Presentation On Project Management Presentation to:: Prof. N.Venkatesan(PGDIC, BTech) Presentation by:: Mohit Tripathi Tapan
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Presentation On Project Management
Presentation to::
Prof. N.Venkatesan(PGDIC, BTech)
Presentation by::
Mohit Tripathi
Tapan
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Project Management
A project may be defined as a series of related jobs usually directed towards some major output and requiring a significant period of
time to perform. Project Management are the management
activities of planning, directing, and
controlling resources (people, equipment,material) to meet the technical, cost, and timeconstraints of a project
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Step 1:: Risk and Return analysis
R isk Analysis::
Demand R isk
Economic R isk
R eturn Analysis::
The internal rate of return(IRR ) is a rate of return usedto measure and compare the
profitability of investments.
The IRR of an investment isthe interest rate at which thenet present value of costs(negative cash flows) of theinvestment equal the net
present value of the benefits(positive cash flows) of theinvestment.
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Step 3:: Scope and Schedule of the Project
Scope of a Project::
S pecifications of each
work package.
Name of the person or
organization unit
responsible.
Schedule of a Project::
Estimated time required
to complete each work
package.
Interrelationships
among work packagesknown as networks.
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A work breakdown structure defines the hierarchy
of project tasks, subtasks, and work packages.
Program
Project 1 Project 2
Task 1.1
Subtask 1.1.1
Work Package 1.1.1.1
Level
1
2
3
4
Task 1.2
Subtask 1.1.2
Work Package 1.1.1.2
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Step 2:: Bankable Project Report and Financial Closure
Based on risk-return
analysis, demand
analysis, a report is
made known asBankable Project R eport
Viability check by
banks.
Loan Offering.
Purpose of consortium
of Banks.
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Estimating Costs
K nown Unknowns
Costs that are known to
be going to occurs such
as digging the
foundation for a house.
The nature of task isknown.
Unknown Unknowns
Costs are unknown that
they are going to occur
e.g. work stoppages,
floods, delay in
receiving materials,accidents etc.
Contingency allowance
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Step 4:: Management of a project
Analyze the critical path.
Project must be completed in time.
Estimate the cost of project in an abstract way.
Possible causes of variation in cost.
Periodic review of project.
Study of gap between actual cost and budgeted
cost. External quality control with internal quality
control.
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Problem
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Prerequisites for Critical Path
Methodology
A project must have:
well-defined jobs or tasks whose completionmarks the end of the project;
independent jobs or tasks;
and tasks that follow a given sequence.
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Steps in the CPM with Single TimeEstimate
1. Activity Identification
2. Activity Sequencing and Network
Construction
3. Determine the critical path
± From the critical path all of the project andactivity timing information can be obtained
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First draw the network
A(2) B(1) C(1)
(2)
E(5)
F(5)G(1)
A None 2
B A 1
C B 1
C 2
E C 5
F ,E 5
G F 1
Act. Imed. Pred. Time
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Determine early starts and early finish times
ES=9EF=14
ES=14EF=15
ES=0EF=2
ES=2EF=3
ES=3EF=4
ES=4
EF=9
ES=4
EF=6
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
Hint: Start with ES=0
and go forward in the
network from A to G.
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Determine late startsand late finish times
ES=9
EF=14
ES=14
EF=15
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
ES=4
EF=9
ES=4EF=6
A(2) B(1) C(1)
D(2)
E(5)
F(5) G(1)
LS=14
LF=15
LS=9
LF=14
LS=4
LF=9
LS=7LF=9
LS=3
LF=4
LS=2
LF=3
LS=0
LF=2
Hint: Start with LF=15 or the
total time of the project and go
backward in the network from
G to A.
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Critical Path & Slack
ES=9
EF=14
ES=14
EF=15
ES=0
EF=2
ES=2
EF=3
ES=3
EF=4
ES=4
EF=9
ES=4
EF=6
A(2) B(1) C(1)
(2)
E(5)
F(5) G(1)
LS=14
LF=15
LS=9
LF=14
LS=4
LF=9
LS=7LF=9
LS=3
LF=4
LS=2
LF=3
LS=0
LF=2
uration=15 weeks
Slack=(7-4)=(9-6)= 3 Wks
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Crashing
It is the technique of minimizing the total
duration of a network of activities, mainly by
reducing the duration of the critical path
activities to the least possible magnitude.
Since the critical path is also the longest, the
duration of this path has to be reduced.
However any reduction in activity durationcomes at the cost of increased cost due to extra
resources required(like labor, electricity etc).
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Economic Value Management
Measure of Economic value of the project as it isexecuted.
Economic Value Management (EVM) is a management
approach towards managing the shareholder µvalue¶ inan organization.
Economic Value Management, is a way of managing a business. It is a rigorous and disciplined approach, that
can provide immediate gains, better long termstrategies, ensure focused execution, and create thealignment within organizations that is critical for success.
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Benefits of EVM Provides immediate gains: The Economic Value
Management methodologies, can identify significantopportunities and provide the foundation for better long-term
strategies. Provide early warning signals.
Better long-term strategy: The discipline of Economic ValueManagement helps companies in the short run, its demanding,focused approach results in better long-term strategies as well.
Better Execution: Economic Value Management creates anexecution focus and discipline often lacking in firms that
supplant accountability for real results with budgeted measuresof performance that often ignore the crucial requirements of return on investment.
Creates Alignment: Economic Value Management creates
organizational alignment. It gets everyone on the same page.
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THE THR EE QUESTIONS
Q.1 Is the project going to be finished by the
scheduled date ?
Q.2 Is the completed work going to meet thestated specifications ?
Q.3 Is the work going to be done with the
estimated cost ?
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The Trade Off
It is sometimes desirable to make trade offs
among time, specifications and cost using the
financial model and other available
information.
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Types of R eports
Trouble R eports
Progress R eports
Financial R eports
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TR OUBLED R EPOR TS
They report both on trouble that has alreadyhappened and also anticipated future trouble
There is a need to reach the appropriate manager
so that corrective action can be taken Any medium can be chosen
Precision is sacrificed in the interest of speed
If the matter reported is significant it isdocumented to keep as a record
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PR OGR ESS R EPOR TS
These compare actual schedule and costs with
planned schedule and costs
Overhead activities not directly involved withthe project can also be calculated similarly
Variances associated with price, schedule
delays and similar factors can be identified
and measured quantitatively
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FINANCIAL R EPOR TS
These are actual reports of project costs that must
be prepared as a basis for progress payments
These reports are less important for management
control purposes than the cost information
contained in progress reports
They are carefully checked for their accuracy
Approximate information that is available quicklyis more important to project management
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Gantt Chart
A Gantt chart is a type of bar chart that
illustrates a project schedule. Gantt charts
illustrate the start and finish dates of the
terminal elements and summary elements of a
project. Terminal elements and summary
elements comprise the work breakdown
structure of the project. Some Gantt charts alsoshow the dependency (i.e. precedence
network) relationships between activities.
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Other related aspects
Quantity of reports
Percent complete
Summarizing Progress Punch List
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QUANTITY OF R EPOR TS
Sometimes more than optimum numbers of
reports are prepared
This incurs extra costs and spends extra time Sometimes important information is
overlooked
Though this is not a serious problem becausemanagers normally know which reports or
section of reports are important
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Project Execution
Schedule and Budget
The three questions???? Trade Off ± Is it required ????
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PER CENT COMPLETE
Percentage of completion of each work
package must be estimated as a basis for
comparing actual time and actual costs with
budgeted costs
In case of R&D and Consulting projects the
percentage of completion is subjective
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SUMMAR IZING PR OGR ESS
Progress payments often are made when
specified milestones are reached
Individual work packages are aggregated In labor intensive project ratio of actual
person-hours on project to total person-hours
for the project
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PUNCH LIST
List of items yet to be accomplished
List of corrections yet to be corrected
Punch List is negotiated with the projectmanager
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INFOR MAL SOUR CES OF
INFOR MATION
Tangible reports are less useful than
information that the project manager gathers
from people
Nevertheless, formal reports are necessary
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R EVISIONS
A trade off between scope, schedule and cost
Is it better to track future progress against the
revised plan or to track the original plan ? R evised plan may be a rubber baseline
Comparison with the original plan may also be
futile as it is obsolete Solution lies in comparing actual cost with
both the original plan and the revised plan
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PR OJECT AUDITING
It is done either during the progression of
project or conclusion of project
The earlier case is preferable Operational Auditing ± concerned with
managing standards
Grave danger of second guessing persists
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PR OJECT EVALUATION
It has two aspects ±
1) Performance in execution of the project
2) R esults obtained from the project
The purpose of the former is to assist in decisionsregarding project managers
The purpose of latter is to discover better ways of
conducting future projects Evaluation of project is subjective and also entails
external factors
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COST OVERR UNS
When actual costs exceed budgeted costs
At best the budget represents what the costs
should have been Although reasonable people can differ and
only one set of conclusions is incorporated in
the budget
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HINDSIGHT
There can be difference between the informationwhich is represented in the report and theinformation which was available with the
manager at the time of report generation The sponsor may overlook budget overruns
Evaluation may lead to changes in rules or procedures
Evaluation may indicate reviews conductedduring the project were inadequate or timelyaction was not take based on these reviews
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EVALUATION OF R ESULTS
Comparison of results with the results that
were anticipated when the project was
approved
Assumptions are made and these assumptions
are documented
Project can not be evaluated until enough time
has elapsed
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CR ITER IA FOR SELECTING
Project should be important enough
The results should be quantifiable
Effects of unanticipated variables should beknown
R esults of the evaluation should have a good
chance of leading to action
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Case
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Metro Project
Delhi Metro R ail Corporation (DMR C) wasestablished by the Government of India and theGovernment of Delhi in March 1995.
Project is divided into three phases. Phase I has been completed and cost INR 105.7bn
($2.3m).
In February 2009, the Delhi Metro project becamethe first railway project in the world to beregistered for carbon credits by the United
Nations.
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Cont«
DMR C saved 112,500MW of power by usingregenerative brakes in the trains, and reduced
carbon emissions by 900,004tn between 2004 and
2007. It is estimated that more than 100,000tn of
carbon dioxide will be offset each year oncePhase II becomes completely operational.
Delhi will have 244 km of Metro rail network.
After the completion of phase 1, DMR TS willcarry 21.8 lakh passengers perday, resulting in
2500 less buses on road.
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Cont«
Average speed of road buses increased from
10.5 kmph to 14 kmph, saving 20 lakh man
hour per day and saving of fuel cost worth
500 crores per year.
Prime Minister declared Mr. Shreedharan to be
role models for future generation.