Project Planning, Management

& Engineering Economics

Course Code – CE407

Project, Program, Portfolio &

Work Breakdown Structure
Lecture # 2
 Learning Objectives

By the end of this lecture, you will be able to;

• Be familiar with brief project management history.

• Define the terms, Project & Project Management.
• Understanding the Project Constraints.
• Distinguish between project, routine operations,
program and portfolio.
• Generate work breakdown structure for a project.
• Identify several uses of a work breakdown structure.
• Estimate tasks duration.
 History of Project Management
• As a discipline, project management developed from several
fields of application including civil construction, and heavy
defense activities.

• Until 1900 civil engineering projects were generally managed

by creative architects, engineers, and master builders
themselves.
• It was in the 1950s that organizations started to
systematically apply project management tools and
techniques to complex engineering projects.
• Project management isn’t new, but the history of project
management is a relatively new development.
 History of Project Management (Cont.)

Two forefathers of project management are:

•Henry Gantt (1917), called the father of

planning and control techniques, who is
famous for his use of the Gantt chart as
a project management tool.

• Henri Fayol (1916), is known for his

creation of the five management
functions that form the foundation of
the body of knowledge associated
with project and program
management.
 History of Project Management (Cont.)
Other Key Contributors
DuPont &
Remington Rand
Critical Path Method (CPM) [ 1957] Corporations

His theories lead to the

Work Breakdown Structure
(1962)
Winslow definition of
Taylor

Resource Allocation
PMI (1969)
EVM (1989)

Program Evaluation and Review Booz Allen

Technique (PERT) (1958) Hamilton
 What is a Project?
A project is a temporary endeavor undertaken
to create a unique product, service or result.
(PMI)
As we can begin to sense, three key pop of these definitions:
 A project is temporary  Every project has an definite
beginning & definite end and therefore defined scope and
resources. The end is reached when the project objectives
have been achieved or when the project is terminated
because its objectives will not or cannot be met.
 A project is an endeavor Resources, such as people and
equipment, need to do work. The endeavor is undertaken
by a team or an organization and therefore projects have
a sense of being intentional, planned events.  Tasks &
Resources.
 A project is unique  It is not a routine operation. Every
project creates a unique product or service.
What is a Project?

[ISO 9001:2000]
 Common Project Term
• Deliverables: A tangible object produced as a result of the
project that is intended to be delivered to a customer. A
deliverable could be a report, a document, a permit or any
other building block of an overall project.
• Milestones: Dates by which major activities are performed.
• Tasks: Also called Actions. Activities undertaken during the
project.
• Risks: Potential problems that may arise
• Issues: Risks that have happened
• Gantt Chart: A specific type of chart showing time and tasks.
Usually created by a Project Management program like MS
Project or Primavera.
• Stakeholder: Any person or group of people who may be
affected by your project or who can affect your project.
 Project Planning
• Planning:
• “what” is going to be done, “how”, “where”,
by “whom”, and “when”
• for effective monitoring and control of
complex projects

“Failing to plan is planning to fail”

by J. Hinze, Construction Planning and Scheduling
What is Project Management?
 Project Management (Cont.)
“Efficient use of resources to complete a project
as designed, on time, at the desired level of
performance, and within budget”

• The above mentioned project parameters are

also called constraints.
 Project Parameters

 Time
 Scope
 Performance
 and cost..
these are related to each other
So C = f(P,T,S)

At any point, you can control only three of the four

parameters because when one of the project parameters
changes, at least one of the other parameter must
change in response
 Project Parameters (Cont.)

• Scope creep: Unplanned changes in project

scope
• Experienced project managers have a formal
process of reviewing and approving changes to
the project. The process is communicated to
everyone involved with the project to stave off
creep
Time, Cost, and Scope: Managing Project Constraints
• Project management gets most interesting when you must
balance the Project Triangle: time, cost, and scope constraints of
your projects.
• The project triangle illustrates the process of balancing
constraints because the three sides of the triangle are connected,
and changing one side of a triangle affects at least one other side.
Trade-off: Impacts of Shorten Schedule
 Impacts of Cost Cutting

• As a project manager, you must consider (or, more likely,

communicate to the decision makers) the benefits versus the risks
of reducing costs.
Impacts of Increased Scope
 Projects vs. Operational Work
Organizations perform work to achieve a set of objectives.
Generally, work can be categorized as either projects or
operations, although the two sometimes overlap.
These two types of work share a number of characteristics:
• Performed by individuals
• Limited by constraints, including resources constraints
• Planned, executed, and controlled, and
• Performed to achieve organizational objectives
Projects and operations differ primarily in that operations
are ongoing and produce repetitive products, services, or
results while projects are temporary and end.
Projects vs Operations
Projects vs Operations Example
 What is Program?
• A program is a group of related projects managed in a
coordinated way to obtain benefits and control not available from
managing them individually.
• Program management is the centralized, coordinated
management of a group of projects to achieve the program's
strategic objectives and benefits. The objective of program
management is to optimize the utilization of resources among
projects.
• Program management focuses on interdependencies:
 Resolving resource constraints and/or conflicts that affect multiple projects within
the program;
 Aligning organizational strategic direction that affects project and program goals
and objectives; and
 Resolving issues and change management within a shared governance structure.
Programs
 Programs Example

• Residential Township >> Construction of houses, residential towers,

landscape project, road construction & marketing project.
• Health Programs, Education Programs
 Portfolio Management
• A portfolio is a collection of projects or programs and other
work that are grouped together to facilitate effective
management to meet strategic business objectives.
• The projects or programs in the portfolio may not
necessarily be interdependent or directly related.
• Portfolio management refers to the centralized
management, which includes identifying, prioritizing, and
authorizing project. The centralized management controls &
manages the projects, programs, and other related work, to
achieve strategic business objectives.
• Portfolio management focuses on ensuring the projects and
programs are reviewed to prioritize resource allocation and
managed to align with organizational strategies.
Portfolio
Portfolio Example
 What is Work Breakdown Structure?
“A deliverable oriented hierarchical
decomposition of the work to be executed by
the project team to accomplish the team
mission and create the required deliverables”
• It organizes and defines the total scope of the project.

You can not take an elephant in one bite, you have to

make pieces of it.
 Work Break Down Structure (WBS) Cont.
• To effectively plan and manage the work, the entire
scope of the total project is reviewed and decomposed
or broken down into discrete tasks giving rise to what is
known as the Work Breakdown Structure (WBS).

• WBS is a task oriented family tree, which forms the

foundation tool or backbone for planning and
controlling the entire project. The WBS provides a
graphical representation of all the project activities.

• The lowest level of the WBS is the work package which

is a group of activities. At the work package level, it
should be possible to assign the work, estimate its
duration, its cost and also keep a track of the project's
progress.
 Work Break Down Structure (WBS) Cont.
WBS allows you to break down a project into pieces
you can plan, organize, manage and control.

The WBS facilitates;

• Detailed planning:
• Scheduling;
• Cost estimating;
• Risk management;
• Budget preparation;
• Monitoring and reporting.
It is the foundation for good project visibility and
management.
 Work Break Down Structure (WBS) Cont.
• It is a first step in creating a schedule and most important
step of planning stage.
• A work breakdown structure is typically presented in the
form of an organization chart-like structure or in the form
of indented list.
 Rules for WBS

• WBS is created with the help of the team.

• Each level of WBS is the smaller level of above.
• WBS includes only deliverables that are required by
the project.
• Work breakdown structure elements are usually
numbered in decimal sequence from top to bottom.
For example, an item labeled “1.1.1.3” can be found
on the fourth level of the hierarchy.
WBS Example
 Estimating Tasks Duration
• Historical record
• Experts judgment
• Three point estimate

• Program Evaluation & Review Technique (PERT) is a network

analysis technique used to estimate project duration when there
is a high degree of uncertainty about the individual activity
duration estimates.

• PERT uses probabilistic time estimates:

• Duration estimates based on using
optimistic, most likely, and pessimistic
estimates of activity durations, or a
three-point estimate.
 Estimating Tasks Duration (Cont.)

• PERT weighted average =

optimistic time + 4X most likely time + pessimistic time

6
• Example:

PERT weighted average =

8 workdays + 4 X 10 workdays + 24 workdays = 12 days
6
where:
optimistic time= 8 days
most likely time = 10 days
pessimistic time = 24 days
Therefore, you’d use 12 days on the network diagram instead of 10
when using PERT for the above example.
 Reference
• PMBOK Guide 4th Edition
• AIMS Education UK
• Project Management Institute (PMI)
• Wikipedia
THANK YOU
History of Project Management (Cont.)
 Project Management (Cont.)

(Robert K. Wysocki / Robert Beck Jr. / David B. Crane, Effective Project Management, 2.
ed., John Wiley & Sons, 2002, p. 79).
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