Project management Concept

1. Project Management Fundamentals

Project
- Is a unique endeavour
- Is designed to attain a specific result
- Requires a variety of resources
- Is limited in time

A project with a unique requirement is that which no one has been through
previously. It is a one time effort and is different from previous similar such
performances in one or more ways. The work at hand also has specific defined
deliverables or results which are desired to be achieved from the effort being put in
to complete the unique requirement. The project would require various resources to
accomplish the objectives and deliver the results. These could be men, money,
machinery, materials (raw, semi-finished, finished), or any other resource, which
may be specific to a project. Time is of essence in any project. There are associated
time lines for delivering the desired result or objective and generally has a given or
specified budget for accomplishing the same.

A project is an endeavor in which human, financial and material resources are

organized in a novel way to undertake a unique scope of work, of a given
specification, within constraints of cost and time, so as to achieve beneficial change
defined by quantitative and qualitative objectives.

Project Management is the art and science of converting vision into reality; abstract
into concrete. (Jain, 1995)

Project management is widely regarded as the most efficient way of managing

change. It focuses on:

1. What the changes are that are required to be brought about - definition of a
change (Initiation Phase)

2. Develop a comprehensive plan covering time, cost, technical parameters and

performance parameters etc. (Planning Phase)

3. Executing change based on step number 2 as mentioned above (Execution Phase)

4. Managing change by using appropriate project management techniques of

monitoring and maintaining the progress

People factor constitutes the key ingredient in the success of bringing about a
change. A skilled and knowledgeable project manager who understands his/her team
members strengths and weaknesses and knows how to motivate them through
leadership is more likely to succeed rather than the one who is ill equipped with
these qualities. Project managers need to extend their domain of influence from the
team to all those who come in their circle of activities including contractors,
customers and stakeholders.
The overall processes of project management
e can view project management from a different perspective of logical relationships
between the various processes.

Project Management constitutes of:

- Planning
- Organizing
- Controlling

Functions of Project Management

The above five functions form the basis of any project management activity. The
scope and the organization are the essential functions of project management. The
remaining three - time, quality and cost are the constraints under which the project
is to be executed and managed.

Project Management is the discipline of managing projects successfully throughout

the entire project life cycle. It comprises the management of all that is involved in
achieving the project objectives as per the key performance indicators. Project
management provides the 'single point of integrative responsibility' needed to ensure
that everything on the project is managed effectively to ensure successful project
completion and delivery.

2. Why Project Management is Needed?

Project management has experienced an extraordinary growth in the last decade.

The growth of the profession can be attributed to globalization and the
unprecedented rate of change making transition complex and non-linear.

Modern project management is emerging as a separate discipline and is crucial today

for enterprises to maintain a competitive edge.

Project management is an art and science of converting vision into reality. It is an

art and science of converting abstract into concrete.

Project could mean 'projection'. Projection of an idea or of a thought . A dream is the

prerequisite to bringing a change. Dreams transform into thoughts; thoughts into
vision; vision into strategies and strategies into operations through actions. And
actions bring change. Project management can also be termed as dream or change
management.

Project management profession is as old as the human civilization. The basic

processes of project management have not changed. These processes are: Initiating,
Planning, Execution, Control and Completion / Close out.

We are all living in a momentous time slot. For the first time in civilization global
human networks are being formed, step-by-step. Mind to mind communication is
possible from anywhere to anywhere at all times with the technology of internet. If
the 20th century can be termed as an advanced 'Industrial age', then the 21st
century will, of course, be an age of 'Communication'. In the past workers were all
brought together to produce goods at a central place. Today, people are all getting
together to produce ideas and its delivery at distributed places.

Time is becoming the most crucial strategic weapon to gain a better market share or
supremacy. Everything should have been done yesterday is the kind of syndrome we
all live by. The explosion of change is mind-boggling. It is estimated that in the last 4
to 6 years, the changes which have occurred based on the information explosion,
exceeds that of the last 100 years. This explosion of changes and shrinkage in time
makes the rate of change as unprecedented.

This unprecedented rate of change is giving rise to the need to manage complex and
non-linear transition processes. Project management is the most desirable discipline
in managing such a situation as project management is also uncertainty
management and complex, non-linear transition processes are uncertain. A new
business game is emerging for which we do not have much experience. Project
management helps us to address such issues throughout the project's life cycle. It
provides a basic understanding about how we should address uncertainties in a
planned and organized way of planning, executing, controlling and then closing.

Modern project management has moved away from a limited addressibility of the
issues connected to time, scope, cost and quality to additional knowledge areas of
risk, communication, procurement, human resource and integration. The
conventional project management triangle with scope, time and cost as the three
sides of the triangle with quality at the center of this triangle is no more adequate to
address present day complexities leading to the addition of important concepts such
as risk management.

Project management discipline is growing and gaining more momentum. Fortune

magazine had rated project management as the career choice #1. More and more
companies are putting their employees through formal training programs on project
management. There has been an 8 to 10 fold increase in the total number of certified
project managers globally.

All these directions in the growth of project management is because globalization is

forcing people and companies to become both faster, better and cheaper and also
remain ahead in maintaining customer focus.

3. Uncertainty and Risk

In a simple way, as shown in the figure below, the project life cycle is divided into 4
simple phases of Initiation or Conceptualization, Planning or Development,
Execution, and Close Out. The process of Control is invoked right from the beginning
of initiating a project to its closure. We have not considered Control as a separate
phase though many do so.

When you start a project, there are many if's and but's and assumptions and
constraints. There are many information gaps that must be bridged and this can be
done only as the project progresses. All these factors make the project
comparatively more uncertain and risky in the beginning. As the project progresses,
we start getting clarifications on many ambiguous issues and can now improve the
reliability of our assumptions and constraints. Thus risk and uncertainties keep on
reducing as the project progresses.

The level of uncertainty and risk remains relatively high during the first two phases
of the project i.e. initiation and planning and does not fall significantly until execution
progressively translates unknowns to knowns. With proper analysis and due
diligence, the initial starting level of total uncertainties can come down thereby
giving a better control on the project during the execution stage.
It is a challenge to ensure that the slope of reducing uncertainties be as negative as
possible to keep better control on the events rather than be driven by them. A large
slope of reducing uncertainties implies that due diligence was carried out and all
open issues requiring resolution were attended to and closed.

On the other hand, if the slope is not too much negative, the project will generally
face time and cost related problems besides a higher risk in deciding the scope of the
work. This could be partly due to the fact that enough emphasis was not placed on
effective planning and perhaps the project was rushed into without first doing a
thorough risk analysis.

4. Amount at Stake

In a simple way, in the figure below, the project life cycle has been divided into 4
basic phases of Initiation or Conceptualization, Planning or Development, Execution,
and Close-Out.

The process of Control is invoked right from the beginning of initiating a project to its
closure. We have not considered Control as a separate phase though many do so.

When you start a project, there are many Ifs and Buts. There are many Assumptions
and Constraints. There are many information gaps that still need to be bridged.

The amount of stake, if measured in terms of resources deployed and the financial
commitment is relatively low during the first two phases of the project. The stake
rises rapidly during the execution phase of the project. As the capital and other
resources deployed keep on increasing with time as the project progresses through
the project life cycle, the amount of stake keeps on increasing proportionately

It is easier to back out from a project during its the initial stages then during the
later part of the project life cycle when considerable work has already been done.
The relationship between amount of stake and uncertainties is inversely proportional
during the project life cycle.

5. Value Addition and Cost of Change

In a simple way, as shown in the figure below, the project life cycle is divided into 4
simple phases of Initiation or Conceptualization, Planning or Development,
Execution, and Close Out. The process of Control is invoked right from the beginning
of initiating a project to its closure. We have not considered Control as a separate
phase though many do so.

Let us review the chart as to the potential of value addition throughout the project
life cycle.

When you start a project, there are many if's and but's and a number of asumptions
and constraints are made. There are many information gaps that need to be bridged
which can be done only as the project progresses. The maximum value addition in
the quantitative and qualitative aspects of a project can be achieved in the early
stage of the project. Phase 1 of the project depicting the initiation phase is where
maximum value addition can be made at the least cost to bring about changes.
During the final phase 4, the room for value addition is minimum.

Let us now review the chart to see the cost of making changes throughout the
project's life cycle.
Often the cost of redo is considerable in relationship to the cost of doing it right the
first time. The same concept can be extrapolated to making changes in the project at
a later stage of the project's life cycle. As the curve shows, the cost incurred to make
changes which could be a result of either new work or rework is considerably more
during the closing stages of the project.

It is advisable that we should endeavor to add as much value as possible at the

beginning of the project life cycle instead of doing so at a later stage. Value additions
made in the beginning of the project life cycle are cheaper and more constructive.
This process will also minimize the chances of incurring extra costs in carrying out
the changes at a later stage of the project.

6. Project Life Cycle

A general concept is given here. For APM BoK details of Project Life Cycle must see
concept 'Life Cycle Design & Management' under Organisational Knowledge area.

Enterprises perform all kinds of work. This includes both the routine operational work
as well as project related work.

Project related activities keep a future angle in view while operational level of
activities are more concerned with the present set of activities. These activities must
necessarily be performed well in order to keep the market share. Operational level
activities ensure the market share is maintained based on the existing product or
services offered by an enterprise.

Operations and projects share many common characteristics. Both operations and
projects require good management to move forward.

Basically all activities require sound management in terms of organizing, resources

(which are never enough), planning, execution, control and finally achieving the aim
for which we begin the work.

Projects are part of the strategic vision of an enterprise. They are futuristic oriented.
Operational activities are repetitive and ongoing.

Projects are one time and unique. Certainties are more associated with projects as
being unique and temporary. Projects have a definite start time and finish time.

Projects of any size, large or small, can be managed by using the scientific project
management skills, methodology and knowledge.

The Project Life Cycle defines the beginning and the end of a project from its
conceptualization to its close-out and hand over.

This includes various key milestones and significant events of relevance to

stakeholders in the project. Enterprises performing projects will usually break-up the
project into various phases. This is done to improve management control of the
project at all levels.

Management control does not imply control only by the upper management but
management control can be, and should be, exercised by everyone in the project to
the extent he or she is responsible for performing and coordinating a group of
activities

Some of the project phases also show more clearly the links to the ongoing
operations of the performing organizations.

One of the major advantages of breaking down the project into various phases is
that as the requirements of resources will vary from one phase to another, it
provides a good way of managing dynamic resources of varied skill levels and
experience throughout the project life cycle.

For instance, in the phase of planning or detailed planning, we would need a set of
skills, which may or may not be totally required in the execution phase. Collectively
all the broken up project phases is called the project life cycle.

What are the characteristics of a project phase?

A project phase is deemed completed with a deliverable or a set of deliverables.

A deliverable is tangible, can be verified and has some value associated with it.
Deliverables may be products or services that are delivered external to the project or
they may be deliverables that are needed for other project work to take place, called
in-house or internal deliverables.

The termination of a phase is decided by the completeness of all the deliverables

linked with the project performance to date. At the end of each project phase, a
decision is taken regarding whether to continue into the next phase of the project or
not. At times decisions are taken to abandon the project.

Decision is also taken to detect/correct all the errors, which need rectification. We
should also include the lessons learned as one of the components, which need to be
brought in at the time of a phase completion.

Such phase end reviews are often called phase exits, stage gates, or kill points.

Generic Project Life Cycle

The points between the beginning and the end of the project will vary considerably,
depending upon the type of business and the specific project being done.

In a generic definition, there is a start or initial phase of a project as well as the final
or closure phase. There will be many intermediate phases in the project and this will
depend on the type and the complexity of the project.

As the project progresses into the intermediate phases, the characteristics of a

project go through change. Commitment is now relatively high not to abandon the
project.

However, one should be business like and rational to check at the completion of
every phase whether to proceed with the project or not. Just because one has begun
the project does not imply that one must always complete it irrespective of financial
and other considerations that may come up later.

An evaluation should be clearly done regarding what it would cost to continue and
the profit and loss in respect to closing the project in between. Sunk costs (costs that
have already been incurred and cannot be recovered) calculations should be made.
At the same time, one should be careful not to create a feeling of uncertainty
regarding whether the project will be completed or not. This could be a disaster for
the company and all those who are associated with the project. Objective
assessment should be made at every stage.

Project life cycle phase concept is one of the major differentiations between
projects and non-projects.

Each project phase is associated with major processes such as initiation, planning,
execution, control and close out.

Often, there is some confusion in distinguishing phases from processes.

Processes can repeat within each phase. It is interesting to note that what is most
optimal for a phase may not be so from the entire project life cycle viewpoint. This
concept is typical of system optimization theory. We must optimize across the
project life cycle rather than merely narrowing down optimization to a single phase.