Project Management

Introduction and Overview

Prof. M Rammohan Rao
Former Dean
Professor Emeritus
Executive Director, Centre for Analytical Finance
Indian School of Business
Hyderabad

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 Acknowledgements
 This material is for teaching purposes only.
Not to be distributed without explicit
permission of the author.
All the material is prepared from the
following sources.
1. C F Gray, E W Larson and G V Desai,
“Project Management, The Managerial
Process”, Tata McGraw Hill, 2010
2. S J Mantel, Jr., J R Meredith, S M Shafer,
M M Sutton with M R Gopalan, “Project
Management Core Text Book” John Wiley
India, 2011 2
3.PPT slides from the Project Management
Course at Edmund T. Pratt, Jr. School of
Engineering at Duke University, USA.
4.Project Management in Practice, A short
note by V. Srinivasa Rao.
5.Project Management Body of Knowledge
(PMBOK) Guide Fourth Edition.
6.Personal thoughts, views, ideas and
experience.
7.Project implementation status of Central
Sector Projects, April – June 2009, MOPSI
 Introduction

 Modified Quote from Gray, Larson and

Desai
“Some of mankind’s greatest
accomplishments – building the Taj Mahal,
discovering a cure for polio, putting a man
on the moon – began as a project.
 ISB conceived and built as a project
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 Project
“Temporary endeavor undertaken to
create a “unique” product, service or
result” (Project Management Institute)

“Set of inter-related activities to

achieve a particular goal or objective”

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Unique set of activities to achieve a
defined outcome within a specified time
frame using specific resources”.
Characteristics
Not routine work
Objective with specifications that can
be measured
Divided into interdependent tasks
Life cycle with a specified due date

Constraints on use of resources (People,

money, equipments etc.)
Budget
Achieves a desired “unique” outcome or
benefit
Vehicle for implementing strategic plans
Need for risk analysis and management
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Projects involve managing change for
improvement
Projects move organizations from state A
to state B in a
Planned and Controlled way

A B
 Project Management
Application of knowledge, skills, tools and
techniques to project activities to meet
requirement
Integrative approach
Integration of projects with strategic plan
Integration with the process of managing

Project Management
A B

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 Importance of Project Management

Business
Projects define and redefine the
business
Businesses are built through series of
projects that define
Physical infrastructure
Products and / or services that are
sold
Processes for making a product or
deliver a service
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Future projects are identified based on
strategic needs to change or define the
company.

Assets in place :

Company may be viewed as portfolio

of assets that have been built through
various projects
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Growth in assets :
Projects in progress and future projects
identified / to be identified in accordance
with strategic plan.
Value of a company :
Strongly depends upon the type of
projects (past, present and future) and
quality of execution of projects.
 Development of country
 Infrastructure
 Water
 Power
 Transport
 Roads, Ports and Airport
 Space Research
 Research and Development
 Poverty Alleviation Schemes
Career as a certified Project Manager
Project Management Institute
http://www.pmi.org
Organization to promote project management
Provide uniform set of knowledge (PMBOK)
Certify competency in project management
skills

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“o e “ur eys o Proje t I ple e tatio …
CIO.com cites a Dynamic Markets survey of
800 IT managers –
 62% of IT projects fail to meet their
schedules.
 49% suffered budget overruns
47% had higher-than-expected
maintenance costs, and
 41% failed to deliver the expected
business value and ROI
Source: CNET News, 09/10/2012, 62 percent of
IT Projects fail. Why?
Refers to: Why do IT projects fail, and is there
anything we can do about it? - by Matt Asay,
March 21, 2008
http://advice.cio.com/remi/two_reasons_why_
it_projects_continue_to_fail
 “o e “ur eys o Proje t I ple e tatio …

Source: Project implementation status of Central Sector Projects, April – June 2009, MOSPI
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 “o e “ur eys o Proje t I ple e tatio …

Source: Project implementation status of Central Sector Projects, April – June 2009, MOSPI

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 “o e “ur eys o Proje t I ple e tatio …

Source: Project implementation status of Central Sector Projects, April – June 2009, MOSPI

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 “o e “ur eys o Proje t I ple e tatio …

Source: Project implementation status of Central Sector Projects, April – June 2009, MOSPI

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 Strategic Project Management
• Logical Framework Approach *
– Also known as
• Goal Oriented Project Planning (GOPP)
• Objectives Oriented Project Planning (OOPP)
– Developed in 1969 for US Agency for
International Development (USAID)
• Design, Monitoring and Evaluation of
projects
* “trategi Ma age e t Made “i ple: Pra ti al Tools for Leader
a d Tea s y Terry “ h idt
Wikipedia: Logical framework approach
The logi al fra e ork approa h y Keerti Bhusan Pradhan
• Four Critical Questions
– What is to be accomplished and why
– How is success to be measured
– What other conditions are necessary
– How do we get there
• Four by four Table
– Four rows
• Describe different types of events
– Four columns
• Provide information about the events
• Four levels / rows
– Goal
• High level objective to which the project
contributes
– Purpose
• Anticipated impact from outcomes
– Outcomes
• Results that the project must deliver
– Inputs
• Activities and resources necessary to deliver
outcomes
• Four columns
– First Column
• Narrative description of event
– Second Column
• Success measures / Objectively Verifiable
Indicators (OVI)
– Third Column
• Means of Verification (MoV)
– Fourth Column
• Assumptions
–External factors that influence positively or
negatively the events
–List includes all the factors that have an
impact
–Not directly controllable
–Project dependency on external factors
–Killer assumptions
• Temporal Logic
– If activities are undertaken and the
assumptions hold, then the outputs will be
delivered
– If the outputs are delivered and the
assumptions hold, then the purpose will be
achieved
– If the purpose is achieved and the
assumptions hold, then the Goal will be
realised
Narrative Summary Verifiable Indicators Means of Important
(OVI) verification assumptions
(MOV)
1. Goal: Contribute to Decrease in eye health Testing for eye
improved eye health in the issues/ problems by a health
specified community specified percentage

2. Purpose: Increased utilization Number of persons i) Records Patients follow

of eye health services utilizing the service is at maintained the treatment
least a certain percentage ii) Survey of
population

3. Outputs: (a) Increased access i) Types and cost of i) Records People are
to eye health services services offered maintained willing to pay
(b) Provision of cost effective ii) Location of facilities, ii) Survey of the charges for
comprehensive and high quality timings of service community better eye
eye health services iii) Capability of staff health care
4 . Inputs/activities: (a) Provide i) Facilities and (i) Records Budget and
health care facilities consumables procured maintained manpower are
(b) Procure consumables and ii) Contents of training (ii) Training available
sessions
equipment sessions
iii) Attendance of staff
(c) Training of staff iv) Publicity generated conducted
(d) Create awareness (iii) Attendance
 Project Life Cycle
Time between the start and end of the
project
Consists of various phases
Each phase includes
Work to be done
Set of inter-related activities
Deliverables
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 Hand off from one phase to another
Results upto that point are reviewed
Necessary directional inputs are given
Acts as a control gate
 Different from Product Life Cycle
Product Life Cycle
Inception
Creation
Use till the end 29
 Project life cycle is a subset of product
life cycle
Inception and creation of Product
 Typical Project
Slow start followed by
Quick Momentum followed by
Slow finish
Figure 1-2 from Text: Page 7
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 Project Life Cycle Phases
Phase1: Project definition and initiation
Project Management Body of
Knowledge (PMBOK) Guide : Starting
the project
Defining stage
Project is conceived
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 Preliminary scope, budget, schedule,
etc., estimated
Approvals obtained
Project charter is deliverable
Handed over to project team for detailed
planning
 Project Life Cycle Phases …contd…
Project Charter:
Document issued by project initiator / sponsor
Authorizes existence / creation of the
project
Authority to project manager to utilize
resources
Reference for making all major decisions
during project life cycle
Document includes a summary of all
important aspects considered while
authorizing the project
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High level study should have been
undertaken prior to issue of charter
Includes
Justification of project
Alignment with strategy
Major objectives
Measurable criteria for success
High level description of
requirements and outcome of the
project
Overview of project risks
Constraints and assumptions based on
organizational and external factors
Major project activities completion
milestones / dates
Project cost estimate and budget
Nomination of project manager and
members of project team
Responsibilities and authority levels of
Name, designation and authority of
project team
person authorizing the project charter
Phase 2: Project planning and scheduling
PMBOK Guide : Organizing and preparing
 Planning Stage
Integrated detailed plans for
 Activities
 Proactively managing
Scope, Schedule and budget
Procurement, quality and communications
Project team
Detailed plans are deliverable
Handed over for execution
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 Phase 3: Project Implementation
PMBOK Guide: Carrying out the project work
Executing Stage
Project manager and team ensure that
Work planned during the planning
stage is carried out
 Authorized resources are used
Monitor and control to ensure
 Quality, technical and performance
specifications
 Completion as per milestones and budget
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Phase 4: Project termination
 PMBOK Guide : Closing the project
 Delivering stage
 Deliverables are checked to ensure
meeting
• Agreed specifications and
• Criteria for success
Settle procurement contracts
Hand over documentation and project to
client
Disbanding the team
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 Project Life Cycle Phases
…contd…
At each phase, a review process is
structured and carried out
Outcome of review is to
Continue or
Redirect or
Hold or
Terminate the project
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 Project Life Cycle Phases …contd…

Figure 1.2 from Project Management: The Managerial Process,

41 Fourth Edition, Special Indian Edition by Clifford F. Gray,
Erik W. Larson and Gautam V Desai
 Program
Group of related projects :
Managed in a coordinated way
Benefits not available for managing
them individually

Examples
Golden quadrilateral corridors
Defense Research Department
Organizations’ program for
defense missile systems
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 Portfolio
Collection of projects and programs
To focus on specific business
grouped together
strategy
Wider than projects and programs
Need not be related projects
May be in different sectors
Strategic diversification
Managed at the highest managerial
level
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 Project Manager
Same functions as other managers
Plan, Schedule, Motivate and Control
Manage
Temporary and non-repetitive
Fixed life project
activities

Customer expectations
Feasible and reasonable
Create
Project Team
Structure / organization
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Work with diverse set of people
Provide to team members
Direction, Co-ordination and
Integration
Other functional managers
Support in terms of
• Knowledge / expertise
• Availability of team members
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 Outsiders
Typically do not have project
allegiance
Vendors / Suppliers
Sub contractors
Other stakeholders
 Conflict Resolution
Responsible for performance
Scope
Work Breakdown structure
Schedules
Resource allocation
Budgets
Status Reports

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 Monitoring
Quality
Appropriate trade off between Time,
Cost and Performance requirement
Closure of project
Documentation
Dissolution of team
 Stakeholders
Individuals or organizations
Actively involved
Impacted by the project
Many more people than initially thought of
Different stakeholders may want different
and possibly conflicting outcomes

Communication with all stakeholders is

important

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PMBOK Guide : Page 24 50
PMBOK Guide 51
 Organization Structure
Existing functional hierarchy
Grouping by functions
Engineering, Production
Marketing, Accounting etc.
Further sub-divisions also may be there
Each employee reports to one person

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Segments of project delegated to
functional department
Each department will do the project work
independently
May be appropriate if one functional area
has a dominant role
High ranking manager in that area is
given responsibility to coordinate Project
Advantages
No change
Flexibility in use of staff
Expertise of the dominant functional
area can be utilized
Easy transition after closure of
project
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Disadvantages
Lack of focus
 Staff have other work
Slow
 Priority may be to other work

Poor Integration
 Each concerned only with their work
 Not concerned about fit with work
done by other departments

Lack of ownership
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Dedicated Project Team
At the other end of the spectrum to
functional organization
Independent of other functions
Full time project manager
Team members chosen

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Advantages
Functional organization remains in tact
Cohesive team
High motivation
Cross functional integration
Specialists from various functions work
together
Faster completion
Members devote full time
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Disadvantages
 Can be expensive
New position of project manage
Resources assigned on a full time basis
Conflict
Between team and other units
 Apple example
 Inadequate expertise
Expertise may be limited to only team
members
Difficult transition after closure of project
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Matrix organization

Quote from GLD:

Matrix management works, but it sure is
difficult at times. All matrix managers must
keep up their health and take stress – Tabs
- A Project Manager
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Hybrid organization
Project management structure is overlaid
on functional hierarchy
Two (sometimes more?) chains of
command
Project team members report to
 Functional head
 Project head
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Forms of Matrix organization
Depends upon relative authority of
 Functional manager and project
manager
Weak or light weight Matrix
 Authority of project manager is weak
 Project managers have responsibility
but weak authority
 Authority strongly in favour of
functional manager
 Project managers prepare
schedules, milestones, reports
etc. and monitor
 Functional manager decides who
is to do what and when
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Balanced or middle weight Matrix
 Authority is shared by project
manager and functional manager
 Project manager
• Establishes plan, schedules and
standards
• Monitors progress and integrates
work done by departments
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 Functional manager
• Assigns staff
• Ensures execution according to
schedules and standards set by
Project Manager
 Close coordination and typically
joint approval of decisions
Strong or heavy weight matrix
Project structure within a matrix
environment
Authority is strongly in favour of project
manager
Project manager
 Establishes plans, schedules and
standards
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Decides on scope trade off and
assignment of functional personnel
Functional manager is consulted on a
need basis
 Sometimes departments may be
like sub-contractors
Advantages of Matrix Structure
More efficient than project structure
 Resources are shared across projects

Better project focus than functional

structure
Flexible in terms of utilization of
knowledge and expertise

Post transition is easier than in project

structure 67
Disadvantages of Matrix Structure
Conflict between project managers and
functional managers

Fighting for resources shared across

Stressful for team members

projects

 No unity of command
 One boss too many
PMBOK Guide : Page 28

69
 Organization Culture
Project friendly culture
Team work and cross-functional
cooperation are dominant

Conflict is voiced and dealt with

effectively

Commitment to Excellence
Functional organization or weak
matrix organization can deliver results
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Project unfriendly culture
Individualism is encouraged
Promotions / increments based on
 Low tolerance for conflict
relationships with superiors
Project manager and team have to
overcome the negative forces
Better to insulate the project team from
Create a distinct team sub-culture
the organization culture
Dedicated project team is preferred.
Alternatively a strong matrix structure
would be required
Other cultural situations

Degree of project friendly culture has

to be assessed

If adequate project friendly culture

exists, balanced or strong matrix
structure may be appropriate

Otherwise, dedicated project team

may become necessary