BBA 5th sem.

Project management
UNIT-1
Project Definition

Project is a unique process, consist of a set of coordinated and controlled activities with start and finish
dates, undertaken to achieve an objective confirming to specific requirements, including the constraints
of time cost and resource.

Examples of project include Developing a watershed, Creating irrigation facility, Developing new variety
of a crop, Developing new breed of an animal, Developing agroprocessing centre, Construction of farm
building, sting of a concentrated feed plant etc. It may be noted that each of these projects differ in
composition, type, scope, size and time.

Project Characteristics

Despite above diversities, projects share the following common characteristics.

Unique in nature. Have definite objectives (goals) to achieve.

Requires set of resources.

Have a specific time frame for completion with a definite start and finish.

Involves risk and uncertainty.

Requires cross-functional teams and interdisciplinary approach.

Difference between projects and operation:

The key difference between projects and operations lies in their objectives, duration, and approach to
execution. Here's a breakdown:

1. Definition

 Project: A temporary endeavor undertaken to create a unique product, service, or result.

 Operation: Ongoing, repetitive activities performed to sustain the organization and maintain
its core functions.

2. Characteristics

Aspect Project Operation

Duration Temporary; has a defined start and end. Continuous; ongoing with no set end.

Objective Deliver a unique output or outcome. Maintain or improve existing systems.

Aspect Project Operation

Scope Defined and specific to the project's goal. Broad and focused on sustaining activities.

Change Introduces change or transformation. Aims to maintain stability and routine.

Developing a new product, launching a Manufacturing, customer support, or IT

Example
marketing campaign. maintenance.

3. Key Focus

 Project: Focuses on innovation, change, and completion of specific goals within constraints like
time, cost, and scope.

 Operation: Focuses on efficiency, stability, and continuity of daily organizational functions.

4. Team and Resources

 Project: Teams are typically temporary, assembled for the project, and disbanded upon its
completion.

 Operation: Teams are permanent and work within a structured routine.

5. Examples

 Projects:

o Building a new office.

o Developing and deploying a new software system.

o Organizing an event.

 Operations:

o Running payroll systems.

o Providing customer service.

o Managing inventory in a warehouse.

Project life cycle:
The Project Life Cycle refers to the structured sequence of phases that a project goes through
from its initiation to its closure. It provides a framework for managing and executing a project
effectively.
Phases of the Project Life Cycle
1. Initiation
2. Planning
3. Execution
4. Monitoring and Controlling
5. Closure
1. Initiation Phase
 Purpose: Define the project at a high level, establish its feasibility, and secure approval
to proceed.
 Key Activities:
o Identify business needs or opportunities.
o Conduct feasibility studies.
o Develop a project charter.
o Identify stakeholders.
o Establish initial scope, objectives, and constraints.
2. Planning Phase
 Purpose: Develop a comprehensive plan to achieve the project’s goals and objectives
within defined constraints.
 Key Activities:
o Define scope, objectives, and deliverables.
o Create a detailed project schedule (e.g., using Gantt charts).
o Develop a budget and allocate resources.
o Identify risks and develop mitigation strategies.
o Establish communication, quality, and procurement plans.
3. Execution Phase
 Purpose: Perform the work outlined in the project plan to produce deliverables.
 Key Activities:
o Assign and manage project resources.
o Execute tasks as per the schedule.
o Maintain stakeholder communication.
o Ensure quality standards are met.
4. Monitoring and Controlling Phase (Occurs Simultaneously with Execution)
 Purpose: Track, review, and regulate project performance and make necessary
adjustments.
 Key Activities:
o Monitor project progress against the plan.
o Measure performance using key performance indicators (KPIs).
o Manage changes through change control processes.
o Address risks and issues as they arise.
5. Closure Phase
 Purpose: Formally complete and close the project, ensuring all objectives have been
met.
 Key Activities:
o Deliver final deliverables to the customer.
o Obtain formal acceptance of project outcomes.
o Release project resources.
o Conduct post-project review (lessons learned).
o Archive project documents.

Project management process:

The Project Management Process involves systematically applying knowledge, skills, tools, and
techniques to project activities to meet project objectives. It is divided into five process groups
as defined by the Project Management Institute (PMI) in the PMBOK Guide (Project
Management Body of Knowledge).
1. Initiating Process Group
 Purpose: Start the project by defining its purpose, scope, and stakeholders.
 Key Activities:
o Develop the project charter.
o Identify and analyze stakeholders (stakeholder register).
o Determine high-level scope, objectives, and constraints.
o Secure project authorization.
 Outputs:
o Project Charter.
o Stakeholder Register.
2. Planning Process Group
 Purpose: Develop a roadmap for achieving project goals.
 Key Activities:
o Define project scope, schedule, and budget.
o Develop plans for resources, quality, communications, and procurement.
o Identify risks and create a risk management plan.
o Develop a work breakdown structure (WBS).
o Define key performance indicators (KPIs).
3. Executing Process Group
 Purpose: Complete the project work defined in the plan.
 Key Activities:
o Manage and direct project execution.
o Acquire, develop, and manage the project team.
o Communicate with stakeholders and provide updates.
o Ensure quality standards are being followed.
o Manage resources and procurements.
4. Monitoring and Controlling Process Group
  Purpose: Track and review project performance to ensure alignment with the plan.
 Key Activities:
o Monitor project progress against the baseline.
o Measure performance using key metrics and KPIs.
o Perform integrated change control to manage deviations.
o Update risk assessments and plans as needed.
5. Closing Process Group
 Purpose: Formally complete the project and document lessons learned.
 Key Activities:
o Obtain stakeholder acceptance of deliverables.
o Transition deliverables to operations or the client.
o Release project resources.
o Conduct a post-project review.
o Archive project documents

Roles of a project Manager:

The role of a Project Manager (PM) is pivotal in ensuring the successful delivery of projects by
overseeing planning, execution, monitoring, and closure. They act as the bridge between
stakeholders, teams, and organizational goals. Here’s an outline of the primary responsibilities
and roles of a Project Manager:
1. Planning and Initiation
 Define Project Objectives: Work with stakeholders to understand and document the
goals and scope of the project.
 Develop Project Plans: Create detailed plans that outline timelines, milestones,
deliverables, resources, and budgets.
 Risk Assessment: Identify potential risks and develop mitigation strategies.
2. Team Leadership and Coordination
 Assemble the Team: Identify and allocate resources, ensuring the right people are in
place for the job.
  Foster Collaboration: Facilitate communication and collaboration across team members,
departments, or external partners.
 Motivate and Guide: Provide leadership, resolve conflicts, and ensure team alignment
with project goals.
3. Execution and Monitoring
 Track Progress: Monitor timelines, budgets, and milestones to ensure the project stays
on track.
 Problem-Solving: Address issues and roadblocks quickly and efficiently to minimize
delays.
 Quality Control: Ensure deliverables meet quality standards and stakeholder
expectations.
4. Communication
 Stakeholder Management: Serve as the primary point of contact for stakeholders,
keeping them informed and involved.
 Regular Reporting: Provide updates on project progress, risks, and changes.
 Facilitate Decision-Making: Ensure stakeholders have the information needed to make
informed decisions.
5. Budget and Resource Management
 Manage Resources: Optimize the use of resources, including personnel, technology, and
materials.
 Control Costs: Monitor spending and adjust plans as necessary to stay within budget.
6. Risk and Change Management
 Risk Mitigation: Proactively identify, assess, and address risks that could impact the
project.
 Change Management: Manage scope changes and ensure any alterations align with
project goals and constraints.
7. Project Closure
 Deliver Final Outcomes: Ensure all deliverables are completed and meet acceptance
criteria.
 Evaluate Success: Conduct post-project evaluations to assess success and identify
lessons learned.
  Documentation: Archive project documentation and provide a final report to
stakeholders.
Key Skills of a Project Manager:
 Leadership and team management
 Excellent communication and interpersonal skills
 Strong organizational and time management abilities
 Problem-solving and critical thinking
 Financial and risk management expertise
 Knowledge of project management methodologies (e.g., Agile, Waterfall, Scrum)

UNIT-2
Project Initiation and planning

Project Charter: Purpose, Components, and Development

A project charter is a formal document that authorizes the initiation of a project and provides
an overarching view of its objectives, scope, and key participants. It acts as a reference guide for
the project team and stakeholders throughout the project lifecycle.
1. Purpose of a Project Charter
 Authorization: Formally authorizes the project and grants the project manager authority
to allocate resources and lead the team.
 Alignment: Ensures alignment between the project and the organization's strategic
goals.
 Clarity: Provides a clear understanding of project objectives, scope, and constraints.
 Accountability: Identifies key stakeholders and their roles, ensuring everyone is aware of
their responsibilities.
 Foundation for Planning: Serves as the foundation for detailed project planning and
decision-making.
2. Components of a Project Charter
A project charter typically includes the following components:
A. Project Overview
  Project Name: A unique identifier for the project.
 Purpose/Business Case: Why the project is being undertaken and the value it will deliver
to the organization.
 Objectives: Specific, measurable goals the project aims to achieve.
B. Scope and Deliverables
 Project Scope: High-level description of what is included and excluded from the project.
 Key Deliverables: Tangible or intangible outcomes expected from the project.
C. Stakeholder Identification
 Sponsor(s): Individuals or groups providing financial or strategic backing for the project.
 Project Manager: The person responsible for leading the project.
 Stakeholders: Key individuals or groups impacted by the project or involved in its
execution.
D. High-Level Requirements
 Summary of the critical requirements to be fulfilled for the project's success.
E. Timeline and Milestones
 Estimated Duration: High-level timeline of the project.
 Key Milestones: Significant points or phases within the project.
F. Resources and Budget
 Summary of required resources, including personnel, tools, and finances.
G. Risks and Assumptions
 Key Risks: High-level risks that could impact the project.
 Assumptions: Premises or conditions assumed to be true for planning.
H. Approval Section
 A space for formal signatures from the sponsor(s) or key stakeholders, officially
authorizing the project.
3. Development of a Project Charter
Developing a project charter involves collaboration and input from multiple stakeholders. Below
is a step-by-step guide:
A. Identify Key Stakeholders
 Determine who will sponsor the project, who the project manager will be, and who else
will be involved.
B. Define Objectives and Scope
 Clearly articulate the project's purpose, objectives, and scope to ensure alignment with
organizational goals.
C. Conduct Preliminary Research
 Understand the business case, risks, and resources required for the project.
 Gather initial input from stakeholders and subject matter experts.
D. Draft the Charter
 Use a standard template or outline to create a comprehensive draft.
 Ensure all critical components are included, such as objectives, milestones, and
responsibilities.
E. Review and Refine
 Share the draft with stakeholders for feedback.
 Revise the charter to address any concerns or additional requirements.
F. Obtain Approval
 Present the charter to the project sponsor(s) for review and formal approval.
 Collect signatures to officially authorize the project.

Stakeholder Analysis:
Stakeholder analysis is the process of identifying, understanding, and prioritizing the individuals
or groups who have an interest in, influence over, or are affected by a project. Effective
stakeholder analysis helps ensure their needs and expectations are managed, contributing to
project success.
1. Purpose of Stakeholder Analysis
 Identify Key Players: Recognize individuals or groups who can impact or are impacted by
the project.
 Understand Interests and Influence: Gain insights into stakeholder expectations,
concerns, and potential influence on the project.
  Facilitate Communication: Develop tailored communication and engagement strategies
for each stakeholder.
 Mitigate Risks: Address potential conflicts or challenges early by understanding
stakeholders’ perspectives.
 Enhance Decision-Making: Ensure the project aligns with stakeholder needs and
expectations.
2. Steps in Stakeholder Analysis
A. Identify Stakeholders
 Internal Stakeholders: Team members, managers, sponsors, department heads.
 External Stakeholders: Clients, vendors, regulators, community groups, shareholders.
 Use brainstorming, organizational charts, or stakeholder maps to identify stakeholders
comprehensively.
B. Categorize Stakeholders
Group stakeholders based on their:
 Interest: How much they care about the project’s outcomes.
 Influence: Their ability to affect project decisions, resources, or success.
C. Analyze Stakeholder Attributes
 Needs and Expectations: What does the stakeholder want from the project?
 Level of Influence: Can they impact timelines, budgets, or deliverables?
 Potential Risks: Are they likely to support or oppose the project?
D. Prioritize Stakeholders
Use tools like the Power/Interest Grid:
 High Power, High Interest: Manage closely (e.g., project sponsor).
 High Power, Low Interest: Keep satisfied (e.g., senior executives).
 Low Power, High Interest: Keep informed (e.g., end-users).
 Low Power, Low Interest: Monitor with minimal effort (e.g., peripheral groups).
E. Develop Engagement Strategies
 Tailored Communication: Determine the frequency and method of communication for
each group.
  Active Involvement: Identify stakeholders who should be directly involved in decision-
making or execution.
 Conflict Resolution Plans: Address potential disagreements or negative impacts
proactively.

Benefits of Stakeholder Analysis

 Improved Communication: Ensures stakeholders receive the right information at the
right time.
 Increased Buy-In: Engaged stakeholders are more likely to support the project.
 Reduced Conflict: Proactively addresses stakeholder concerns, minimizing resistance.
 Better Resource Allocation: Focuses efforts on stakeholders who can significantly impact
the project.
 Enhanced Project Success: Aligns project goals with stakeholder expectations, ensuring
long-term value.

Work Breakdown Structure (WBS) in Project Management

A Work Breakdown Structure (WBS) is a hierarchical decomposition of a project into smaller,
more manageable components. It organizes project work into deliverables and activities,
making it easier to plan, execute, and monitor.
1. Purpose of a WBS
 Clarity: Breaks down complex projects into smaller, understandable parts.
 Organization: Provides a structured framework for managing project activities.
 Resource Allocation: Helps assign responsibilities and resources to specific tasks.
 Progress Tracking: Enables effective monitoring and control by tracking smaller, discrete
elements.
 Risk Management: Identifies potential risks in each component and allows for better
mitigation strategies.
2. Components of a WBS
A WBS typically has the following levels:
A. Project Level
 The top level represents the overall project goal or deliverable.
B. Deliverables/Phases
 The second level breaks the project into major deliverables, phases, or components.
C. Work Packages
 The third level consists of smaller, manageable tasks or work packages needed to
complete the deliverables.
D. Activities
 Optional further breakdown into detailed activities or tasks, depending on the
complexity.
3. Characteristics of an Effective WBS
 Deliverable-Oriented: Focuses on outcomes rather than processes.
 Hierarchical: Follows a top-down approach to decompose work.
 Defines Scope: Includes only work required for project completion.
 Measurable: Each component should have clear, measurable outcomes.
 Unique Identifiers: Assigns a unique code or number to each element for tracking (e.g.,
1.1, 1.1.1).
4. Steps to Create a WBS
A. Define Project Scope
 Identify the project's objectives, deliverables, and requirements.
B. Identify Major Deliverables
 Break the project into its primary outputs or phases.
C. Decompose Deliverables
 Divide each deliverable into smaller components, such as sub-deliverables, work
packages, and tasks.
D. Review and Validate
 Ensure all work required for project completion is included and that no unnecessary
items are listed.
E. Visualize the WBS
 Represent the structure graphically (tree diagram), as an outline, or in tabular form.
5. WBS Formats
  Tree Diagram: A hierarchical graphical representation.
 Outline Format: Uses levels and numbering for a textual structure.
 Tabular Format: Lists components in rows and columns with details.

Basic Steps in PERT / CPM Project scheduling by PERT / CPM consists of four main steps

1. Planning

The planning phase is started by splitting the total project in to small projects. These
smaller projects in turn are divided into activities and are analyzed by the department or
section.

 The relationship of each activity with respect to other activities are defined and
established and the corresponding responsibilities and the authority are also stated.

 Thus the possibility of overlooking any task necessary for the completion of the project
is reduced substantially.

Scheduling  The ultimate objective of the scheduling phase is to prepare a time chart
showing the start and finish times for each activity as well as its relationship to other
activities of the project.  Moreover the schedule must pinpoint the critical path
activities which require special attention if the project is to be completed in time.  For
non-critical activities, the schedule must show the amount of slack or float times which
can be used advantageously when such activities are delayed or when limited resources
are to be utilized effectively.

3. Allocation of resources  Allocation of resources is performed to achieve the desired

objective. A resource is a physical variable such as labour, finance, equipment and space
which will impose a limitation on time for the project.  When resources are limited and
conflicting, demands are made for the same type of resources a systematic method for
allocation of resources become essential.  Resource allocation usually incurs a
compromise and the choice of this compromise depends on the judgment of managers.

4. Controlling

 The final phase in project management is controlling. Critical path methods facilitate
the application of the principle of management by expectation to identify areas that are
critical to the completion of the project.  By having progress reports from time to time
and updating the network continuously, a better financial as well as technical control
over the project is exercised.  Arrow diagrams and time charts are used for making
periodic progress reports. If required, a new course of action is determined for the
remaining portion of the project

Advantages and Disadvantages

PERT/CPM has the following advantages  A PERT/CPM chart explicitly defines and
makes visible dependencies (precedence relationships) between the elements, 
PERT/CPM facilitates identification of the critical path and makes this visible, 
PERT/CPM facilitates identification of early start, late start, and slack for each activity, 
PERT/CPM provides for potentially reduced project duration due to better
understanding of dependencies leading to improved overlapping of activities and tasks
where feasible. PERT/CPM has the following disadvantages:  There can be potentially
hundreds or thousands of activities and individual dependency relationships,  The
network charts tend to be large and unwieldy requiring several pages to print and
requiring special size paper,  The lack of a timeframe on most PERT/CPM charts makes
it harder to show status although colours can help (e.g., specific colour for completed
nodes),

Example questions of CPM and PERT

 Q!:Find the critical path and calculate the slack time for the following network

Q2:

Draw network diagram . fnd the critical path and project length .also find the ES,LS,EF,LF
and floats of each activity.

Q3: Draw the network and find the critical path and project length. Also find Total
floats,Free floats floats

Activity A B C D E F G H I J K L

Precedence -- -- A A A D C D E,F B,I G, J,K

H
Activity

Duration 4 8 2 4 9 1 7 3 2 2 5 4
 Q4:A project has the following activities with their durations:

Activity A B C D E F G H

I.P. -- -- -- A,B B,C C D E,F,G

Duration 1 2 2 2 4 1 4 8

1. Draw the project length and critical path.

2. Find the floats of each activity.

PERT:

A small project consisting of eight activities has the

following characteristics:
(i) Draw the PERT network for the project.

(ii) Prepare the activity schedule for the project.

(iii) Determine the critical path.

(iv) If a 30- week deadline is imposed, what is the probability that the
project will be finished within the time limit?

Q:A small project consisting of ten activities has the

following characteristics:
Determine the critical path.

Q3: Product manager has planned a list of activities

culminating in the inaugurate launch of the new products.

These are given in the table below:

UNIT-3
Project Execution and Control in Project Management
Project Execution and Control are two critical phases in the project lifecycle that focus on
implementing the project plan and ensuring the work aligns with the project’s objectives. These
phases are interconnected, as controlling ensures that the execution remains on track.

1. Project Execution
The execution phase involves performing the work defined in the project plan to deliver the
intended outcomes.
Key Objectives:
 Deliver project deliverables as per the agreed-upon scope.
 Ensure resources are effectively utilized.
 Maintain stakeholder engagement and communication.
Key Activities:
1. Team Coordination:
o Assign tasks and responsibilities as per the project plan.
o Facilitate collaboration and ensure proper resource allocation.
2. Communication Management:
o Keep stakeholders informed through regular updates.
o Resolve conflicts and ensure alignment with project goals.
3. Quality Management:
o Ensure deliverables meet quality standards through regular checks.
4. Procurement Management:
o Manage contracts, suppliers, and procurement processes as needed.
5. Issue Resolution:
o Address problems or roadblocks that arise during execution.
2. Project Control
The control phase focuses on monitoring project progress and taking corrective actions to
ensure alignment with the project plan.
Key Objectives:
 Track progress against the project baseline.
 Identify and mitigate risks.
 Ensure the project stays within scope, time, and budget.
Key Activities:
1. Performance Monitoring:
o Use key performance indicators (KPIs) to measure project performance.
o Track progress against milestones and schedules.
2. Scope Control:
o Manage changes to project scope through a formal change control process.
o Avoid scope creep by ensuring all changes align with project objectives.
3. Schedule Control:
o Monitor adherence to the project timeline.
o Adjust schedules when necessary to avoid delays.
4. Cost Control:
o Track expenses to ensure the project stays within budget.
o Address cost overruns through reallocation or corrective measures.
5. Risk Management:
o Continuously identify, assess, and mitigate risks.
6. Stakeholder Communication:
o Provide consistent updates on progress, changes, and issues.
7. Quality Assurance:
o Conduct inspections or audits to ensure deliverables meet agreed-upon
standards.

3. Tools and Techniques for Execution and Control

A. Tools for Execution:
 Project Management Software: Tools like Microsoft Project, Trello, or Asana to assign
tasks and track progress.
 Communication Tools: Slack, Zoom, or email for team collaboration.
 Collaboration Platforms: SharePoint or Google Workspace for document sharing.
B. Tools for Control:
 Gantt Charts: To monitor timelines and task dependencies.
 Dashboards: Real-time updates on project KPIs.
 Earned Value Management (EVM): To track cost and schedule performance.
 Risk Registers: To log and manage risks.
4. Integration of Execution and Control
 Execution and control are iterative processes. As work progresses, monitoring ensures
that deviations are identified and addressed.
 Regular meetings, status reports, and performance reviews are essential to integrate
both phases.
5. Challenges in Execution and Control
 Resource Constraints: Limited resources may hinder progress.
 Scope Creep: Uncontrolled changes in scope can derail the project.
 Stakeholder Misalignment: Miscommunication may lead to conflicting expectations.
 Unforeseen Risks: Unexpected issues can disrupt execution.

1. Strategic Assignment of Resources:

 Skill Matching: Ensure the right person or team is assigned to a task based on their skills
and experience. This can reduce the need for retraining and improve task efficiency.
 Workload Balancing: Assign tasks based on current team members' availability, avoiding
overburdening any single resource.
 Resource Pooling: For larger projects, consider maintaining a pool of resources that can
be reassigned to different tasks as priorities change.
 Priority Assignment: Ensure resources are allocated to high-priority tasks first to prevent
delays in crucial areas.
2. Managing Resources Efficiently:
 Monitoring and Tracking: Use project management tools (like Gantt charts, resource
histograms, or software like Microsoft Project) to track the allocation and use of
resources.
 Forecasting: Anticipate resource needs based on the project timeline. This helps prevent
shortages or overuse.
 Communication: Regular updates between team members and project managers can
help ensure resources are used optimally.
 Optimization: Reevaluate resource allocations periodically, making adjustments based on
task completion rates or shifting project needs.

Resource Leveling:
Resource leveling is the process of adjusting the project schedule to ensure that resources are
not over-allocated. In other words, it is used to resolve resource conflicts when there is a
shortage of available resources to meet the demands of the project schedule.
Strategies for Resource Leveling:
 Delay Tasks: Reschedule non-critical tasks to distribute the resource load more evenly
over time. This helps avoid periods where resources are overworked.
 Extend Project Duration: If necessary, extend the project timeline to reduce the intensity
of resource usage at any given time. This is especially helpful when there are constraints
on resource availability.
 Consolidate Tasks: Merge similar tasks or break them down into smaller tasks to avoid
bottlenecks and spread the workload.
 Split Assignments: In cases where some tasks have flexible dependencies, they can be
split into parts and rescheduled to prevent overloading.
1. Methods for Estimating Project Costs:
Cost estimation is the process of predicting the monetary resources required to complete a
project. Accurate cost estimates help in planning, securing funding, and managing the financial
aspects of the project.
a. Top-Down Estimation:
 Definition: A high-level estimate based on the project’s overall goals and scope.
 Method: A senior manager or project sponsor typically provides a broad estimate using
historical data or experience from similar projects.
  Advantages: Fast and simple to apply, particularly for small projects or early-stage
planning.
 Disadvantages: Less accurate due to limited detail, may result in underestimation or
overestimation.
b. Bottom-Up Estimation:
 Definition: A more detailed method where cost estimates are developed for individual
work packages or tasks.
 Method: Break the project into smaller tasks or components, estimate the cost for each
one, and then aggregate them to get the total project cost.
 Advantages: More accurate, as it takes into account all components and detailed work.
 Disadvantages: Time-consuming and can become cumbersome for large projects with
many components.
c. Analogous Estimation (Expert Judgment):
 Definition: This method uses historical data from similar past projects to estimate costs.
 Method: Compare the new project with previous ones, adjusting for differences in
scope, complexity, and other factors.
 Advantages: Quick and cost-effective.
 Disadvantages: May not be precise if the current project has significantly different
conditions or scope.
d. Parametric Estimation:
 Definition: Uses mathematical models or historical data to estimate costs based on
specific parameters or variables (e.g., cost per unit of work).
 Method: Identify key variables that affect the cost (e.g., number of resources or project
size) and apply a formula or parameter to calculate the cost.
 Advantages: Useful for projects with repeatable, well-defined tasks.
 Disadvantages: Requires reliable data to generate accurate estimates.
e. Three-Point Estimation (PERT):
 Definition: A technique that considers uncertainty and provides a range of cost
estimates.
  Method: For each task, three estimates are made: the optimistic (best case), the
pessimistic (worst case), and the most likely cost. The formula is then used to calculate
the weighted average: Expected cost=(Optimist
2. Creating a Project Budget:
The project budget is a detailed, time-phased plan that outlines the estimated cost for the
project. It provides the financial roadmap for the project and helps in managing costs.
Steps in Creating a Project Budget:
 Define the Scope: Clearly define all the tasks, work packages, and deliverables that need
to be completed.
 Develop Cost Estimates: Use the cost estimation methods outlined above to estimate
the costs for each task or work package.
 Determine Contingency Reserves: Include contingency funds for potential risks and
uncertainties.
 Consider Resource Costs: Factor in costs related to human resources, materials,
equipment, software, and overhead.
 Develop a Cost Baseline: This is the approved version of the budget that includes all
planned costs, and it serves as a reference for performance measurement.
Budget Components:
 Direct Costs: Costs directly associated with the project work, such as salaries,
equipment, and materials.
 Indirect Costs: Overhead or administrative costs not directly linked to a specific task
(e.g., office space, utilities).
 Fixed Costs: Costs that remain constant regardless of the project’s progress (e.g., rent,
insurance).
 Variable Costs: Costs that fluctuate with the project’s activities (e.g., labor hours, raw
materials).
 Contingency Funds: A reserve set aside to manage potential risks and unforeseen costs.

3. Managing Cost Control:

Cost control is the process of monitoring and managing project costs to keep the project within
the approved budget. Effective cost control helps prevent cost overruns and ensures financial
stability throughout the project lifecycle.
Cost Control Techniques:
a. Earned Value Management (EVM):
 Definition: A project management technique that integrates scope, schedule, and cost
to assess project performance.
 Method: EVM compares the planned progress with the actual progress to determine
how much value has been earned and what costs have been incurred. Key metrics
include:
o Planned Value (PV): The budgeted cost of work scheduled.
o Earned Value (EV): The budgeted cost of work actually completed.
o Actual Cost (AC): The actual cost incurred for the work performed.
o Cost Performance Index (CPI): Measures cost efficiency: C
EV
CPI=
AC
b. Variance Analysis:
 Definition: A method of analyzing the difference between planned and actual costs.
 Method: Regularly compare the actual costs with the budgeted costs to identify
variances. Investigate the cause of any discrepancies and take corrective action.
 Key Metrics:
o Cost Variance (CV): The difference between the earned value and the actual cost.
CV=AV-AC
c. Forecasting and Reforecasting:
 Definition: The process of predicting future project costs based on current performance
data.
 Method: Regularly update cost estimates and budgets as the project progresses to
ensure that the financial forecast remains accurate. Use trends and historical data to
predict future expenses and adjust accordingly.
d. Change Control Process:
 Definition: A formal process for managing changes to the project scope or budget.
 Method: Changes in scope often lead to changes in costs. Any change request must be
assessed for its impact on the project budget, and approvals must be obtained before
proceeding.
e. Regular Cost Monitoring:
 Definition: Continuously track actual expenditures against the project budget.
 Method: Use software tools or manual tracking systems to monitor costs on an ongoing
basis. Hold regular budget reviews with the project team and stakeholders.

Risk Management
Effective risk management is essential for the success of any project. It involves
systematically identifying, analyzing, planning responses to, and monitoring risks
throughout the project lifecycle. Here's a detailed overview of the key components:
1. Risk Identification:
This initial phase involves systematically identifying potential risks that could impact the
project's objectives. Utilizing techniques such as brainstorming sessions, expert
interviews, SWOT analysis, and reviewing historical data from similar projects can help
uncover both internal and external risks. Documenting these risks in a risk register is
crucial for tracking and managing them effectively.
KirkpatrickPrice
2. Risk Analysis:
Once risks are identified, the next step is to assess their potential impact and the
likelihood of their occurrence. This analysis helps prioritize risks based on their severity
and probability. Techniques like qualitative analysis (e.g., risk matrices) and quantitative
analysis (e.g., Monte Carlo simulations) can be employed to evaluate risks more
precisely.
360Factors
3. Risk Response Planning:
After analyzing the risks, it's essential to develop strategies to address them. Common
response strategies include:
 Avoidance: Changing the project plan to eliminate the risk or its impact.
 Mitigation: Implementing actions to reduce the likelihood or impact of the risk.
 Transfer: Shifting the risk to a third party, such as through insurance or outsourcing.
 Acceptance: Acknowledging the risk and preparing to manage its consequences if it
occurs.
Developing contingency plans and allocating resources for these responses is vital to
ensure preparedness.
 4. Risk Monitoring and Control:
This ongoing process involves tracking identified risks, monitoring residual risks, and
identifying new risks throughout the project. Regularly reviewing the risk register,
assessing the effectiveness of implemented response plans, and making necessary
adjustments are key activities. Utilizing tools like Earned Value Management (EVM) can
help in monitoring project performance and identifying potential risks early.
1. Quality Planning:
Quality planning is the process of determining the quality standards relevant to the project and
deciding how to achieve those standards. It ensures that the project will deliver the expected
quality outcomes.
Key Activities in Quality Planning:
 Define Quality Standards: Determine the quality standards that need to be adhered to
for the project's deliverables. These standards could be set by the organization, industry,
or regulatory bodies.
 Identify Quality Requirements: Collaborate with stakeholders to understand their
quality expectations and requirements. This includes determining the criteria for
success.
 Develop Quality Metrics: Establish specific metrics to assess whether the project
outputs meet the desired quality. These could include performance indicators,
tolerances, or thresholds.
 Determine Roles and Responsibilities: Assign roles and responsibilities to individuals or
teams for ensuring quality standards are met.
 Plan for Quality Assurance and Control: Define how quality assurance (QA) and quality
control (QC) processes will be implemented throughout the project.
Tools for Quality Planning:
 Quality Management Plan: A document that outlines the quality objectives, standards,
and procedures for the project.
 Work Breakdown Structure (WBS): Helps in identifying the deliverables and ensuring
that each one meets quality expectations.
 Flowcharts, Process Maps, or Checklists: Tools to guide quality processes and ensure
compliance.
2. Quality Assurance (QA):
Quality assurance refers to the activities that ensure quality management processes are being
followed and that the project’s deliverables are being created according to defined standards.
QA focuses on preventing defects and ensuring that processes are efficient.
Key Activities in Quality Assurance:
 Process Audits: Conduct periodic audits to check whether quality management
processes are being followed and whether improvements can be made.
 Training and Development: Provide necessary training for team members to ensure they
have the skills and knowledge to adhere to quality standards.
 Continuous Improvement: Foster an environment of continuous improvement by using
methods like Six Sigma or Kaizen to enhance processes.
 Verification: Ensure that processes are being followed by conducting reviews or
assessments during different phases of the project.
 Corrective Actions: Implement corrective actions when quality standards are not being
met to improve processes moving forward.
Tools for Quality Assurance:
 Quality Audits: Assess whether the project processes meet the defined standards.
 Process Improvement Tools: Tools like Pareto Analysis, Fishbone Diagrams, and Root
Cause Analysis are used to identify underlying issues and enhance processes.
 Benchmarking: Compare project practices to industry standards or best practices to
identify gaps and improvement areas.
3. Quality Control (QC):
Quality control is the process of monitoring and measuring project performance and
deliverables to ensure that they meet the specified quality standards. QC is more focused on
identifying defects and correcting them to ensure the final product is of the required quality.
Key Activities in Quality Control:
 Inspection and Testing: Perform inspections, testing, or reviews of the deliverables to
identify any defects or variances from the expected quality.
 Defect Detection: Use tools like checklists, reviews, and statistical sampling to detect
defects or non-conformities.
 Data Collection and Analysis: Collect data on the quality of deliverables and analyze
them to assess whether quality standards are being met.
  Corrective Actions: When defects or quality issues are identified, corrective actions are
implemented to ensure that the final product meets the required specifications.
 Accept or Reject Deliverables: Once the deliverables are tested or inspected, the project
manager must decide whether to accept or reject them based on quality outcomes.
Tools for Quality Control:
 Control Charts: Used to monitor variations in performance and detect potential quality
issues.
 Statistical Process Control (SPC): A method used to monitor and control the quality of
processes using statistical methods.
 Inspection Checklists: Used to ensure that all aspects of the project or product meet
quality requirements.
 Sampling Techniques: A method of testing a subset of deliverables to infer quality levels
for the entire set (e.g., random sampling, acceptance sampling).
 Pareto Analysis: Identifies the most frequent causes of defects so they can be prioritized
and addressed.

Change management:
Key Components of Change Management:
1. Change Planning:
o Define the need for change, goals, and desired outcomes.
o Identify the scope of change and potential impacts on the organization or
project.
o Create a detailed change management plan outlining steps, timelines, and
resources.
2. Communication:
o Clearly communicate the reasons for the change, the benefits, and how it will
impact stakeholders.
o Maintain open channels for feedback and questions to address concerns and
reduce resistance.
3. Stakeholder Engagement:
o Identify key stakeholders and involve them early in the change process.
 o Address their concerns, provide support, and involve them in decision-making
when possible.
4. Training and Support:
o Offer training to help individuals adapt to new processes, tools, or systems.
o Provide ongoing support to ensure that people feel confident in handling the
changes.
5. Resistance Management:
o Identify potential sources of resistance and address them proactively.
o Involve influential leaders or change champions to promote acceptance.
6. Monitoring and Evaluation:
o Monitor the progress of the change and assess whether it's being adopted
successfully.
o Make adjustments as needed to ensure the change is sustained and that any
issues are addressed promptly.

UNIT-4
Project monitoring and Evaluation
Performance management is a continuous process of identifying, measuring, and developing
the performance of individuals and teams to align their efforts with organizational goals. It
focuses on setting clear expectations, monitoring progress, providing feedback, and fostering
improvement to drive both employee growth and organizational success.
Key Components of Performance Management:
1. Goal Setting:
o Set clear, measurable, and achievable goals aligned with the organization’s
strategy.
o Utilize frameworks like SMART goals (Specific, Measurable, Achievable, Relevant,
Time-bound) to ensure clarity and focus.
2. Continuous Feedback:
o Provide ongoing, constructive feedback to employees about their performance,
strengths, and areas for improvement.
 o Create a two-way communication culture where employees can also provide
feedback to management.
3. Performance Appraisal:
o Evaluate individual or team performance periodically (e.g., annually or semi-
annually) to assess progress towards goals and overall effectiveness.
o Often involves self-assessments, peer reviews, and manager evaluations.
4. Development and Training:
o Identify areas where employees need support and offer development
opportunities such as training programs, workshops, or mentorship.
o Encourage skill development to enhance performance and career growth.
5. Recognition and Reward:
o Recognize and reward high-performing individuals or teams to motivate and
retain talent.
o Use both monetary (bonuses, raises) and non-monetary (acknowledgment,
promotions) forms of recognition.
6. Corrective Action:
o Address performance issues early through coaching or additional training.
o Set clear expectations and provide support for underperforming employees to
improve their performance.
Key Performance Indicators (KPIs):
KPIs are quantifiable measures that help track and evaluate the progress of specific activities
and objectives, providing insight into whether the organization is on track to achieve its goals.
Types of KPIs:
1. Leading KPIs:
o Predict future performance or outcomes, helping to take proactive measures.
o Example: Employee training hours as a leading indicator for improved
performance.
2. Lagging KPIs:
o Reflect past performance, showing how well the organization or individual has
performed against set goals.
 o Example: Quarterly sales revenue as a lagging indicator of overall business
success.
3. Operational KPIs:
o Measure the efficiency of day-to-day operations.
o Example: Average response time in customer service or production cycle time.
4. Strategic KPIs:
o Track long-term goals related to the organization's overall strategy.
o Example: Market share or customer satisfaction rate.

Earned Value Analysis

Earned Value Analysis (EVA) is a project management technique used to assess a project's
performance by comparing the planned progress with the actual progress. It helps in tracking
project costs, schedule performance, and forecasting future project outcomes. EVA provides
critical insights into how well a project is adhering to its schedule and budget, making it easier
to identify potential issues early.
Key Concepts of Earned Value Analysis:
1. Planned Value (PV):
o The budgeted cost of work that was planned to be completed by a specific time.
o PV is also referred to as Budgeted Cost of Work Scheduled (BCWS).
o It represents the value of the work that should have been completed by a given
point in the project.
2. Earned Value (EV):
o The budgeted cost of the work actually completed by a specific time.
o EV is also called Budgeted Cost of Work Performed (BCWP).
o It reflects the value of the work that has been completed, based on the original
budget.
3. Actual Cost (AC):
o The actual cost incurred for the work that has been completed by a specific time.
o AC is also referred to as Actual Cost of Work Performed (ACWP).
 o It shows how much money has been spent up to that point in the project.

Key Performance Indicators (KPIs) in EVA:

1. Cost Variance (CV):
o Formula: CV = EV - AC
o Measures the difference between the earned value and the actual cost.
o A positive CV indicates that the project is under budget, while a negative CV
indicates cost overruns.
2. Schedule Variance (SV):
o Formula: SV = EV - PV
o Measures the difference between the earned value and the planned value.
o A positive SV indicates the project is ahead of schedule, while a negative SV
means the project is behind schedule.
3. Cost Performance Index (CPI):
o Formula: CPI = EV / AC
o A ratio that indicates cost efficiency. A CPI greater than 1 means the project is
under budget, while a CPI less than 1 suggests inefficiency or cost overruns.
4. Schedule Performance Index (SPI):
o Formula: SPI = EV / PV
o A ratio that measures how well the project is adhering to its schedule. An SPI
greater than 1 indicates the project is ahead of schedule, while a SPI less than 1
suggests delays.
5. Estimate at Completion (EAC):
o Formula: EAC = BAC / CPI
o The forecasted total cost of the project based on current cost performance.
o BAC is the Budget at Completion, or the total planned budget for the project.
6. Estimate to Complete (ETC):
o Formula: ETC = EAC - AC
 UNIT-5
Project closure:

The project closure process marks the final phase of a project, ensuring that all project activities
are completed, deliverables are handed over, and the project is formally closed. It involves
closing contracts, releasing resources, documenting lessons learned, and ensuring that all
project goals and objectives have been met.
Steps in the Project Closure Process:
1. Complete Deliverables and Confirm Acceptance:
o Ensure all deliverables meet the project requirements and quality standards.
o Obtain formal sign-off from the client or stakeholders confirming that the
deliverables have been completed to satisfaction.
2. Conduct Final Project Review:
o Perform a final project evaluation to assess the success of the project.
o Review project performance in terms of cost, schedule, quality, and scope.
o Ensure that all project objectives have been met and any remaining work or
changes are addressed.
3. Release Project Resources:
o Release any project team members, contractors, and other resources.
o Reassign or reallocate team members to other projects or roles.
o Ensure that equipment and materials are returned, stored, or disposed of
appropriately.
4. Close Contracts and Agreements:
o Close any outstanding contracts with vendors, contractors, or suppliers.
o Ensure that all payments are made, deliverables are accepted, and that the terms
of the contract are fulfilled.
o Resolve any contract disputes or issues before closing contracts.
5. Document Lessons Learned:
 o Conduct a post-mortem or lessons learned session with the project team and
stakeholders.
o Document successes, challenges, and areas for improvement that can be applied
to future projects.
o Use this information to create a lessons learned repository for future reference.
6. Finalize Project Documentation:
o Ensure all project documentation, such as plans, reports, and final status
updates, are archived properly.
o Include any project-specific documents like financial reports, change orders, risk
assessments, and communications.
o Ensure all intellectual property, data, and documentation are transferred or
retained according to agreements.
7. Evaluate Project Performance and Report:
o Prepare a final project report summarizing the project’s performance, including
how it compared to initial objectives, timelines, and budgets.
o Communicate the overall project results to stakeholders and any other relevant
parties.
8. Celebrate Success and Recognize Team:
o Acknowledge the hard work of the project team and celebrate successes.
o Recognize individual and team contributions with rewards or recognition.
9. Close the Project with Stakeholders:
o Formally close the project with key stakeholders, ensuring they have received all
deliverables and feedback.
o Ensure that all parties understand that the project is officially concluded.
Benefits of Effective Project Closure:
 Clear Completion: Ensures that the project is formally finished and no further actions
are required, reducing the risk of incomplete tasks or unresolved issues.
 Knowledge Transfer: Captures valuable insights and lessons learned for future projects,
enabling continuous improvement.
 Stakeholder Satisfaction: Ensures that stakeholders are satisfied with the project
outcomes and have their expectations met, leaving a positive impression.
 Resource Efficiency: Properly releases project resources, freeing them up for future
initiatives.
 Compliance and Risk Mitigation: Closes out all contractual obligations, mitigates risk of
disputes, and ensures compliance with legal and financial requirements.