Fundamentals of Project Management

Project Management Workshop

21 March 2014

Who Am I

• SUTHARTHAN

• Head of Examinations AIMST

University

• 11 years experience in Industry

, handling projects for MNC

and Minor Projects

• Project Lead for ISO

certification for Faculty of

Pharmacy , AIMST Uni.

• Please switch you mobile to silent mode

• You are allowed to take calls if it’s real emergency , but you

should do it outside of this room

• Expect two way interactions , if u got questions please do

ask

• You are allowed to go to gents or ladies if you need so..

Agenda for today

• 8.15 to 8.30am – registration of participants

• 8.30 am – session starts

• 10.15 am– breakfast

• 10.30 am – session continues

• 1 -2.30 pm – Lunch break

• 2.30 – 3.45pm – Tea break

• 3.45 – 5pm – session continues

• 5pm – session ends

Introductions and Expectations

• Who are you?name, job and responsibilitieswhat do you consider to be your

strengths in the work environment (e.g. decisive, good communicator, assertive, good at empathising, good listener, etc)

• What previous experience do you have of managing projects?

• What are your expectations from today?

Insights for today

• What is Project and Project Management and it’s

importance ?

• Role of Project Managers

• Some Project Management Definitions , terminology

• Key techniques in Project Management

• Tools for Project Management

• …and much more …

Some Questions

• How many of you have been involved in a project

• Anyone serve as a project manager ?

• How do projects differ from ordinary work ?

• What makes project work more difficult?

• How important is project management ?

• What is enabler of successful projects and how do we

achieve it ?

What is a project ?

• A definitive deliverable (objective and goal)• Takes time• Unique• Consumes resources• Has start date and end dates• Is broken up into tasks (activities, steps)• Consists of processes • Proceeds through milestones• Utilizes teams• Based on personal integrity and trust

Why Projects

Why organize an activity or job as a project?

• It allows you to better structure and organize the tasks that need to be performed

• Well developed approaches and tools are available for managing projects

• Easy-to-use software is available for scheduling and budgeting projects

• Experience has shown that the work/job can be done faster, cheaper, and better when managed as a project

Sample Projects

• Can you name a few ?• - Built a monument• - Construct a building / plant• - Baking a cake• - Wedding • -Product Launch • -Making a movie• - House renovation• - and much more..

Types of Projects

The mix of projects undertaken should

support the firm’s corporate strategy.

• Derivative projects—small

improvements

• Platform projects—develop new line of

products using existing technology

• Breakthrough projects—new generation

of products using new technology

• R&D projects—develop new knowledge

Terms often confused with ‘project

• Process /Operational – a series of steps needed to perform a routine activity (e.g. purchasing). A project may contain many processes.

• Programme – work performed towards achieving a long term goal (e.g. a health awareness programme). Programmes may never achieve all their goals, and may comprise a series of projects

What is Project Management

• The initiation, planning, execution, control and termination of projects in a formal, directed and intelligent fashion– According to Project Management

Institute (PMI)

Why is Project Management

• Because companies are organized around projects (and processes)

• Because project management is recognized as a core competence

• Because project management is a discipline in disarray—we just don’t know how to manage projects well

• Because project management differs in significant ways from ordinary management

Advantages of Project Management

• Better control of human resources• Improved customer relations• Shorter development times, lead times• Lower costs• Higher quality• Higher profit margins• Improved productivity

About PMI

• The Project Management Institute- www.pmi.org

• Has an established Body of Knowledge-guides and standards o PMBOK (1996, 2000, 2002, 2008,)

• Will certify you as a PMP if…..o You can pass its exam, ando You have at least 2000 hours of

successful PM EXPERIENCE

9 knowledge Area according to PMI

The Role of Project Managers• Manage the projects• Manage shifting priorities• Manage Changing schedules• Manage the Big Picture / Overall

perspective• In charge of all aspects of the project

including• - Developing the Project Management

Plan• - Keep project on track• - Identifying, monitoring & responding

to risk• - Providing accurate & timely reporting

of project matrix

Skills, Competencies of the PM

• Leadership--articulate the vision and hold everyone accountable to it

• An ability to develop people• Communication competencies• Interpersonal competencies• Able to handle stress• Problem solving skills• Time management skills• Negotiation skills

Quiz

Project Selection Models

Project Selection

• Project selection is the process of evaluating individual projects or groups of projects,

• and then choosing to implement some set of them so that the objectives of the parent organization will be achieved.

• The proper choice of investment projects is crucial to the long-run survival of every firm.

• Daily we witness the results of both good and bad investment choices.

Project Models

Decision Models

• Models abstract the relevant issues about a problem from the plethora of detail in which the problem is embedded.

• Reality is far too complex to deal with in its entirety.

• This process of carving away the unwanted reality from the bones of a problem is called modeling the problem.

• The idealized version of the problem that results is called a model.

Criteria for Project Selection Model

1. Realism2. Capability3. Flexibility4. Ease of use5. Cost6. Easy computerization

Numeric and Non-Numeric Models

• Both widely used, Many organizations use both at the same time, or they use models that are combinations of the two.

• Nonnumeric models, as the name implies, do not use numbers as inputs. Numeric models do, but the criteria being measured may be either objective or subjective.

• It is important to remember that:– the qualities of a project may be represented

by numbers, and– that subjective measures are not necessarily

less useful or reliable than objective measures.

Nonnumeric Models

• Nonnumeric models are older and simpler and have only a few subtypes to consider.

• Some Nonnumeric Selection Methods• Sacred Cow (president’s pet project)

– Do you want to keep your job?

• Operating/Competitive Necessity– You must do this project to stay in business

• Comparative Benefits– Examine +/- of each potential project

Factor Scoring Method

Example: 3 projects; 4 factors; 1-5 scale (5=best)

Factor ProjectA ProjectB ProjectC

Cost 2 4 3Risk 4 3 1Suitable 4 2 5Skills 2 2 5

Total Score: 12 11 14

Some Numeric Selection Methods

Common Financial Assessment Methods– Payback Period

• Simple to use and easy to understand

• Ignores returns beyond payback period and time value of money

– Discounted Cash Flow (NPV)• Considers time value of money and

all returns• Favors short-term projects• Ignores all non-monetary factors

except risk

Payback Period Example

Expected project costs are $700,000

Expected returns are $200,000 per year

Payback period = 700,000 ÷ 200,000 = 3.5 years

Revenues would cover investment costs in 3.5 yrs.

Discounted Cash Flow

Net Present Value

where

I0 = initial cash investment

Ft = net cash inflow in period t

k = required rate of return or hurdle

rate

n

1tt

t0

k1

FI)project(NPV

What are the criteria for success in Project Management

• Completion on time• Completion within budget• Completion with full functionality &

Quality ( Meeting the requirement)

with complete

Customer Satisfaction

The triple Constraint/Quadruple Constraint

• Time \\\\\\• Cost---- Tradeoffs between these• Scope //////• Quality

Scope Creep

• Scope creep can be defined as a process where changes are made to a

projects deliverables, outcomes or requirements/features either without

stakeholder’s approval or without managing the effects this change or

changes could have on the projects schedule, budget or time.

• HOW DOES SCOPE CREEP HAPPEN?

• Scope creep could occur when the project requirements are not well

formed or are not clearly understood by stakeholders. Scope creep could

also occur due to unforeseen circumstances and events, both external and

internal, changes in laws or regulations, technology, market trends and

demands, during the project. Also, incessant change request by

stakeholders to improve the project, if not well managed could also cause

scope creep (Lewis, J. P.)

What can go wrong !

CONSEQUENCES OF SCOPE CREEP

• Scope creep if not managed properly is every project

manager’s worst nightmare, with several effects on both

the project and his personal life.

• projects will be affected by mismanagement of scope creep

might also suffer decreased return on investment (RIO),

additional losses and increased cost of maintenance

The Project Life cycle

Basic PM lifecycle (PMI)

Project Life Cycle

• Conception Phase (The Idea)

• Definition Phase (The Plan)

• Initiation Phase (The Team)

PLAN

• Execution & Ctrl Phase (The Work)

DO

• Evaluation Phase/Close (The Wrap-up)

REVIEW

The Conception phase – the idea

• Essentially - What are we going to do?• For small projects an informal discussion

might adequate• For larger projects, a more formal review

and discussion processes required.- project Charter

• Key questions to answer should be:• Should you do it? What is the benefit

and do the benefits outweigh the costs?• Can you do it? Is it technically feasible

and are there enough resources?

Tool and Technique

BRAINSTORMING

Brainstorming

• Brainstorming was coined in the 1940s by

Alex Osborne a US advertising executive.

• It works by temporarily removing the

social blocks which we all have which

prevent us from being creative. Blocks

such as:

o Feeling our ideas will be ridiculed

o Feeling we don’t know enough to voice

an opinion

o Focusing on simple solutions rather than

taking a risk

Brainstorming

• Brainstorming is essentially a method for

being creative in groups, particularly

useful for creative problem solving.

• ‘Popcorning’ is the new name for

brainstorming

The rules of brainstorming

• No judgement or criticism of an idea

• Quantity of ideas is more important than

quality

• Freewheeling - rapid a spontaneous ideas

• Mutating and combining ideas – one

person’s idea stimulates ideas from

another person

• No answer or idea belongs to a person,

they belong to the group

• Answers and ideas must be produced

rapidly

• 1 question or problem is posed• 2 people in a group take turns to answer• 3 each suggestion is written down by a

note taker• 4 repeat the process until the group run

out of ideas• 5 Select, filter and choose the most

appropriate ideas.

Brainstorming how to do it

• That temptation at this point is to get started (after minimal planning). This is the traditional British approach.

• It gives the appearance of immediate activity and progress. We are busy ‘doing’.

• But it leads to mistakes and waste. • We end up with Plan-Do, Do-Re-Do, Re-

plan, Re-Do, RE-Do, Re-Plan etc

So what we do..

• Consequently…o Projects over runso Cost too mucho Don’t achieve desired result

• So we...o Hunt for the guiltyo Persecute the innocento Promote the uninvolved

But I am too busy to spend time planning!…Planning allows you to:

• Ensure that people only work on activities which

are needed, and do them correctly the first time,

not waste time doing unnecessary activities.

• Anticipate potential problems and take

preventative action to deal with them before they

happen.

• Do things in the right order at the right time,

which should prevent things going wrong later.

• video

Why do so many projects fail to meet expectations?

A study by Hughes (1986) identified three main reasons for projects failing.

•  1 a lack of understanding of project management tools and an over reliance on project management software

•  2 communication problems•  3 failure to adequately adjust to changes

that occur during the course of the project

Continued..

• Hughes notes that many managers are apt

to lose sight of the project. By focusing on

the project management software and

managing this rather than the actual

project!

• Michalski (2000) observes that

“good communication is the key successful project management”.

So we will use a Project Life Cycle like this

• Conception Phase (The Idea)

• Definition Phase (The Plan)

• Initiation Phase (The Team)

• Implementation Phase (The Work) DO

REVIEW• Evaluation Phase (The Wrap-up)

Proper Planning Prevents

Poor Project Performance

• Review the reasons for the project.• Describing detail what results are to be

produced.• Create a list of all the work to be

performed.• Produce a detailed project schedule.• Calculate budgets.• Describe how risk is to be managed.• Identify any assumptions about the

project.• Identify and define the roles of the

project’s team members.

The Definition phase – the plan

The Initiation phase – start up

• Assign people to project roles, ensure they are

available when needed. Negotiation may be

necessary.

• Give and explain all tasks to team members.

• Set up systems and accounts to track personnel

information and financial expenditure.

• Announce the project’s start, what it will produce.

When it will start when it will finish

Important document in Initiation Phase

• Project Charter – statement of Scope , Objectives and

participants in a project and is a critical document to ensure

that everyone involved in project is aware of its purpose

and objectives.

• It outlines the project objectives, identifies the main

stakeholders , and defines the authority of the project

manager.

• Purpose : Reasons for undertaking the project , Objectives

and constraints of the project , assumptions that influence

the project environment, directions concerning the solution

–scope , identifies the main stakeholders, empowers the

Project Manager the authority to carry out the project

PROJ ECT CHARTER

Project Name:

Team Name:

Product Name:

Customer:

Date:

Revision Number:

1. PROJECT GOALS Describe the business need, opportunity or problem that the project was undertaken to address – i.e., the project justification.

2. DELIVERABLES Provide a high level list of “what” needs to be done in order to reach the goals of the project. Each deliverable should be sufficiently detailed so that the Project Team will understand what needs to be accomplished. Describe the deliverable using action words (verbs) such as “deliver, provide, create, research, etc. Deliverables should be measurable, so the Project Sponsor and Team can determine whether the deliverable has been successfully completed at the project’s conclusion. 3. SCOPE DEFINITION Document the scope of work to be delivered. To assist you in defining scope, use documentation such as RFP’, sales proposals, business requirements, functional specifications, etc. to set and limit the scope. In Scope is what the project will include to meet the requirements of the Project goals. Out of Scope excludes responsibilities, activities, deliverables or other areas that are not part of the Project. The project will include: The project will not include:

4. PROJECT MILESTONES Identify the significant project milestones. 5. ASSUMPTIONS, CONSTRAINTS & DEPENDENCIES Identify the assumptions that were made to form the basis of defining scope. Also identify any assumptions t hat will be made for the purposes of planning the project. The objective here is to set the boundaries and address how the triple project management constraint (scope, time and cost) are potentially impacted/managed. List any constraints (potential factors that will impact the delivery or make it difficult to manage the project) on the project or dependencies on resources or funding to the project. Consider time, cost, dates and regulatory issues as constraints or dependencies to the project. 6. RELATED DOCUMENTS Reference any related documents that were used to define scope and assumptions – e.g., RFQ, RFP, Sales Proposal, etc. Also reference any product and process related standards and frameworks that constrain the work to be done. 7. PROJECT ORGANIZATIONAL STRUCTURE Identify the key stakeholders and team members by function, name and role. Function Name Role

Project Scope Management (Most Important element in Project Management )

• Scope Management is primarily concerned with

defining and controlling what is & what is not

included in the project.

• Processes are presented as discrete components

with well defined interfaces but in practices the

will overlap & interact in ways that may not have

been detailed.

• what needs to be accomplish to deliver the

product, service / result with the specified

features and functions

Activity – Group

• Develop a Project Charter for your project . It could be any

project or simple project.

• Must contain

• - Project Name , Project Charter Author , Project

Manager, Project Charter status , Proposed Project start &

End Date

• - Project details – Project Description , Project Purpose ,

Project Goals & Outcomes , Project Scope , Project

deliverables , Benefits , stakeholders , constraints /risk ,

Assumptions , Project Team , Budget , any dependencies ,

communication plan , project timeline

Implementation phase – the do

• Doing the tasks as laid out in your plan

• Regularly comparing the actual

performance with the plan, knowing and

anticipating when things are not going

according to schedule

• Fixing problems that arise.

• Keeping everyone informed

Progress Tracking

Past

What happened?What was supposed to happen?

Present

What’s going on?Issues? Changes?

Future

What’s supposed to happen?Risks?

Tools that we use in Projects

• Milestone chart – similar to Gantt chart but they only show

major events and no duration, they simply represent the

completion of activities. Good tools for reporting to

management and to the customer.

• Gantt Chart / Bar Charts – very effective for progress

reporting and control. No interdependencies between

activites.

Managing Change

Acknowledge

Assess

Accept

Approve

Managing Issues

The Evaluation phase – the wrap up or review

• Get the customer’s approval of final

results.

• There may be formal project hand over to

the client

• Complete any paperwork.

• Hold a post project evaluation to recognise

achievements and discuss lessons learned

Reviewing Stage Who can take the blame?

Reviewing Stage

Review KPIs, Metrics, Objectives

Reflect Lessons Learned

Report!

Roles in projects – who is responsible for what?One of the the benefits of project management

techniques is the opportunity to clarify roles. • Project sponsor – person who’s paying for it

• Project champion - person who wants to see it happen

• Project manager – will ensure it happens

• Project team – will make it happen

• Stakeholders – those affected by it and with an interest in it, but not necessarily part of it.

Stakeholder - definition

• A stakeholder is, for our purposes at

the moment, “a person or

organization who is affected by or

impacted by what you are trying to

do”

WHO?

Is paying for itIs making profit of itIs using itIs with/against itInfluences itWill be promotedWill be punished

Who are the STAKEHOLDERS??

• Customers• Project Sponsor—the guy w/ deep pockets• Users• Project team• Support staff• Suppliers• Opponents• People involved-in or affected by project

activities

Stakeholders 4 things to do with them

• List them

• Try to understand their likely perspective -

how might they react to the project?

• Assess their relative importance

• Act appropriately with the stakeholder

throughout the project – identify and decide

what action you may need to take

How to Manage Stakeholders

Organizational Structures

Organizational structure describes the management reporting relationships in the org.Organization charts show these relationships.How do projects fit within an organization?• Traditional functional organization• Functional project organization• Pure project organization• Matrix project organization

Traditional Functional OrganizationCompany President

MarketingVice President

CustomerService

Manager

DomesticSales

Manager

InternationalSales

Manager

EngineeringVice President

SystemsEngineering

Manager

ElectronicsEngineering

Manager

SoftwareEngineering

Manager

MechanicalEngineering

Manager

TechnicalDocumentation

Manager

HumanResources

Vice President

Finance &AdministrationVice President

ManufacturingVice President

FabricationManager

AssemblyManager

TestingManager

ProductionSchedulingManager

ShippingManager

ProcurementVice President

PurchasingManager

Receiving &InspectionManager

Functional Project Organization

• Project organized and controlled within a functional unit or department

• Usually for smaller projects with a narrower focus

• What are the advantages of this structure?

• What are the disadvantages?

Functional Project OrganizationCompany President

MarketingVice President

CustomerService

Manager

DomesticSales

Manager

InternationalSales

Manager

EngineeringVice President

SystemsEngineering

Manager

ElectronicsEngineering

Manager

SoftwareEngineering

Manager

EngineeringProject A

EngineeringProject B

HumanResources

Vice President

Finance &AdministrationVice President

ManufacturingVice President

FabricationManager

AssemblyManager

TestingManager

ShippingManager

ManufacturingProject 1

ProcurementVice President

PurchasingManager

Receiving &InspectionManager

Pure Project Organization ( Projectized Org.)

• Each project is organized as a separate division reporting to senior management

• Effective for large projects, not small. Why?

• Each project owns its resources/personnel

• Each project may not have much depth of technical expertise, but it should have breadth

• Project Manager has full authorities to assign priorities

Pure Project Organization

Matrix Project Organization

• Most common organizational structure• Has many advantages of functional

project and pure project structures• Project team members have two

bosses• Team members may be assigned part-

time to project and may have less loyalty to the project

Matrix Project Organization

3

1

0

1 1/2

4

1/2

1/2

1/4

3

4

1 1/2

1/2

1/2

1/4

1

The 7 Steps to Project Success

The 7 Steps..

• Project Success Chart ( Project Charter )

• Work Breakdown Structure ( WBS )

• Task Assignment Matrix

• Task Duration Table

• Project Network Diagram

• Gantt Chart Schedule

• Project Budget Chart

The 7 Steps..

• Project Success Chart ( Project Charter )

• Work Breakdown Structure ( WBS )

• Task Assignment Matrix

• Task Duration Table

• Project Network Diagram

• Gantt Chart Schedule

• Project Budget Chart

• To illustrate these steps, I will

use a simple small project,

making a birthday cake as an

example

Step 1 – Project Success Chart

• List the factors vital to the success of the project – the project

objective, the project deliverable (s) and the project success

criteria.

• Project Objective is what will be achieved by when. In our

example project objective is “Bake a cake in time for my

mother’s birthday party.”

• The project deliverable (s ) are what will be delivered by when

. In our case project deliverable is one-2 layer chocolate cake

with Pokemon decorations, in time for the birthday party.

• The project success criteria is what will meet or exceed the

expectations of each stakeholders. The first step is to list all

of the stakeholders. In our case it consists of my mother, her

parents and the birthday party guests

Step 1 Continued..

• The expectations of her parents are that the cake be

reasonable cost, and that it be available on time. The

expectations of the guests are that the cake be available in

sufficient quantity, that it taste good, and that it be

available in time.

• The advantage of the Project Success Chart – the elements

of the project that enable its success can be communicated

to the project team members in a very short period of time.

Project Objective ( What will be achieved by when )

Bake a cake in time for my daughter’s birthday party

Project Deliverables ( What will be delivered by when )

One 2 layer chocolate cake with Pokemon Decorations, in time for

the birthday party.

Success Criteria ( what will meet or exceed the expectation of each

stakeholder

Stakeholders Success Criteria

Mother Chocolate cake, Pokemon deco

on time

Husband Reasonable cost, on time.

Birthday party guests Sufficient quantity, taste , on

time.

Step 2 – Work Breakdown Structure

• WBS is a way organizing all of the tasks in the project. The

method used is to break the project objective into sub-

objectives. For each Sub-Objective I list the tasks necessary to

achieve the sub-objective.

• In this case , the Make Cake sub objective consists of 1) Look

in cake recipe book, 2) Measure / mix cake ingrdients, 3) Cool

cake , and 4) Bake cake. Tasks do not have to be listed in the

correct time sequence.

• The Make Frosting sub –Objective consists of 1) Looking in

frosting recipes book, and 2) Measure / Mix frosting

ingredients . The purchase Ingredients sub-Objective consists

of 1) Drive to Store, 2 ) Buy Decorations.

• In many projects, there is an Integration function. In this case

we must put the cake and decorations together. Perform

integration subjective of 1) Put deco on cake and 2) Slather

frosting on cake.

Step 3 – Task Assignment Matrix

• Will list the tasks and task owners .

Step 4 – Task Duration Table

• List three estimates for each task – Optimistic , Most likely , and

Pessimistic . The optimistic values usually have a probably have

the best

case estimate , Most Likely – medium estimates , Pessimistic-

the worst

case estimate.

Step 5 – Project Network Diagram• Shows the logical flow of tasks in the project.

• From our Task Assignment Matrix, we can do all task

simultaneously, because we have assigned different resources

to each of these tasks.

• Critical Path is the longest path of the project. To determine

the Critical Path , we combine the results above with our Task

Duration Table from step 4. From the table we use the most

likely estimates of task duration to determine the longest

path in project or Critical Path.

Step 6 – Gantt Chart Schedule• We will use the information from Step 4 to determine a

contignency to protect the project due date from schedule

overruns.

• Project buffer is placed at the end of the Critical Path to

protect against overruns in the duration of the tasks on the

critical path

• We see that pessimistic estimates for the Critical Path tasks

total to 300 minutes, and the most likely estimates total to

200 minutes.

• We take half of the difference between the total of the

pessimistic and most likely estimates as the project buffer ,

which in this case would be 50 minutes.

• Gantt Chart constructed , including the 50 minute project

buffer.

• If we start the birthday cake project by 8am, we should have it

ready for the birthday party scheduled for 12.30 pm in the

afternoon.

Step 7 Project Budget Chart

No item Plan Actual Price per unit Cost (RM)1 egg 20 25 0.3 7.52 baking powder 1 box 1 box 2.5 2.53

Total XX

Budget Chart

Summary

• Identify what is project and project management

• Project life cycle

• How to select a project

• Skills needed to be a good Project Manager

• Able to do a simple project

• Identifying stakeholders and their importance in

Project Management

• The end!