESTIMATES: THE MOST COMMONLY USED ESTIMATES ARE AS FOLLOWS:

COST ESTIMATES, TIME ESTIMATES, PROFIT ESTIMATES
COST ESTIMATES:
MEANING: ESSENTIAL FOR OBTAINING APPROVAL FROM THE COMPETENT AUTHORITIES
HELPS IN ACQUISITION FO FUNDS
CHOOSING THE APPROPRIATE SOURCES OF FUNDS
REPAYMENT SCHEDULE
HELPS IN PLANNING
COST CONTROL AND COST MANAGEMENT

TYPES OF COSTS:
y FIXED COSTS/VARIABLE COSTS
y OPERATING COSTS
y WORKING CAPITAL COSTS
y INVESTMENT COSTS
y NORMAL AND ABNORMAL COSTS
y REVENUE AND CAPITAL COSTS
y TERMINAL COSTS
y SUNK COSTS
TIME ETIMATIONS:
1 Lead time: it is the interval of time between the start of an activity and the finish of the
succeeding activity
2 LAG TIME: Time interval between the finish of the preceeding activity and the finish of the
succeeding activity
3 LATEST OCCURRENCE TIME {LOT}=is the latest possible time at which an event or an activity
can start.
4 EFI EARLY FINISH TIME: is the earliest time in which an event can finish.
5 EOT {EARLY OCCURRENCE TIME}= is the earliest possible time in which an event can finish.
6 Optimistic time: is the estimated time in which the activity can be completed if everything
goes well.
7 PESSIMISTIC TIME: is the estimated time in which an activity can be completed under very
adverse circumstances.
8 MOST LIKELY TIME:
Is the most probable time in which the activity can be completed .
9 Slack/Float:
Slack is the difference between the latest event time and the earliest event time for a
particular event .
10 RANGE ESTIMATES:
Work duration when expressed in a range for eg:
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6-8 months.

The other kinds of estimates are prepared for the following:

y THE EXPECTED DURATION OF COMPLETION OF THEPROJECT
y EXPECTED DURATION OF COMPLETION OF AN EVENT
y EXPECTED DURATION OF COMPLETION OF AN ACTIVITY
y EXPECTED TIME FOR NEGOTIATIONS
y EXPECTED LAPSE OF TIME FOR AGREEMENTS
y EXPECTIME TIME FOR INSTALLATIONS OF PLANT AND MACHINERY ETC

PROFIT ESTIMATIONS:
y ESTIMATONS OF PROFIT BASED ON THE FOLLOWING METHODS
y PAY BACK PERIOD METHOD
y AVERAGE RATE OF RETURN METHOD
y INTERNAL RATE OF RETURN METHOD
y NET PRESENT VALUE METHOD


ZERO DATE:
The final step in establishing a project is the fixation of a zero date. The zero dates of a project signals
an effective start of the project.
The Project Completion date is fixed based on the zero date
The activities done before the zero date are known as Pre Project Activities