An Overview of Project Management Definition of Project: Any undertaking that has definite, final objectives representing specified values to be used in the satisfaction of some need or desire. A cluster of activities that is relatively separate and clear-cut. A project typically has a distinct mission and a clear termination point. In the broadest sense, a project is specific, finite task to be accomplished. Common Features: • A desired outcome at the end • Consume significant amount of resources – time and money. • Have limitations on resources that are available • Not undertaken frequently; successful completion is essential • Well-defined activities with a clear-cut start and end.
A project is synthesizing predetermined amounts of the resources of an organization to generate something that will assist the organization in designing and executing its strategies. Key Considerations: i. What is the cost? ii. What is the time required? iii. What are the capabilities that it provides to the organization? v. Whether it will fit into the strategies of the organization? Types of Projects: All projects do not involve the same level of managerial skills, costs, technology, complexity, etc. On the basis of Shenhar classification, projects can be grouped by taking the degree of uncertainty and system complexity or scope. Degree of uncertainty ranges from low to high. It is divided as Low-tech, Medium-tech, High-tech, and Super-tech. Based on system complexity, a project can be classified as Assembly project,
System project and Array project. Refer the following figure: (Degree of Uncertainty) Super High-tech
Enterprise resource planning, implementation in multi-national organization
High-tech
New shrinkAdvanced radar wrapped software
Medium-tech
New cell phone
Low-tech
Construction
Auto repair
Projects Assembly System projects projects (System Complexity/ scope)
Array projects
Shenhar’s (2001) Classification
What is Project Management? Managing a project is called project management. According to Harold Kerzner, “ Project Management is the art of creating the illusion that any outcome is the result of predetermined, deliberate acts, when in fact, it is dumb luck.” While this is
tongue-in-cheek definition, it nevertheless reflects the situation in many organizations pretty well. More precisely, “ Project Management can be defined as planning, organizing, staffing, directing and controlling some parts of organization for a relatively short time of period of time to achieve the project objectives within the laid down constraints.” Time, Cost and Performance: Hitting the bull’s eye on the three counts is essential for the success of a project. Symbolically, the success or otherwise of project management can be expressed as follows: 3 S = Σ Wi Ri t=1
where, 1 to 3 = Time, cost and performance, Wi = Weight assigned to each factor Ri = Degree of success in each factor
Why Project Management? The decision on whether or not to set-up a separate project management division is subjective, as some of the factors that are considered should be on a case to case basis. The factors to be considered are: i) Interactions or interdependencies between various departments, iii) Sharing of common resources, iv) The importance of the project to the organization, v) Size of the project, vi) Degree of unfamiliarity with the work involved and its complexity, viii)Changes in the market, ix) The reputation of the organization, Project management should be made use of keeping all these factors in view and also the cost it entails.
Life Cycle of A Project: The life of a project can be divided into phases. These phases correspond with changes in the levels of activity or effort put into the project and the uncertainty regarding the final outcome of the project and are not just of academic interest. There are broadly four phases in the life of a project: Phase I : Conception and Selection Phase II : Planning and Scheduling Phase III : Implementation, Monitoring and Control Phase IV : Evaluation and Termination Functions to be performed during the four phases: Phase I i. Identifying a need for a project. ii. Establishing goals to be achieved by the project. iii. Estimating the amount that the firm will have to commit for the project. iii. Presenting the project idea/alternatives to the management and get approval.
Phase II i.
Set-up a technical team to decide on how the project can be implemented. ii. Plan for the requirements of personnel, finance, materials etc. iii. Prepare a schedule keeping in view the date given by the client or the management, and the required buffer time to meet unexpected events or mishaps. Phase III i. ii. iii. iv. v.
Procuring materials Building and testing the tools Developing support systems Producing the system that is aimed at Verifying whether its performance is up to the laid down standard vi. Making modification to either bring the performance to the required level or to suit the changes suggested by the client or management
Phase IV i. Training operational staff ii. Transfer of material iii. Transferring the responsibilities iv. Releasing surplus resources, that remain after use v. Releasing the project staff for the next assignment Effort Spent on a Project: The level of Effort increases until phase III and then decreases Phase III Level of effort Phase II Phase IV
Phase I Time
Project Overview Statement(POS): It is referred to as Project Scope Statement. POS can be divided into five parts: i. Project Problem/Opportunity ii. Project Goal iii. Project Objectives iv. Success Criteria v. Assumptions, Risks, and Obstacles Product Analysis: It is a technique for understanding the features and functions of a product. Techniques like ‘Value Analysis’ and ‘Quality Function Deployment’ help the project manager gain more information regarding the project. A cost/benefit analysis is necessary for studying the various tangible and intangible costs and benefits associated with the project. Risk Analysis: It is a report which describes the various risks associated with the proposed project activities, their probability of occurrence
and their severity. Formal procedures should be mentioned to deal effectively with these risks in the POS. It also describes risk identification techniques, risk quantification, and other risk control measures. Financial Analysis: The following financial aspects of a project are analyzed in the financial analysis which is an attachment to the POS. To do so, a project manager must 1) Define the problem/opportunity clearly 2) Define the scope of the project, what it included and what it does not include 4) Identify alternative solutions for the problems 5) Rank the alternative solutions 6) State the expected time and costs required 7) Project the profits from the project 8) List of recommendations. Cost Benefit Analysis: It explains the economic and social justification for the
proposed project. But it is difficult to analyze project costs and benefits as some intangible benefits cannot be quantified. Difference between Project Manager and Project Champion: Project Managers • Prefer to work in groups • Committed to their managerial and technical responsibilities • Committed to the corporation • Seek to achieve the objective • Are willing to take risks
Project Champions * Working independently * Committed to technology
* Committed to profession * Seek to exceed the objective * Are unwilling to take risks; try to test everything • Seek what is possible * Seek perfection • Think in terms of short time spans * Think in terms of long term spans • Manage people * Manage things • Are committed to and pursue * Are committed to and pursue material intellectual Project Managers: Are good at handling men and matters, but are not as sound as the champion in technical matters. Project Champions: Excellent ideas from their experience and knowledge but are not very good at getting things done.
Project Manager VS Line Managers Where a separate project department is set up, there is always a constant tussle between the line managers and the project manager.This tussle arises as both compete with each other to share the organization’s: i. Money ii. Manpower iii. Equipment iv. Facilities v. Materials, and vi. Information/Technology In such a situation, the success of a project depends on: i. Presence of a good working relationship between the project manager and the line manager and ii. Effective handling of the cross reporting by the functional employees ( the employees sent to work on the project)
The Project Manager Co-ordinates and integrates activities being carried out across various functional departments. So, he should posses strong communicational and interpersonal skills to succeed. Managing line staff is referred to as interface management, as it involves: i. Managing human relationships in the organization with respect to all those connected with the project ii. Balancing the managerial and technical functions iii. Coping with risks associated with project management iv. Handling organizational restraints such as capital rationing effectively The Line Manager Because of his tough bargaining in allocation of resources to the projects, the line manager is generally considered to be a villainous character by project managers. But on the other side of the coin, he has his own problems:
i. Limited availability of resources ii. Having to cater to many work orders iii. Deadlines to be met iv. Unscheduled changes in the tasks to be done v. Technical breakdowns vi. Employee turnover, etc. And, it is not as if the entire responsibility lies with the project manager. If a task fails, the line manager is also accountable. Project Management in India Right from the inception, it should be said, that it has been a failure in India. Severe time and cost overruns have been the characteristics features of projects, particularly in the public sector. The commonly quoted reasons for the overrun: Internal reasons: • Disputes with local people on acquisition of land and compensation. • Bad choice of technology • Non-availability of skilled personnel.
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Lack of proper planning. Non-availability of the equipment of required quality at the required time. • Poor quality of the inputs purchased. • Labor disputes • Lack of proper handling of organizational issues such as appointment of the project manager. • Absence of proper co-ordination between different departments involved, such as customs, sales tax, etc. • Lack of proper monitoring and follow up. External Reasons • Funds not being released by the concerned department on time. • Changes in foreign exchange rates. • Inflation • political instability and lack of political will to implement projects quickly and efficiently. • Budget deficits and diversion of funds to other uses.
Management of International Projects The role of project management gains significance in handling international projects effectively. There are certain unique challenges faced by the project manager in managing international projects such as political disturbances, cultural barriers and so on. The following points are considered in respect of international projects: Impact of the Business Environment on International Projects Impact of Socioeconomic Environment on International Projects Impact of Legal Environment on International Projects Impact of Technological Environment on International Projects Impact of Cultural Diversity on International Projects Managerial Behavior in International Projects Summary: The development of project management has benefited the organizations immensely by better co-ordination, orientation towards customers’ needs and fast pace of achieving the targets.