MB0049 Ebook - 2

MB0049-Unit-01-Basics of Project
Management
Unit-01-Basics of Project Management
Structure:
1.1 Introduction
Learning Objectives
1.2 Definition
1.3 Need for Project Management
1.4 Project Management Knowledge Areas and Relationship
1.5 The Project Life Cycle
1.6 The Project Manager
1.7 Knowledge Areas, Process and Connection
1.8 Phases of Project Management Life Cycle
Analysis and evaluation phase
Marketing phase
Design phase
Inspecting, testing and delivery phase
Post completion analysis
1.9 Project Management Processes
Project processes
Process groups
Process groups and knowledge area matrix
Process Interactions
Initiating processes
Planning processes
Executing processes
Controlling processes
Closing processes
Customisation
1.10 Project Failure
1.11 Essentials of Project Management Philosophy
What is a project?
Project parameters for negotiation
How does project management add value ?
1.12 Project Management Principles
1.13 Roles, Responsibilities and Teamwork
The players
Roles and responsibilities of project team
1.14 Summary
1.15 Terminal Questions
1.16 Answers to SAQs and TQs
Answers to Self Assessment Questions
Answers to Terminal Questions
1.1 Introduction
The economy of India has been growing over the last few years. Many industries have come up
in various sectors. The government is always looking for growth of the country. In such a
booming market, a huge amount of money is being invested in various projects. In this
perspective it becomes very important for managers to manage the projects effectively in order to
maximise the returns. Faced with unprecedented growth in business, todays corporate world
needs proper and effective project management. Hence efficient and effective project managers
have become the need of the hour.
More and more companies across the globe are adopting the practices of managing projects and
looking out for skilled managers and practitioners. This has increased the demand for project
managers globally. Hence, we advise you to read and understand the concepts of project
management as discussed in this book.
This book focuses on the development, maintenance, evaluation, promotion and administration
of projects. You will be able to understand the concepts in project management and prepare
yourselves to handle projects since most of the concepts in this book are explained adopting
practical approach. You will also be able to understand the application process in project
management.
In this unit, we would first attempt to explain project management through a preview of globally
recognised best practices. These best practices form a part of managing projects of all sizes and
types in virtually any domain of business. Various sections and sub-sections of this unit would
cover key aspects, definition and basics of project management.
Learning Objectives
By the end of this unit, you should be able to:
Recall the basics of project management.
Recall the definitions, terminologies and concepts in project management
Recognise the importance of project management in business
Describe the scope of project planning and its phases
Describe the role of project manager
Recognise the reasons for project failure
Self Assessment Questions
True or False?
1. The economy of India has been growing over the last few years.
1.2 Definition
Let us look at the definition of some vocabulary that you will often encounter in a project
management discussion.
Project A project is a set of activities which are networked in an order and aimed at achieving
the defined goals for which the project is undertaken. Upon completion of all the activities, the
goals of the project would have been achieved.
Management Management is the technique of understanding the problems and needs and
controlling the use of resources, such as cost, time, manpower, and materials.
Project Management It is an art of controlling the cost, time, manpower, and hardware and
software resources involved in a project.
Project Cycle A project cycle basically consists of the various activities of operations,
resources and the limitations imposed on them.
Process A process is part of the project which consists of simple and routine instructions to
achieve a desired result of any activity of the project. A process is responsible to bring about the
changes in the input fed to the process and to give out desired outputs as a result of the process.
Resource It refers to manpower, machinery, money and materials required in the project.
Scope It refers to the various parameters that affect the project in its planning, formulation
and execution.
Project Cost It is the budgeted expenditure of the project.
Now that you know what a project is can you think of some examples? Here are some that we
could think of.
Examples of a Project
Commissioning a new industrial unit
Constructing a house
Setting up an office
Developing a technology
Launching a new product in the market
True or False?
2. A project cycle basically consists of the various activities of operations and resources and the
limitations imposed on them.
3. Project management is an art of controlling the cost, time, manpower, hardware and software
resources involved in a project.
1.3 Need for Project Management
Project management is necessary because it helps an organisation execute a project successfully

by:
a) Preventing Project Failure: A project requires huge investments which should not go waste.
A loss in any project would have direct or indirect impact on the society. Project management
helps an organisation prevent failures in projects.
b) Controlling Project Scope: Scope of the project activity may undergo a change. Project
management helps an organisation define and control project scope.
c) Improving understanding: Lack of understanding of the project among the participants leads
to failure. Project management helps participants understand the project and its purpose.
d) Managing Risks: A project is vulnerable to various risks. A project is affected if the

technology used is changed during the course of project execution. Similarly changes in
economic conditions may affect a project. Project management is very useful in assessing and
mitigating such risks.
e) Managing Project Problems: Consequences of ignoring project related problems can be very
serious. Project management helps in identification and communication of problem areas.
Fill in the blanks
4. Project management is necessary because _____ used may change during the course of project
execution.
1.4 Project Management Knowledge Areas and Relationship
Project Management Knowledge Areas refer to various techniques needed to manage projects,
the practical methodologies adopted in formulating a project and managing the resources which
would affect the project completion. Relationship with other management disciplines is essential
for a project to be successful. Supporting disciplines include law, strategic planning, logistics,
human resource management and domain knowledge.
True or False?
5. Relationship with other management disciplines is not essential for a project to be successful.
1.5 The Project Life Cycle
The Project Life Cycle refers to a logical sequence of activities to accomplish the projects goals
or objectives. Irrespective of the complexities of the project, a life cycle of a project consists of
a) Understanding the scope and objectives of the project
b) Formulating and planning various activities
d) Executing the project
d) Monitoring the project and controlling the project resources
Fill in the blanks
6. A life cycle of a project consists of understanding the ______ and _____ of the project,
formulation and planning various ______, project execution and project _______ and ______ the
project resources.
1.6 The Project Manager (PM)
A project manager is a person who manages the project. The project manager is responsible for
carrying out all the tasks of a project. Responsibilities of the project manager include:
Budgeting and cost control
Scheduling tasks
Allocating resources
Tracking project expenditures
Ensuring technical quality
Managing relations with the customer and company
Life cycle of a project manager overlaps with the development life cycle in the middle. Duties of
a project manager start before the development and continue even after delivery of the product.
Fill in the blanks
7. The ________ is responsible to carry out all the tasks of a project.

8. Life cycle of a project manager _____ with the development life cycle in the middle.
1.7 Knowledge Areas, Process and Connection
There are nine knowledge areas consisting of integration, scope, time, cost, quality, risk, human
resources, communications, and procurement. These areas group 44 Project Management
Processes. All of the knowledge areas are interrelated and each should be taken care of during
project planning. Figure 1.1 lists the nine knowledge areas.
Fig. 1.1: Project management knowledge areas
Let us know about each of these 9 project management knowledge areas.
1. Project Integration Management: Deals with processes that integrate different aspects of
project management.
2. Project Scope Management: Deals with processes that are responsible for controlling project
scope.
3. Project Time Management: Deals with processes concerning the time constraints of the
project.
4. Project Cost Management: Deals with processes concerning the cost constrains of the
project.
5. Project Quality Management: Deals with the processes that assure that the project meets its
quality obligations.
6. Project Human Resources Management: Deals with the processes related to obtaining and
managing the project team.
7. Project Communication Management: Deals with the processes concerning communication

mechanisms of a project.
8. Project Risk Management: Deals with the processes concerned with project risk
management.
9. Project Procurement Management: Deals with processes related to obtaining products and
services needed to complete a project.
In total, there are 44 processes involved in Project Management. These are mapped to one of
nine Project Management Knowledge Areas.
1.8 Phases of Project Management Life Cycle
The various phases in project management life cycle are
Analysis and evaluation
Marketing
Design
Inspecting, testing and delivery
Post completion analysis
Figure 1.2 shows the phases in a sequence.
Fig. 1.2: Phases of project management life cycle
Let us now discuss each of these phases.
1.8.1 Analysis and Evaluation Phase
It starts with receiving a request to analyse the problem from the customer. The project manager
conducts the analysis of the problem and submits a detailed report to the top management. The
report should consist of what the problem is, ways of solving the problem, the objectives to be
achieved, and the success rate of achieving the goal.
1.8.2 Marketing Phase
A project proposal is prepared by a group of people including the project manager. This proposal
has to contain the strategies adopted to market the product to the customers.
1.8.3 Design Phase

Based on the inputs received in the form of project feasibility study, preliminary project
evaluation, project proposal and customer interviews, following outputs are produced:
System design specification
Program functional specification
Program design specification
Project plan
1.8.4 Inspecting, Testing and Delivery Phase
During this phase, the project team works under the guidance of the project manager. The project
manager has to ensure that the team working under him implements the project designs
accurately. The project has to be tracked or monitored through its cost, manpower and schedule.
The tasks involved in these phases are:
Managing the customer
Marketing the future work
Performing quality control work
1.8.5 Post Completion Analysis Phase
After delivery or completion of the project, the staff performance has to be evaluated. The tasks
involved in this phase are:
Documenting the lessons learnt from the project
Analysing project feedback
Preparing project execution report
Analysing the problems encountered during the project
True or False?
9. The analysis and evaluation phase starts with receiving a request to analyse the problem from
the Manager.
10. SQC has to be conducted to determine the essential requirements of a project for achieving
the target.
11. Design phase consists of inputs received and output.
12. Project feedback analysis and project execution report are done in post completion analysis
phase of the project.
1.9 Project Management Processes
Project management consists of the following interacting processes organised in groups.
Project processes
Process groups
Process interactions
Customisation
1.9.1 Project Processes
A project process is a series of activities to achieve the target. Project process is classified into
two main categories: Project management process and Product oriented process.
Figure 1.3 compares the two categories.
Fig. 1.3: Project process categories
1.9.2 Process Groups
Project processes are categorised under five Process Groups.
1. Initiating processes: These processes initiate the project and establish commitment.
2. Planning processes: These processes are meant for devising and maintaining a workable
scheme to accomplish the business need.
3. Executing processes: These processes are used for coordinating people to carry out the plan.
4. Controlling processes: These processes monitor and measure progress and take remedial
action.
5. Closing processes: These processes are meant for formalising acceptance and bringing
project to an orderly end.
Figure 1.4 shows the connection between Process Groups in a Phase.
Fig. 1.4: Connection between Process Groups
1.9.3 Process Groups and Knowledge Area Matrix
As mentioned earlier, Project Management is composed of 44 processes that are mapped to one
of nine Project Management Knowledge Areas. Each of these processes also falls into one of the
five process groups. This gives us a matrix structure wherein every process can be related to one
knowledge area and one process group. Table 1.1 presents this matrix.
Knowledge Project Management Process Groups

Area Processes
Initiating Planning Executing Monitoring Closing
Process Process Process and Process
Group Group Group Controlling Group
Process Group
Project Developing Develop Direct and Monitor and Close
Management Project Project Manage Control Project Project
Integration Charter Manage-ment Project Work
Developing Plan Execution Integrated
Preliminary Change Control
Project Scope
Statement
Project Scope Scope Planning Scope
Management Scope Verification
Definition Scope Control
Scope WBS
Project Time Activity Schedule
Management Definition Control
Activity
Sequencing
Activity
Resource
Estimating
Activity
Duration
Estimation
Schedule
Develop-ment
Project Cost Cost Estimating Cost Control
Management Cost Budgeting
Project Quality Quality Perform Perform Quality
Management Planning Quality Control
Assurance
Project Human Human Acquire Manage Project
Resources Resources Project Team Team
Management Planning Develop
Project Team
Project Communi- Information Performance
Communication cations Distribution Reporting
Management Planning Manage
Stakeholders
Project Plan Purchase Request Contract Contract
Procurement and Seller Administra-tion Closure
Planning Acquisitions Responses
Plan Select Sellers
Contracting
Project Risk Risk Risk Monitoring
Management Management and Control
Planning
Risk Identifi-
cation
Qualitative Risk
Analysis
Quantitative
Risk Analysis
Risk Response
Planning
1.9.4 Process Interactions
The individual processes overlap and interact throughout a project or its various phases. The
common features of process interactions are:
Inputs: It refers to the client documents converted to action plans to be acted upon.
Tools and techniques: It refers to the mechanisms applied on to the inputs to create desired
outputs
Outputs: It refers to the documents that are results of the process.
Let us now look at the interactions of each of the process groups.
1.9.4.1 Initiating Processes
Every process is initiated by management group decision which results in the next phase of the
project.
1.9.4.2 Planning Processes

Interactions focus on planning. Planning processes are highly interdependent. If the cost is
unacceptable, scope and time may need to be redefined
1.9.4.3 Executing Processes
Interactions in this group depend on the nature of the work. They are dynamic and dependent on
team innovations.
1.9.4.4 Controlling Processes
The interactions are aimed at measuring project performance [time, cost, quality] and identifying
the variances from the plan. Project plans are updated and corrective action is taken.
1.9.4.5 Closing Processes
The interactions revolve around review of the project, findings and analysis of the project
performance with respect to various processes.
1.9.5 Customisation
At times, project management processes need to be customised based on the requirement of the
product. Find below some examples of customisation:
Large projects may need details A detailed project management plan might be necessary to
indicate every detail in the initial stages.
Smaller projects may need relatively less details - A detailed plan may not be required in the
initial stages.
Process details might change for other reasons Resource identification might be required
for scope definition.
Fill in the blanks
13. Project management consists of interacting processes namely _____, _____, interactions, and
________ which are organised in groups.
14. Project process is classified into ______ and _______ process.
15. _____ and _____ refer to the mechanism applied on the inputs to create desired outputs.
1.10 Project Failure

Why do projects fail? Let us find out the answer. A project may fail because of one or more of
the following reasons
a. Incidence of project failure :
Projects being initiated at random at all levels
Project objective not in line with business objective
Project management principles not observed
Project manager with no prior experience in the related project
Non- dedicated team
Lack of complete support from clients
b. Factors contributing to project success not emphasised :
Project objective not aligned with business objective
Working beyond the framework of project management methodology
Ineffective and erroneous scoping, planning, estimation, execution, controls and reviews, and
closure
Not having a proactive approach towards project bottlenecks
Failure in communication and managing expectations effectively with clients, team members
and stake holders
c. Overview of Information and Communication Technologies (ICT) projects:
Involve information and communications technologies such as the World Wide Web, e-mail,
fibre-optics and satellites
Enable societies to produce, access, adapt and apply information in greater amounts, more
rapidly and at reduced costs
Offer enormous opportunities for enhancing business and economic viability.
d. Other common problems encountered during projects
No prioritisation of project activity from an organisational position
One or more of the stages in the project mishandled

Less qualified/non-dedicated manpower
Absence of smooth flow of communication between the involved parties
True or False?
16. One of the reasons why a project may fail is that Project management is not observed.
17. If the project objectives are in alignment with business objective, then the project may be a
failure.
1.11 Essentials of Project Management Philosophy
1.11.1 What is a Project?
A project may be stated as
A programme of non-routine work bringing about a beneficial change
Guided by at least one well-engaged sponsor who has both adequate authorities and resources
to charter the project effort
Has a start and an end date
A multi-disciplinary team brought together for the project
Scope of work that is well defined
Constrained by cost, time and quality
1.11.2 Project parameters for negotiation
During the course of a project, a team negotiates for one or more of the following:
Scope, cost and schedule objectives

Changes to scope, cost or schedules
Contract terms and conditions
Resources
1.11.3 How does project management add value?
Projects may be completed with one or more of the following:
Stretched deadlines
Over stressed team
Wasted resources
Unmet customer functional requirements
Overshot budget
A good project management methodology provides a framework for the processes. It provides
guidelines for the execution of the project that greatly increases the chances of the project being
successful, and therefore provides value to the project.
The following are some of the steps of a good project management.
Define the project
Reduce it to a set of manageable tasks
Obtain appropriate and necessary resources
Build a team to perform the project work
Plan the work and allocate the resources to the tasks
Monitor and control the work
Report progress to senior management and/or the project sponsor
Close down the project when completed
Review it to ensure that the lessons are learnt and widely understood

True or False?
18. A project may be stated as a single disciplined team brought together for the project.
19. Scope, cost and schedule are some of the parameters used for project negotiation.
20. Some of the steps of good project management are
Define the project,
Reduce it to a set of manageable tasks and
Obtain appropriate and necessary resources.
1.12 Project Management Principles
There are five dimensions that must be managed on a project. These are
1. Features
2. Quality
3. Cost
4. Schedule
5. Staff
These dimensions are independent of one another. Addition of staff may shorten schedule but
increase the cost. The trade-offs among these five dimensions are not linear. For each project, we
need to decide which dimensions are critical and how to balance the others so as to achieve the
key project objectives. Each of the five dimensions can take one of three roles on any given
project a Driver, a Constraint or a Degree of Freedom.
A driver is a key objective of the project. A constraint is the limiting factor beyond the control of
project team. Any project dimension that is neither a driver nor a constraint becomes a degree of
freedom.
A constraint gives the project team virtually no flexibility. A driver has low flexibility and a
degree of freedom that provides wider latitude to balance that dimension against the other four.
An important aspect of this model is not which of the five dimensions turn out to be drivers or
constraints on any given project, but that the relative priorities of the dimensions be negotiated in
advance by the project team, customers and management.
A graphical way to depict these points is to use a Kiviat diagram. A Kiviat diagram is a graph
which allows us to plot several values (five, in this case) as an irregularly shaped polygon on a
set of normalised axes. The position of each point on its axis indicates the relative degree of
flexibility of that dimension for a particular project. It is plotted on an arbitrary scale of 0 10
(where 0 would indicate completely constrained and 10 would indicate completely flexible).
The Kiviat graph is a useful tool in project management to compare the relative flexibility of the
parameters considered. Figure 1.5 shows a Kiviat graph.
Fig. 1.5. Kiviat graph
Fill in the blanks
21. Five dimensions that must be managed on a project are ____, _____, Cost, _____, and staff.
22. A ___________ gives the project team virtually no flexibility.
23. _________ is a graphical way to present the five project dimensions
1.13 Roles, Responsibilities and Teamwork
1.13.1 The Players
The players in a project management are the individuals and the organisations that are actively
involved in the project and whose interests may be affected (positively or negatively) by the
outcome (success or failure) of the project. These players, also called stakeholders of the
project, exert influence over the project and its results. Find below a list if players in a project.
Project manager: It refers to the individual responsible for managing the project
Customer: It refers to the individual or organisation who will use the product, which is the end
result of the project.
Performing organisation: It refers to the enterprise whose employees are most directly involved
in doing the work of the project.
Sponsor: It refers to the individual or group internal or external to the performing organisation
that funds the project.
1.13.2 Roles and Responsibilities of the Project Team
There are a number of projects which an organisation works on. It is not possible for one
individual to manage all the projects. There is a team of managers who manage the projects.
There may be different teams working on different projects. An experienced project manager and
his team may manage more than one project at a time. The project team is responsible for
ensuring that the project upon completion shall deliver the gain in the business for which it is
intended for. The project team has to properly coordinate with each other working on different
aspects of the project. The team members are responsible for the completion of the project as per
the plans of the project.
True or False?
24. The players in a project management are the individuals and the organisations.
25. An experienced project manager and his team can manage only one project at a time.
26. The team members are responsible for completion of the project as per the plans of the
project.
1.14 Summary
Now that you have gone through this unit, you should have understood and learnt the
fundamentals of project management, the various definitions, terminologies and concepts in
project management. You must have realised the importance of project management in business
applications and the scope of project planning. Also, you are now familiar with the various
phases involved in project management. This unit has been presented to you so that you can
understand the role of project manager and also the reasons for project failure. You are advised
to go through the following terminal questions and answer them.
1. Define project management, resource, process and project cycle.
2. What is the necessity of project management?
3. Explain the life-cycle of a project.
4. What are the various phases of project management life cycle? Explain.
5. Explain the various interacting processes of project management.

6. What are the parameters considered in a project for its negotiation?
7. What are the steps in good project management?
8. Explain the five dimensions that must be managed on a project.
9. What are the roles and responsibilities of a project manager?
1.16.1 Answers to Self Assessment Questions
1. True
2. True
3. True
4. Technology
5. False
6. Scope, objectives, activities, monitoring and control.
7. Project Manager
8. Overlaps
9. True
10. False
11. True
12. True
13. Project Processes, process groups, customisation
14. Project management, product oriented
15. Tools and Techniques.
16. True
17. False
18. False
19. True
20. True
21. Features, quality, schedule
22. Constraint
23. Kiviat diagram
24. True
25. False
26. True
1.16.2 Answers to Terminal Questions
1. Refer to section 1.3
6. Refer to section 1.12.2
9.Refer to section 1.14.2
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MB0049-Unit-02-Project Planning and
Processes
Unit-02-Project Planning and Processes
Structure:
2.1 Introduction
Learning Objectives
2.2 Project Life Cycle and Process Flows
2.3 Characteristic
2.4 Project Planning and Scoping
2.5 Planning Tools and Estimation
Planning tools
Project organisation
Project structure
Project key personnel
Project management team
Key stakeholders
Stage teams
Key resources
Work breakdown structure (WBS)
Task duration
Planning estimation
Purpose of estimation
Estimating tips
2.6 Estimation Approaches and Estimation Tools
Estimation approaches
Bottom up approach
Top down approach
Estimation tools
2.7 Risk Management
Components
Classification and categories
2.8 Summary
Answers to self assessment questions
Answers to terminal questions
2.1 Introduction
It is well known that organisations continue to grow year by year. As there is a need to grow, it
becomes necessary for a growing organisation to resort to effective growth plan. The plan needs
to be properly prepared. It is possible to prepare proper plans only if the manager has sufficient
knowledge of the various processes of the project. The manager has to work on the various
project life cycle stages and apply necessary planning tools to come out with a proper growth
plan for the company. The project manager needs to be meticulously aware of the various
techniques of identifying the project items, work break down structure of the project, task
duration, and estimation.
This unit deals with the various techniques and methodologies of project planning.
Learning Objectives
Explain the project life cycle and its process flows
List the ways in which a project has to be planned and executed

List the tools necessary to plan the resources
Explain the estimation approaches in project management
Recall the fundamentals of managing the risks involved in a project
2.2 Project Life Cycle and Process Flows
The Project Life Cycle refers to a logical sequence of activities to accomplish the projects goals
or objectives. It thus outlines the important processes that are required by any project from start
to end. Normally a project will go through a sequence of processes as shown in the figure 2.1.
Fig. 2.1: Project process flow
Let us now try to understand the project life cycle with reference to the process flow mentioned
above.
In the preparation stage, the project manager, along with the associates and team members, draft
the outline of the project. They identify the various factors required to be taken care of in the
project. Based on their discussion, they formulate the plans and model the activities for
execution. They prepare the budget. After the model is approved, they recommended it for
implementation.
During the planning stage, roles and responsibilities of the various members involved in the
project are listed out. In addition, the project team works on the feasibility report to assess the
project feasibility with respect to time, finance and technicalities. A thorough risk analysis is also
performed to arrive at the uncertainty factors. The findings of the risk analysis are used to
establish the control factors to be exercised during the execution of the project. Various
monitoring tools are set to monitor the project progress. All the key issues found at the planning
stage of a project are documented in a project plan.
Project Plan
A project plan is documented with the following key issues
Key stages of the project
Project logic diagram
Key stages responsibility chart

Estimates for all key stages
Optimised project Gantt chart
Updated and reviewed project risk log
Risk management forms for new high risks
Project operating budget
Next stage is the implementation stage which involves the execution of the project as agreed in
the project plan, while carefully monitoring progress and managing changes. The completion
stage consists of the satisfactory delivery of all the deliverables to the customer.
Project Deliverables
A project is undertaken to deliver either a service or a product. Project

deliverables could be a set of outputs that are expected during various stages
of the project. It could be as simple as a new product or modification of an
existing product.
A project life cycle is not complete without a review to look into the various issues which
affected the project during the course of its execution. This helps in listing the best practices and
documenting the lessons learnt.
2.3 Characteristics
Any project may be considered to have the following characteristics:
a) Resource requirement: During the course of executing the project, it is seen that the resource
requirement increases from start to an intermediate stage of the project. It further increases at a
rapid rate and becomes constant while the project is at its 80 to 95% progress stage. Thereafter
the resources requirement decreases to zero bringing the project to a finish. Refer to the figure
2.2 for a chart.
b) Funds: The requirement of funds for the complete execution of the project also follows the
same trend as that of the resources. Both the requirements are more or less proportional. Refer to
the figure 2.2 for a chart.
c) Probability of completion: The probability of completing the project can be estimated based
upon the normal distribution curve. In the initial stage of the project the probability of
completing the project is low though not zero. It gradually increases and as the project
approaches finish the probability of completing the project tends to become 100%. Refer to the
figure 2.2 for a chart.
d) Risk: The risks involved in the project affecting its completion time are high at the initial
stages and low at the later stages of the project. Refer to the figure 2.2 for a chart.
e) Design changes: The project during the course of its progress may be subjected to changes
because of some external factors. The influence of such external factors on the project may result
in changes in the design of the project though not very often. It is observed that such changes, if
any, are normally high during the initial stages of the project and decreases as the project
approaches finish. Refer to the figure 2.2 for a chart.
Fig. 2.2: Characteristic chart
True or False?
1. Any project is undertaken to deliver either a service or a product.
2. Project logic diagram, key stages responsibility chart, Gantt chart are the
only key issues documented in a project plan.
3. The five characteristics of a project are resource requirement, funds, and

probability of completion, risk and design changes.
2.4 Project Planning and Scoping
Before you create a project plan, you need to define the project scope. A project scope provides
the information that you need to complete the project plan.
The purpose of project planning and scoping is to first identify the areas of the project work and
the forces affecting the project and then to define the boundaries of the project. In addition, the
scoping has to be explicitly stated on the line of the project objectives. It also has to implicitly
provide directions to the project. The planning and scoping should be such that the project
manager is able to assess every stage of the project and also enabling the assessment of the
quality of the deliverable of the project at every stage.
Fist, let us list the steps involved in project scoping. These steps include:
i) Identifying the various parametric forces relevant to the project and its stages
ii) Enabling the team members to work on tools to keep track of the stages and thereby proceed
in the planned manner
iii) Avoiding areas of problems which may affect the progress of the project
iv) Eliminating the factors responsible for inducing the problems
v) Analysing the financial implications and cost factor at various stages of the project
vi) Understanding and developing the various designs required at various stages of the project
vii) Identifying the key areas to be included in the scope through various meetings, discussion,
and interviews with the clients
viii) Providing a base and track to enable alignment of project with the organisation and its
business objectives
ix) Finding out the dimensions applicable to the project and also the ones not applicable to the
project
x) Listing out all the limitations, boundary values and constraints in the project
xi) Understanding the assumptions made in defining the scope
After completing the project scoping, you can start your project plan. Project planning involves
three processes as shown in the figure 2.3.
Fig. 2.3: Project planning processes

Let us now list the steps involved in each process of project planning.
a) The identification process The main steps in the identification process of any project are:
i) Identifying initial requirements
ii) Validating them against the project objective
iii) Identifying the criteria such as quality objectives and quantitative requirements for assessing
the success of both the final product and the process used to create it
iv) Identifying the framework of the solution
v) Preparing a template of the frame work of solution to illustrate the project feasibility
vi) Preparing relevant charts to demonstrate the techniques of executing the project and its
different stages
vii) Preparing a proper project schema of achieving the defined business requirements for the
project
viii) Identifying training requirement
ix) Making a list of the training program necessary for the personnel working on the project
x) Identifying the training needs of the individuals working in various functions responsible in
the project
xi) Preparing a training plan and a training calendar
xii) Assessing the capabilities and skills of all those identified as part of the project organisation
b) The review Process The main steps in the review process of any project are:
i) Establishing a training plan to acquaint the project team members with the methodologies,
technologies and business areas under study
ii) Updating the project schedule to accommodate scheduled training activities
iii) Identifying the needs for review and reviewing the project scope
iv) Reviewing a project with respect to its stages and progress by preparing a plan for the review,
fixing an agenda to review the project progress and keeping the reports ready for discussion
about stage performance
v) Reviewing the project scope, the objective statement, the non conformances in the project
stages and identifying the need to use the project plan
vi) Preparing a proper project plan indicating all the requirements from start to finish of the
project and also at every stage of the project
vii) Preparing a checklist of items to be monitored and controlled during the course of execution
of the project
c) The analysis process The main steps in the analysis process of any project are:
i) Comparing the actual details with that in the plan with reference to project stages.
ii) Measuring various components of the project and its stages frequently to control the project
from deviating and also monitor the performance.
iii) Deciding how the task, the effort and the defects are to be tracked, what tools to be used,
what reporting structure and frequency will be followed at various stages.
iv) Identifying the preventive and corrective steps to be taken in case of any variance
v) Performing root cause analysis for all problems encountered.
If all the above steps are performed, scoping and planning become effective
and the ideal outcome are achieved.
What is root cause analysis?
Root cause analysis (RCA) is a problem solving method aimed at identifying

the root causes of problems or events, as opposed to merely addressing the
immediately obvious symptoms. This can minimise the likelihood of
problem recurrence.
True or False?
4. The purpose of project planning and scoping is to first identify the areas of the project work
and identifying the forces affecting the project and then to define the boundaries of the project.
5. Avoiding areas of problems which may affect the progress of the project is the only factor to
be considered for scoping a project.
6. Assessing the capabilities and skills of all those identified as part of the project organisation is
a step in the analysis process.
7. Comparing the actual details with that in the plan with respect to project stages is a task of the
identification process.
2.5 Planning Tools and Estimation
2.5.1 Planning Tools
There are several planning tools which may prove useful for coordinating a project successfully.
In this section we will discuss each of these tools.
2.5.1.1 Project Organisation
A project organisation consists of five process groups namely Initiation, Planning, Execution,
Control and Close. Each process groups requires a set of skills and activities as shown in table
2.1.
Table 2.1: Project organisation
Process Skills and Activities

Preparing an outline project justification, plan and project
budget
Initiation Selecting and briefing the project team, assigning roles and
organisation
Doing feasibility study- risk and key success factors

Creating project definition and project plan
Planning
Communicating to the team
Allocating and monitoring the work and cost
Execution Ensuring work and team cohesion
Reporting progress
Monitoring progress and managing changes
Control
Helping the team to solve project problems
Satisfactory delivery
Close
Compiling lessons from project experience
2.5.1.2 Project Structure

Project structure consists of development plan, project tracking and oversight. Figure 2.4 shows
the development plan of a typical software project.
Fig. 2.4: Project development plan
2.5.1.3 Project Key personnel
It is crucial to identify those business areas that are within the scope or directly interface with the
scope boundary. These areas are listed in the Business area column of the project assignment
worksheet. The key personnel for each area should be identified and subsequently listed in the
Person column of the project assignment worksheet.
2.5.1.4 Project management team
A senior management team will be accountable for the project. They identify project sponsor,
client representative and technical representative. A project management team consists of the
following roles:
Stage managers who will plan and manage the project on a day-to-day basis for this stage
Project coordinators such as client coordinator and technical coordinator who will clearly
define these coordination, control activities and identify the suitable personnel to carry them out
2.5.1.5 Key stakeholders
It is important to identify management level personnel who are critical to the success of the
project. The responsibilities of the key stakeholders must be documented.
2.5.1.6 Stage teams
For each stage of project management life cycle, appropriate personnel should be identified.
After allocation of staff to the stage, the team structure is defined and team leaders appointed. It
is important to document the time commitment and responsibilities to be performed by the team
members.
2.5.1.7 Key resources
Individuals assigned to a key resource role may work towards gathering Business key
resources and Technical key resources. They are project coordinators and team invitees.
2.5.1.8 Work Breakdown Structure (WBS)
The entire process of a project may be considered to be made up on number of sub process
placed in different stage called the Work Breakdown Structure (WBS).
A typical example of a WBS of a recruitment process is indicated in figure 2.5:
Fig. 2.5: Work breakdown structure (WBS)
WBS is the technique to analyse the content of work and cost by breaking it down into its
component parts. Project key stages form the highest level of the WBS, which is then used to
show the details at the lower levels of the project. Each key stage comprises many tasks
identified at the start of planning and later this list will have to be validated.
WBS is produced by identifying the key elements, breaking each element down into component
parts and continuing to breakdown until manageable work packages have been identified. These
can then be allocated to the appropriate person.
The WBS does not show dependencies other than a grouping under the key stages. It is not time
based there is no timescale on the drawing.
What are Lead Time and Lag Time?
Lead time: It is an amount of time, which a successor task can overlap with
its predecessor task, i.e. the time before the completion of the predecessor at
which the successor can start.
Lag time: An amount of time, between a predecessor and a successor task,

i.e. the time after the completion of the predecessor that the start of the
successor is delayed.
2.5.1.9 Task duration
Identifying lead and lag times helps in working out task duration.
2.5.2 Planning Estimation
2.5.2.1 Purpose of estimation
Estimation is an integral part of project planning. Let us find out why.
2.5.2.2 Estimating tips
Find below some tips to keep in mind when you estimate for a project.
Base estimates on some analytical, quantitative process than on a number pulled out of thin
air. Historical metrics data can help.
Explain your estimating method to the stakeholders and compare with what they want. They
may not really have an estimate; it may be a guess or a goal.
If you cant provide an accurate estimate because there are no written requirements, offer to
provide a more precise estimate after some initial exploration of the project scope and
general user requirements.
Why estimate?
Estimations assist in defining the project functional requirements
It prevents surprises on various fronts such as effort, schedule, cost and end
result
Reasonable estimates (even if not accurate) tend to become a self-fulfilling

prophecy.
Present a range of estimates: best case, most likely case and worst case, with the approximate
probability of meeting each one. Presenting a single estimate at the beginning of a sizable project
sets an expectation that will persist in peoples minds long after the original requirements and
assumptions have drastically changed.
Negotiate for a larger team, fewer features, phased delivery or reduced quality as ways to
achieve an aggressively accelerated schedule. Make sure the stakeholders understand these trade-
offs.
Redo your estimate with some different assumptions of project size, resources or other
factors to see how close you can come to the managers shorter goal. Make sure the assumptions
are clearly communicated to everyone involved in the decision-making.
Make a counter offer in case your estimation does not meet your stakeholders expectation,
showing them what fraction of the systems functionality could realistically be delivered in the
time period expected.
Fill in the blanks
8. In the control process the progress is ________ and the ______ are managed.
9. The entire process of a project may be considered to be made up on number of sub process
placed in different stage called the ____________.
10. _______ is the amount of time, which a successor task can overlap with its predecessor task,
i.e. the time before the completion of the predecessor at which the successor can start.
2.6.1 Estimation Approaches
There are two types of estimation approaches. Figure 1.3 lists the two approaches. Let us discuss
each of them.
Fig. 2.6: Estimation Approaches
2.6.1.1 Bottom up approach
The bottom up approach consists of the following steps.
i) Project manager first divides the product under development into major modules.
ii) Each module is subdivided into smaller units.
iii) Project manager defines a standard for manufacturing and self-testing by
Identifying modules in the system and classifying them as simple, medium or complex
Using either the provided standard definitions or definitions from past projects as much as
possible
Getting the average build effort for simple/medium/complex (S/M/C) programs from the
baseline if a project specific baseline exists
2.6.1.2 Top Down Approach
The top down approach consists of the following steps.
i) Getting the estimate of the total size of the product in function points
ii) Fixing the productivity level for the project using the productivity data from the project
specific capability baseline from the general process capability baseline, or from similar projects
iii) Obtaining the overall effort estimate from the productivity and size estimates
iv) Using effort distribution data from the process capability baselines or similar projects to
estimate the effort for the various phases
v) Refining the estimates taking project specific factors into consideration
2.6.2 Estimation Tools
The various estimation tools that may be used in managing a project are listed in figure 2.7.
Fig. 2.7: Estimation Tools
Let us familiarise ourselves with each of these tools.
a. Algorithmic model It consists of one or more algorithms that produce an effort estimate as a
function of a number of variables or cost drivers.
b. Expert judgment It relies on one or more people who are considered experts in some
endeavour related to the problem at hand. For example, it can be a software application or effort
estimation.
c. Analogy It refers to the comparison of the proposed project to completed projects of a
similar nature whose costs are known. The organisations process database is a source for
historical cost data.
d. Top down An overall cost estimate for the project is derived from global properties of the
product. This estimate will usually be based on the previous projects and will include the costs of
all functions in a project like integration, documentation, and quality assurance and configuration
management.
e. Bottom-up Each component of the software product is separately estimated and the results
aggregated to produce an estimate for the overall job.
f. Automated estimation models A number of computerised models are available which

estimate cost and schedule from user inputs of size and environmental cost factors. Most of these
are algorithmic models that use components as the measure of size.
What if a project specific baseline does not exist?
Use project type, technology, language and other attributes to look for similar
projects in process database. Use data from these projects to define the build
effort of S/M/C program. If no similar project exist in the process database
and no project specific baseline exist refine the estimates based on project
specific factors.
True or False?
11. The estimation approaches are the logarithmic and sequential approaches.
12. Expert judgment and analogy are types of estimation tools that may be used in managing a
project.
2.7 Risk Management
Risks are those events or conditions that may occur and whose occurrence has a harmful or
negative impact on a project. Risk management aims to identify the risks and then take actions to
minimise their effect on the project. Risk management entails additional cost. Hence risk
management can be considered cost-effective only if the cost of risk management is considerably
less than the cost incurred if the risk materialises.
2.7.1 Components
Important components in risk management are shown in figure 2.8.

Fig. 2.8: Risk management components
Let us be familiar with the actions involved in each of the components.
a) Risk Assessment Identify the possible risks and assess the consequences by means of
checklists of possible risks, surveys, meetings and brainstorming and reviews of plans, processes
and products. The project manager can also use the process database to get information about
risks and risk management on similar projects.
b) Risk Control Identify the actions needed to minimise the risk consequences. This is also
known as risk mitigation. Develop a risk management plan. Focus on the highest prioritised
risks. Prioritisation requires analysing the possible effects of the risk event in case it actually
occurs. This approach requires a quantitative assessment of the risk probability and the risk
consequences. For each risk, determine the rate of its occurrence and indicate whether the risk is
low, medium or of high category. If necessary, assign probability values in the ranges as
prescribed based upon experience. If necessary assign a weight on a scale of 1 to 10.
c) Risk Ranking Rank the risk based on the probability and effects on the project; for
example, a high probability, high impact item will have higher rank than a risk item with a
medium probability and high impact. In case of conflict, use judgment.
d) Risk Mitigation Select the top few risk items for mitigation and tracking. Refer to a list of
commonly used risk mitigation steps for various risks from the previous risk logs maintained by
the project manager and select suitable risk mitigation step. The risk mitigation step must be
properly executed by incorporating them into the project schedule. In addition to monitoring the
progress of the planned risk mitigation steps, periodically revisit the risk perception for the entire
project. The results of this review are reported in each milestone analysis report. To prepare this
report, make fresh risk analysis to determine whether the priorities have changed.
2.7.2 Classification and Categories
Risk management may be classified and categorised as
1. Risk assessment and identification The assessment and identification focuses on

enumerating possible risks to the project. Methods that can aid risk identification include
checklists of possible risks, surveys, meetings and brainstorming and reviews of plans, process
and work products. The project manager can also use the process database to get information
about risks and risk management on similar projects.
2. Risk prioritisation Focus on the highest risk. Prioritisation requires analysing the possible
effects of the risk event in case it actually occurs. This approach requires a quantitative
assessment of the risk probability and the risk consequences. For each risk rate, the probability of
its happening as low, medium or high. If necessary, assign probability values in the ranges given
for each rating. For each risk, assess its impact on the project as low, medium, high or very high.
Rank the risk based on the probability. Select the top few risk items for mitigation and tracking.
3. Risk Control: The main task is to identify the actions needed to minimise the risk
consequences, generally called risk mitigation steps. Refer to a list of commonly used risk
mitigation steps for various risks from the previous risk logs maintained by the PM and select a
suitable risk mitigation step. The risk mitigation step must be properly executed by incorporating
them into the project schedule. In addition to monitoring the progress of the planned risk
mitigation steps periodically revisit the risk perception for the entire project. The results of this
review are reported in each milestone analysis report. To prepare this report, make fresh risk
analysis to determine whether the priorities have changed.
True or False?
13. Risk management aims to identify the risks and then take actions to minimise their effect on
the project.
14. Important components of risk are risk assessment, risk control, risk ranking and risk
mitigation.
15. Identifying the actions needed to minimise the risk consequences, are generally called the
risk development steps.
2.8 Summary
Now that you have gone through this unit you should have learnt the basics of the project life
cycle and its process flows. You are now aware of the ways in which a project has to be planned
and executed. You have also been familiar with the tools necessary for project planning. You
have also learnt about the estimation approaches in project management and the fundamentals of
managing the risks involved in a project.
1. What are the various characteristics of a project?
2. What are the steps in scoping a project?

3. Explain the various steps in the identification process of a project.
4. What are the tools used in project planning?
5. How can risks be prioritised?
1. True
2. False
3. True
4. True
5. False
6. False
7. False
8. Monitored, changes
9. WBS
10. Lead Time
11. True
12. False
13. True
14. True
15. False

Copyright 2009 SMU
MB0049-Unit-03-Project Management
Essentials
Unit-03-Project Management Essentials
Structure:
3.1 Introduction
Learning Objectives
3.2 Characteristics of Project Mindset
3.3 Process Groups
Process interactions
Initiating processes
Planning processes
Executing processes
Controlling processes
Closing processes
3.4 Customisation
3.5 Project Monitoring and Control
Preliminary work
Project progress
Stage control
Resources
Quality control
Schedule quality review
Agenda for quality review
Conduct quality review
Follow up
Review quality control procedures
3.6 Project Process Control
Approvals
Change control
Changing project management process
Tools for changing a process
Project closure
Completion of activities and benefits
Post implementation review
Tools for post implementation review
Final project reporting and documentation
3.7 Summary

3.1 Introduction
It is a known fact that well planning does not necessarily mean well execution. Execution of a
project is the heart of any Project Management. Many organisations fail in executing their well
planned projects in spite of following various procedures. Facts reveal that the success rate is
dependent on whether the company or the organisation is fundamentally strong to handle such
projects or not. There are certain processes, systems and structure required for a sound execution
of a project. What is essential for a project to become successful has to be clearly listed. It is
extremely important that you implement each process in its entirety and that you communicate
the process clearly to your project team.
In this unit some of the prerequisites like communication and information systems, focus and
orientation toward quality and capabilities to handle problems and mindset will be brought out.
We will see how the organisation working on projects have to adhere to these factors related to
projects and their impacts.
Learning Objectives
Describe project management characteristic
List various process groups
Describe project monitoring steps, project control and project quality
Explain the control of the project process
List post closure activities along with the way of reporting and documentation
3.2 Characteristics of Project Mindset
Project Management is all about a mindset. The figure 3.1 captures all the major characteristics
of project mindset.
Fig. 3.1: Characteristics of project mindset
a) Time: It is an important parameter in framing the right mindset. It is possible to improve the
pace of the project by reducing the time frame of the process. The mindset is normally to work
out a comfort mode by stretching the time limits.
b) Responsiveness: It refers to quickness of response of an individual. The vibrancy and

liveliness of an individual or an organisation are proportional to its capabilities to respond to
evolving processes and structure.
c) Information Sharing: Information is power. Information is the master key to todays

business. Information sharing is an important characteristic of the project mindset today. A
seamless flow of information is a key to build a healthy mindset among various stakeholders in a
project.
d) Processes: Project mindset lays emphasis on flexible processes. The major difference in a
process and a system is in its capabilities of providing flexibility to different situational
encounters. Flexible processes possess greater capabilities of adaptability.
e) Structured planning: Structured planning based on project management life cycle enables
one to easily and conveniently work according to the plan. It also enables efficient use of project
resources and prioritisation of the activities based on resource planning.
Hence having a right mindset and flexible processes in place is very important for a sound
project management. Now let us have an assessment exercise.
True or False?
1. Responsiveness refers to quickness of response of an individual.
2. It is possible to improve the pace of the project by reducing the time frame of the process.
3. Project mindset lays emphasis on rigid processes.
3.3 Process Groups
Project management processes can be categorised under five Process Groups as mentioned below
1. Initiating processes: These processes initiate the project.
2. Planning processes: These processes are meant for devising and maintaining a workable
scheme to accomplish the business needs. Proper planning is essential to increase the efficiency
and effectiveness of the resources.
3. Executing processes: These processes are used for coordinating people and resources to carry
out the plan. As described earlier, improper execution even with a good planning will result into
project failure.
4. Controlling processes: These processes monitor and measure progress on continuous basis
and take a necessary remedial action. This helps in ensuring that the project is on schedule and
under budget. Any major deviations are also addressed as a part of this process.
5. Closing processes: These processes are meant for formalising acceptance and bringing project
to an orderly end.
Figure 3.2 shows the connection between the process groups.
Fig. 3.2: Connection between process groups
3.3.1 Process Interactions
These individual processes are linked by inputs and outputs. Central to them are the tools and
techniques. This is depicted in figure 3.3 below:
Fig. 3.3: Process interactions
Inputs: It refers to the client documents converted to action plans to be acted upon. It also
contains other necessary information required to be acted upon in a particular process.
Tools and techniques: It refers to the mechanisms applied on to the inputs to create desired
outputs. There are various standard tools and techniques available for each of the processes.
Organisation may use them or customise one according to their needs.
Outputs: It refers to the documents that are results of the process. These in turn may again act
as an input for next process.
Let us now look at the interactions of each of the process groups.
3.3.1.1 Initiating Processes
Every process is initiated by management group decision which results in the next phase of the
project.
3.3.1.2 Planning Processes
Interactions focus on planning. Planning processes are highly interdependent. Hence this makes
it more important that things are planned properly. If there is an overrun on one parameter, the
entire project may go for a toss. For example, if the cost is unacceptable, scope and time may
need to be redefined.
3.3.1.3 Executing Processes
Interactions in this group depend on the nature of the work. They are dynamic and dependent on
team innovations and responsiveness.
3.3.1.4 Controlling Processes
The interactions are aimed at measuring project performance [time, cost, quality] and identifying
the variances from the plan. Tracking the project performance is a continuous process. In case of
deviation from the planned project, plans are updated and corrective actions are taken.
3.3.1.5 Closing Processes
The interactions revolve around review of the project, findings and analysis of the project
performance with respect to various processes.
True or False?
4. Identifying variances from the plan is a part of closing processes.
5. The individual processes are linked by inputs and outputs.
6. Inputs refers to the documents that are results of the process

3.4 Customisation
At times, project management processes need to be customised based on the requirement of the
product. Find below some examples of customisation:
Large projects may need details A detailed project management plan might be necessary to
indicate every detail in the initial stages.
Smaller projects may need relatively less details - A detailed plan may not be required in the
initial stages.
Process details might change for other reasons Resource identification might be required
for scope definition.
True or False?
7. Large projects may need details which might indicate every detail in the initial stages.
3.5 Project Monitoring and Control
Any project aimed at delivering a product or a service has to go through phases in a planned
manner in order to meet the requirements. It is very important to measure the performance of the
current status of the project at anytime against its planned version. This helps to tackle any
unexpected deviation in time, efforts and cost. It is possible to work according to the project plan
only by careful and close monitoring of the project progress.
It requires establishing control factors to keep the project on the track of progress. The results of
any stage in a project, depends on the inputs to that stage. It is therefore necessary to control all
the inputs and the corresponding outputs from a stage. This is achieved through devising proper
controls for every stage.
A project manager may use certain standard tools to keep the project on track. The project
manager and the team members should be fully aware of the techniques and methods to rectify
the factors influencing delay of the project and its product. It is important for all stakeholders to
know the impact of the changes in any parameters to the overall project. The various steps
involved in monitoring and controlling a project from start to end are shown in figure 3.4.
Fig. 3.4: Steps for monitoring and control
Now let us look into detail for each of these steps.
3.5.1 Preliminary work
The team members understand the project plans, project stage schedule, progress controls,
tracking schedules, summary of the stage cost and related worksheets. All the members have to
understand the tolerances in any change and maintain a change control log. They must realise the
need and importance of quality for which they have to strictly follow a quality review schedule
and frequently discuss the quality agendas. They must understand the stage status reports, stage
end reports, stage end approval reports.
3.5.2 Project Progress
The members must keep a track of the project progress and communicate the same to other
related members of the project. They must monitor and control project progress, through the use
of regular check points, quality charts, and statistical tables; control the quality factors which are
likely to deviate from expected values as any deviation may result in changes to the stage
schedule. The project manager ensures that these changes are made smoothly and organises
review meeting with the project management group. Thus all the members are aware about the
progress of the project at all times. This helps them to plan well in advance for any exigency
arising due to deviation from planned schedule.
3.5.3 Stage Control
The manager must establish a project check point cycle. For this, a suitable stage version control
procedures may be followed. The details are to be documented stage wise. Project files have to
be timely updated with appropriate version control number and revision status should be
maintained for each change. Team members are identified who will exercise controls at various
points of the project.
3.5.4 Resources
Plan the resources required for various stage of the project well in advance. Communication is
the key. Brief both the project team and the key resources about the objectives of every stage,
planned activities, products, organisation, metrics and the project controls. This increases the
visibility into the project performance and hence a quality control can be achieved. Allocating a
right resource at the right place and the right time will significantly enhance the efficiency and
effectiveness of the resource.
3.5.5 Quality Control
This is very important in any project. It is a tool which helps in tracking the progress of various
parameters at any stage of the project. A project manager may use a standard quality control or
customise according to the requirements. Quality control is possible if the project members
follow the quality charts and norms very strictly. It is also important for all the project team
members to know the importance of such quality checks and should have a good visibility into
project performance.
3.5.6 Schedule Quality Review
Conduct quality reviews at regular intervals. It is recommended that quality review be scheduled
at the beginning of the stage and also at the ending of every stage. This helps the project manager
and team members to plan well in advance for any unforeseen deviation.
3.5.7 Agenda for Quality Review
Create and distribute a quality review agenda specifying the objective, products, logistics, roles,
responsibilities and time frame. This increases the effectiveness of the review and also reduces
the time gap.
3.5.8 Conduct Quality Review
Conduct the quality review in a structured and formal manner. Quality review should focus on
product development and its quality factors. Focus on whether it meets the prescribed quality
standard.
3.5.9 Follow Up
Revise the complete quality review product status from In-progress to QR Complete. Follow
up the actions planned in strict manner which ensures conformity to the standards.
3.5.10 Review Quality Control Procedure
Verify that the quality objectives for each product are appropriate and that all participants are
satisfied both with the process and its outcome. This is to ensure that all the stakeholders of the
project are in conformity of control procedures.
Fill in the blanks:

8. It is possible to work according to the project plan only by careful _______ of the project
progress.
9. During the _______ the members must keep a track of the project progress and communicate
the same to other related members of the project.
10. ________ is possible if the project members follow the quality charts and norms very strictly.
3.6 Project Progress Control
In this section, we will look at detailed end to end project progress and control steps. This starts
from the approval of the control procedures from the management or the project sponsor to post
closure review analysis of the project. Before diving into project progress control steps, let us
look at some tools and mechanisms to periodically track and monitor performance. Figure 3.5
describes the same.
Fig. 3.5: Project progress control tools and mechanisms
Monitor Performance: The first step for any project control mechanism is to monitor the
progress. There are numerous ways to monitor and measure various project parameters. For
example, the team members log in details of actual start date, actual finish date, actual hours
worked per task, estimated hours to complete the task, elapsed time in hours to compete the task,
any miscellaneous costs incurred during a stage. These inputs become the base to monitor the
performance of the project and its stages.
Update Schedule: Update the schedule for actual start date for tasks started, actual finish date
for tasks finished, actual hours worked per task, latest estimated work in hours to complete the
task.
Update Costs: Update the stage cost summary worksheet with actual costs incurred during the
period and estimated remaining costs. Miscellaneous costs will be automatically updated from
the scheduler, since they are calculated from actual work.
Re-plan Stage Schedule: Review the tracking Gantt and Cost workbook and identify any
deviation from the baseline. Analyse the cause of the deviation. Refer back to the project control
factors to help determine the appropriate corrective action and adjust the schedule accordingly.
Determine if the stage has exceeded the progress, cost and quality tolerance levels agreed with
the project management team. Review status of open issues and determine any further action
required on these issues. Review the status of any outstanding quality reviews. Review any new
change requests.
Conduct Team Status Review: Conduct a status meeting with the project team. This is
important to bring everyone on the same page of the project progress. Typically, items for
discussion are the planned activities for the current period that are incomplete or overdue,
activities for the next period, new issues identified in the current period, issues closed in the
current period, summary of results of quality reviews, summary of schedule and cost status,
suggested revisions to the plan.
Create Status Reports: The status report provides a record of current achievement and
immediate expectations of the project. The status has to be effectively communicated to all
concerned parties.
Create Flash Reports: Summarise the accomplishments for the month, schedule status,
upcoming tasks for the month and any major issues. Distribute the same to all project team
members and stakeholders.
Project Status Reports: As discussed earlier, the status report provides a record of current
achievements and immediate expectations of the project. This is generated on a regular basis
depending upon the type, requirements and phase of the project. Typically it is generated for a
week. A weekly status report may include:
Accomplishments during the period
Items not completed during the period
Proposed activities for the next period
Any predicted slippage to the stage schedule, along with cause and corrective action
Any predicted cost overrun along with cause and corrective action
Now let us look at the project process control steps.

Fig. 3.6: Project progress control steps
3.6.1 Approvals
In any project, it is important to have top management or project sponsors into confidence about
all the aspects of the project. This project stage reviews the decisions taken and actions planned
and get it approved by the top management. The goals of such review are to improve quality by
finding defects and to improve productivity by finding defects in a cost effective and timely
manner. The group review process includes several stages like planning, preparation, overview
of a group review meeting, rework recommendations and follow-up.
3.6.2 Change Control
Uncertainties are a part and parcel of any project and hence we need to be adaptive and flexible
enough to accommodate such changes. Controlling the changes in the project is possible through
a proper Change Management process and using necessary tools for controlling the change.
Change control is necessary to control the increase of work at various stages of project and to
manage effectively the disruptions in the stages, if any. These factors may affect the progress of
the project, resulting in deviations from the stage schedules, project and stage cost and project
scope.
3.6.3 Changing Project Management Process
As described earlier, you should be responsive enough to handle the changes demanded by the
situation. The processes involved in bringing about a change are the following. The same is also
described in figure 3.7.
a) Request for a change: The need for the change is identified first. Based on the need a formal
request is made. This request can come from either a member of the project team or a client or a
coordinator or key stakeholder.
b) Identify Alternate Solutions: Evaluate the change request and identify several alternative
solutions. Assess the alternatives with respect to the functional scope, schedule, effort and cost.
There are various tools available to access the best option in a given scenario.
Fig. 3.7: Change management process
c) Decide on the Actions for the change: Present the change request, alternative solutions and
recommendation to the project management team. The project management team is required to
accept the recommendation, choose an alternative solution, or request further investigation.
Based on this a final action plan for the change is selected.
d) Implement change: Once the change is decided, it is finally implemented in the project.
Appropriate schedule and other project plan adjustments are made to accommodate the change.
The same is communicated to all the project team members. They also monitor progress and
execute quality control on the changes.
3.6.4 Tools for Changing a Process
There are various tools which can be used to bring about a change in a process. All such tools
can be mainly classified into two types, as shown in the figure 3.8
Fig. 3.8: Tools for changing a process
a) Change Management System (CMS): It is a methodology which requires collection of all

formal documented procedures, defining how project performance will be monitored and
evaluated, how project plans could be updated, how various measures can be implemented to
control the change process. These procedures may be unique to an organisation based on their
project needs. It also includes procedures to handle the changes that may be approved without
prior review, so that the evolution of baseline can be documented.
b) Configuration Management (CM): Identify the configuration items and define the naming
and numbering scheme, structure the changes, define a backup procedure, and follow the
methods for tracking the status of configuration items. Identify and define the responsibility and
authority of the CMS.
3.6.5 Project Closure
Any project that is planned properly and executed as per the plan will also close successfully.
For successful completion of a project every aspect of the project should be monitored and
controlled. Such aspects include the resources used, time and efforts invested and the cost
analysis.
3.6.6 Completion of activities and benefits
The closure of a project is followed by its analysis and performance measured against its
scheduled baseline version. However, the closure of a project may result in the following
benefits:
a) It implies that on successful completion of a project, it has not drifted from its intended course
and plans. Otherwise it would have resulted in a change and may also have kick started another
project affecting the main project.
b) The project members are acknowledged for the completion of the project, motivating them to
take up more projects wherein the members would be able to confidently handle and take care of
all the problems based upon their learning from earlier project.
c) It results in setting up of processes for continued development and improvement of the final
product of any project forthcoming.
d) It results in setting up of improved standard process and estimating models for this type of
future projects.
e) It enables resource redeployment.
Moreover, the deliverable at the end of each stage could be:
a) A set of specified outputs for each stage of the project
b) New products or modified existing product
c) Items that may be less easy to distinguish like parameter setup data transfer, staff training
3.6.7 Post Implementation Review
After every stage of a project is implemented, it may so happen that there could be a minor
change or modification which has to be reviewed. This is known as post implementation review.
The review is performed in four parts as depicted in figure 3.9.
a) Final product review: The product obtained after every stage must meet the requirements of
that stage. If it completely meets the stated objectives, then focus on the issues of maintenance of
the processes and product performance. If the final product does not completely meet the
objectives then identify the variations in the product and analyse the variation. Study the factors
responsible for the change and evaluate each one separately.
Fig. 3.9: Post implementation review
b) Outstanding project work review: Many times it is found that there may be some item of
the project which is still not in its stage finished form. It may be insignificant as it may be a by-
product of that stage which may not be required immediately for the next stage. Then the items
that are open should be resolved and necessary steps be taken to close such open items.
c) Project Review: Every aspect of a project from start to end has to be reviewed. The
objectives, performance criteria, financial criteria, resource utilisation, slips and gains of time,
adherence to the project definition and plans have to be reviewed. All such review details and
reports have to be well documented for future use.
d) Process review: Every process is important in any project. One may review the process to see
if any changes can be made to improve its performance.
3.6.8 Tools for Post Implementation Review
There are various tools for post project implementation review that may be considered for
improving and developing processes of the project. Reports are prepared on the same which
becomes the basis for all future discussion. Some of the tools that may be considered for post
implementation review are shown in figure 3.10.
Fig. 3.10: Tools for post implementation review
a) Final Product Evaluation: This may be done through regularly organised meetings and
quality reviews.
b) Outstanding Project Work Evaluation: All outstanding works of a project can be reviewed
to check its output quality, its performance compared to planned and evaluate the same.
c) Project Review: Review questionnaire may become important if the reviews are to be
structured and group discussion may be initiated depending upon the points to be discussed.
d) Process Evaluation: Evaluation of any process is one of the key issues of the project
3.6.9 Final Project Reporting and Documentation
After completion of a project stage and the project as a whole, it is well analysed and
documented. Reports are prepared to indicate the details.
The objective of the stage, the project and the corresponding plans should be reviewed and items
that are still open should then be closed or resolved. The outstanding items should be passed on
to the person responsible for the subsequent work. It is necessary to document every stage of the
project. Every review meeting by the project team and any other members of the project
organisation and follow ups have to be well documented. The risks that were managed have to be
analysed and documented. Also discussions should be held about various metrics could have
been used during the course of the project and necessary changes in the stages.
Effects on the process and the corresponding metrics are evaluated and documented. Some of the
outcomes that need to be well documented are
a) Key stages of the project
b) Project logic diagram
c) Key stages responsibility chart
d) Estimates for all key stages

e) Optimised project Gantt chart
f) Updated and reviewed project risk log
g) Risk management forms for new high risks
h) Project operating budget
This serves as a baseline for future project reference
True or False?
11. We update the schedule for actual start date for tasks started, actual finish date for tasks
finished, and actual hours worked per task, latest estimated work in hours to complete the task.
12. While creating status reports, summarise the accomplishments for the month, schedule status,
upcoming tasks for the month and any major issues.
13. Change control is necessary to control the increase of work at various stages of project and to
manage effectively the disruptions in the stages, if any.
14. SCM and CM are the tools used for changing a process.
15. Project review questionnaire may become important if the reviews are to be structured and
individual discussion may be initiated depending upon the points to be discussed.
3.7 Summary
Now that you have gone through this unit, you will be confident in applying the thoughts to a
project with respect to the project management characteristic and the various process groups.
You learned the importance of having a right project mindset. You have also studied the
interactions between various process groups.
You have also understood the project monitoring steps, project control and project quality as
applicable to any project management activity. Project monitoring and control is a continuous
process and all the stakeholders are to be kept in confidence before implementing any change.
Also explained in this unit is the methodology of controlling the project processes. We also
discussed how the changes in a project should be evaluated and various tools available for the
same.
At the end you have studied about the steps to be followed post project completion. Proper
analysis of the project is important to determine the success of the project. You learned the
complete end to end cycle of post project completion activities. How to close activities along
with the way of reporting and documentation is also explained. In addition to this, you also
learned various tools used for post implementation review and for a change in a process.
1. What are the characteristics of project mindset?
2. What is the need of customisation?
3. Explain the various steps involved in monitoring and controlling a project.
4. How is the project progress controlled?
5. Indicate the processes involved in bringing about a change.
6. What are the tools used for changing a process in a project?
7. Write in detail about the post implementation review of a project.
1. True
2. True
3. False
4. True
5. False
6. False
7. True
8. Monitoring
9. project progress
10. quality control
11. True
12. False
13. True
14. True
15. False
1. Refer 3.3
2. Refer 3.5
3. Refer 3.6
4. Refer 3.7
5. Refer 3.7.3
6. Refer 3.7.4
7.Refer 3.7.7
Copyright 2009 SMU
MB0049-Unit-04-Concepts of Managing
Conflict Quality and IS
Unit-04-Concepts of Managing Conflict Quality and IS
Structure:
4.1 Introduction
Learning Objectives
4.2 Concept of Managing Conflicts, Quality and the IS
Conflict management
Communication requirement and capabilities

Quality management
Project management information system
4.3 Modern Trends in Project Management
4.4 Perception
The project development process cycle
Planning for review
Conducting the review
Taking actions on findings
Implementing continuous improvement
Critical success factors
Results and benefits of the project quality reviews
Macro issues
Knowledge factor (K)
4.5 The Modern Mantra of Project Management
4.6 New Horizons in Project Management Nine Steps
4.7 Summary
4.1 Introduction
It is well known that in any management system there is always some conflict. It may result out
of individuals or groups having different opinions. The project gets affected by this conflict. It
could be resolved by proper understanding among the project members. Conflict can also be
resolved by properly communicating the ideas and discussing the issues in detail. There has been
a growing awareness among organisations of the importance of effective conflict management.
Equal importance is also given to quality management and information system.
In this unit, you will learn these concepts with respect to project management. In addition you
will be familiarised with the recent trends in project management.
Learning Objectives
Explain concepts of conflict management, quality management and project management

information system
Recognise the modern trends in project management
List the new horizons in project management
4.2 Concept of Managing Conflicts, Quality and the IS
4.2.1 Conflict Management
It is possible to manage conflicts in one of the following ways
a. Avoid the issue
b. Approach the problem in such a way as to obtain the solution quickly
c. Discuss and share the problem
d. Resolve any misunderstanding by means of a discussion among project members
e. Work on a common solution technique that will lead to a win win situation
f. Emphasise on collaboration
4.2.2 Communication Requirement and Capabilities
Much of a projects success depends on the communication channels. The communication

requirements and capabilities of a project should be developed to address the following issues:
a. Communication frequency Sponsors of development projects prefer bi-weekly verbal

updates and written reports complemented by personal meetings only at milestone achievement.
However, project managers prefer to communicate on a weekly basis using all three media.
Statistically, significant differences exist with the sponsors higher preference for
communication at milestones or project phase end, and project managers higher preference for
daily communication. A similar discrepancy exists in technical service project. Meeting
frequently will help customers get the updates on the project progress.
b. Response Profiles The respondents show interest mainly on the information available and
the preference on mode of communication at various levels.
c. Barriers to communication The barriers may be plenty. Suitable plan to avoid the barriers
may be prepared.
d. Behaviour pattern exhibited Executives often communicate decision with little or no

knowledge of the implication of their decisions for the company or the people who have to
implement decisions. They may sometimes fail to communicate effectively leading to sending
out a different message. Managers feel stressed or overstretched in implementing executive
decisions. They may lack enthusiasm for change and fail to collaborate or practice teamwork
with their peers. Employees are left in the dark who feel unheard and unappreciated.
Let us now list some essential characteristics of an effective communication network.
4.2.3 Quality Management
Quality of any product or service is defined as its conformance to the standards or the stated
requirements. Total Quality Management (TQM) represents the entities and their prerequisites
for achieving world class quality. Many use the Malcolm Baldrige National Quality Award
benchmark.
According to this benchmark, quality may be realised by
Adopting a philosophy in line with the objectives of the organisation. The aim should be to
continuously improve the philosophy.
Achieving effectiveness in the organisational performance and fulfilling or exceeding the

community expectations.
Many others use the Six Sigma concept to increase the profits by eliminating variability, defects
and waste that undermine customer loyalty. It may be implemented by understanding the scope
of various metrics going to be used in the project, DMAIS (define, measure, analyse, improve
standardise) methodology and philosophy. The strategy of Six Sigma is to shift, shrink and
stabilise. Company policies and desired quality standards form the basis for an effective quality
control programme. Let us now look at a simple caselet to understand the criticality of a precise
companywide policy.
4.2.4 Project Management Information System (PMIS)
An information system is mainly aimed at providing the management at different levels with
information related to the system of the organisation. It helps in maintaining discipline in the
system.
An information system dealing with project management tasks is the project management
information system. It helps in decision making in arriving at optimum allocation of resources.
The information system is based on a database of the organisation. A project management
information system also holds schedule, scope changes, risk assessment and actual results.
The information is communicated to managers at different levels of the organisation depending

upon the need. Let us find how a project management information system is used by different
stakeholders.
Who needs information and why
Upper managers To know information on all projects regarding

progress, problems, resource usage, costs and
project goals. This information helps them take
decisions on the project. They should review the
projects at each milestone and arrive at
appropriate decision
Project manager and To see each project schedule, priority and use of
department managers resources to determine the most efficient use
across the organisation.
Project team members To see schedule, task lists and specification so
that they know what needs to be done next.
The four major aspects of a PMIS are
a. Providing information to the major stakeholders
b. Assisting the team members, stakeholders, managers with necessary information and summary
of the information shared to the higher level managers
c. Assisting the managers in doing what if analyses about project staffing, proposed staffing
changes and total allocation of resources
d. Helping organisational learning by helping the members of the organisation learn about
project management
Usually, the team members, and not the systems administrators of the company, develop a good
PMIS. Organisations tend to allocate such responsibility by rotation among members with a well
designed and structured data entry and analytical format.
True or False?
1. It is possible to manage the conflicts by discussing and sharing the problems.
2. Build employee trust in the communications process so that hones feedback becomes a part of
the natural way of working is the only essential characteristic of a communication network.
3. Quality of any product or service is defined as its conformance to the standards or the stated
requirements.
4.3 Modern Trends in Project Management
There are a number of ways a manager can implement a project successfully. As it is important
to monitor and control the project activities throughout various stages, it becomes much more
important to resort to effective and powerful tools to coordinate the activities. Modern trends in
project management have shown a number of ways that can be considered to achieve good
results in any project. Irrespective of whichever way one wants to choose for effective outputs,
the essential methods are as follows:
meticulous planning of all the activities
referring to checklist which could have been creatively designed
adopting quality control measures and standards
Fill in the blanks
4. Irrespective of whichever way one wants to coordinate for effective outputs, the essential
processes are the ________ of all the activities, referring to checklist which could have been
creatively designed, adopting quality control measures, standards etc.
4.4 Perception
As per the current trends in project management, the perception is that the job of a manger is to
obtain result. A more result-cum-profit oriented corporate strategy lays greater emphasis on
maximised efficiency of operations. Some of the tools being used currently are shown in figure
4.1:
Fig. 4.1: Project management tools
Let us discuss each of these tools in brief.
a. Continuous Business Process Improvement It is a process through which a project team

passes on the details of any system as recommendation for standardisation. It acts as a business
process element for the company as a whole. As part of continuous business process
improvement, a project team passes on the details of any system as a recommendation for
standardisation of future project processes.
b. Force Field Analysis The analysis is done by adopting suitable methods to identify external
factors which may affect the project progress. The external factors are the hurdles in a project.
Use of appropriate processes minimises and eliminates the hurdles resulting in a smooth flow of
activities and project progress. The external forces may be related to customers, technology
change, or shift in trends.
Various analysis techniques and procedures can be used to identify major external factors or
forces which could affect development process. These forces could be related to customer
profiles. The responsibility of the analysis is entrusted with the senior most member of the team
rather than the leader or manager.
c. Information Risk Management Various methods can be adopted to reduce the risks in a
project. A proper methodology is one that is based on the quality control aspect which may even
be automated and integrated into the project process.
The risks arising out of corruption, age, field size variation and format mismatch have to be
controlled. Scientific, analytical and quite often automated system of quality control of key input
data connected with the project help reduce risks in the project. Responsibility of information
risk management normally rests with the system administrator a team member or an external
member.
d. Management Assurance Measure It is a task performed by the project leader to convince

management against wavering. At the same time, it aims at preparing team members to counter
any unexpected storms in the project. This is the greatest opportunity for a leader to mature and
go up the ladder as well as an equal opportunity for the member to emerge a leader through
accepting a challenge.
Management may consider measures to identify members who would have managed to face the
unexpected hurdles in the project and overcome them by their creative skills. Some measures
may be adopted to encourage the member. It may be perceived as an opportunity to promote the
member. Many organisations even tend to nominate leaders for different project teams.
e. Quality Certification Quality certification from a leading organisation should be obtained.

Certification will enable the management team to realise the importance of a process and how
effectively projects can be managed smoothly.
f. Strategic Inflection Point A real test for the project leader and the management team is to
accurately predict the exact point of the development process where the team might face a
massive problem. These points may be related to political, geophysical and rarely to time.
4.4.1 Project Development Process Cycle
Every company would be interested to improve their performance over their previous
performance in projects. In order to improve project performance, the company must assure
quality and quality control at every stage of the project throughout the project life cycle. The
various phases which may be considered in the development of the process cycle in any project
are shown in figure 4.2:
Fig. 4.2: Quality control phases
4.4.1.1 Planning for Review
In this phase the main focus is on collection of data. Data is the main input requirement of any
successful project information system and therefore the project.
The steps to follow in this phase include:
Preparing a suitable plan for data analysis after the data has been gathered.
Obtaining necessary commitment from management and team members to participate actively
and take actions on findings.
Ensuring that every project member gives his or her commitment to participate and deliver the
service/product in the project.
Ensuring that review is planned for every stage of the project.
Preparing schedule for each project review.
4.4.1.2 Conducting the Review
In this phase, the review is conducted as a planned in the preceding phase. The review leader is
the project manager. The steps to conduct the review include:
Preparing an agenda before the review. The agenda should be well structured in terms of time
and content.
Making necessary arrangements to gather inputs for the review.
Incorporating points, which are external to the project. These external points have to be well
structured to be reviewed.
Documenting key points of the meeting. A reporter should be designated for this job.
Formulating an automated checklist for the session. Make use of flipcharts to collect data from
participants.
4.4.1.3 Taking actions on findings
In this phase, a project team takes actions on the findings of the review meeting. The steps to
follow in this phase include:
Determining the points which are critical to the project and its performance.
Having brain storming sessions to discuss critical points.
Making a list of all such items discussed and items suggested.
Grouping the data into categories and then prioritise, either by group discussion or voting.
Identifying action items
Assigning the task to a project member or a team.
Setting expectations of scope, investment, time, for each item and send a copy to the team
Following up all the actions.

Placing review reports in the project documents file, in the quality/productivity departments and
in the library.
Making reports available to managers of the life process for similar projects.
4.4.1.4 Do continuous improvement
Continual improvement is one of the management mantras. Every organisation wants to improve
continuously. It is not possible to achieve improvement unless sufficient measures are adopted to
calculate improvement. The steps to ensure continuous improvement include:
Encouraging the quality managers to look for quality themes that emerge from review meetings.
The quality managers should highlight trends and de-escalate chronic problems.
Acting on recommendations from previous projects as reviews are a continuous check process
in the Plan-Do-Check-Act cycle of a quality management cycle.
Capturing project data to check do a retrospective analysis of the progress and improvement.
Doing periodic project reviews that will trigger mid-project corrections.
Conducting immediate and informal retrospective analysis after solving unexpected obstacles
Understanding any impact on the remainder of the project.
Recognising people for extra efforts and noteworthy contributions.
Being open to attend reviews for other projects.
Learning from similar ventures, warranty failures, customer surveys and experiences of other
divisions and companies.
Being a part of continuous organisational learning program that includes experimentation,

evaluation and documentation with easy access and retrieval.
4.4.1.5 Critical Success Factors
It is necessary that a company identifies critical factors in a project. These factors may slacken
the project if not focused. Some of these success factors are discussed below.
Routine tasks may be assigned to lower level team members as this may relieve the project team
from wasting their skill set on routine matters.
In terms of project delivery, the project office can relieve project managers of tasks, like filling
forms and templates, getting these forms signed off, mailing, receiving and checking items.
The project office can also help the project manager in the project scope definition, project kick-
off preparation and planning tasks, through mentoring and coaching services.
Regarding project quality reviews, the project management office adds value providing
processes, tools and project management experience but any quality review process can be
implemented by the team without sponsorship from the management level.
These are the combining strengths that make the project manager move forward and achieve the
project success. It is necessary to identify all the critical success factors. One of the critical
success factors for the project quality review process implementation is to convince and sell the
benefits to the management team of the organisation. The team should exhibit better control of
their project portfolio and then demonstrate better control about business profitability.
4.4.1.6 Results and Benefits of the Project Quality Reviews
The main benefits of the project quality review are that project status is formally visible to the
whole organisation. It creates awareness and room for improvement. Through reviewing, in a
detailed manner, we can have a clear idea about the lack of knowledge mistakes, errors,
deviations, and their reasons.
The project quality reviews help the project manager to make the necessary adjustments and take
the actions needed to finish the project on time, scope and budget.
The entire project team including the project manager, the customer and the sponsor benefit from
project quality reviews.
Who benefits and how
Project manager Can build a disciplined and controlled team.
Can anticipate results and potential problems

of the customer.
Sponsor Gets to know more project details and then to
ask the customer upper management level for
clarifications
Management It adds value to their expectations which are a
crucial for future projects
4.4.2 Macro Issues
a. Evolving Key Success Factors (KSF) Upfront: In order to provide complete stability to
fulfilment of goals, a project manager needs to constantly evaluate the key success factors from
time to time. While doing so, he needs to keep the following aspects of KSFs in mind:
The KSF should be evolved based on a basic consensus document (BCD).

KSF will also provide an input to effective exit strategy (EES). Exit here does not mean exit
from the project but from any of the drilled down elemental activities which may prove to be
hurdles rather than contributors.
Broad level of KSF should be available at the conceptual stage and should be firmed up and
detailed out during the planning stage. The easiest way would be for the team to evaluate each
step for chances of success on a scale of ten.
KSF should be available to the management duly approved by the project manager before
execution and control stages.
KSF rides above normal consideration of time and cost at the levels encompassing client
expectation and management perception time and cost come into play as subservient to these
major goals.
b. Empowerment Title (ET): ET reflects the relative importance of members of the

organisation at three levels:
i) Team members are empowered to work within limits of their respective allocated
responsibilities. The major change from bureaucratic systems is an expectation from these
members to innovate and contribute to time and cost.
ii) Group leaders are empowered additionally to act independently towards client expectation and
are also vested with some limited financial powers.
iii) Managers are empowered further to act independently but to maintain a scientific balance
among time, cost, expectation and perception, apart from being a virtual advisor to the top
management.
c. Partnering Decision Making (PDM): PDM is a substitute to monitoring and control. A

senior with a better decision making process will work closely with the project managers as well
as members to plan what best can be done to manage the future better from past experience. The
key here is the active participation of members in the decision making process. The ownership is
distributed among all irrespective of levels the term equally should be avoided here since
ownership is not quantifiable. The right feeling of ownership is important.
This step is most difficult since junior members have to respond and resist being pushed through
sheer innovation and performance this is how future leaders would emerge. The PDM process
is made scientific through:
i) Earned value management system (EVMS)
ii) Budgeted cost of work scheduled (BCWS)
iii) Budgeted cost of work performed (BCWP)

iv) Actual cost of work performed (ACWP)
d. Management by Exception (MBE): No news is good news. If a member wants help he or

she locates a source and proposes to the manager only if such help is not accessible for free.
Similarly, a member should believe that a team leaders silence is a sign of approval and should
not provoke comments through excessive seeking of opinions. In short leave people alone and let
situation perform the demanding act.
The bend limit of MBE can be evolved depending on the sensitivity of the nature and size of the
project. MBE provides and facilitates better implementation of effectiveness of empowerment
titles. MBE is more important since organisations are moving toward multi-skilled functioning
even at junior most levels.
4.4.3 Knowledge Factor (K)
Knowledge is the most powerful mover of the wheels of progress. K factor is an index of the
extent to which one can manage today with yesterdays knowledge content and also the extent to
which todays knowledge will be used tomorrow. This would render the development process
more productive.
With the opportunities for juniors to access information from new knowledge bases, seniority is
no more an automated scale for knowledge. It is important for leaders to recognise the
knowledge potential of the younger members. It is equally important for younger members not to
suppress their knowledge potential from its application. Knowledge can be lost if it is not
updated and utilised. It is the task of every team member to maximise the K-factor in all
directions.
Fill in the blanks
5. As per the current trends in project management, the perception is that the job of a manger is
to obtain ________.
6. ______ is a process through which a project team passes on the details of any system as
recommendation for standardisation.
7. ___________ is a task performed by the project leader to balance efforts to convince

management against wavering with efforts to prepare team members to counter any unexpected
storms in the project.
8. Reviews are a check process in the ________ cycle of a quality cycle.
9. The team can find benefits for the project manager because it helps in terms of ______ and
_______.
The modern mantra of project management seems to have five essential aspects Define,
Measure, Analyse, Improve, and Standardise (DMAIS).
Fig. 4.3: DMAIS
1. Define benchmark, customer requirement, process flow map, quality function deployment,
project management plan
2. Measure data collection, defect metrics, sampling
3. Analyse cause and effect, failure modes and effect analysis, decision and risk analysis, root
cause analysis, reliability analysis
4. Improve design of experiments, modelling , robust design
5. Standardise control charts, time series, procedural adherence, performance management,

preventive activities
Fill in the blanks
10. The modern mantra of project management, have five essential aspects which are: ____,
_____, _____, ______, and _______.
4.6 New Horizons in Project Management Nine steps
The concepts of project management keep evolving as new horizons become prominent. Let us
look at some of them.
a. Believing in discontinuity and not in continuity with incremental improvements:

Continuity or status quo is a function of quantum of changes. Incremental improvements are
valid only when the rate of change is not excessive. Modern domains and development processes
are highly dynamic. Project management today demands discontinuity and greater flexibility,
with no hurdles to move into the future. An open mind towards the unknown is the key.
Members are not expected to be rattled by sweeping changes demanded by the dynamically
changing objectives.
b. Owning the problems and sharing the solutions: Experience is gained through keeping an
open mind to problems. Experience is now not judged by number of years of service but by the
number and complexity of problems owned and solved. The fixed mould mentality of passing
the buck and expecting credit for discoveries is not appreciated any more.
c. Breaking the status quo mentality: This implies that future is not an extension of the present
and therefore it needs to be tamed. Excessive focusing on future may not however be
appreciated. A proper balance is a must. In most cases, a conflict between a present centric
manager and a future centric project leader can only be solved by the innovative predictive
approach of a member it is usually the member who is more aware of future bugs and client
centric problems.
d. Stepping out of comfortable zone: Momentarily, a member might feel more comfortable to
stay in the comfort zone and refrain from risks. However, he or she should remember that a team
leader has emerged by stepping out of the comfort zone. On the other hand, if a member decides
to step out of the comfort zone and be innovative and contribute then this would amount to
emergence of a future leader. Promotions are not time bound any more.
e. Human capital bypassing financial: Human capital has left financial capital far behind. A
member should therefore appreciate and maintain self realisation of his importance in the
organisation. However, to sustain credibility, the member should remember that his or her value
is not related to the level or the salary but on the quantum of output, again not on the volume of
coding but on the value of the work done to the product. Combining these two concepts of
human capital and value, the concept of return on the time invested has replaced return on
investment when it comes to valuation.
f. Transforming work culture from 5 to 7 dimensions: Conventionally we live among the five
dimensions X, Y, Z, time and mind. We need to add passion and joy if we aim any substantial
progress. It is important for a member to decide to do what he or she wants to do. Then the gap
between wish and reality is narrowed and the results improve. A project could well become a
work of art.
g. Real number of encounters replacing number of years of experience: The experience level
is now judged by the number of encounters of major problems solved rather than the number of
years. Experience is then counted as wisdom. The secret formula for a member is to build an
inventory of encounters meaningful to his or her own dream or passion profile.
h. Seeking meaning out of change: Change could be a threat or an opportunity. If change is

resisted, it is essential for the entire team, through extraordinary team effort and brain storming,
to weigh consequences before drafting of a plan to match proposals for changes. The key lies in
extraordinary inter personal skills and communication.
i. Detachment from the fruits of results: To act is within ones control. To get a reaction or a
reward is not within his or her purview. Too much attention to these factors would result in drop
in productivity and further hinder personal progress. The team members should rather analyse
and discuss among themselves and let results speak for themselves.
One should appreciate that there is every chance that a leader or a manger can be issued
marching orders if he or she fails to recognise results of individual performances. After all, it is
his responsibility to build a second line and move up the ladder himself. One matures by quickly
tiding over temporary disappointment with non-recognition and just continues.
Most organisations now encourage presentation by members as well as self assessment reports.
On the flip side, this may be one of the reasons for heavy turnover, but the member should
remember that he or she is entering another organisation with greater maturity and perhaps better
chances of moving up. Managements now tend to constantly watch the balance between
retention and attrition.
True or False?
11. Continuity or status quo is a function of quantum of changes.
12. Modern domains and development process are highly static.
13. The secret formula for a member is to build an inventory of encounters meaningful to his or
her own dream or passion profile.
4.7 Summary
After going through this unit you would have understood the various trends in project
management. You now know how to manage the conflicts in project management. The concepts
of Project Management Information System have also been explained in this unit. The quality
aspects of project management have been explained in simple form so as to enable you to
understand the concept behind quality management in projects. The concept of macro issues and
the knowledge factor are explained with respect to project management. You have been also
exposed to the new horizons in project management.
1. What is the importance of PMIS?
2. What are the major aspects of PMIS?
3. What are the various steps which may be considered in the development of the process cycle
in any project?
4. What is knowledge factor?
5. List out the macro issues in project management and explain each.
6. What is the modern mantra in project management?
1. True
2. False
3. True
4. Meticulous planning
5. Result
6. Continuous business process improvement (CBPI)
7. Management Assurance measure
8. Plan-Do-Check-Act
9. Discipline and Control
10. Define, Measure, Analyse, Improve, Standardise
11. True
12. False
13. True

Copyright 2009 SMU
MB0049-Unit-05-Project Performance
through PMO and HR
Unit-05-Project Performance through PMO and HR
Structure:
5.1 Introduction
Learning Objectives
5.2 Project Management Office (PMO)
5.3 Improvement of Performance
Reviews and their purpose
Environment and strategy
Internal project management strategy
External project management strategy
Case Study
5.4 Project Manager Teams
5.5 Professional Responsibility
5.6 Human Resource Management
5.7 Personnel Productivity
Assessment of personnel productivity

5.8 Team Work and Interpersonal Behaviour
5.9 Traits of Successful Teams
5.10 Summary
5.1 Introduction
Concept of Project Management Office (PMO) is gaining ground recently in Project

Management. This is because the resources are limited especially knowledge and people and
hence they need to be optimally utilised across many projects. These valuable resources should
be reused multiple times wherever possible.
This would result in improved efficiency and productivity and ultimately lead to excellent
customer satisfaction which ensures more profits and repeat contracts. Economies of scale can be
achieved through sharing and optimal utilisation of people resource. In line with this, you will
learn the importance of human resource management in project management.
In addition to this, the review of projects that is, their methodology and the important of
interpersonal relations in achieving the productivity of the personnel are discussed in this unit.
Learning Objectives
Describe Project Management Office (PMO)
Explain performance measurement in project management
Recognise responsibility of team members and their professional approach
Explain the importance of human resource management in projects
Assess the abilities and analyse the behaviour of project team members
5.2 Project Management Office (PMO)

An office is a small group of people which coordinates various activities responsible for an
enterprise for controlling at least one or more functions. It deals with the external environment
with authority for allocating contracts and controlling all aspects of its execution. Most
importantly, it is headed by one manager who directs controls and is responsible for the working
of the office and its members. This is shown in figure 5.1.
The role of the Project Management Office is considered to have two layers
One layer renders traditional project management services for an entire organisation and
Second layer functions as a governing committee for all projects throughout the organisation.
The PMO strives to standardise and introduce economies of repetition in the execution of
projects. The PMO is the source of documentation, guidance and metrics on the practice of
project management and execution. Organisations around the globe are defining, borrowing and
collecting best practices in process and project management and are increasingly assigning the
PMO to exert overall influence and evolution of thought to continual organisational
improvement.
Fig. 5.1: Roles of Project Management Office (PMO)
If there are many projects running, it is advisable to have a project manager for each of them. In
that case the PMO will act as a coordinating body giving support to all of them in terms of
human resources, budgets, procurement of materials, taking care of statutory and legal
requirements. The project managers can depend on the PMO to provide them with information
about sub-contractors, equipments, any changes in schedules, customers visits or inspection and
any facility he may need from other projects. Sometimes conflicts arise both within a project and
among projects regarding resources, priorities, funds.
The PMO will have to resolve conflicts, reconcile competing demands and ensure cooperation.
In case of a single project, the project managers responsibility will be to focus upon all the
details of the project and seek resources from those above him in the hierarchy. The PMO should
divide its responsibilities for competent handling of all functions log books, expenses,
transport, maintenance of equipments and communication. Documentation and authorisations
should be closely watched for the success of projects.
Fill in the blanks

1. In cases where there are many projects running, the PMO will act as a _________ giving
support to all of them in terms of human resources, budgets and procurement of materials.
2. ___________ and _______________should be closely watched for the success of projects.
5.3 Improvement of Performance
It is very easy for projects to go astray, because most of the activities are not repeated. Often
90% of projects do not meet time/cost/quality targets. Only 9% of large, 16% of medium and
28% of small company projects were completed on time, within budget and delivered
measurable business and stakeholder benefits. [Standish Group Chaos Report, 1995] There are
many reasons for such failures. As per a KPMG survey of 252 organisations, technology is not
the most critical factor. Inadequate project management implementation constitutes 32% of
project failures, lack of communication constitutes 20% and unfamiliarity with scope and
complexity constitutes 17%. Accordingly 69% of project failures are due to lack and/or improper
implementation of project management methodologies.
Learning will have to take place on the first place. This is where the competent Project Manager
becomes important. When recruiting and building an effective team, the manager must consider
not only the technical skills of each person, but also the critical roles and chemistry between
workers. Instructions have to be clear and the progress kept in constant purview with reference to
the milestones. A project manager is often a client representative and has to determine and
implement the exact needs of the client, based on knowledge of the firm they are representing.
The ability to adapt to the various internal procedures of the contracting party, and to form close
links with the nominated representatives, is essential in ensuring that the key issues of cost, time,
quality and above all, client satisfaction, can be realised. As a governing committee, it has to
make continuous reviews of performance of the projects. The PMO must create and maintain the
ability of the project manager to remain focused on the clients requirements and meet them.
PMO must have the necessary tools to that effect. Now let us look at the ways we can have
significant improvement in the performance.
5.3.1 Reviews and their purpose
Reviewing and monitoring the work at every stage of the project is very important. This helps is
detecting early errors and helps in tackling any adversity well in advance. This also ensures that
the project is on track and lastly that same can be used for member recognition for good work.
The reviews are generally divided into four types which are conducted at different stages of the
project. Figure 5.2 describes the same:
Fig. 5.2: Types of reviews
A project review is a process where we capture information from the team experience and see the
variances and deviations from the plan. These reviews help in increasing productivity and
improving organisational success. They also help the project manager and team to plan for any
uncertainty well in advance. Each of these reviews is conducted after each important phase of a
project management life cycle. Initiation review is conducted after the project initiation. Planning
review is conducted after planning phase. Project review is conducted after the project execution
phase and quality assurance review is conducted after the warranty phase of the project.
Depending on the managers ability, the reviews can be made more meaningful. Performance
improvement starts with commitment to an agreed plan. The reviews are meant to keep the
activities according to the plan. The purpose of them can be stated as:
Finding out the feasibility of the project and helping management team to take a decision based
on this initial review.
Checking if all the necessary activities were done before presenting a customer the proposal or
solution.
Checking if all the formal agreements and procedures were formally accepted and reviewed
between the customer and the project delivery organisation.
Finding out the deviation and allowing elbow room for changes in the action plan for
improvement.
Thus, you learned the importance of reviews in increasing the performance and improving the
productivity of the team members.
5.3.2 Environment and Strategy
By their very nature, projects tend to create chaos. This is majorly due to the number and variety
of activities and tasks to be carried out by people with different backgrounds and experience. In
most of the cases, they are meeting for the first time. Since projects are always time bound, there
is not much time for learning either the technical skills or inter-relationship behaviours. In such
chaotic conditions, creating an environment where people learn to get along and complete work
is important. The project manager should take charge and make sure that others understand.
Strategy of the organisation should be the navigator for the project. Project manager also needs
to be attuned to the cultural, organisational and social environments surrounding the project.
Understanding this environment includes identifying the project stakeholders and their ability to
affect its successful outcome. This leads to the possibility of influencing this environment in a
positive way, for the better reception of the change which the project is designed to introduce.
The project manager will do well to get commitments from all members of the team. All gaps
must be filled soon. Chaos creates gaps all through the project and the strategy will be to fill
them as and when they arise.
Therefore, it is essential that the project manager and his or her project team are comfortable
with, and sympathetic towards, their cultural, organisational and social surroundings. Setting
priority across departments is of utmost importance. POR Plan of Record should be prepared
for the process and tools used in the projects. This record helps in allocation of resources.
Another important factor of strategy is prevention of loss of information along with effective
retention. It has been found to be useful to have CFTs Cross Functional Teams for each project
who will be in charge of each project. The strategies to improve the performance can be split into
internal and external project management strategies. They are as below:
5.3.2.1 Internal Project Management Strategies
Projects fail for many internal reasons, some of them technical, some of them managerial.
However, even the technical failures can often be traced back to a failure on the part of the
projects executive management to recognise and deal with these inherent managerial risks. The
project manager has a vital role to play in achieving project success and should therefore insist
on the following:
Executive Support: The executive must clearly demonstrate support for the project
management concept by active sponsorship and control.
Competence: The project manager and his team members must be competent. Other functional
personnel assigned to the project must also be competent.
Project Team: The project manager should have a say in the assembly of his project team,
which will help him to obtain their personal commitment, support and required quality of
service.
Management Information Systems: Effective project management information and control

systems must be in place.
5.3.2.2 External Project Management Strategies
On some projects, events external to the project sometimes come as a surprise to the project
manager and his team and are therefore seen as obstacles to progress. However, as noted earlier,
projects generally exist only because of that external environment and so it is essential for the
project team to recognise that they must also be responsive to it.
Clearly, the environment will not be the same for every project. In fact, it is likely to be
determined principally by three considerations, namely:
The product or service resulting from the project
The technology and the manner of its application, and
Its physical location
To identify potential difficulties stemming from the projects stakeholders, to assess their
probability of occurrence, and to try to head them off in advance, the project team must learn to
interact frequently with those individuals and institutions which constitute the most important
elements of the projects external environment. Together with the projects sponsors, owners and
users, these people constitute the projects direct and indirect stakeholders. Strategies for
managing external environment can be as below:
Developing a Sound Stakeholder Environment
Stakeholder Groupings
Project Public Relations
Now let us look at a caselet to understand the importance of managing the environment.
Fill in the blanks
3. The POR is for both _________ and _________.
4. A ___________is a process where we capture information from the team experience and see
the variances and deviations from the plan.
5. By their very nature projects are very orderly. State whether this statement is TRUE/FALSE
5.4 Project Manager Teams
Just as higher manager teams act together and ask for what is best for the company, Project
Manager Teams are formed for the various projects. They act as a group to ensure that all
projects are completed. In this way they will learn to use finite resources. It is better to make the
team responsible for implementing the strategy.
A project manager is the person accountable for accomplishing the stated project objectives. Key
project management responsibilities include creating clear and attainable project objectives,
building the project requirements, and managing the triple constraint for projects cost, time,
and quality.
A project manager is often a client representative and has to determine and implement the exact
needs of the client, based on knowledge of the firm they are representing. The ability to adapt to
the various internal procedures of the contracting party, and to form close links with the
nominated representatives is essential in ensuring that the key issues of cost, time, quality and
above all, client satisfaction, can be realised.
The project manger is the overall leader of the project and is responsible for the delivery of the
project and with managing the aspirations of team members along with maintaining a healthy
work environment. He is responsible for the team dynamics and promoting team work. Figure
5.3 describes the qualities that one should look for in a project manager.
Fig. 5.3: Qualities of a project manager
Enthusiasm: He/she must have the desire to do the job and willingness to put in that extra
work.
High tolerance for ambiguity: Under conditions of chaos and disparate team members, clear
cut authority lines do not exist in a project environment. Situations exist where doubts about
correctness of decisions will have to be faced. Project managers should take decisions, with a
little uncertainty because others also may not know. He will be taking a risk. But that is why
leaders are there. Such timely qualities will result in members accepting him/her as a member.
High Coalition and Team Building Skills: This concerns both the external and internal team
members. Customers, their representatives, suppliers, inspectors are all from the outside who are
interested in the progress of the project. Building up relationships and balancing competing
requirements is a necessary characteristic of a project manager.
Client/Customer Orientation: Customer expectations and problems are continually changing

and the better the project manager understands the problems of the customer, the better he will
be able to solve them. Having a customer focus is essential to achieve customer delight. The final
measure of success of the project is satisfaction of the customer. This not just helps is gaining
repeat contracts but also increasing the credibility of the project team and firm.
Business Orientation: The project manager should understand the business of the organisation
he works for. He should know the way things are looked at by the top management and align his
thoughts and conduct, so as not to be in confusion or conflict with them. In addition to these soft
skills he should also have a good knowledge of the domain. He should have his senses tuned to
grasp business opportunities that crop up during the implementation.
Fill in the blanks
6. The final measure of success of the project is ____________ of the ___________.
7. The Project Manager should understand the ___________ of the _____________ he works
for.
True or False?
8. During implementation there will be doubts about the correctness of decisions.
5.5 Professional Responsibility
With increasing competition, organisations have to finds new ways of customer retention and
adopt innovative measures to increase their customer base. However, one common requirement
is productivity improvement.
Professional responsibility is very much expected by customers. They want to ensure that the
project managers and executives take the baseline responsibility and follow all the codes of
conduct. Managerial and executive productivity are measured with respect to zero defects and
overall team performance. Installing Development Methodologies and Quality Systems is the
responsibility of managers.
Another area of Professional Responsibility for managers is reduction in process cycle time. This
is defined as the total time taken to complete an entire single process. It is also termed as turn
around time. A few examples of high cycle time activities are:
a) Procurement Time: This is for outsourced software and hardware. There are multiple factors
which go into a procurement process. Activities like identification of the requirements, their
details, verification and authorisation, inputs from the company, the start of the activities by the
vendors are all parts of this process. Due to extreme dependencies on various parties,
procurement cycle has a high turnaround time
b) Processing Time: This refers to the time lag which goes into and between each of the
processes mentioned above.
c) Order Confirmation Time: This refers to the time taken by the company as well as the
vendors to take a final call on a particular discussion.
Besides, there are many opportunities for laxness to enter. The common factors for all these are
absence of details, lack of awareness and absence of checks and balances. The project manager
should set up systems that will take care of these.
In addition to these, a few more areas where managerial productivity are taken into reckoning
are:
a) Creativity
b) Lateral thinking
c) Quality Circles
d) New Product Introduction Lead time
e) Managing Change
f) Implementing Total Quality Management (TQM)
g) Empowerment of junior level executives
You will notice that none of these factors are directly connected with the implementation. But,
when these are undertaken the effectiveness of every member improves bringing about all round
development. Hence, a great amount of emphasis is given on professional responsibilities across
organisations.
Fill in the blanks
9. Installing _______ and ____________ is the responsibility of managers.
5.6 Human Resource Management

As we know, people are an important part of a projects success. The projects are resource
constrained. The management of the human resources on a project has a major impact on the
projects success or failure.
However, the project manager must also be sensitive to the unique needs of the project
environment and as to how this general knowledge is applied in a different way than in the
operational environment of the ongoing enterprise.
The temporary nature of projects means that personal and organisational relationships generally
will also be temporary and, quite often, new. Staff-related project management processes must
address these transient relationships.
Both the nature and number of people involved in a project change as the project moves
through its life cycle. For example, initially there will be limited number of staff in the project
and as it moves along more staff will be inducted into the project. Staff management processes
must recognise and address these changing needs.
Human resource management activities are often split between project management and other
managers within the performing organisation. The scope of responsibility of the project manager
may lie somewhere between:
An extended responsibility, including the selection of sourcing organisations, obtaining staff

and performance assessment.
A limited responsibility focused on coordination with the permanent roles outside the project
such as the functional manager, the resource deployment manager and/or the people
development manager.
All the parties must understand and carefully adhere to the division of responsibilities that is in
force. All the processes here must be carefully interpreted based on the actual distribution of
responsibilities between the project manager and the other roles.
Now let us consider human resource management (HRM) from two different perspectives of the
project itself Operations Projects and IT Projects.
Operations Projects: Some of the main features of the operations project are described below.
The inputs are physical
Suppliers are many
Quality, testing, quantity measured at supplier/contractors place
Different projects are spread far and wide
Monitoring, control and audit have to be done continuously

Materials are subject to damage, loss, pilferage warehousing is a must
Logistics is critical for the project
We have more number of employees per unit value in the conventional project than in IT
projects
Absenteeism, in most cases will have a cascading effect on performance
IT Projects: An IT Project as compared to an operation project will have an informal structure.

The following are its characteristics:
Informal Structure
Better communication and understanding of the project throughout the team
Reliability and quality can be measured while the product or service is being designed
People resource is the most important and critical part of the project
For the operations, the skills required are easy to assess and employing people is quite a straight
forward process. The compensation packages are well settled. In IT projects, however, there is a
great amount of uncertainty of the suitability of persons and turnover rates is quite high. Both
types of projects have diversity and complexity peculiar to each of them. To take away the
highly variable functions of HRM, it is better to have the PMO implement the policies of the top
management. The Project Manager should focus on the technical aspects of the management.
This improves the focus as well as increases the efficiency of the resource utilisation.
True or False?
10. We have more number of employees per unit value in the conventional project than in IT
projects.
Fill in the blanks
11. Both types of projects have __________ and ________ peculiar to each of them.
5.7 Personnel Productivity
As discussed earlier, personnel productivity is an important parameter which determines project

performance. Personnel productivity can be at various levels right from top management to a
project team member.
Productivity at the junior level can be assumed and controlled only if all other supporting
elements of business are well balanced. Higher productivity cannot be expected if they are not
motivated enough. The ways in which you can boost their productivity is given below. They can
be motivated through:
a) Sufficient content of development activities. The work should be interesting and challenging
enough. It should bring a sense of satisfaction and achievement.
b) Favourable working condition. Productivity decreases if the environment is not supportive.

The environmental conditions should make one feel comfortable to stay at the workplace
c) Proper delegation of activities. It is important to have a clear line of authority and balanced
delegation of work.
d) Timely reward and recognition. Acknowledging a good task or work always boost morale
of the resource.
e) Adequate availability of resources. If adequate resources are not present, it would lead to
frustration and finally loss of focus and commitment.
f) Properly planned system of quality control and process control. If the process is not
supportive and flexible, even the best efforts will not be enough to get tolerable quality.
g) Adequate maintenance support for hardware and software. These ensure that no work
gets held up on this account efficiencies bring in productivity and time lag decreases it.
As far as productivity as well as quality is concerned, especially where projects are concerned, it
is good to follow Demings philosophy, which states create conditions for performance, do not
use rhetoric, pay him well and give the pride of working.
5.7.1 Assessment of Personnel Productivity
As discussed earlier, as personnel productivity is critical to success of any project, it is very

important to measure it so that it can be monitored and improved. There are many standard tools
and templates available to assess the productivity. However, the methodology may be
customised depending upon situations.
Unlike productivity on shop floors, Personnel Productivity can be considered on a collective

basis. The following can be used as guide lines to make assessments:
a) Time for development of a new product
b) Index of financial cycles
c) Time for finding and proving a solution to serious customer complaints

d) Time for development of a bigger market for an existing product
It is better to avoid the following parameters for assessment:
a) Individual achievements or failures
b) Individual outputs
c) Reflection on Financial Health
d) Reflection on Inventory
It is better to remember always that the first person to know that something has gone wrong is
the person who caused it. If left alone or hinted in privacy, contemplation and a desire to make
amends is strong in every individual. It is not suggested here that mistakes should be forgotten or
excused. If tendency persists, then serious corrective action should be initiated at the earliest.
Training and proper orientation will help.
Fill in the blanks
12. Unlike productivity on shop floors, Personnel Productivity can be considered on a

___________
5.8 Team Work and Interpersonal Behaviour
A team can be defined as a group of people with different skills often with different tasks who
work together towards a common project with a meshing of functions and with mutual support.
The following figure 5.4 depicts the characteristic of a team:
In a team, all members are interdependent on each other. One should appreciate the problems
faced by others. Only then will he/she be appreciated by someone. It is therefore important that
in a business environment, particularly in project management, effort to construct solutions
jointly has great benefits, both for the teams as well as the organisation.
Good teamwork starts with a shared understanding of its importance. Many organisations recruit
people with an aptitude for and leaning towards teamwork. Their induction process emphasises
it, the way teams work demonstrates it. Although team members have clear and designated
responsibilities, they help others when required. Good teamwork behaviour is recognised and
rewarded. Teamwork is built into the organisation culture it is a part of the way we do things
around here. It has to be carefully nurtured.
Fig. 5.4: Characteristics of a team work
The top management has the responsibility of encouraging such a culture to develop team work
to healthy inter-personal behaviour.
Inter-personal behaviour calls for:
Projection of a pleasant, but firm personality
Clarity of expression and communication
Patience in listening and reacting with empathy
Documentation and correct recording
Offering to help
Calling for help whenever necessary
Seeking information before attempting decisions
Not waiting for things to go wrong
Motivation of others through efficiency and meticulousness, rather than urging and exhibiting
dependency
Putting team goals ahead of individual targets
The project manager should make it a habit of expressing appreciation openly for any good work
done. Cross Functional Teams have become a necessity and the synergy they generate would be
lost if inter-personal behaviour is not of high standard. As members are from different functions,
understanding the requirements or compulsions of others is difficult. This fact should be
impressed upon all the members and requesting them to cooperate is vital.
True or False
13. As members are from different functions, understanding the requirements or compulsions of
others is easy.
5.9 Traits of Successful Teams
Work Teams in organisations empower employees to take maximum responsibility to make

decisions, which were once thought to be the prerogative of managers. Decision of the team
represents the collective wisdom of its members and as they are all bound by them, they try to
make it better.
The point of interest is that the outcomes of the decisions will have a bearing on their
performances. On the other hand, if they are carrying out the decision of the manager, they do
not feel responsible for the consequences. Their commitment to perform well is reduced. This is
the logic behind successful teams.
The presumption is that the members are endowed with the knowledge, skill and commitment to
perform the activities upon whom they take decisions. It is the managers responsibility to
provide them with knowledge and training to enable them to have confidence. The characteristics
of successful teams are:
Clear and Elevating Goal
-Goal has to reflect group/community values
-Use words and pictures to describe and market the mission
-Just beyond reach but nonetheless possible
Results-Driven Structure
-Balance between process and product
-Give participants immediate feedback
-Maintain communication among stakeholders
Competent Team Members
-Build community capacity

-Encourage and inspire wide participation
-Diverse and balanced leadership
Unified Commitment
-Team spirit
-Commitment from all levels of organisations
-Identification, respect with others on the team
Collaborative Climate
-Understand the obstacles to collaboration
-Build relationships
-Collaboration as a journey, not a destination
Standards of Excellence
-Performance measures
-Project outcomes
-Evaluate, refine, revise
External Support and Recognition
-Diversified financial support
-Recognition for accomplishments celebrate successes
-Internal support from partner agencies
Principled Leadership
Embrace diversity and conflict as learning opportunities
Build consensus
Foster vision, a belief in the opportunity for change, and opportunities for meaningful
involvement.
Hence it is very important for teams to build that synergy to achieve the team advantage. The
secret of team work advantage lies in the following:
a) Clear understanding of the organisational goals, objectives and norms.
b) Open communication among team members.
c) Creation of balance among team members by having a high sense of ownership.
d) Recognition of the strengths and weaknesses of the members.
e) Close-knit relationship for performance enhancement.
f) Accepting the leadership qualities of one or two members and offering unconditional support
to them.
g) Encouragement of constructive evaluation of each members contribution with a view to

resolve problems.
h) Willingness to accept differences of opinion, but capacity to make concessions with the team
in mind.
i) Taking initiative and giving it all to complete challenging jobs.
Teams are not built in a day. Owing to circumstances and opportunities, managements put
together a group of people, who they have decided will be able to take up a job or project and
complete it. Since different skills at different levels are needed along with knowledge of different
kinds, a hierarchy is created. As jobs get done, each of them would have evaluated the others.
Factors of congruence and dissonance will make some adhere and some depart. Wherever
necessary, training programmes have to be conducted. Each organisation has to find path it has
to take. Top managements commitment and competent managers should guide the teams.
5.10 Summary
You have now understood the necessity and relevance of the performance of the project team
members. You are now familiar with the effects of performance on the team members of the
PMO. The ways of PMOs functioning and their roles in improving performance have also been
explained in this unit. You have understood how teams function for the success of the project
and how the interpersonal behaviour affects the project and its progress. You also learnt the art
of human resource management and its importance in project management. We have also
discussed team work and the traits of a successful team.
1. Mention any six characteristics of interpersonal behaviour.
2. What are the four types of Reviews?
3. State any three principles of Demings Philosophy relevant to Project Management
4. Mention the important traits of leader.
5. Why are Cross Functional Teams necessary for Project Teams?
6. How are IT Projects different from those of Operations?
7. Which are the components of Cycle Time?
8. What are the characteristics of a successful team?
9. Providing adequate resources is key to productivity Comment
1. Coordinating body
2. Documentation and authorisations
3. Process and Tools
4. Review
5. False
6. Satisfaction, customer
7. Business, organisation
8. True
9. Development Methodologies and Quality Systems
10. True
11. Diversity and complexity
12. Collective Basis
13. False
1. Refer to 5.8
2. Refer to 5.4.1
3. Refer to 5.8
4. Refer to 5.5
5. Refer to 5.8
6. Refer to 5.5
7. Refer to 5.6
8. Refer to 5.10
9. Refer to 5.8
Copyright 2009 SMU
MB0049-Unit-06-Project Development and

Modern trends in Project Management
Perception
Unit-06-Project Development and Modern trends in Project Management Perception
Structure:
Introduction
Learning Objectives
Project Development Process Cycle
Modern Trends in Project Management Perception
Recent Revolutions in Project Management
Summary
Terminal Questions
Answers to SAQs and TQs
6.1 Introduction
Projects are basically conceived as a one time performance of a set of activities which result in
their completion. At the end, we have something new, a radical change in the situation. The
project satisfies the need for something which will be useful for a long time.
Development of a project is the stage at which the original concept of the need takes a concrete
shape as to what can be expected at the end of the project. This is a process of finding out as to
what are the inputs required, who will do it, how much it costs and how long it will take. During
this process we set up signposts to indicate the path and at every stage we make a review of the
quality of what has been done so far.
In this unit, we will see the evolution of the concept and the latest trends in the field.
Learning Objectives
List the steps in a project development
Explain the benefits of project quality review
Recall evolution of project management concept
Identify the trends in the IT project management process
Explain the latest developments in the field

True or False?
1. A Project generally satisfies the need for something which will be useful only for a short time.
6.2 Project Development Process Cycle
Conflict Management
The basic characteristic of a project is that it is set of non-repetitive activities which create a
unique product or service. The activities utilise a variety of resources. Systematic acquisition and
deployment in a relatively short span of time is the essential process of a project.
Development of a project starts with the acceptance of the proposal by the customer in all
respects technical and commercial. The marketing people first take agreement of the details
and the time schedules for various stages from the project manager and then give their
commitment to the customer.
Let us now have a look at the stages in the project development process. Figure 6.1 lists the
stages in a sequential manner.
Fig. 6.1: Stages of project development
Many of the above activities can be performed concurrently and can save a lot of time. These
activities are generally common for most of the projects. In some cases, many of the activities
are done by one or two persons.
You will observe that information flow is of utmost importance. With most communication
becoming almost instant, it is extremely necessary to follow the protocol established and to
ensure that the decision making processes are not hindered. Having developed the project as
above, it is ready for implementation.
Let us now discuss each of the stages of project development process.

Obtaining the specifications
This is the culmination of the efforts of the marketing department in securing the contract. The
needs and associated requirements are clearly written down, based on which the proposal has
been given.
This is an important phase as the needs of the customers would be converted to a proposal which
should meet their requirements. In most cases, a number of changes would have to be made.
Considerations of cost, possibility of a few changes to accommodate the technical requirements
or acquisition of new technology to incorporate improved performance characteristics will be
considered.
Time required for the project may undergo a change. To reduce the cost, or to improve upon
delivery or for better monitoring, the customer may offer the services of a few of his personnel,
equipments or even buy technology. When all these are agreed upon, a detailed document
covering all aspects would be ready.
Based on the final document, the specifications of all components of the project will be made. If
a few components have only broad descriptions of what is intended, they are noted and the
person/department which would finalise these components within a time frame is worked out.
When all these specifications are available, the project manager can proceed further.
Creating a work breakdown structure (WBS)
Once the specifications are completely ready, the project manager has the responsibility of
showing the work elements in a structure which shows the sequence in which they are to be
performed. This is known as work break down structure. To create an effective work breakdown
structure, a project manager needs to ask himself a set of question specific to the project.
All these questions and many more need to be settled at this stage itself. This will enable a
project manager to identify the persons responsible for different activities and fix the sequence of
operations.
Preparing a comprehensive PERT Chart
A number of activities make a project. Due to technological necessities, some activities can be
performed only after some others have been completed. Some activities are independent of some
other set of activities.
Different activities have different duration for their completion. Some projects are big and a
number of clearly distinguishable stages or milestones are identified. Since some activities run
concurrently, there are possibilities that one set of activities end up early and have to wait for
some other activities to proceed further. This means that there are more paths from the beginning
to the end, and one of them takes more time than the others. We call that critical path. A PERT
chart helps us to follow the critical path. Let us become familiar with the PERT chart.
PERT stands for Program (or Project) Evaluation and Review Technique. It is a popular project
management model designed to analyse and represent the tasks involved in completing a given
project. It also helps in identifying the minimum time required for completing the total project.
A PERT chart is a graphic representation of a projects schedule, showing the sequence of tasks.
It also shows the tasks that can be performed parallely, and the critical path of tasks which has
direct impact on the project schedule. The tasks in the critical path must be completed as per
schedule in order for the project to meet its completion deadline. The chart can be constructed
with a variety of attributes, such as:
earliest and latest start dates for each task
earliest and latest finish dates for each task
slack time between tasks
Table 6.1 to displays some terms associated with a PERT chart.
Table 6.1: PERT terminology
Terminology Explanation
Event/Milestone It is a point that marks the start or completion of one or
more tasks.
Activity It is the actual performance of a task. It represents the
time, effort, and resources required to move from one
event to another. An activity cannot be completed until
the event preceding it has occurred.
Optimistic time It is the minimum possible time required for
accomplishing a task, assuming everything proceeds
better than is normally expected.
Pessimistic time It is the maximum possible time required to accomplish
a task, assuming everything goes wrong (but excluding
major catastrophes).
Most likely time It is the best estimate of the time required to accomplish
a task, assuming everything proceeds as normal.
Float It is the amount of time that a task in a project network
can be delayed without causing a delay in Subsequent
tasks or Project Completion.
Critical Path It is the longest possible continuous pathway taken from
the initial event to the terminal event. Any time delays
along the critical path will delay the reaching of the
terminal event by at least the same amount.
Lead time It is the time by which a predecessor event must be
completed in order to allow sufficient time for the
activities that must elapse before a specific event
reaches completion.
Lag time It the earliest time by which a successor event can
follow a specific event.
Slack The slack of an event is a measure of the excess time
and resources available in achieving this event. Positive
slack would indicate ahead of schedule; negative slack
behind schedule; and zero slack on schedule.
Figure 6.1 shows a PERT chart for a seven-month project with five milestones (10 50) and six
activities (A F).
Fig. 6.1: Sample PERT chart
You need to be familiar with some conventions while preparing a PERT chart.
While making the first draft of a PERT chart, number the events sequentially in 10s (10, 20,
30). This allows you to insert additional events later. These events are also known as
milestones.
Two consecutive events in a PERT chart are linked by activities. You will represent these
activities as arrows.
You need to present the events in a logical sequence. No activity can commence until its
immediately preceding event is completed.
Represent critical path as red arrows.
In PERT, we take into consideration the fact that the time allocated for all the activities might not
be determinable. So, we give three time estimates optimistic, most likely and pessimistic.
Giving weightage of four to the most likely period, we try to find the variance of the project.
As some activities get completed earlier, there are opportunities to utilise the resources allocated
to them for the critical activities to hasten the project. These are done on a continuous basis as
the project is under progress. Since actual times taken for the activities are changing, reviewing
helps us to meet the deadline by resource smoothing. A chart is prepared and stubs of different
colours are used to indicate the progress of all activities, so that corrections can be effected.
Now let us look at the steps to construct a PERT chart for a project.
How to construct a PERT Chart
1. Identify all tasks or project components. Have a brainstorming session

to capture all tasks needed to complete the project. Document the tasks on
small note cards.
2. Identify the first task that must be completed. Keep the appropriate
card at the extreme left of the working surface.
3. Identify any other tasks that can be started simultaneously with the
first task. Line up these tasks either above or below the first task on the
working surface.
4. Identify the next task that must be completed. Select a task that must
wait until one of the tasks identified in steps 2 and 3 is completed. Place the
appropriate card to the right of the card showing the preceding task.
5. Identify any other tasks that can be started simultaneously with the
task identified in step 4. Place these tasks either above or below the said
task on the working surface.
6. Continue this process until all component tasks are sequenced.
7. Identify task durations. As a team, agree on the approximate amount of

time needed for completing each task. Document this duration time on the
appropriate task cards. Note the duration time as the elapsed time for the
task, not the actual number of hours spent doing the work.
8. Construct the PERT chart. Number each task, draw connecting arrows,
and mention duration, anticipated start date, and anticipated end date for
each task.
9. Determine the critical path. The projects critical path includes the tasks
that must be completed on time to prevent delays in project completion.
Critical paths are typically displayed in red.
Forming groups and teams
The next stage in the development of the project is to identify persons who will undertake the
various tasks. These tasks may include procurement of materials, maintaining equipments,
stocking of spares, and so on. Some of these tasks are to be shared between teams. However,
most of the teams formed are focused on the jobs assigned to them.
Forming and developing teams, which contribute their best to the project, is a challenging task. A
project manager should ensure that the knowledge and skills of the members of a team
complement those of others.
Project teams in the IT, R & D, Innovation fields where knowledge base is very high need to
build an atmosphere of camaraderie and mutual respect. This goes a long way in improving
efficiency. Opportunities should be created for them to spend time together outside working
hours. If for some reason, any member does not want to stay in a team; his or her desire should
be addressed at the earliest.
The latest trends in HR are to find new ways to make employees feel comfortable and important
so that they stay and work better. A number of professional consultants offer training
programmes for the managers in this area.
Forming a core group consisting of members chosen from as many teams as possible.
After identifying the team, a project manager needs to form a core group of members. They
usually will be senior members in the teams. Their responsibilities will include:
Sharing information about the progress of the project
Identifying activities that can be hastened or retarded
Identifying facilities that can be loaned
Picking a person from a team to help another team in solving a problem
Facilitating conflict resolution among the teams
Since coordination and cooperation result in better problems solving, the members of the core
group should bring to the notice any changes they want in their teams.
Fixing the responsibility areas

This is a crucial stage in the development of the project. Every person in the project team
including the members of the core group should know what is expected of him. Each team will
know as to what they are expected to complete during what periods. The core member of a team
will constantly be in touch with the other teams as well as the project manager regarding the
progress or any other additional resources the team would need to keep up to the schedule.
Preparing budgets, supplier contracts
At this stage the project manager knows what his teams can contribute to the project. He will
prepare the budget for what his organisation is going to buy for the project. These procurements
are to be utilised by the various team members for completing their jobs.
In certain cases, a number of items may have to be procured and the organisation may wish to
give out contracts to suppliers. The contracts have to be given out depending on the competitive
offers, quality and delivery schedules required. Firm commitments from suppliers have to be
obtained. Clauses about inspection, transport, insurance and payment need to be worked out in
detail and accepted.
Project overruns are common and costly. Many good projects have floundered on this account.
Many firms, knowing that these are likely to happen, will add these costs to the project cost.
While doing so, they need to consider its effect on the competitive edge. Every care should be
taken to ensure these issues are attended to at this stage.
Setting up communication channels, feedback routes and monitoring mechanisms.
The last step in the development process of a project is to establish a system of reporting and to
start taking action on these reports. Monitoring and control become meaningful when timely
actions are taken.
With the availability of intranet and internet, transfer of information has become very easy and
authentic. Internet chatting and video-conferencing avoids movements of persons, saving time
and money. Nevertheless, personal meetings are useful to clarify a number of matters, especially
financial ones.
Fill in the blanks
In PERT, we give three time estimates _________, ________ and _____________.
3. Many good projects have floundered on account of ___________.
6.3 Modern Trends in Project Management Perception
Owing to competition and projects being undertaken on a global scale, projects are no longer
constrained by volumes, funds or even by materials. Technology can be accessed globally.
Consultants are hired to receive specialised inputs. Modern software programmes are available
for testing processes even before they are manufactured, assembled or applied. Simulation
programmes are written for various situations that the project flows through. The main benefits
are perceived in the area of costs and time. Principles of TQM, Kaizen, and Lean Manufacturing
are being applied by most companies to derive leverage by eliminating waste. All these are
characteristics of modern business and require new practices. Some of the emerging practices are
listed in figure 6.2.
Let us now discuss each of these trends.
Continuous Business Process Improvement (CBPI)
It is a process through which a project team passes on the details of any system as
recommendation for improvement. The improvements are then practiced by many teams,
verified and authenticated. Thus, they become standards. During implementation or after a
review of performance, we may still find areas which can be taken up for improvement.
To avoid duplication of the learning process, Knowledge Management practices are implemented
for enterprise-wide availability. CBPI is entrusted to a smaller team within a team for initiating,
implementing, analysing and distributing the process.
Fig. 6.2: Modern Trends in Project Management
Force Field Analysis

All improvement programmes have many hurdles such as competition, customers demands,
technology changes, economics, and governmental regulations. Employee resistance is also
considered a hurdle. At times, the organisational members feel threatened or unwilling to learn
new things to avoid exposing their weaknesses. The resistance may also arise out of a real
concern that the change may be too costly or time consuming or even unnecessary.
Force Field Analysis is done to minimise and eliminate the hurdles resulting in a smooth flow of
activities and project progress. This analysis has its roots in Force Field Theory enunciated by
Kurt Lewin. The theory states that the two sets of forces are in opposition. So, to effect change,
managers must find ways to increase the forces of change and reduce the forces of resistance.
This needs to be done simultaneously. As a result there will be a movement towards change. On
achieving some success, the consequences of changes should be allowed to be settled. After
reinforcing the effects, the effort should be continued to effect change. The project manager will
be in charge of the whole process.
Information Risk Management
As part of Information Risk Management, the information is constantly subjected to Scientific

and Analytic Processing. Often automated systems are used for quality control of key input data
connected with the project. This prevents the risks of over-runs from going beyond the control of
the team.
One of the major problems with data undergoing a lot of processing is the corruption that may
occur and the consequent effect on the decision making process. The project manager should
take the assistance of a system administrator and run checks as frequently as possible. A few
members of the team will also be associated to reduce the risk.
SEI-CMM and ISO Certification
SEI-CMM is mostly for the software projects. This certification helps the customer to have
confidence to get a project executed by a firm. The ability to handle complex software projects is
certified at five levels. The initial three levels correspond to companies which have started doing
business, standardised their processes with repeatable performances with high quality. The latter
levels certify the companys capability of high standard of maturity and optimisation of
processes. This guarantees that the customer is assured of high quality of product and also that
the processes that are delivered the software programmes and applications give the customer
consistent performance.
These certifications are necessary for software projects because there are not many materials or
completed products that can be inspected and supervised or corrected during the course of
development, manufacture or delivery. These are heavily people oriented and their contribution
to the excellence of the product will come only at the end when the product is completely ready.
Now we have P-CMM and CMMI to indicate that certification is carried out with reference to
the people who undertake the project.
ISO certification is concerned with integration. ISO9000 and ISO9000:2000 are certification
standards mostly for firms which produce any of the following:
Drawings
Materials which are purchased
Processes which can be seen, inspected, and corrected
Products which can be measured
These ISO standards certify the procedures that are followed. These standards are often accepted
both by the supplier and the customer.
Fill in the blanks
4. _________ enunciated by Kurt Lewin, states that the two sets of forces are in opposition.
5. The project manager should take the assistance of a _________ and run checks as frequently
as possible.
6. Principles _____, _____ and _______ are being applied by most companies to derive leverage
by eliminating waste.
6.4 Recent Revolutions in Project Management
The field of Project Management has undergone a sea change in recent years because of various
factors of which the critical ones are listed in figure 6.3.
Fig. 6.3: Factors contributing to revolutions in project management

Let us discuss each of these factors.
a) Information Technology (IT)
Every project will have a huge information inflow which needs to be sorted, classified,
distributed, and analysed for the purpose of decision making. Actions need to be taken based on
these. IT speeds up these processes in many ways. Some of the advantages are of IT are listed
below:
The information is made available across the organisation at speeds which are impossible to
match manually.
Information is no longer limited to a physical space because of intranet and internet facilities.
Production of drawings using CAD has become universal.
Documentation required in supply chain management has become faster and accurate, thus
facilitating execution of projects.
Online communication has improved reporting, feed-back and decisions.
b) Automation of Physical Work
Automation means elimination of human intervention in performing tasks. Sophisticated

machines, Special Purpose Machines, CNCs have reduced human effort in workplaces.
Movement of materials is conducted by programmed material handling equipments like the
Automated Guidance Vehicle Systems. It is now possible to identify materials because of the bar
coding systems.
c) Workplace Flexibility
With advances in transport and easier movements across countries, the whole world has become
one huge workplace. With globalisation, many firms have offices in many countries and projects
are accepted worldwide. This flexibility has enabled project managers to outsource materials and
people, for achieving better profits.
d) Elimination of traditional jobs and work structures
Organisations are getting flatter. Teams have become very important. They perform most of the
functions of management like purchase, recruitment, training, accounts, and transport and so
on. Though the corporate office keeps track of all activities, the autonomy extended to the team
has resulted in faster decision making. This is highly cost effective.
The knowledge and skill factors of various jobs have changed greatly. We find that companies
are installing self-directed teams, who initiate actions required of them to complete the jobs or
projects on hand. It has been the practice of wellrun and progressive organisations to give a
great amount of autonomy to their employees.
e) Globalisation of Markets, supplies and workforce
With liberalisation in full swing, the organisations are getting chance to explore new markets.
Similarly, having resource supply from a foreign land is no longer expensive. In fact the
outsourcing industry that has flourished in India is a proof of many global companies preference
to have workforce located offshore.
f) Domination of Knowledge Holders
Intellectual property rights have become a crucial asset of an organisation in todays cutthroat
competition. These are the legal protections given to persons over their creative endeavours and
usually give the creator an exclusive right over the use of his/her creation or discovery for a
certain period of time. It may include patents, copyrights, trademarks, and trade secrets.
True or False?
7. Having given autonomy to teams the management need not keep track of their activities
6.5 Summary
After going through this unit you have understood the various trends in project management.
You now know how to manage the conflicts in project management. The concepts of Project
Management Information System have also been explained in this unit. The quality aspects of
project management have been explained in simple form so as to enable you to understand the
concept behind quality management in projects. The concept of macro issues and the knowledge
factor are explained with respect to project management. You have been also exposed to the new
horizons in project management.
1. What do you understand by Resource Smoothing?
2. What are the important stages in the process of development of a project?
3. Explain the relevance of Work Breakdown Structure in determining responsibility area.
4. What are the functions of the Core Group in project management?
5. Why team work is very important for implementation of projects?
6. What is the relevance of knowledge management in project management?

1. False
2. Optimistic, most likely and pessimistic
3. Project overruns
4. Force Field Theory
5. System Administrator
6. TQM, Kaizen, and Lean Manufacturing.
7. False
Copyright 2009 SMU
MB0049-Unit-07-Organisational Issues in
Project Management
Unit-07-Organisational Issues in Project Management
Structure:
7.1 Introduction
Learning objectives
7.2 Organisational change
Types of organisational change
Evolutionary change
Revolutionary change
7.3 Traits of the professional manager
7.4 Bringing about Organisational Change in the Project Management Scenario
7.5 Summary
7.1 Introduction
Projects by their nature are not amenable to any streamlined operations. Various activities across
all functions are undertaken by a number of people. There is a good amount of distribution of
labour depending upon the skill set of team members. The project manager and his team
committed to any one project will have to depend upon the various functionaries in the
administrative functions like Human Resources, Finance, Procurement, Legal at various points of
time to accomplish their task. This results in a lot of interdependencies and hence they need to be
tackled properly. These business functions are an integral part of any organisation. They may not
be dedicated to a single project but are used across projects. Besides, no project manager will
need them on a continuous basis. The project manager and his core team have the responsibility
for the project deliverables and support services
Each project is operated like a small company by itself. All the resources required for each
project are assigned to work on that project. The project manager has complete project and
administrative authority over his team. This differs from the matrix functional type of structure,
where the people in the project would be controlled in technical aspects by the project manager,
but administrative control is exercised by the functional managers.
Organisational change as a process has implications for the project based organisational
structure. Generally, there is no opportunity for members of different teams to share knowledge
and experience. Latest developments in organisations are in the fields of knowledge
management, where such sharing should not only be made possible, but obligatory for effecting
economy both of physical resources and time.
This unit focuses on the organisational change, its impact on the project and best practices to
handle them. You will learn about the nature and types of organisational change and the steps to
bring out such organisational change.
Learning Objectives
Explain organisational change and its types
Describe the need for change in project management scenario
Describe how a professional manager can implement change
Explain latest developments in the process of organisational change relevant to project

management.
7.2 Organisational Change
Every organisation must change to survive in a world of cutthroat competition, constant

technological progress, and rapid communication. But the change becomes effective and
beneficial only if it is be driven by knowledge.
Organisational change can be defined as a set of actions resulting in a shift in direction, attitude
or process that affects the way an organisation functions. It can either be an intentional shift as
planned by leaders within the organisation or an involuntary reaction to outside situations
beyond its control.
Change may affect the strategies an organisation uses to carry out its mission, the processes for
implementing those strategies, the tasks and functions performed by the people in the
organisation, and the relationships between those people. Naturally, some changes are relatively
small, while others are sweeping in scope, amounting to an organisational transformation.
Change is a fact of organisational life, just as it is in human life. An organisation that does not
change cannot survive long much less thrive in an unpredictable world. Several factors may
create the need for an organisational change, including new competition in the marketplace or
new demands by customers. These types of external forces may create expectations of improved
efficiency, better service, or innovative products.
When organisational change is well planned and implemented, it helps ensure the organisations
continued survival. It can produce many tangible benefits, including improved competitiveness,
better financial performance, and higher levels of customer and employee satisfaction.
These benefits may take some time to achieve, however, and the transition period that
accompanies major organisational change usually is a time of upheaval and uncertainty.
Not every individual in the organisation will benefit personally from change; some will be
casualties of change, especially if jobs are cut or realigned. But change should make the
organisation as a whole stronger and better equipped for the future.
Organisations will have structures, hierarchies, functions, communication patterns, decision

centre, and most importantly cultures, which define them and make them unique. The
organisational members have to implement changed practices for several reasons.
However, this change process must be managed. An unmanaged change initiative can produce
accidental and damaging effects such as:
poor morale
loss of trust in management
workplace jealousy
lower productivity
Hence, orchestrating the change process is very crucial
A Caselet on an Organisation Change Initiative
When a leading public sector bank was implementing a process change, it

faced a peculiar problem. When the organisation announced the
transformation to employees, two extreme reactions were observed. There
were employees totally gung-ho about the transformations and those who
were cynical.
The bank decided to generate positive stimulation and help employees

channelise their dynamism. It started a reward and recognition programme
for the high performers on the new system. This started motivating the
cynical employees to adopt the new process. Such steps energise the staff
towards transformation.
7.2.1 Types of Organisational Change
Organisations have mainly two types of changes to contend with evolutionary and
revolutionary, as shown in figure 7.1.
Fig. 7.1: Types of organisational change
The first is the evolutionary change which is gradual, incremental and with a narrow focus on
one or a few processes. These changes take place as the organisation evolves. Evolutionary
changes are implemented in an effort to ward off some impending problems.
The second one, revolutionary change, occurs as a result of the following:
drastic structural changes
new technology
new thrust for a huge increase in capacity
new business acquisition
implementation of a new strategy
Let us discuss both the types in details.
7.2.1.1 Evolutionary Change
There are three theories around evolutionary change socio-technical systems, total quality
management and flexible workers and flexible work teams as shown in figure 7.2.
Fig. 7.2: Theories of evolutionary change
Let us have a look at these theories:

a) Socio-Technical Systems: Socio-technical changes take place as the organisation evolves over
time. The managers need to optimise both the technical and social systems for promoting
effectiveness. They need to adjust both the systems gradually so that group norms and
cohesiveness are not disrupted. This also helps in avoiding group-level resistance to change.
Changes in the way tasks are performed do change perception among workers about their own
groups which might have been disrupted owing to technical requirements. A manager needs to
resolve this issue promptly and efficiently.
If properly managed and implemented, socio technical changes bring in continuous improvement
in product quality.
b) Total Quality Management: It is an ongoing effort among members across functions to find
new ways to improve quality in products and services. This change process, though incremental,
requires both workmen and managers to adopt new ways to view their roles in the organisation.
The implementation of TQM begins with the commitment to quality.
c) Flexible Workers and Flexible Work Teams: Monotony of repeat work often leads to poor
performance of workers. This can be solved through bringing in flexibility into the work system.
Each worker can substitute another worker and can change his team depending upon the
exigency. This means that all the workers are trained for multiple tasking.
Thus, a flexible work team becomes a group of workers who assume responsibility for
performing all the operations necessary for a particular portion of the project.
This change has been found to promote quality because of the absence of boredom, which may
cause loss of quality.
7.2.1.2 Revolutionary Change
There are four important instruments for revolutionary change Reengineering, E-Engineering,
Restructuring and Innovation. They are shown in figure 7.3
Fig. 7.3: Instruments of revolutionary change
Let us discuss each of these instruments.
a) Reengineering: This is a process by which managers redesign a bundle of tasks into roles and
functions so that organisational effectiveness is achieved. By doing so dramatic improvements in
critical measures of performance like cost, quality and service are expected. There will be a
radical rethink about the business processes adopted.
A business process may be of any activity like inventory control, product design, orders
processing, and delivery systems. No reference is taken to the existing process and an entirely
new process is adopted.
The following rules for reengineering are effective:
i) Make changes with the outcome in mind not the tasks that result in them.
ii) Make the users of the results of the process effect the change.
iii) Let the people on the spot decide on the solution decentralise.
b) E-Engineering: The term E-Engineering refers to the attempts of companies to make use of all
kinds of information systems, to make their functions efficient. New information systems are
installed for conducting all business processes in the organisation. The use of electronic
communication within the organisation enables frequent interactions between employees and
results in better communication.
Typically meetings require their presence, but with teleconferencing a lot of time and money is
saved. Data have repositories which are accessible, transferable and updatable instantly and used
by all concerned. Cross-functional workflows make it easier to coordinate activities. The
increase in efficiency makes the organisation meet customers requirements faster. All these
result in widespread utilisation of knowledge in the organisation. It helps in creating and making
available high quality of information. The information system also comprises of intranet and
internet solutions to carry on their regular activities online.
c) Restructuring: This is attempted with change in authority and task relationships of managers.
The move from the functional form or a standard division structure to combine or divide areas of
control and authority to facilitate better coordination and/or workflow can be described as
restructuring. In the process, a few jobs may not be there. Few people may have multi-functional
activities. The main purpose is to reduce bureaucratic costs. This is because of a change in
strategy. Downsizing is also a way of restructuring.
d) Innovation: It is the successful use of skills and resources in such a way that the outcome
effectively meets customers needs. Changes in technology have made computers cheaper, faster
and more user friendly. This has made a thorough change in the skills of employees and
managers.
Every company needs to adopt new methods, find them and to make them relevant in the
changing world. The thrust in every department/function should be to do things better with new
methods. A culture that promotes this thought across the organisation is the best way to benefit
from it. For promotion, suitable people have to be selected, trained, empowered and rewarded. A
thorough change in the way problems are solved is needed.
The Project Manager may have to initiate the change process to increase the effectiveness of his
team. Being a key person and the change agent in the organisation, his actions are always under
scrutiny. If he takes initiative, whenever the opportunity arises, to effect incremental changes, he
will face minimum resistance both by the top management and his team members.
Fill in the blanks
1. Organisations will have _______, __________, ________ , and most importantly cultures
which define them and make them unique
2. Make changes with the ________in mind and not the ______that result in them.
7.3 Traits of the Professional Manager
The project manager is an important team member who often makes the difference between
project success and failure. You already learned earlier that the first step of successful Project
Management lies in understanding that each project and each team is unique, and should be
handled accordingly.
A project manager should have the skills to unite diverse individuals and have them function as
one cohesive team. It is a wrong notion that a project manager only needs team management
skills. In reality, a project manager needs many more skills.
In addition to the skills mentioned above, there are certain traits (as shown in figure 7.4) that
enable a manager to be effective in his functioning. The top management will look for these in a
person who they want to employ for project management.
Skill Check List for a Project

Manager
Time management skills
Creative problem-solving
Interpersonal and communication skills
Decision-making skills
Strategy making skills
Leadership skills
Domain skills
Fig. 7.4: Traits of a project manager
Let us discuss some of these traits in detail.
a) Leadership: These managers lead by exhibiting the characteristics of leadership. They know
what they should do, know why they are doing it, how to do it and have the courage and vision to
execute it. They have the power of taking along others with them. They lead by making
themselves as an example for the entire team. He is about to trust his team members and assign
the right job to the right person.
b) People Relationships: Any leader without followers cannot be successful. They need to have
excellent human relationship skills. The manager should:
build up his team based on the core values of sincerity, objectivity, dedication and ethics
ensure that his subordinates get opportunities for growth based on performance
make his subordinates a part of the decision making process, thus ensuring cooperation and
commitment during implementation
delegate freely and support them
give enough room for expression of thoughts and also make things challenging for team
members
keep aspirations of the team members into considerations

c) Integrity: Highest levels of trust, fairness and honesty are expected while dealing with people
both within and outside the organisation. This includes the customers, shareholders, dealers,
employees, the government and society at large. They ensure that functioning is clean. Their
transactions will be transparent. Ethics is something they practice diligently.
d) Quality: The quality philosophy should not cover only the product quality, but every process
that has gone into making it. Economy of words when instructions are given, acknowledging
compliance, arriving on time, remembering the promises and above all a keen eye for details and
patience to make others know what they want are components of quality.
e) Customer Orientation: It is now recognised that every organisation has two sets of
customers internal customers and external customers. Internal customers are people in the
organisation employees, directors and team members. External customers are clients and all
members of society the company comes in contact in connection with the business.
Both the customers need the companys solutions for their problems. So, the managers thinking
about any problem is what can I do for him and all actions will be in that direction. He should
constantly thrive for customer satisfaction.
f) Innovation and creativity: Professional managers think beyond the obvious. They exhibit a
keenness to go behind a problem and attempt to find the root cause of the problem. They will
draw from their experience from diverse fields, seek further information and consider all possible
alternatives and come out with some new and unique solution. This happens when they have
open minds.
A saying goes the human mind is like a parachute, it is useful only when it is open. Such a
work culture is very conducive for problem solving, which is the aim of all creativity. Their
persistence will reward the entire team. Besides, such actions will be observed by their team
members and will infuse a spirit of adventure and commitment to work creatively and bring
better solutions faster.
g) Performance Management: The professional manager not only ensures that his performance
is at peak all times, but motivates his entire team to perform the same. This comes by
appreciation and encouragement. In case of shortfalls, he arranges training for them so that their
performance improves. Thus the team members know that they are expected to perform, that
they get help to do so and their effort is recognised and rewarded too. This is the simple path of
performance management.
Managers can follow a seven step performance management model as shown in figure 7.5.
Fig. 7.5: Steps for performance management
1. Set Objectives/Performance Standards: To mange any criterion, it is necessary to measure

the factors that are responsible for it. Then measures of the utilisation, the processes used, their
suitability, and the difficulties faced in utilisation and how they were resolved are considered.
For every employee the level of achievement is set in terms of quantities. This is the basis for
evaluating performance.
2. Communicate these to the employees: This procedure ensures that team members know
what is expected of them and help them to adjust their activities in such a way as to meet the
expectations. This enables them to seek help, consult their colleagues or managers. It is possible
that some objectives may not be met. The communication to his boss may help in reallocating
the job, so that there will be no hiccups at the end of the period.
3. Review/monitor: Review helps in resetting the goals when they cannot be achieved for
various reasons such as shortage of resources and time. By monitoring, the shortfalls can be
made up with the allocation of extra resources, or even diverting the operation.
4. Check actual performance Vs. Standards set: This is the evaluation phase. Comparison on
every detail is made. Differences are recorded. Particular areas are chosen for improvement.
5. Identify gaps: Gaps mean the shortfall in performance standards. The immediate supervisor is
also involved. The extent to which they affect the functions of the job itself are identified.
6. Jointly decide on corrective action, if needed: There is a possibility that the performance
has exceeded the set standards. But if performance is not good and the reasons and extent have
been identified, the course of action for effecting corrections is decided. Giving extra
responsibilities, training, relocation is considered. Counselling sessions may be conducted.
7. Reset objectives for next period: The targets are revised either upward or downward
depending on the conclusion of the appraisal process.
h) Identification with the organisation: A sense of pride and belonging goes with the
ownership of the job, the project, team members and organisation. This is brought about by the
culture and communication system in the organisation. Information sharing brings in trust and
promotes belongingness. The tendency seen is that most managers strongly identify with their
own departments, units or divisions and they lack a sense of organisation.
In the light of increased competition and ever changing strategies to develop business
orientation, means every manager should be aware of the companys plans, products and
policies. An obvious corollary to this is that the organisations communication policy too should
be conducive to such information sharing.
Today, many organisations are using interventions such as team building, survey feedback, and
other activities, to ensure that employees build up a strong sense of identity and pride in the
organisation they work for.
i) Empowering employees: The professional manager should possess the ability to empower his
employees down the line. Many managers are not even ready to delegate their authority to
subordinates and end up only delegating responsibility.
Empowerment is the process by which employees are encouraged to take decisions pertaining to
their area of work. This leads employees developing a sense of pride in their jobs. But managers
often hesitate to empower their subordinates as they feel insecure and show a sense of
uncertainty. The professional manager practices empowerment and encourages employees to
grow and develop in their positions.
j) Coping with changes: There is a saying The only constant in this world is change. A
professional manager has the ability and capacity to cope with change. He accepts the fact that
change is inevitable and is ready to implement change at the workplace.
To implement change successfully, it is essential that employees are involved in the

implementation of change. Moreover, the positive and negative consequences of change need to
be discussed and understood before implementation. Thus a professional manager has the
attitude to accept change as a way of life and takes it in his stride.
Fill in the blanks
3. Such a work culture is very conducive for _________ which is the aim of all creativity.
4. To implement change successfully, it is __________ that employees are involved in the

_____________ of change.
True or False?
5. Project managers do not delegate authority, they delegate responsibility.

7.4 Bringing about Organisational Change in the Project Management Scenario
A project is managed by the project manager who is completely in charge of all matters
connected with it. In case of organisations, where multiple projects are handled, restructuring is
almost a continuous. The reason is that resource availability in terms of people and their skills
will be changing. With resource smoothing, many persons will have to be shifted for short
periods.
To accommodate these, many managers create pools of persons with special knowledge, skills
and ability. Number of opportunities for creativity is many in project execution. Every project is
unique. Resources vary, customer demands are different. Thus the change process will have
never stopped to begin.
Now let us look at a model by which you can manage the change. Cummings and Worley
(Organisation Development and Change, 1995) describe a comprehensive, five-phase, general
process for managing change, as shown in figure 7.6.
Fig. 7.6: Change management model
This process seems suitable for organising and describing general guidelines about managing
change. Let us look at each phase in detail.
a) Motivating Change: This phase includes creating a readiness for change in a project team
and developing approaches to overcome resistance to change. Project managers should enlighten
members of the team about the need for change. While doing so, he can express the current
status of the organisation and where it needs to be in the future, and develop realistic approaches
about how change might be accomplished.
People want to feel that their concerns are being heard. While communicating the need for the
change and how the change can be accomplished successfully, project managers must listen to
the employees and make the team members feel that the approach to change will require their
strong input and ongoing involvement.
b) Creating Vision: Project managers must articulate a clear vision. A clear vision describes
what the change effort is striving to achieve. The vision should clearly depict how the
achievement of the vision will improve the organisation. It is very important that team members
believe that the vision is apt and achievable.
c) Developing Political Support: This phase of change management should not be ignored as it
is the phase that often prevents successful change from occurring.
Politics in a team is about power. Project managers must realise that power is important among
members of the team who are striving for livelihood and recognition. Matters of power and
politics are hence critically important to recognise and manage during organisational change
activities.
Since a change initiative often means shifts in power across management levels, functions and
groups, it must have the support of all key power players, for example, senior management, and
others who are recognised as having strong expertise and integrity.
d) Managing Transition: This phase takes place when the organisation strives to make the
actual leap from the current state to the future state. All the action plans towards the change
initiative get implemented in this phase. These plans can include a wide variety of activities
designed to make the change happen in the organisation, for example, creating and modifying
major structures and processes in the organisation. These changes might require continuous
mentoring and training to enforce new policies and procedures. Moreover, ways of effective
change management should continue. These include strong, clear, ongoing communication
about:
the need for the change
the status of the change
the solicitation of team members continuing input to the change effort.
e) Sustaining Momentum: Often, the most difficult phase in managing change is this phase
when leaders work to sustain the momentum of the implementation and adjustment of plans.
Change efforts can encounter a wide variety of roadblocks such as:
Strong resistance from members of the organisation
Sudden departure of a key leader in the organisation
A drastic reduction in sales
Strong, visible, ongoing support from top leadership is critically important to show overall
credibility and accountabilities in the change effort. Those participating in the change effort often
need ongoing support, in the form of provision of resources, along with training and coaching.
True or False
6. Opportunities for creativity are many in projects.
7. When multiple projects are handled restructuring is rare.

7.5 Summary
In this unit you have learnt about how the organisations are structured. You have learnt the
meaning of Organisational Change and how the process brings about improved effectiveness in
the organisations, especially the need for change in Project Management Scenario. You also
learnt two different types of organisational change.
You have also learnt about the role of a professional manager and how a professional manager
can implement change. Traits of a professional manager have been described in detail with all
the roles and expectations. You are now aware of the skills and qualities required to be an
effective change agent in organisational change. You have also learned the dynamics of an
organisation and the importance of managing all the concerned stakeholders through case
studies.
Finally, you have seen a model to implement any change effectively in project management
scenario. The latest developments in the process of organisational change relevant to Project
Management were also covered in this lesson.
1. Define a Flexible Work Team.
2. What is Reengineering?
3. What are the seven steps of performance management?
4. What is empowerment?
5. Explain the difference between TQM and Innovation
6. Describe any five important traits of a Leader
7.7 Answers
1. Structures, hierarchies, functions, communication patterns, decision centres, (any three of

these)
2. Outcome, tasks.
3. problem solving
4. essential, implementation
5. False
6. True
7. False
1. Refer to 7.3.1
2. Refer to 7.3.2
3. Refer to 7.4 (g)
4. Refer to 7.4 (f)
5. Refer 7.3.1 and 7.3.2
6.Refer to 7.4
Copyright 2009 SMU
MB0049-Unit-08-Project & Programme

Management P2M for Enterprise
Innovation Structure
Unit-08-Project & Programme Management P2M for Enterprise Innovation Structure
Structure:
8.1 Introduction
Learning Objectives
8.2 Project and Programme Management P2M
Process of P2M
Managing the programme
8.3 Projectised organisations

8.4 Guidelines for Development of High Technology
8.5 Technology Substitution
8.6 Summary
8.8 Answers to SAQs amd TQs
8.1 Introduction
Todays economic environment presents many challenges for Business and Information
Technology leaders. These challenges require them to consider introduction of significant cost
saving, process efficiency, and delivery effectiveness, while managing an increasingly complex
portfolio of business projects. This is not an easy job at all unless a proper and portfolio
management is in place.
In an industry where over 70% of projects have consistently failed to meet business objectives,
and where it is often difficult to control project budgets and schedules, effective practices in
project, program, and portfolio management are more critical than ever before. Many of the
approaches for mitigating the risk associated with this high rate of project failure are not new.
However these approaches need to be reintroduced in a disciplined and structured operating
process.
An enterprise generally will have many projects running at any point of time. These projects may
be running at different stages with different requirements and are of different nature.
Organisations often fail to recognise the importance of managing a business change programme
as an overall strategic initiative.
It is common to apply project management discipline to specific components of the change

particularly the IT systems. Even greater focus and rigour should be applied towards achieving
the overall business objective. Organisations need to monitor each project and make a
programme to manage them as a group to leverage the advantages and become ready for
managing diversity. This is known as Project and Program Management (P2M).
There are many consulting firms which help in the formulation of strategies, training the
managers and staff in the implementation of the process and developing software programmes
and applications dovetailing them for specific customer requirements. Modern organisations in
all fields depend on technology to improve their processes to deliver the best products and
services to their customers. More importantly, customers expect that their contractors use latest
technology and implement them when performing on their projects. It helps to obtain
information faster and enable them to effect any changes that they may need to implement.
It helps to be a projectised organisation. It facilitates the exercise of control over the projects
especially when there are many projects at different locations. Projectised organisations are not
special or a separate species but those which tend to treat most of the work they do as
compartmentalised projects. The time schedules are derived for a specific set of objectives. Each
job gets fitted into a slot so that resources required will be identifiable and therefore control
becomes easier. The purpose is to consider all the projects from the organisations view point as
a programme for implementation.
Development of technology and its application for this purpose is very important and essential.
In this unit, we will see the various steps that are taken for development of technology. We will
go through the process of making innovation as an enterprise wide effort.
Learning Objectives
Explain the concept of P2M and its purpose
Describe how projectised organisations can increase competitiveness
Describe how technology helps in project and programme management
Explain the process of development of high technology
Describe the importance of innovation for enterprises
Fill in the blanks
1. ____________ ___________ are not special or a separate species but those which tend to treat
most of the work they do as compartmentalised projects.
2. The portfolio of projects consists of both ____________ of projects and _____________

projects.
8.2 Project and Programme Management P2M
In todays scenario, an organisation needs to respond quickly to social changes such as economic
uncertainty. A quick response is also needed when there are increasingly complicated and
sophisticated requirements, not only in technical systems but also in social systems and
enterprise management. Project management must be capable of effectively solving these
complex and complicated problems, and manage projects and programs to promote value
creation activities. To create this capability, P2M was developed as a new PM knowledge and
competency system.
P2M complements the knowledge repositories and competency standards of other international
project management bodies. P2M goes beyond the scope of other official project management
standards and guides by also encompassing programme management.
This is important as enterprise applications goes beyond a simple foundation for standalone
engineering projects, and must encompass complexities and interrelationships requiring a
program approach to consolidation and management of projects.
As shown in figure 8.1, there will be two levels of management focus program and project.
Fig. 8.1: P2M components
At the programme level, the programme management team are focused on driving change across
all relevant parts of the organisation. They manage the portfolio of projects. Below that, each
individual initiative will have its own leadership, focused on delivering a specific component of
the solution. These can be individual projects.
The characteristics of these two levels can be drastically different. Programme managers often
need to be politically astute promoters, negotiating with the leadership team in different parts of
the business to achieve the overall strategic corporate goal. They will often be dealing with
imprecise, evolving concepts. They may establish the business case and persuade others of its
advantages. They will be visionaries who understand that there should be a better way of running
a business.
Contrast this to the character of a project manager. The project manager will doggedly strive to
deliver a specified overall deliverable for the business. Project managers will focus intensely on
their target, getting involved in the detailed issues. They deliver the goods but rarely step back
to consider the bigger picture.
Some aspects of programme management are similar to the management of projects, albeit
conducted at a higher, more strategic level. For example, a programme manager will address
risks and issues but focusing on impacts for the overall initiative and the best interests of the
organisation as a whole. A project manager performing the same tasks would, in contrast,
address risks and issues to delivering the specific defined deliverables of the concerned project.
After gaining a significant insight into programme and project management, let us have a look on
effective programme management. Effective programme management involves:
Focusing on the various strategic initiatives taken up for multiple projects and the issues related
to benefits and risks
Bringing about the attention of management to a defined set of benefits, which are understood
immediately, which are managed throughout the implementation and completion
Helping top management to set priorities, choosing options and allocate resources
Setting up mechanisms to measure and ensure that the projects making contributions for
realising expected business benefits
Ensuring that the effects of the programme driven changes are coordinated, the transitions are
successfully managed. The operations are effective and efficient.
8.2.1 Process of P2M
After thoroughly understanding the importance and need for P2M, lets now look at the process of
P2M. The methods which are adopted and the activities that are going to be undertaken include
the following steps. The primary activities include preparing and maintaining a set of activities
and the workflow that is to be followed and identifying business areas responsible for different
stages. The following are key points:
a) Making sure that the priorities are relevant and the projects are run on the basis of their impact
on the business as a whole
b) Structuring the programme so that the responsibilities and roles at both programme and
project level are acceptable to both the top management and managers
c) Planning the various points of review between various phases of the projects
The process has to incorporate all the important aspects which are to be addressed during
implementation and management of the projects. It is important to identify all factors and
incorporate resources men, materials, technology and time, so that their provision can be
planned.
8.2.2 Managing the Programme
We learned the concept of P2M and the acute need of managing the portfolio of projects as a
programme. When we consider the portfolio of projects as a programme, there are many aspects
of the management that we need to consider closely. The main considerations will be on
resources, risks, quality of the projects at every stage of the execution in terms of meeting the
expectations of the client as per the contract and monitoring the change processes that get
enmeshed during implementation. The specifics concerning the above are explained in figure
8.2:
Fig. 8.2: Aspects of programme management
Let us look at each specific in detail
a) Risk Management: Evaluating and mitigating the risks associated with the programme is
very important. This may have impact on the planned changes to the business operations.
b) Process: Process governing the delivery of the project should be well defined. They should
ensure that the quality and purposes are fully met.
c) Change Management: We saw in earlier chapters that change is a part of any project and
hence a programme as well. This deals with keeping a track of the changes and developments
external to the project environment and studying their impact on the programme.
d) Personnel Management: Human resource is one of the most important resources in

programme management. We need to ensure that people are adequately trained and placed at the
right place. This is essential to ensure on schedule and smooth delivery of the projects.
e) Support Services: We need to ensure that the support services like human resources and IT
are able to adapt to the changes that take place in the projects as well as business operations as a
whole.

Fill in the blanks
3. The initiatives taken up for multiple_______ and issues related to ___________ constitute
P2M.
4. Two main supporting services for Project Management are ______ and _______.
8.3 Projectised Organisations
Organisations may follow various models depending upon their adopted strategies, the nature of
the industry and various policies governing the same. Projectised organisation is one of the
various models of organisations, which enterprises adopt to run their businesses depending on
the policies they follow, the opportunities they want to exploit and the constraints that the
environment forces on them.
Most organisations follow some sort of projectisation of their activities and business functions.
It can be applied to varied industries, be it manufacturing, development of a product, research,
entering a market, acquiring of another company, training programmes, setting up a new plant,
among many others.
In some situations, organisations find it advantageous to treat a set of activities requiring

resources of different kinds for short periods to reach a particular stage. Organisations call that a
project. Let us now look at the objectives of a typical projectised organisation in order to make
their business model useful:
Accommodate discrete projects as a group in certain organisational units to facilitate

monitoring and controlling performance levels at various stages.
Assign priority of divisional management efforts based on Paretos law backed by statistics or
rules of thumb. This is to ensure prevention of problems or profit growth on the portfolio of
projects at hand. Paretos law, in its generalised form, states that 80% of the objectives (effects)
are achieved with 20% of the means (causes).
Facilitate project resource assignment and subsequent adjustment especially human and
information resources among the various projects. There should be proper sharing of resources
among various projects.
Enumerate, evaluate and implement various procedures of standardisation in the form of tables,
charts, manuals, templates with the abundance of data that get generated across projects.
Analyses of data help in identifying opportunities of making changes in similar projects. This
also enables knowledge reuse in the organisation.
The project management capability can be enhanced with the help of the PMO, by setting
objectives and measuring them with success achieved. Each project can be measured for its
maturity level. Enhancement of the levels of different projects does become a motivational factor
for performance enhancement. This creates a system of internal benchmarking which gets
initiated almost automatically resulting in highly efficient organisation as a whole.
The principles of Project Management can be extended to various traditional operational type
units.
By this time, you can make out the important aspects of a projectised organisation. You may be
inquisitive to know how this model differs from the traditional one. The main differences
between the traditional and project approach are mentioned in table 8.1. Here, we would like to
emphasise that no one approach can be considered the better for all businesses or at all times for
the same business. However, many organisations have found the project approach worth giving a
try to improve productivity.
Table 8.1: Comparison between traditional and projectised organisation
Traditional organisations Projectised organisations

They have the formal organisation They have teams comprising members
structure, with departments, functions, who are responsible for completing
sections having a hierarchy of one entire deliverable product.
managers and their assistants.
All of the managers function on a The teams will have all the resources
continuous basis catering to a series of required to finish the jobs.
requirements issued by the planning
department.
An assembly of various units of their They have a time schedule within
production forms a products and a which all the elements of the projects
variety of such products make up the have to be completed.
business of the company.
No particular member or a department There is greater accountability among
or a team is responsible for the team members and everyone is
completion of any particular product. responsible for the delivery.
Their creativity and innovation is in
particular respect of their jobs.
Most of the members do not get It is found that a sense of ownership
exposed to other areas of operations in of the project motivates team
the organisation. They become members to be creative, cooperative
specialists and insular. among them to achieve high
productivity.
True or False
5. Projectised organisations achieve higher efficiencies because they do the same jobs repeatedly
6. All the tenets of Project Management can be applied to traditional organisations.
Fill in the blanks
7. Assign priority of divisional management efforts based

on _______backed by statistics or ______________for prevention of problems.
8.4 Guidelines for Development of High Technology
As the application of technology has become critical for the survival of organisation it has
become imperative for organisations to initiate measures for the development of high technology
to be ahead of competition. There are many specialised Research and Development firms which
offer their expertise to their clients problems. However, their services may be available to the
competitors and many technologies developed by the companys own research personnel cannot
be shared with outsiders.
So the strategy would be to utilise the services of external resource to the extent they are suitable
for our purpose, but with a strong base of R and D of our own. This will really differentiate the
best companies from other ordinary ones. The following figure 8.2 gives some guidelines in the
form of rules which would help organisation to be strong in this area.
Fig. 8.3: Guidelines for development of high technology
Rule 1: Identify the critical technologies and make a deliberate choice for indigenous
development: One of the main reasons for lack of high technology base is that no attempt has
ever been made for its indigenous development. Hence, the first step in the critical technology
development is a deliberate decision for making the process wholly indigenous.
Time that may elapse before anything tangible is found will be long. The quality of the outcome
has to be proven with a lot of experimentation, which costs money. The clients may suspect that
the best is not being given to them.
Many people, even at higher hierarchical positions want the easy way out import. But
experience has shown that once the process is started, it will be found that certain technologies
are easier to develop than to acquire from outside sources.
The knowledge that gets acquired, experience that is gained and confidence that it endows, make
the organisation self-sufficient. The encouragement that people gain from this makes it
worthwhile.
Rule 2: Always aim one step higher in performance: Usually, high technology development
has a long gestation period. By the time the product is perfected, it might have become obsolete.
This necessitates that the period should be shortened.
The other alternative is to make technology developments futuristic i.e. keep the aim or target
one step beyond what is required. Combination of both will yield better results. Using principles
of concurrent engineering, we can start building components as developed and assembling on ad
hoc basis.
This would be followed by testing them and making changes taking into consideration any new
requirements. Every attempt to make the product contemporary will improve the competitive
advantage.
Rule 3: Focus on Multi-Use Technologies: The focus is on multi-user and multi-role systems.
During the course of development, the customer preferences may undergo a great change, and
the intended application of the technology or the product may no longer exist.
This uncertainty demands that we should aim at multi-user products. The possibility of making
products which can address multi-functions should be considered. All these are to be conducted
on a continuous basis so that obsolescence is avoided.
Rule 4: Spot the competency of divisions and empower them for technology development:
Every division of an organisation has certain inherent strength and is unique in itself. We must
identify and build around this strength to realise maximum contribution. The strength may be
software skills, large trainable power, culture, value system or excellence in academics. It can be
translated into the required competency through innovation management.
Rule 5: Ensure Redundancy for Critical Systems and Technologies: It has been observed that
critical technologies have a tendency of acquiring high uncertainties. Multi-technology routes are
devised so that the target is reached in spite of blocks on any other route.
Even multiple sourcing is deployed to ensure availability without any failure. The redundancy
needs extra resources, but then we cannot allow critical systems to stop for any reason. The
project success within the time slot allotted is worth making sacrifices for.
Rule 6: Focus efforts through Programme / Project / Mission oriented approach: The
traditional way of technology development is carried out without any link to the product
development of activities. The outcome of these activities will be in the form of models,
publications and working prototypes to some designed / assumed specifications.
Such development is not normally bound by any time frame or the cost or the product is not
directly usable for any application. This approach is not suitable for the development of high
technology systems in a resource constrained environment.
Projecting the technology development provides a sense of purpose and direction to the
development efforts and integrates all the efforts towards the common goal. The outcome of such
development efforts will be channelled into useful products.
Rule 7: Build concurrency into every activity: Building concurrency into every activity is
essential to reduce the development cycle time and to counter the technology obsolescence.
Many of the tasks that are normally done in a serial fashion can be done in parallel by
synchronizing the flow of information.
The practices of the concurrent engineering where the design of the product and all its associated
processes are carried out simultaneously are based on team work and participation. This would
not only help in reducing the development cycle time, but also in improving the product
functionality with regards to requirements. Concurrency can be accomplished in many ways both
for product development as well as for technology transfer, user evaluation and production.
Rule 8: Build long term Partnership with all the Stake holders: High technology
development is a dynamic process with large information exchange, teamwork, problems,
failures and successes. It requires long term partnership and commitment from all stakeholders
including the development partners, production partners and customers.
This can be achieved by tailoring suitable management structure and review system such that at
each stage of the project all the stakeholders are involved. Many institutions including R & D
organisations, industries, academia will be useful in these endeavours. It is essential to build
suitable organisational interface with each type of organisation based on their priorities.
Rule 9: Focus on Problem Forecasting and Prevention: The traditional project monitoring and
control approach is based on solving the problems as they arise during the project execution.
In high technology development, projects that involve delays become very costly. At every stage
we need to ascertain that we are moving in the right direction. Failures in the early stages of the
projects are less costly and harmful than at later stages.
Forecasting can be done by trying to analyse all possible situation during planning stage and
trying to answer what if questions and obtain answers. This also empowers the team to plan for
any deviation right from the very beginning. Proper forecasting can act as a base for effective
prevention step. Once the practice starts, it may even become a standard method of starting a
project.
Rule 10: Ensure Continuous and Integrated Performance Measurement: Measurement
means evaluating the achieved outcomes against expected. The process improves the actual
activities which take us towards our goal and also verify whether what we expected was right.
Haphazard or ad hoc measurements are worse than no measurement. When all persons know that
evaluation will be done on a continuous basis, they know that everything they do is going to get
measured. This will surely increase the quality and the performance.
True or False
8. The traditional way of technology development is carried out with corresponding link to the
product development of activities
9. Failures in the early stages of the projects are less costly and harmful than at later stages.
Fill in the blanks
10. ________ development has a long gestation period.
8.5 Technology Substitution
Technology substitution is based on the fact that several alternate technological routes exist to
create a particular device. These alternate routes are normally hidden behind the commonly
known processes, in different forms. Identification of these hidden technologies will open up
opportunities for technology substitution.
Some of the examples of technology substitution are in the fields of Aerospace, Automobile,
Water storage dams, among others.
Here let us study two examples from the aerospace industry. This is to give you enough insight
to think out of the box and come up with concepts which can change the trend.
In recent years, in aerospace industry, because of the versatility of software programmes which
can be written to simulate a variety of operating conditions, a great amount of work is going on
both in terms of variety and depth. Hence it was essential to look for better substitution. This
resulted in the following.
a) Substitution of experimentation: Tests are conducted to certify the performance parameters

of Aerospace Systems Wind tunnels. In this process, wind is allowed to blow at speed which the
aircraft is expected to fly and simulation is conducted for the aircraft engine, wings, tails and
other parts. Readings are recorded and analysed.
Now with the use of computer systems this costly and lengthy procedure can be substituted by
Computational Fluid Dynamics. The flight testing can be greatly reduced by the use of digital
and hardware in loop simulation. This has resulted in significant savings and reduction in
simulation time.
b) Substitution or enhancement of Hardware with Software: This concept has gained

significant attention and a lot of research in past decade. Complex software is programmed on
hardware for effective functionality.
For example, in the case of an Inertial Navigation System, the Gyro Stabilised Platforms can be
replaced by the strap down systems using On-Board computer and software improving the
accuracy of navigation systems.
In the same way, a wide variety of subsystems for commercial and industrial uses have been
devised. It is well known that many of them find military applications and are made especially
for them. However, these are superior to those used for industrial purposes for obvious reasons.
With some minor improvements they can be used for superior performance, when such
requirement can bear a little higher cost.
Fill in the blanks
11. With the use of computer systems this costly procedure of Aerospace testing can be
substituted by __________
12. Identification of these hidden technologies will open up opportunities for _________.
8.6 Summary
Now that you have gone through this unit, you would have learnt about projectised organisations
and how they are able to increase competitiveness. More importantly, you learned concept of
Programme Management (P2M) and its importance in todays scenario. You learned the
difference between traditional organisation and projectised organisation.
In the later part of this unit, you have also understood how technology helps in Project and
Programme Management. You saw the pivotal role played by technology in the success of
Project and Programme Management. You are now aware of the process of development of high
technology and the innovations for an enterprise.
Lastly, you also learned that technology is not the end in itself and there is a huge scope of
innovation and substitution. You saw this with an example of Aerodynamics industry.
1. What are the main considerations in planning P2M?
2. What are the reasons for projectisation of organisations?

3. What is substitution? Why is it necessary?
4. Explain the concept of concurrency in High Technology Development.
5. Measurement of performance enhances it. Why?
6. How to overcome obsolescence in Developmental Activities?
1. Projectised organisations
2. Programme, individual projects.
3. Benefits and risks
4. IT and Human Resources
5. False
6. False
7. Paretos Law, rules of thumb
8. False
9. True
10. High Technology
11. Computational Fluid Dynamics
12. Technology Substitution
1. Refer to 8.3.1
2. Refer to 8.4
3. Refer to 8.6
4. Refer to 8.5
5. Refer to 8.5
6.Refer to 8.5
Copyright 2009 SMU
MB0049-Unit-09-Guide to Systematic
Scientific Project Management
Unit-09-Guide to Systematic Scientific Project Management
Structure:
9.1 Introduction
Learning objectives
9.2 New horizons in project management nine steps
Concept of total economics
9.3 Stages in a project management cycle DMAIS
9.4 The role of effective data management in the success of project management
9.5 Measuring and managing success
9.6 Summary
9.1 Introduction
Success of a project depends on the scientific methods deployed. Measuring performance helps
us to understand the factors which contribute to success. You can try to adopt the same practices
for projects which may have similar requirements and activities. In this unit you will consider
how systematically implemented projects are dependent on effective data management systems.
In addition to the above you will study a few more key concepts such as:
Nine Steps new horizons in project management
Concept of total economics
Business metrics
Project management metrics
team member selection
Tips and Tricks for successfully implementing a metrics programme
Learning Objectives
Identify the nine steps which indicate the latest developments in project management
Explain key Data Communication Systems
Describe the way Communication and Systems Management are addressed in modern project
management
9.2 New Horizons in Project Management Nine Steps
The concepts of project management keep evolving as new horizons become prominent. Figure
9.1 lists such nine steps that are expected to show a new way of looking at various functions of
project management.
These can be adopted in different project situations either as steps or as guiding principles. These
steps give a new way of looking at various functions of management. Let us discuss each of
these steps.
Step 1 Being ready to accept discontinuity and be flexible
The objective of any change initiative is achieved by making incremental changes. Incremental
changes give an opportunity to all stakeholders to accept, implement, and verify the impact of
the changes. After they come in terms with the consequences, they can move further and
consolidate the gains. Incremental improvements are, however, acceptable only when the rate of
change is not excessive.
Fig. 9.1: Nine new horizons in project management
Modern development processes are very dynamic and call for quantum changes. Hence, project
management in the modern context demands faster implementation by using high technology and
extensive outsourcing. As a result, continuity is not expected at the cost of flexibility and agility.
Project management today demands discontinuity and greater flexibility, with no hurdles to
move into the future. An open mind towards the unknown is the key. Members are not expected
to be rattled by sweeping changes demanded by the dynamically changing objectives. So a
project management team should be ready to work at a greater pace irrespective of the frequent
changes that may come in at any stage of the development.
Step 2 Owning the problems and sharing the solutions
Ownership involves acceptance of a problem and a total commitment to resolve the same. The
project manager should seek the help of his team members and devise means to solve problems.
He should look at the problems with an open mind and evaluate all possibilities to fix them. He
should encourage the team to adopt this practice so that solutions come out faster.
It is a good practice to document all the means by which solutions were obtained. This helps in
recognising contributions as well as getting a reference for similar situations. This document
with problem solving methods can be circulated and shared across the organisation for the
benefit of other managers. This aspect is a crucial part of Knowledge Management practices.
Step 3 Breaking the status-quo mentality
Status-quo mentality implies that we need to accept the present situations as the best thing.
Accordingly, people with such mentality make no attempt to make the present situations better.
This attitude is the enemy of creativity and innovativeness. Research has shown that the human
mind is always creative. By forcing it to accept what is comfortable; we are deprived of the gift
of nature. We have to look for opportunities for improvement and change which is the principle
of continuous improvement in TQM.
Breaking the status-quo mentality implies that future is not an extension of the present and
therefore it needs to be tamed. Excessive focusing on future may not however be appreciated. A
proper balance is a must.
Step 4 Stepping out of comfortable zone
Seeking comfort in our work area is understandable, but to avoid taking any risk with the jobs to
be performed is not a good practice. Challenges have to be faced, uncertainties have to be tackled
and solutions found. This calls for accepting things as they come even if they are not comfortable
always. This in turn gives opportunities for the project team to build confidence and learn new
things.
Risk aversion is not a good characteristic of a leader. Momentarily, a member might feel more
comfortable to stay in the comfort zone and refrain from risks. However, he or she should
remember that a team leader has emerged by stepping out of the comfort zone. On the other
hand, if a member decides to step out of the comfort zone and be innovative and contribute then
this would amount to emergence of a future leader. Promotions are not time bound any more.
Step 5 Human capital by-passing financial
Investment in Human Resources is by far the most productive. People are the great assets of a
company. That is the reason training and benefits given to the personnel are no longer considered
an expense, but an investment. The returns are long term and they improve with the passage of
time. More importantly, quality becomes achievable only by the efforts and commitment of
personnel. Providing opportunities for excelling in their performance is an important factor for
retaining good employees.
Human capital has thus left financial capital far behind. A member should therefore appreciate
and maintain self realisation of his importance in the organisation. However, to sustain
credibility, the member should remember that his or her value is not related to the level or the
salary but on the quantum of output, again not on the volume of coding but on the value of the
work done to the product. Combining these two concepts of human capital and value, the
concept of return on the time invested has replaced return on investment when it comes to
valuation.
Step 6 Transforming work culture

The project manager should attempt to make the workplace friendly and fun-filled. People
should enjoy working, not be forced to work. Nowadays, every HR Manager is trying to devise
schemes to make the place of work to be a fun place.
Values are the general criteria, standards or guiding principles that determine how people behave
in response to events and situations. These have a bearing on the culture of an organisation.
Organisations are concerned with the influence these have on the work that the employees
perform. These values determine the way employees interact with their colleagues and outside
people.
If needed, organisations may think about changing the way business is conducted to transform
the work culture. To bring about the desired change in the employees, the senior management of
an organisation should lead by examples. They need to provide certain positive experiences for
the employees.
All these do not come in a day. A deep understanding of the way these contribute towards
bringing about change and an inner urge to practice them even in adversity lead to success. Then
work will never become a burden. Work becomes an opportunity to remain joyful and find
meaning to ones action.
As employees, you need to add passion and joy if we aim any substantial progress. It is
important for a member to decide to do what he or she wants to do. Then the gap between wish
and reality is narrowed and the results improve. A project could well become a work of art.
Step 7 Meaningful encounters more important than years of experience
By tradition, we have been taught to treat the number of years of experience as a measure of
knowledge and wisdom which will have a bearing on the correctness of the decision taken.
Though, time and again, it has been proved that it is not the case. However, it has been difficult
to overcome this because of the hierarchies and structures that the organisations have.
The experience level is now judged by the number of encounters of major problems solved rather
than the number of years. With the explosion in knowledge and change in work culture owing to
the compulsions of competition and consequent changes in which work is accomplished, it has
become relevant to consider the challenges one has met and successfully resolved is his working
life. These will indicate the capability of a person to meet difficult situations in future.
The secret formula for a member is to build an inventory of encounters meaningful to his or her
own dream or passion profile.
Step 8 Seeking meaning out of change
You should consider change only when it is necessary or advantageous to meet the challenges
that cannot be overcome using the traditional approach.
You should keep in mind that the outcomes of change are not always beneficial. It should not be
forgotten that before a change is attempted, some pre-requisites have to be met. Then the time,
money and energy expended in bringing about change become meaningful.
Consider the implementation of TQM as an example. Before attempting the process, you should
ensure that the various procedures for assuring quality are being practiced. It should be ensured
that the instruments for assuring quality are being used and calibrated. We should also train the
personnel on how to use them.
You should attempt to implement TQM only when the existing processes are incapable of
assuring zero defects or Six Sigma standards despite employees having every facility and and a
high standard of quality being achieved on a sustainable basis.
The change you seek will have meaning only when the organisational culture, managements
commitment, the processes of procurement and many other factors that Deming states are put in
place.
Finally, a project manager must note that change could be a threat or an opportunity. If change is
resisted, it is essential for the entire team, through extraordinary team effort and brain storming,
to weigh consequences before drafting of a plan to match proposals for changes. The key lies in
extraordinary inter personal skills and communication.
Step 9 Emotional Intelligence
This is a quality highly sought in managers, especially Project Managers. Keeping ones cool
when things go wrong is the basic tenet of this concept.
One of the most dangerous aspects of the thinking process is expecting, assuming and favouring.
Having taken all measures in the hope that the result will be certain is understandable, but
expecting it as a certainty puts a lot of pressure on oneself and others. This coupled with the
other two factors creates bias in ones mind and it reflects in ones decisions and actions.
In a project, we are dealing with a number of uncertainties, including people and their behaviour.
Getting upset will reduce the quality of decisions. When the manager exhibits emotional
intelligence, others understand and respond properly.
9.2.1 Concept of Total Economics
Any system of operations in which materials are acquired, stored, converted, distributed and paid
for must require an information flow along the supply chain. A host of data moves along with the
material as an information flow. Some of them are listed below.
type of material
quantity
shape
chemical composition
drawing or specifications to be met
supplier
price
taxes
insurance
place of loading
destination
transport
packaging
mode of payment
Value goes on getting added along the supply chain. Economies are effected when the
consumption of material, power, movement and time are reduced. Inventory costs money and has
to be kept to the minimum for achieving total economy. All these depend on procedures that
have been scientifically designed and implemented efficiently.
Fill in the blanks

1. Modern development processes in the field of Project Management are very dynamic and call
for _____ and __________.
2. One of the most dangerous aspects of the thinking process is to ________, _______ and
__________.
3. Value goes on getting added along the ________.
9.3 Stages in a Project Management Cycle DMAIS
Project managers consider the five steps DMAIS as generic for any system of a journey
towards excellence. Figure 9.2 lists the five steps hidden in the acronym DMAIS. DMAIS is
highly relevant in Project Management for the simple reason that each step gives out in detail the
actions to be taken to ensure readiness for the next step. Verification of DMAIS implementation
is possible with checklists which can be prepared and used by employees at all levels. The team
members can be given training to follow them.
Let us consider each of five steps of DMAIS.
Fig. 9.2: DMAIS
1. Define This step requires that what is sought to be achieved is identified in all its detail. The
following are the inputs which will define what we are going to make:
a. Benchmark: It refers to the standards achieved by the best in the industry. A companys
product is set to meet them.
b. Customer Requirement: It refers to the documentation of customer requirements. Proper

understanding of customer requirement is of utmost importance. You should deliver what a
customer requires.
c. Process Flow Map: It shows the activities that take place to result in the product at the end
of them.
d. Quality Function Deployment This tool compares the quality characteristics in a

companys product with those in their competitors and their relative importance to the customer.
To achieve them, you find the technical specifications you have to incorporate in our product.
e. Project Management Plan This includes the materials, men, activities, schedules,
milestones and so on.
2. Measure In this step, we measure the outcomes of the activities. This is done using the
following methods.
a. Data collection You need to collect the data about the work that is done and compare as to
how it corresponds with what is required
b. Defect Metrics You need to capture the deviations that are in the effective potion of the
work in defect metrics. Then you need to decide whether they are acceptable or need
rectification.
c. Sampling If the volumes are high, you need to select a few of them and inspect them to see
whether the entire batch is acceptable
3. Analyze In this step, you have to analyse the data received from the preceding step by using
the following tools:
a. Cause and Effect Diagrams also called Fishbone Diagrams
b. Failure Mode and Effect Analysis FMEA
c. Root Cause Analysis
d. Reliability Analysis
4. Improve In this step, you have to implement the measures to remove the defects found
earlier for improving the process. This can be done using the following measures.
a. Design of Experiments The effect of changing values of parameters is done in a controlled

way. This allows you to experimentally determine the effect of variations determined. You can
use the results for optimising the process
b. Robust Design The equipment design is made robust to reduce the variations.
c. Tolerances The permitted deviations are made closer, so that the capability of process is
increased
5. Standardize When improvements have become consistent, the methods adopted are
standardised.
Fill in the blanks
4. Benchmark The _____ achieved by the ____ in the ________.
5. Cause and Effect Diagrams also called __________ Diagrams.

6. Measures to remove the defects found earlier are ______________for improving _____,
_____ and _____.
9.4 The Role of Effective Data Management in the Success of Project Management
Data management consists of conducting activities which facilitate acquiring data, processing it
and distributing it. Acquisition of data is the primary function.
To be useful, data should have three important characteristics timeliness, sufficiency and
relevancy (as shown in figure 9.3). Management of acquisition lies in ensuring that these are
satisfied before they are stored for processing and decisions taken on the analysis.
Fig. 9.3: Characteristics of useful data
There should be data about customers, suppliers, market conditions, new technology,
opportunities, human resources, economic activities, government regulations, political
upheavals, all of which affect the way you function. Most of the data go on changing because the
aforesaid sources have uncertainty inherent in them. So updating data is a very important aspect
of their management.Storing what is relevant in a form that is available to concerned persons is
also important. When a project is underway dataflow from all members of the team will be
flowing with the progress of activities. The data may be about some shortfalls for which the
member is seeking instructions. A project manager will have to analyse them, discover further
data from other sources and see how he can use them and take decisions. Many times he will
have to inform and seek sanction from top management.
The management will have to study the impact on the overall organisational goals and strategies
and convey their decisions to the manager for implementation. For example, Bill of Materials is
a very important document in Project Management. It contains details about all materials that go
into the project at various stages and has to be continuously updated as all members of the
project depend upon it for providing materials for their apportioned areas of execution. Since
information is shared by all members, there is an opportunity for utilising some of them when
others do not need them. To ascertain availability at some future point of time, information about
orders placed, backlogs, lead times are important for all the members. A proper MIS will take
care of all these aspects. ERP packages too help in integrating data from all sources and present
them to individual members in the way they require. When all these are done efficiently the
project will have no hold ups an assure success.
Fill in the blanks
7. The three important characteristics of data are ________, ___________ and _____________.
8. _______ helps in integrating data from all sources and presents them to individual members in
the way they require.
9.5 Measuring and Managing Success
Project Managers are the key persons on whom top management depend upon for accurate
periodic reports about the project. So the managers are continually concerned about the
measurable aspects of the project in progress. Not all facts will show a measure of success of a
project.
The facts reported may not mean anything to the management. Therefore metrics used should be
answering fundamental questions, the answers to which will be responsive to the needs of the top
management. Metrics are important when predicting and controlling the outcome is important.
We know what to correct, when to correct and how much to correct the factors that affect the
measurement.
Measuring is for the purpose of effecting corrections as project is progressing. Both the end-
deliverables and the execution process have to be measured. The former is done to make sure
that they support the business objectives. The latter is performed to make sure that the processes
are running as predicted.
Let us now look at some metrics and find out their meanings, measurements and benefits:
ROI
Meaning: It refers to the Return on investment on various investment

proposals.
Measure: You need to measure how long it will take for realising increased
revenue or reduced cost to pay back the project investment.
Benefits: It results in optimisation of performance

Customer Satisfaction
Meaning: It implies meeting clients needs expectations and defined scope.
Measure: You need to measure document needs and expectations in a

clearly defined scope.
Benefits: It removes ambiguity of project acceptance and improves overall

acceptance.
Time and budget to Date
Meaning: It refers to the part of the original budget and schedule that has
elapsed to date as against work accomplished.
Measure: You need to measure hours worked, materials consumed, and

milestones reached.
Benefits: It allows project progress to be measured against original

estimates.
Quality
Meaning: It refers to the metric that will be used to determine acceptability

of the end products.
Measure: The measures vary from project to project. They could be

expressed as a factor of defects, response time, delay in execution, number
of milestones reached within time, and so on.
Benefits: It removes ambiguity about project acceptance, and ensures

clients satisfaction.
On the same lines we have the following metrics for the project execution:
Schedule Estimate
Cost estimates
Staff productivity
Average time to repair
The top management may determine which of the metrics they would like to use to measure
efficiency, which they can communicate to the client also. Then the project manager will set up
suitable reporting systems and analyse the progress accordingly. Success is the culmination of all
measuring activities which brings satisfaction to all stakeholders. Lessons learnt should be the
guiding factors for future projects.
Fill in the blanks
9. The metric that will be used to determine acceptability of the end products is ___________.
True or False
10. Periodic reports show clearly indicates the success of the project.
9.6 Summary
In this unit you have been able to identify the nine steps which indicate the latest developments
in Project Management. The concepts to understand key operational and data communication
systems have been explained. You would have learnt how to analyse key data elements for
hierarchy and how to structure an operational model. You have also got an idea on the way
Communication and Systems Management are addressed in modern project management.
1. What factors of internal environment are conducive for a culture of change?
2. What are the components of information flow in any system of operations?
3. State any four metrics and their benefits.
4. Explain the process of data acquisition.
5. What are the main utilities of an ERP package?
6. Explain utility of data management for BOM.
9.8 Answers
1. High technology and extensive outsourcing
2. Expecting, assuming, favouring
3. Supply chain
4. Supply chain standards, best , industry
5. Fishbone
6. Implemented,
7. Relevancy, sufficiency and timeliness
8. ERP packages.
9. Quality
10. False
6.Refer to section 9.5
Copyright 2009 SMU
MB0049-Unit 10-Project Management

Process
Unit 10-Project Management Process
Structure:
10.1 Introduction
Learning objectives
10.2 Project management review process guide for corporate and major information systems
Purpose
Roles and responsibilities
Relationship to other programs
10.3 Project management review process schedule and timeline
Applicable projects
Reporting schedule
Project management data
Project files
Review briefings
Termination from the review process
10.4 Review templates
General overview
Status of action items from prior review
Project status
Project schedule / decision points
Development funding status
Estimated total cost
Maintenance funding status
ROI
Exclusions
Product status
Issues and risks
10.5 Post-Review activities
Issues or concerns requiring attention

Status of open items from review
CIO reports
10.6 Summary
10.1 Introduction
We have learned all the aspects of project management in previous chapters and varied processes
related to it. In this unit, these concepts of various processes in project management have been
put together to demonstrate how actually a project management document is outlined with
respect to a typical Project Management Process. The document has been put forth based upon
the experience of several organisations and project managers.
This unit explains Project Management Process through a documentation approach, building the
concepts covered so far. In this unit, we shall focus on actual documentation done for project
management. We will see project management review process guide for Information Systems
followed by process schedule and timeline. We will also see review templates and post review
activities.
As a part of Project Management Process, various sections and subsections of this unit would
cover the following key aspects:
a) Project Management Review Process Guide for Corporate and Major Information Systems
b) Roles and Responsibilities
c) Project Management Review Process Schedule and Timeline
d) Management of Project Management Data
e) Project Documentation
f) Guidelines for preparing the briefings
g) Project Schedule / Decision Points
h) Performance Measures
i) Issues and Risks, Planning for Project Surprises Coping with Risk, Risk Management
Planning
Learning Objectives
Explain the key elements of a typical project management process.
Explain the key process elements within the industry.
Describe various terminologies and concepts applicable to practical business processes.
Describe key issues in an organisation and address the same within a comprehensive Process
Document.
Explain the way a typical Project Management Process Document is developed from a set of
Building Blocks.
10.2 Project Management Review Process Guide for Corporate and Major Information
Systems
Project Management Review Process for Corporate and Major Information Systems was
instituted to review all major information systems in development, enhancement, or production
of a product or a service. These reviews provide a forum for bringing together key project
stakeholders to communicate project status, plans, and issues to management and senior
management, for example. Chief Information Officer (CIO), Chief Finance Officer (CFO).
They are not by their nature intended to be decision-making events, but can serve as a forum for
discussion and issue resolution. This document describes the Project Management Review
Process for the corporate and major information systems with the associated responsibilities,
reporting requirements and tools, resources, and references.
Now let us look into each of them in detail:
10.2.1 Purpose
The Project Management Review Process for Corporate and Major Information Systems was
instituted to review all corporate and major information systems. This process is in concert with
the framework of the Capital Planning and Investment Control (CPIC) process.
It provides a life-cycle review process from system inception to retirement, and a correlation
process between the CPIC processes and Enterprise Architecture (EA) processes. This includes
Departmental Information Architecture as well as other significant departmental programs and
projects. These reviews serve as a forum to raise issues and concerns that will impact the project
and ensure that acceptable actions or corrective plans exist for addressing any significant
negative impacts.
The Project Management Reviews provide information and insight to the CPIC Governance
Group, the staff responsible for the funding, operation, integration and interoperability,
architectural alignment, standards compliance, and other affected staff. The information and
insight is necessary for understanding potential impacts to the project, other systems in the
environment, and to the infrastructure.
The Project Senior Management Review requires much of the same reporting of information as
the Project Management Review with the key difference being the number of projects reviewed.
The Project Management Review is designed to collect data on one project. The Project Senior
Management Review is designed to enable Program Managers to report status information on
multiple projects to one or more senior managers, for example, the CIO, the CFO, and related
deputies. Senior managers may also participate in the Project Management Review.
10.2.2 Roles and Responsibilities
The following figure 10.1 shows a list of key participants and their responsibilities in the Project
Management Review Process.
Fig. 10.1: Project management review roles and responsibilities
a) Chief Information Officers (CIO): Conducts Project Senior Management Reviews, monitors
project progress, facilitates resolution of related project issues
b) Chief Financial Officers (CFO): Approves investments in corporate/ major information

systems projects
c) Systems Owners: Develop or approve project deliverables, present project statuses, and
facilitate resolution of project issues.
d) Program Managers: Develop or approve project deliverables, approve changes to project
scope, ensure project reporting, present project status, conduct project management reviews,
manage project funding and authorise work activities.
e) Project Managers: Perform day to day project management, develop project deliverables,
prepare project management review and senior management review presentations, present
project status and manage resolution of project issues.
f) Corporate Management Investment Process Program Staff: Evaluate major information

systems which receive CMIP funding and prepare report for the top management.
g) Delivery Manager: Reviews and comments on project deliverables and work products,
schedules and supports the review meetings, provides support to systems owners and project
managers, advises the CIO and associate CIOs
h) Key Project Stake Holders and other invited participants: Attend the review meeting,
participate in discussion and provide inputs as appropriate.
10.2.3 Relationship to other Programs
There is mutual benefit for Corporate and Major Information Systems project teams and many of
the programs as a result of the information exchange generated by the Project Management
Reviews. Throughout the project life-cycle, project staff should collaborate and communicate
with staff responsible for capital planning, information architecture, standards, information
security, safety, configuration management, risk management, quality management and
assurance.
The information exchange may address status, issues, processes, requests, requirements,
approvals and assistance in the areas of project plans, schedules, budgets, functional content,
scope, staffing, infrastructure and operations.
Corporate and major information systems are reviewed from their inception to retirement
through the Capital Planning and Investment Control (CPIC) phases. The phases of CPIC are
shown in the figure 10.2.
Fig. 10.2: Capital planning and investment control phases
True or False
1. Project Management Review Process for Corporate and Major Information Systems was
instituted to review all major information systems in development, enhancement, or production
of a product or a service.
2. Project Management reviews serve as a forum to raise issues and concerns that will impact the
project and ensure that acceptable actions or corrective plans exist for addressing any significant
positive impacts.
3. There is no benefit for Corporate and Major Information Systems project teams and many of
Reviews
10.3 Project Management Review Process Schedule and Timeline
The Project Management Review Process includes the following steps. It is also shown in the
figure 10.3.
a) Identification of projects that will participate in the reviews.
b) Development and adherence to a quarterly reporting schedule.
c) Compilation of standard project management data into a presentation data.
d) Collection of detailed project files that support the information reported during the Project
Management Reviews and which may be requested for inspection during a formal audit.
e) Participation in the review meetings with any required follow-up activities.
Fig. 10.3: Project management review steps
10.3.1 Applicable Projects
Any corporate or major information system at any facility is a candidate for the Project
Management Review Process. A meeting will be scheduled to introduce and explain the Project
Management Review Process and reporting tools. As candidate projects are added to the review
portfolio, they will be incorporated into the next review cycle schedule.
The program and project managers of the information systems that are included in the review
portfolio are expected to comply with the process described in this guide. The program and
project managers of information systems that are not being reviewed through the Project
Management Review Process should also consider using this guide as mandates, that all
information technology resources undergo a management, control, and review process.
Several of the current and future corporate and major information systems initiatives have been
identified in the Departmental Information Architecture Program guidance series and in the
Corporate Systems Information Architecture (CSIA) document. Infrastructure projects may be
considered candidates for the review process. Modernisation plans are also sources for
identifying corporate and major systems that should be included in the review portfolio or whose
system owners should implement and follow this process.
10.3.2 Reporting Schedule
The Project Senior Management Reviews are scheduled every three months in conjunction with
the fiscal year. A table may be prepared to contain the columns. For example, As of Date
column indicates the last day in which information should be included for each reporting period;
the Briefing Due Date column provides the date that an electronic version of the briefing is
due.
10.3.3 Project Management Data

Legislative and regulatory mandates ensure that technology initiatives are implemented at
acceptable costs within reasonable and expected time frames. The team ensures that investments
in information technology are fully justified and aligned with agency missions and business
needs. Agency Chief Information Officers (CIOs) have the responsibility to ensure co-ordination
and tracking of investments.
Throughout the project life-cycle it is important to apply standard project management best
practices, including tracking and reporting, to all projects, regardless of size. For smaller
projects, stages may be combined and deliverables reduced in scope as appropriate. For larger or
more complex projects, additional project planning, tracking, and reporting activity may be
appropriate.
For all projects identified to participate in Project Management Reviews, the standard set of
project management reporting requirements fits into the following five categories:
a) General Project Overview
b) Project Status
c) Product Status
d) Issues and Risks
e) Project Unique Information
10.3.4 Project Files
A substantial amount of project management information that is useful throughout the

information systems life-cycle should be gathered in a central project file maintained by the
project manager. All work products developed during the project life-cycle should be included in
the project file.
The project manager should verify that all pertinent project information and documentation are
placed in the project file on a timely basis. In addition to being useful in responding to routine
and ad-hoc requests for information, a project file is instrumental in case of internal or external
audits.
Information about projects in the review portfolio will be made available for addition to the
Corporate and Major Information System repository. This repository serves as a database or data
warehouse for storing and accessing information. In addition to the Project Management Review
briefing slides, the repository is being used to store other information needed for reporting.
The following list includes some of the documents that should be provided for the projects
participating in the review process:
a) Set of review charts

b) Supporting documents (if any)
c) Handouts (if any)
d) Project plan
e) Work Breakdown Structure (WBS)
f) Review meeting notes
Access to the repository is restricted to members of the staff responsible for the reviews,
responding to inquiries, and preparing federally mandated reports in addition to the program and
project managers.
10.3.5 Review Briefings
There are two formats for the review briefings. They are shown in figure 10.4.
Fig. 10.4: Review briefings formats
The First Time Review is the initial briefing that occurs when a project is first added to the
review portfolio. All subsequent reviews use the Ongoing Review briefing format.
The primary difference between the two formats is the general overview of the project that is
presented during the First Time Review (FTR). This information is omitted from the Ongoing
Review briefings unless it has changed since the previous review.
It is expected that some of the charts in the First Time Review will need to be included in the
first Ongoing Review of the Fiscal year since annual objectives and funding may change at the
start of the fiscal year.
The briefing content is designed to address all of the pertinent information about the project at a
level appropriate for management and senior management including the CIO.
Preparation and electronic submission of each briefing to the CIO is required on a quarterly
basis. A face-to-face briefing may not be required each quarter. The CIO will notify the system
owner/program/project manager to schedule the face-to-face briefings that are required for each
reporting period.
There are some general guidelines for preparing the briefings.

The briefing can be given by the project manager.
Other project stakeholders or key personnel may be involved in the presentation.
The briefings should focus on the current status and issues associated with the project.
Two hours are allocated for each briefing.
Participants may attend the meeting in person.
Program and project managers are expected to bring their senior management to the quarterly
briefings.
Senior contractor management attendance is considered to be a good indicator of their interest

in assuring their staffs are delivering good products.
A detailed Work Breakdown Structure (WBS) should be provided with the presentation charts.
10.3.6 Termination from the Review Process
By mutual agreement between the CIO and the Program Manager, once a project has been
implemented (that is., the system is in operation), the project may discontinue the review
briefings.
Now let us go through a Self Assessment Questionnaire before going to next topic:
Fill in the blanks:
4. Throughout the project life-cycle it is important to apply standard project management best
practices, including ______ and reporting, to all projects, regardless of size.
5. The full form of CSIA is _______.
6. The two formats for the review briefings are _____ and ______.
7. The _____ are scheduled every three months in conjunction with the fiscal year.
10.4 Review Templates
Each Project Management Review meeting starts with an introduction of the members along
with the agenda and guidelines of the meeting. The remainder of the review meeting focuses on
six categories of information general overview, status of action items from prior review,
project status, product status, issues and risks, project unique information. This is depicted in
figure 10.5.
Electronic templates are used to assist project staff in the preparation of the Project Management
Review briefings First-Time Reviews, Ongoing Reviews, and Samples.
The templates serve as a means of standardising the reporting requirements and enabling a
common set of criteria for evaluating the health and progress of the departments corporate and
major information systems.
Presenters may choose to develop their own set of slides as long as the requested information is
covered.
Fig. 10.5: Project management review categories
10.4.1 General Overview
This category sets the stage for the remainder of the information provided during the review.
Generally four slides are included in this set. For the First Time Review, all four slides should be
covered. In subsequent reviews, the slides should be included only if any of the information has
changed. Slide 6 may need to be provided at the first quarter of each fiscal year, since it
documents the objectives by year and is required in Ongoing Reviews, if information has
changed.
10.4.2 Status of Action Items from Prior Reviews
This slide provides accountability and closure for issues or action items that were raised during
the past review. Issues and action items are listed in the review report that is distributed after the
review by the staff.
The project manager is expected to check this list in line with the preparation for the current
review, include all listed items on the slide, and provide the status of each item. Issues and action
items that are closed during the period from the prior review to the current review should be
reported in addition to any items that are still open.
10.4.3 Project Status
The project status category focuses on the management approach used for the project. This
includes schedule, cost, decision, points, ROI, funding status among others. Information
presented in this category should cover the following aspects.
a) The project plan should include a logically laid out schedule with dates for significant items
and decision points over the current fiscal year as well as the out-years.
b) Various project specific details should be showcased. It should have the work out details with
respect to the following questions:
i. What has occurred during the last quarter?
ii. What was accomplished including any changes from previously identified project deliverables
(the baseline?)
iii. Have the dates accelerated or slipped dates?
iv. Any significant newly identified/requested user requirements and their impacts on schedule,
costs, etc.
v. Dates planned to achieve the project objectives.
The First Time Review slides for the Project Status section should be reviewed at the start of
each fiscal year to determine if project changes warrant their inclusion in the first quarter
Ongoing Review.
10.4.4 Project Schedule/Decision Points
The project plan and project schedule should demonstrate the inclusion of plans to address
known or likely obstacles. They also include identified points where decisions or involvement by
the CIO or the project managers management is necessary.
The plans should include expected achievement dates for the item/activity performance metrics
(overall project performance metrics), requirements, and review items. The plan should also
include key decision points such as:
when the project exits one stage and enters another
when the contractor(s) comes aboard
when dates will be frozen for a particular phase of installation
when deployment and/or conversion to the new system are to occur

date when the new system becomes the system of record
An updated project plan with a work breakdown structure should be maintained that contains the
details for the next 12-18 months, and less detail for the out-years. The out-year breakdown
should contain the key/major items and decision points.
Provide the detailed work breakdown structure as background material for each review to
handout as part of the presentation and to be posted on the project management review
information repository.
10.4.5 Development Funding Status
If any portion of the project moves into production while modules are still under development,
the slide should also include funding status for the development costs.
10.4.6 Estimated Total Cost
The standard requires capitalisation of direct and indirect costs, including employee salaries and
benefits for employees who materially participate in the project. The CFO uses a website data
collection system for tracking and documenting costs.
The program or the project manager is responsible for ensuring that capitalisation costs are
captured for the project. Capitalisation should be projected in the business case and then captured
and tracked for each year of the project thereafter. All such information is captured by Chief
Financial Officer (CFO) and team.
10.4.7 Maintenance Funding Status
This slide is used to identify the maintenance costs and funding sources for the project. The
intent of the slide is to help in forecasting, planning and justifying expenditures for maintenance
of new systems.
Maintenance funding needs to be documented. Communicate issues or concerns raised as

quickly as possible. Display projected maintenance costs beyond development completion.
Record the project maintenance funding by source for the next seven years of the project.
10.4.8 ROI
Return on Investment (ROI) is the calculated benefit that an organisation is projected to receive
in return for investing money, time and resources in a project. Within the context of the review
process, the investment would be in an information system development or enhancement project.
ROI information is used to assess the status of the business viability of the project at key
checkpoints throughout the projects life-cycle. ROI may include the benefits associated with
improved mission performance, reduced cost, increased quality, speed, or flexibility, and
increased customer and employee satisfaction.
ROI should reflect such risk factors as the projects technical complexity, the agencys
management capacity, the likelihood of cost overruns, and the consequences of under or non-
performance. Where appropriate, ROI should reflect actual returns observed through pilot
projects and prototypes.
ROI should be quantified in terms of money and should include a calculation of the break-even
point (BEP), which is the time (point in time) when the investment begins to generate a positive
return. ROI should be re-calculated at every major checkpoint of a project to see if the BEP is
still on schedule, based on project spending and accomplishments to date.
If the project is behind schedule or over budget, the BEP may move out in time; if the project is
ahead of schedule or under budget the BEP may occur earlier. In either case, the information is
important for decision-making based on the value of the investment throughout the project life-
cycle.
Any project that has developed a business case is expected to refresh the ROI at each key project
decision point (that is, stage exit) or at least yearly.
10.4.9 Exclusions
If the detailed data collection, calculation of benefits and costs, and capitalisation data from
which ROI is derived was not required for a particular project, then it may not be realistic or
practical to require the retrofit calculation of ROI once the project is added to the review
portfolio.
In such a case, it is recommended that a memorandum of record be developed as a substitute for

ROI. The memorandum should provide a brief history of the program, a description of the major
benefits realised to date with as much quantitative data as possible, and a summary of the process
used to identify and select system enhancements.
Some of the major benefits experienced by sites that installed the information system that would
be important to include in the memorandum are:
a) Decommissioning of mainframe computers.
b) Reduction/redirection of labour.
c) Elimination of redundant systems.
d) Ability to effectively upgrade all sites with one standard upgrade package.
In each case above, identify the specific site, systems, and labour involved in determining the
cited benefit. Identify any costs or dollar savings that are known or have been estimated.
The memorandum will be used as tool for responding to any future audit inquiries on project
ROI. For the Project Management Review, it is recommended that the project leader replaces the
text on the ROI document through:
a) A note stating which stage of its-cycle the project is in.
b) A bulleted list of the most important points from the memorandum of record.
c) A copy of the memorandum of record for the review repository.
In subsequent reviews of the information system, the ROI slide can be eliminated from the
package. There is one notable exception to this guidance. Any internal use software project in the
maintenance phase of its life-cycle that adds a new site or undertakes an enhancement or
technology refresh that reaches the cost threshold established by standard will need to satisfy
capitalisation requirements.
It requires all agencies to capitalise items acquired or developed for internal use if the expected
service life is two or more years and its cost meets or exceeds the agencys threshold for internal
use software. The standard requires capitalisation of direct and indirect costs, including
employee salaries and benefits for both federal and contractor employees who materially
participate in the software project.
Program managers are considered to be the source of cost information for internal use software
projects. If capitalisation data is collected for the project in the future, the project would be
expected to calculate and track its ROI.
10.4.10 Product Status
The product status section focuses on the technical approach. This includes system architecture,
project methodology and processes, product quality, and risks and issues. Product measurements
are used in quality assurance processes to project and measure product quality. These include
defect reporting, testing status, and customer satisfaction measurements.
Performance Measures
Performance measurements are used in project management and quality processes to determine
and communicate status and accomplishments measured against specific objectives, schedules,
and milestones. These measurements extend to include delivery of desired products and services
to customers, whether external or internal.
Performance measurement is the ongoing monitoring and reporting of program

accomplishments, particularly progress towards pre-established goals. It is typically conducted
by program or agency management.
Performance measures may address:

the type or level of program activities conducted (process)
the direct products and service delivered by a program (outputs)
the results or those products and services (outcomes)
A program may be any activity, project, function, or policy that has an identifiable purpose or
set of objectives.
Capital Planning and Investment Process must institute performance measures and management
processes.
Measurements can be reported at the program and project level and can include:
resource and cost goals
schedule and progress goals
trade-offs and risk outcomes
product quality goals
customer satisfaction goals
Basic categories of performance measurements include measures of efforts, measures of

accomplishments and measures that relate efforts to accomplishments (as depicted in the figure
10.6).
Fig. 10.6: Basic categories of performance management
a) Measures of efforts: Efforts are the amount of financial and non-financial resources (in terms
of money, material) that are put into a program or process.
b) Measures of accomplishments: Accomplishments measures report what was provided and
achieved with the resources used. There are two types of measures of accomplishments outputs
and outcomes. Outputs measure the quantity of services provided; outcomes measure the results
of providing those outputs.
c) Measures that relate efforts to accomplishments: These are efficiency measures that relate
efforts to outputs of products or services. They also measure the resources used or cost (for
example, in rupees, employee-hours, or equipment used) per unit of output.
They provide information about the production of an output at a given level of resource used and
demonstrate an entitys relative efficiency when compared with previous results, internally
established goals and objectives.
10.4.11 Issues & Risks
The project manager is responsible and accountable for all the external and internal issues of the
project. Issues are expected to be resolved during project team meetings or stage exits.
Significant issues, whether resolved or not, should be documented and discussed at the project
Management review.
This is done for the purpose of lessons-learned so that the same difficulties are not repeated
during subsequent enhancements or upgrades or by other corporates or major systems, and
solutions are shared throughout the department.
Present the issues or concerns that need to be addressed by management or senior management.
Bring the awareness of those concerns or issues either about the project or the proposed solution
that may be resolved. This information is typically identified and raised by the project manager.
Project Unique Information: Highlight any additional project information to be included in the
Project Management Review.
Overview of Project Status: Its purpose is to communicate a visually-oriented thumbnail

view of the projects status. The status will be reported as Green, Yellow, or Red, using the
predefined criteria.
The data should be a cumulative representation of the project status. All parties present at the
review should reach consensus that this slide fairly represents the status of the project, as it will
be used for (higher) management reporting purposes.
True or False:
8. Each Project Management Review meeting starts with an introduction of the face-to-face and
meet-me call participants and an opportunity for general comments.
9. The templates serve as a means of standardising the reporting requirements and enabling a
major information systems.
10. The customer is expected to check this list in preparation for the current review, include all
listed items on the slide, and provide the status of each item.
11. The program/project manager is responsible for ensuring that capitalisation costs are
captured for the project.
12. A program may be any activity, project, function, or policy that has an identifiable
manager.
10.5 Post-Review Activities
Once the Project Management Review has been conducted, follow up with program/project
managers on any issues or concerns requiring attention. Also check the status of open items from
the review and CIO reporting actions, for example, reports to the CIO Council. The CIO may
also recommend quality assurance analysis be conducted.
10.5.1 Issues or Concerns Requiring Attention
The project manager is responsible for raising issues or concerns that require assistance or
guidance to the attention of the CIO. These items should be communicated whenever they
become known, and not held for the next Project Management Review.
The CIO will assign appropriate OCIO staff available to help resolve open items. The program /
project manager should communicate the status of these items in each quarterly review until the
items are resolved / closed.
10.5.2 Status of Open Items from Review
The program/project manager is responsible for tracking the open items from the review and
communicating the status in each quarterly review until the items are closed. The scheduling of
reviews will coordinate with the program/project manager after the quarterly reviews to help
ensure that new items have been captured for tracking and action by the program/project
manager.
10.5.3 CIO Reports
The staff supporting the CIO quarterly reviews will prepare a summary report after each Project
Management Review. The summary report will include the following information:
a) Summary Status
b) Open Issues/Items
c) Status Performance Objectives/Measures
d) Status of Schedule/Cost
The summary report will be provided to the program/project manager to gain concurrence on the
content. The summary report will be used by the CIO when reporting status to the CIO Council.
10.6 Summary
In this unit you have learnt the key elements of a typical project management process and the key
process elements within the industry. You have learnt about the various terminologies and
concepts applicable to practical business processes along with the key Issues in an organisation
and address the same within a comprehensive Process Document.
You have also learnt about the way a typical Project Management Process Document is
developed from a set of building blocks.
Fill in the blanks:
13. ________ is responsible for raising issues for concerns that require assistance or guidance to
the attention of the CIO.
14. The staff supporting the CIO Quarterly Reviews will prepare a summary report after each
_____________.
1. Explain in detail the project management review process.
2. What are the various post review activities?
3. What is the significance of reviewing ROI?
10.8 Answers
1. True
2. False
3. False
4. Tracking
5. Corporate System Information Architecture
6. First time, Ongoing
7. Project Management Review
8. True
9. True
10. False
11. True
12. False
13. Project Manager
14. Project Management Review
1. Refer 10.3
2. Refer 10.5
3.Refer 10.4.8
Copyright 2009 SMU
MB0049-Unit-11-Project Risk Management

Unit-11-Project Risk Management
Structure:
11.1 Introduction
Learning Objectives
11.2 Planning for Project Surprises Coping with Risk
When to perform risk management?
11.3 Risk Identification
11.4 Risk Analysis
11.5 Risk Management Planning
11.6 Reviewing Risks
11.7 Risk Management Process
11.8 Overview of Risk Management
11.9 Summary
11.1 Introduction
Risk is an inherent part of any project. You cannot neglect the potential impact of risk in the
project. Risks can be at any stage of the project life cycle and create impact based on it. In simple
words, project risk can be defined as the possibility that something may go wrong, or at least not
turn out as planned. Risks are different for each project, and risks change as a project progresses.
In any project, it is difficult to assess the quantum of risks involved. Therefore careful planning
will result in minimising the risk in a project. The formulation of a project is based on the
estimates of the past data available with the project management team. The data may have been
from the recorded information about past projects executed successfully or from the experience
of the project management team members.
There will be lots of uncertainties and surprises in a project during its execution. It is necessary
to analyse and estimate the project in all respects in order to enable the manager take proper
decision on the project. Project-specific risks could include but are not limited to following
examples:
Mismanagement of resources
Loss of key employees
Questionable vendor availability and skills
Insufficient time
Incorrect estimation of scope
Inadequate project budgets
Funding issues
Cost overruns
Legal liabilities
Credit risks
Accidents and natural disasters
Project risk management is all about the systematic process of identifying, analysing, prioritising
and responding to risk by applying risk management principles and controlling the probability
and/or impact of unfortunate events at the project level. It attempts to maximise the probability
and consequences of positive events and to minimise the probability and consequences of
adverse events. The goal is to prevent or reduce risk in a cost-effective manner without
compromising quality or harming the mission or timeline.
The benefits of proper risk management in projects are huge. Organisations can generate a lot of
profit if they deal with uncertain project events in a proactive manner. The result will be that they
minimise the impact of project threats and seize the opportunities that exists.
Proper risk management enables you to deliver the project on time, on budget and with the
quality results ones project sponsor/client demands. In addition to this, other project team
members can be also happy and motivated enough to perform better and better. All this would
essentially boil down to increase in the productivity of team members and in the efficiency and
effectiveness of the resources. In this unit you will learn more about project risk management.
Learning Objectives
By the end of this unit, you will be able to:
Define risk in a project
Explain the situation of risks and identify its impact

Recall the steps necessary to manage risk
Describe the review processes for a risk situation and its causes
List ways to mitigate risk
11.2 Planning for Project Surprises coping with Risk
As mentioned earlier, risk is an inherent part of any project. Irrespective of how much you have
planned, your project (software product or process improvement effort) is plagued with
uncertainties. Hence you cannot sideline or dilute the importance of risk management and needs
to have an effective risk management system in place.
Risk management involves identifying potential problems (risks), analysing those risks, planning
to manage them, and reviewing them.
Many development groups run project without any consideration for the problems that might
occur. Risk management works as an insurance for projects, and can help reduce project costs
and efforts when trouble strikes. It can also help in preventing problems even before they take a
bigger shape. When risk management techniques are used, you can prevent problems and
anticipate others to make the project run smoothly.
Risk management as a process has evolved rigorously. Later in this unit, you will see the famous
four steps to deal and manage the risk in a project. However, before discussing risk management,
let us have a look at the various types of risks.
You have already seen some classic examples of sources of risks in the introduction. Each of
these risks can be classified in the four types of risks listed in figure 11.1 and explained later:
Fig. 11.1: Types of project risks
As discussed earlier, there are different types of risks involved in a project. They can be broadly
classified as:
a) Project Risks: This is the risk pertaining to pure project related parameters and activities.
They may arise from changes in the scope of the project, in the work quantities, and in the
resource requirements. Risk may also originate from estimation error or unexpected
developments in a project.
As you have already studied, project success depends on three major parameters including Cost,
Resources and Timelines. Figure 11.2 shows the interdependency between the three elements. If
any of these elements are altered, the entire project is exposed to risk.
Fig. 11.2: Source of project risks
b) Market Risk: This is the risk which is external to project but related to it. It is the risk arising
out of a change in any of the following market parameters price change, changes in market
regulations, economic changes, competition, and competitors product changes.
c) Industry Risk: This is an industry specific risk. It is the risk arising out of a change in
scientific instruments used in a business activity or changes in company policies because of
changes in the industry.
d) Social and Political Risk: These are the risks pertaining to society at large. Although the
probability is very low but it may have a big impact on the project. These risks may arise out of
changes in labour situation, labour laws, environmental laws, and so on.
The following table 11.1 shows examples of common project level risks:
Table 11.1: Sample project level risk checklist
Category Risk
Unrealistic or incomplete scope definition
Scope
Scope statement not agreed to by all stakeholders
Unrealistic or incomplete schedule development
Schedule
Unrealistic or incomplete activity estimates
Project Inadequate skills and ability of the project manager
Management
Inadequate skills and ability of business users or subject
matter experts
Inadequate skills and ability of vendors
Poor project management processes in place
Lack of or poorly designed change management processes
Lack of or poorly designed risk management processes
Inadequate tracking of goals/objectives throughout the

implementation process
Lack of legal authority to implement project
Legal
Failure to comply with all applicable laws and regulations
Loss of key employees
Personnel Low availability of qualified personnel
Inadequate skills and training

Inadequate project budgets
Cost overruns
Financial
Funding cuts
Unrealistic or inaccurate cost estimates

Lack of stakeholder consensus
Changes in key stakeholders
Lack of involvement by project sponsor

Organisational
Loss of project sponsor during project
Changes in agency/office leadership
Organisational structure
Poor timing of product releases
Business Unavailability of resources and materials
Poor brand image

Congressional input or interest
Changes in related systems, programs
Labour strikes or work stoppages
External Seasonal or cyclical events
Lack of vendor and supply availability
Financial instability of vendors and suppliers
Contractor or grantee mismanagement

Internal Unavailability of business or technical experts
Complex technology
Technical New or unproven technology
Unavailability of technology
Unrealistic performance goals
Performance
Immeasurable performance standards
Resistance to change
Cultural
Cultural barriers or diversity issues
Unrealistic quality objectives
Quality
Quality standards unmet
11.2.1 When to Perform Risk Management?
You discussed earlier that risk may be associated at all stages of a project life cycle. The earlier
the risks are identified, lesser is the impact and easier is the mitigation. By contrast, risks can be
more difficult to deal with and more likely to have significant negative impact if they occur later
in a project.
Risk probability is simply the likelihood that a risk event will occur. On the other hand, risk
impact is the result of the probability of the risk event occurring plus the consequences of the
risk event. Impact, in simple terms is defined as how much the realised risk is likely to hurt.
The propensity (or probability) of project risk depends on the projects life cycle, which includes
five phases: initiating, planning, executing, controlling, and closing. While issues can occur at
any time during a projects life cycle, issues have a greater chance of occurring in earlier stages
due to unknown factors.
The relationship of risks and their probability across the project life-cycle process is illustrated in
the following figure 11.3. As the figure explains, the probability of the occurrence of the risk is
higher in the initial stage and least in the closing stage. The greater area in pink signifies a
greater probability of occurrence of risk.
Hence, it is important to adapt to these risks and be flexible enough to tackle them. We discussed
about the probability of the risk occurring at various stages of the project life cycle. In the later
section, you will learn about the impact created by these risks at each stage.
Fig. 11.3: Probability of risks versus stages of project life cycle
The opposite is the case for risk impact. At the beginning of the project the impact of a problem,
assuming it is identified as a risk, is likely to be less severe than it is later in the project life
cycle. This is obvious because at this early stage there is much more flexibility in making
changes and dealing with the risk.
Additionally, if the risk cannot be prevented or mitigated, the resources invested and
potentially lost at the earlier stages are significantly lower than later in the project. On the other
side, as the project moves into the later phases, the consequences become much more severe.
This is attributed to the fact that as time passes, there is less flexibility in dealing with problems,
significant resources have likely been already spent, and more resources may be needed to
resolve the issue.
The figure 11.4 shows the relationship between impact and various stages of project life cycle.
You can very well note that this is exactly inverse to the relationship of probability and the
project stages.
Fig. 11.4: Impact of risks versus stages of project life cycle

After gaining a good understanding of risk along with its occurrence and impact, let us know
focus on how to manage them. The major risk management processes followed widely is
described in figure 11.5.
These steps should be performed at the beginning of a project, at the beginning of major phases
in a project (such as requirements, design, coding, and deployment) and when there are
significant changes (such as feature changes, target platform changes and technology changes).
We will cover each step in detail in the subsequent section of this unit. However, please note that
these steps are generic in nature and you may customise them to cater to individual needs.
Fig. 11.5: Steps for risk management
As seen from the figure above, there are four generic steps to manage a risk:
a) Risk Identification
b) Risk Analysis
c) Risk Management Planning
d) Risk Review
Now let us have a detailed look at each of these steps:
11.3 Risk Identification
Risk identification occurs at each stage of the project life cycle. To identify risks, we must first
define risk. As defined earlier, risks are potential problems, ones that are not guaranteed to occur.
When people begin performing risk identification they often start by listing known problems.
Known problems are not risks. During risk identification, you might notice some known
problems. If so, just move them to a problem list and concentrate on future potential problems.
As projects evolve through project development so too does the risk profile. Project knowledge
and understanding keep growing, hence previously identified risks may change and new risks
identified throughout the life of the project. Here we will discuss various tools and techniques
available for risk identification. The best and most common methodology for risk identification
is done using a brainstorming session. The brainstorm typically takes 15-30 minutes. You have
to be sure to invite anyone who can help the team think of risks. Invite the project team,
customer, people who have been on similar projects, and experts in the subject area of the
project. Involving all stakeholders is very important.
Limit the group size to nine people. In the brainstorming session, participants discuss out
potential problems that they think could harm the project. New ideas are generated based on the
items on the brainstorm list. A project manager can also use the process to refer to a database of
risk obtained from past. Here, prior experience and learning from past project plays a very
important role. The information obtained from such databases can help the project manager to
evaluate and assess the nature of the risk and its impact on the project. Also to a great extent the
judgment of the project manager based upon his past experience comes very handy in dealing
with risks.
Another important method is to generate alternative solution or methodology to deal with risk.
Generate solution by means of group review meetings or a brainstorm session. However,
consider the following points during a brainstorm session:
Selection of weak areas in a project, such as unknown technology being used or to be used
Things those are critical or extremely important to the effort, such as the timely delivery of a
vendors database software, creation of translators, or a user interface that meets the customers
needs
Things that have caused problems in the past, such as loss of key staff, missed deadlines, or
error-prone software
Some examples of risks that may be identified in such sessions are:
We may not have the requirements right
The technology is untested
Key people may leave
The server wont restart in situation X
People might resist the change
Any potential problem, or critical project feature, is a good candidate for the risk list. Once we
have created a list, work with the group to clarity each item. Also ensure that duplicate items are
removed. The output of this step should include:
Name of the risk
Detailed description of risk event

Risk Trigger
Risk Type
Potential Response
Comments, if any
True or False
1. Risk management is insurance for projects, and can help reduce your costs and efforts when
trouble strikes.
2. Industry risk arises out of changes in labour situation, labour laws, environment law, etc.
3. Risks are potential problems, ones that are guaranteed to occur.
11.4 Risk Analysis
The first step in risk analysis is to make each risk item more specific. Risks such as, Lack of
management buy-in, and people might leave, are a little ambiguous. In these cases the group
might decide to split the risk into smaller specific risks, such as, manager decides that the
project is not beneficial, Database expert might leave, and Webmaster might get pulled off
the project.
The next step is to set priorities and determine where to focus risk mitigation efforts. Some of the
identified risks are unlikely to occur, and others might not be serious enough to worry about.
Paretos law studied earlier applies here.
During the analysis, discuss with the team members each risk item to understand how
devastating it would be if it did occur, and how likely it is to occur. This way you can gauge the
probability of occurrence and the impact created. You can form a matrix based on the likeliness
of occurrence and the impact created as shown in table 11.2. For example, if you had a risk of a
key person leaving, you might decide that it would have a large impact on the project, but that it
is not very likely.
Table 11.1: Risk Analysis
In the process, we make the group agree on how likely it thinks each risk item is to occur, using a
simple scale from 1 to 10 (where 1 is very unlikely and 10 is very likely). The group then rates
how serious the impact would be if the risk did occur, using a simple scale from 1 to 10 (where 1
is little impact and 10 is very large). To use this numbering scheme, first pick out the items that
rate 1 and 10, respectively. Then rate the other items relative to these boundaries.
To determine the priority of each risk item, calculate the product of the two values, likelihood
and impact. This priority scheme helps push the big risks to the top of the list, and the small risks
to the bottom. It is a usual practice to analyse risk either by sensitivity analysis or by
probabilistic analysis. This is shown in figure 11.5.
Fig. 11.5: Quantitative risk analysis
Sensitivity Analysis: In sensitivity analysis, a study is done to analyse the changes in the
variable values because of a change in one or more of the decision criteria.
Probabilistic Analysis: In the probability analysis, the frequency of a particular event

occurring is determined, based on which its average weighted average value is calculated. Each
outcome of an event resulting in a risk situation in a risk analysis process is expressed as a
probability.
Risk analysis can be performed by calculating the expected value of each alternative and
selecting the best alternative. Now that the group has assigned a priority to each risk, it is ready
to select the items to manage. Some projects select a subset to take action upon, while others
choose to work on all of the items.
Fill in the blanks:
4. The first step in risk analysis is to make each risk item more _____.
5. In ________ a study is done to analyse the changes in the variable values because of a change
in one or more of the decision criteria.
6. In the ______, the frequency of a particular event occurring is determined, based on which it
average weighted average value is calculated.
11.5 Risk Management Planning
After analysing and prioritising, the focus comes on management of the identified risks. In order
to maximise the benefits of project risk management, you must incorporate the project risk
management activities into our project management plan and work activities.
There are two things you can do to manage risk. The first is to take action to reduce (or partially
reduce) the likelihood of the risk occurring. For example, some project that work on process
improvement make their deadlines earlier and increases their efforts to minimise the likelihood
of team members being pulled off the project due to changing organisational priorities. In a
software product, a critical feature might be developed first and tested early.
Second, you can take action to reduce the impact if the risk does occur. Sometimes this is an
action taken prior to the crisis, such as the creation of a simulator to use for testing if the
hardware is late. At other times, it is a simple backup plan, such as running a night shift to share
hardware.
For the potential loss of a key person, for example, you might do two things. You may plan to
reduce the impact by making sure other people become familiar with that persons work, or
reduce the likelihood of attrition by giving the person a raise, or by providing extra benefits.
True or False:
7. In managing a risk, the first step is to take action to increase the likelihood of the risk
occurring.
8. In managing a risk, the second step is to take action to reduce the impact if the risk does occur.
11.6 Review Risks
After you have implemented response actions, you must track and record their effectiveness and
any changes to the project risk profile. You need to review the risks periodically so that you can
check how well mitigation is progressing. You can also see if the risk priorities need to change,
or if new risks have been discovered. In such case, you might decide to rerun the complete risk
process if significant changes have occurred on the project.
Significant changes might include the addition of new features, the changing of the target
platform, or a change in project team members. Many people incorporate risk review into other
regularly scheduled project reviews. In summary, risk management is the planning to potential
problems, and the management of actions taken related to those problems.
11.7 Risk Management Process
So far you studied the detailed procedure to estimate risks and its impact. This section focuses on
practising the same. The following are the simple steps which can be followed:
i. Determine scope of the risk session.
ii. Select the team and moderator.
iii. The moderator explains the risk process to new team members.
iv. Identify risks (potential future problems).
v. Brainstorm areas of risk, for example, weak areas such as unknown technology. Things which
are critical are extremely important to the effort. Such as the timely delivery of a vendors
database software, creation of translators, or a user interface that meets the customers needs.
vi. Identify things that have caused problems in the past, such as loss of key staff, missed
deadlines, or error-prone software.
vii. Remove invalid or irrelevant stuff.
Current problems should be treated as problems, not risks. The focus should be to minimise the
risks. Stakeholders may adopt various strategies to prevent the risk but risks are unavoidable.
Risks vary from one project to another project. A contingency plan has to be prepared to handle
the risks.
The figure 11.6 shows the steps to handle the risks.
a) Identify Risks: The following are the questions that you should ask to identify the correct
risk. You should critically analyse the difference between a risk and a problem. For each risk
item:
Does the team understand the risk item? If necessary, split into separate risk items, e.g., Disk
may overload under condition X. Disk may overload under condition Y. Discuss and determine
its scope.
Fig. 11.6: Steps to handle risks
What would the consequences be if the probable risk item occurs?

Determine what the impact would be if the worst happens, using a scale of one to ten as
described earlier.
Determine the likelihood of the risk item to occur, using a scale of one to ten.
Determine the priority of the risk items through quantitative analysis (impact x
likelihood). Focus on the items with the highest priority.
b) Analyse Risks: Analysis of risk and its impact is very important. There are many models
available. You may customise any of them for the specific needs. Software may be used for the
purpose of analysis.
c) Mitigate Risks: Proper mitigation plan is a must in order to handle the risks arising in the
project. The plan should focus on high priority issues. Select the most important risk issues, such
as the top 2 or 3, or top 20%.
Brainstorm on actions that could be taken to reduce the likelihood of the risk item occurring.
Brainstorm on actions that could be taken to reduce the impact if the risk item does occur.
Decide which actions to pursue. Select a person to be responsible for each action chosen.
Document the information in the risk management plan.
d) Review Risks: Establish how often risks should be reviewed (once a month is typical). Risk
reviews can be incorporated into existing project status and phase reviews. Update the list based
on risk review sessions.
e) Control Risks: It refers to controlling the deviations in a project which may be one of the
reasons to induce a risk element in the project. Controlling the risk ensures that the project is
likely to be completed as per the plans and heading towards the goals set for the project. It is
preferable to work in a structured mode to handle risks in a project. The final goal should be to
complete the project on time and as per the schedule within the given budget and limited
resources with the desirable quality.
Fill in the blanks:
9. ________ involves identifying potential problems (risks), analysing those risks, planning to
manage them, and reviewing them.
10. Risk identification can be done using a ______ session.
11.8 Overview of Risk Management
There is a mutual benefit for corporate and major information systems project teams and many of
Reviews. Corporate and major information systems are reviewed from their inception to
retirement, i.e., throughout the Capital Planning and Investment Control (CPIC) phases of
Identification, Selection, Control, and Evaluate. Several of the current and future corporate and
major information systems initiatives have been identified in the Departmental Information
Architecture Program guidance series and in the Corporate Systems Information Architecture
(CSIA) document.
The templates serve as a means of standardising the reporting requirements and enabling a
major information systems. Presenters may choose to develop their own set of slides as long as
the requested information is covered. Performance measurements are used in project
management and quality processes to determine and communicate status and accomplishments
measured against specific objectives, schedules, and milestones. These measurements extend to
include delivery of desired products and services. As discussed earlier, there are two things you
can do to manage risk. First is to take action to reduce (or partially reduce) the likelihood of the
risk occurring. For example, some projects that work on process improvement make their
deadlines earlier and increase their efforts. Second, you can take action to reduce the impact if
the risk does occur. Sometimes this is an action taken prior to the crisis, such as the creation of a
simulator to use for testing if the hardware is late.
You may decide to rerun the complete risk process if significant changes have occurred on the
project. Significant changes might include the addition of new features, the changing of the
target platform, or a change in project team members. Many people incorporate risk review into
other regularly scheduled project reviews. By now, you understand that risk management is the
integral part of any project management and you cannot neglect it. Besides, this is not a onetime
process but an evolving one and requires continuous attention till the closure of the project.
True or False:
11. CSIA stands for Collaborative Systems for Information Analysis.
12. Performance measurements are used in project management and quality processes to
determine and communicate status and accomplishments measured against specific objectives,
schedules, and milestones.
11.9 Summary
This unit has covered the fundamentals of reviewing a project and also identifying the risks
involved in a project. You learnt the basic structure of risk management in any project. This
includes identification of risks followed by its analysis, its mitigation plan and its monitoring
mechanism.
This unit discussed the steps necessary to manage the risks and focused on the processes needed
to review a risk situation.
You also learnt the qualitative and quantitative analysis of the risk. This is done to prioritise the
various potential risks. You saw two approaches for the same.
1. What are the types of risks involved in a project?
2. What are the typical steps involved in analyzing a risk?
3. Explain the five steps to handle a risk.
1. True
2. False
3. False
4. Specific
5. Sensitivity Analysis
6. Probability Analysis
7. False
8. True
9. Risk Management
10. Brainstorming
11. False
12. True
1.Refer 11.3
2.Refer 11.5
3.Refer 11.8
Copyright 2009 SMU
MB0049-Unit-12-Fundamentals of
Application Software
Unit-12-Fundamentals of Application Software
Structure:
12.1 Introduction
Learning Objectives
12.2 Odette Documentation System Specifications
Introduction to SCMo
Defining the process documentation system
Model, object and symbol specifications
Description of models and objects
Process chain
Model integration and model navigation
Supply chain modelling / mapping assignment symbol
12.3 Methodology and Concepts
ARIS web publisher

Master global materials management operations guidelines
Strategy and improvement
Work organisation
Capacity and production planning
Customer interface
Production and product control
Supplier interface
12.4 Project Management using software
Reviewing the baseline
Tracking progress
Balancing workloads
Monitoring variances
Creating reports
12.5 Summary
12.1 Introduction
Project Management has become so complex in modern times that project teams have started to
realise the challenges of handling such a formidable mix of business processes. The sheer
volumes had earlier led to suspended animation of several large projects till a number of leading
software firms, led by Microsoft, came up with an IT-integrated approach with well-designed
standardised software solution for Project Management.
Apart from breathing easy, project team members sensed the opportunity to exhibit better
efficiency and a greater level of adherence to schedules when a bulk of their manual processes
were automated to a great extent. They are able to simulate various scenarios and accurately
estimate the parameters like resources consumption, time and cost. Undisputedly, today these
software applications have become an integral part of any project management in all industries.
In this unit, therefore, we would attempt to understand Project Management Application

Software through a cursory look at the features and capabilities of leading software solutions like
MS PROJECT, ODETTE, INNOVATEUR and AGILE. While this just serves to understand the
concepts, you are advised to visit their websites and download demo versions to understand how
they work. This unit will really enhance your understanding and practicality of project
management.
Various sections and subsections of this unit would cover details of the following:
Project Management Application Software
ODETTE
ARIS Web Publisher
Microsoft Project 2002
AGILE Project Management System apart from writing a winning Business Plan
Learning Objectives
Explain the structure of popular Project Management Software Solutions.
Describe key processes within the industry which can be IT-enabled and integrated effectively.
Analyse key features and functions of these software.
Describe how an IT-enabled approach could benefit organisation enhance productivity and
efficiency as part of their Project Management Systems.
12.2 Odette Documentation System Specifications
The ODETTE project was started in June 2000 as part of the IST framework programme 5
financed by the European Commission. The main goal of the project was to develop object-
oriented hardware design methodology. This new design methodology was combined with a
class library of basic building blocks and a tool-set that provides synthesis and simulation
support
The prime deliverable of the ODETTE is a system for object-oriented hardware design based on
SystemC(TM) system description language, which provides a migration path from object-
oriented system specifications to efficient hardware implementations.
12.2.1 Introduction to Supply Chain Monitoring (SCMo)
The intent of this document is to define the structure of the Documentation System, its content,
the method of content generation and to attain common documentation of all standard processes
of ODETTE.
The documentation is valid for the SCM group of ODETTE. The Documentation System is
intranet based to provide immediate access to current, up-to-date process documentation.
The system allows users to navigate through graphical structures to relevant documentation and
processes which were created with the ARIS-Toolset.There are various advantages of using such
a documentation system. The process documentation system serves the following objectives as
shown in figure 12.1.
Fig. 12.1: Objectives of process documentation system
a) Standard / Best Practices: Documentation system stores and presents standards and best
processes to be adhered to across the industry. This also helps the organisation to secure their
correct applications.
b) Central Repository: It also offers a central location of all processes and system related
information. This includes customising documentation to working guidelines.
c) Adaptation: Adaptation is another unique objective achieved through documentation system.

They allow flexible and quick adaptation in case of process changes or enhancement and provide
the updated information immediately.
d) Reference: It also provides easy and quick reference to the documents. They present the
standard processes in the intranet, where users can look up the current processes whenever
necessary.
e) Availability: Process documentation system is available at every working location.
12.2.2 Defining the Process Documentation System
The content of the process documentation system includes the area supply chain management
from the ODETTE Supply Chain Management Group.
The system includes graphical process documentation, in the form of process chains, as well as
the entire range of documentation related to the processes. Related information is attached to
each documentation level, where it can be in the form of a single document or a link to further
documents or other process chains.
The process documentation system gives, according to its objectives, an overview and a detailed
view of the relevant processes for Supply Chain Monitoring (SCMo). The processes give the
information as to which activities are done and by whom, when the activities are done and which
systems and information support those activities. Easy system operation is achieved through the
use of top-down navigation and the availability of a search index.
12.2.3 Model, Object and Symbol Specifications
This section covers details and specification including models and model types used.
ARIS offers a wide variety of model types to enable modelling customised to individual
specifications. The models and model types used in the documentation system are listed in the
following table 12.1
Table 12.1: Models and model types
Model Identification Model Type

Work Package Function Tree
Process Function Tree
Sub Process Process Chain (eEPC)
12.2.4 Description of Models and Objects
As we saw earlier, we have two types of models (as shown in figure 12.2). They are Function
Tree and Process Chain.
Fig. 12.2: Model types

Function Tree: The entry level of the process documentation structure is the function tree that
shows the hierarchic structure of the process documentations. The function of the Supply Chain
Monitoring (SCMo) documentation contains three levels as shown in figure 12.3.
Fig. 12.3: Supply chain monitoring levels
Level 0: Work Package: Level 0 shows the work packages, which represent the different part
projects. At present only the SCMo-processes are described in this documentation.
Level 1: Process: On Level 1, the processes that belong to the work package on Level 0 are
listed. They are not yet the specific processes, but rather self-contained process blocks. They
represent a higher picture.
Level 2: Sub-Process: In Level 2, the processes are graphically depicted in the form of process
chains. The process chain-model itself can be opened via the assignment.
The following table 12.2 below describes the objects that are used in the function tree-model:
Table 12.2: Objects of function tree model
Object Definition Example

Function An object that represents a work Operative Processes
package, a process or a sub
process. Updated SCMo-
Inventory Information
Edge Illustrates logical succession by Alert Workflow
connecting the individual
elements.
12.2.5 Process Chain
The Process Chain describes a process based on the chronological as well as the logical
interdependencies. The following questions are considered in the process chain depiction:
When shall an activity be done?
What should be done?

Which resources (IT-systems, information, data, organisations) are necessary and to acquire?
A Process Chain contains some elements, which are called objects in the ARIS-Toolset. Some
objects are mandatory like event, function, edge and connectors. The other objects can be added
for a more detailed description.
The following table 12.3 gives the details of the same.
Table 12.3: Objects of process chain
Object Definition Example

A component representing achieved False alert Alert and
Event state in the process flow. Each process root-causes
starts and ends with an event.
A component representing either Find root causes
Function manual or system supported tasks to Define counter
be carried out. measures
Organisation Describes which kind of organisation Logistics
Unit Type fulfils or contributes to the function.
Describes the person who fulfils or Head of Logistics
Person Type
contributes to the function.
Describes the kind of IT system that SCMo-Tool
Application
supports a function.
Object linked to another process
Process
representing dependency between
Interface
multiple processes.
An information object offering a link Bill of delivery
Document to descriptive texts corresponding to
the Process.
A cluster is an information object that Production Link
combines different entity types and
describes which information (data) is
Cluster
needed for a successful fulfilment of
the function or which information is
created by fulfilling the function.
Connector Represents branching in non-linear
processes.
(Linking
Operator)
Illustrates the chronological and
Edge logical succession of a process by
connecting the individual elements.
12.2.6 Model Integration and Model Navigation

The above mentioned models are connected with one another to create the integrated model in its
entirety.
The entry point in the documentations system is the model Process Overview SCMo. This
model is the starting point for the navigation to other models.
The navigation between models is done via the assignment symbol. The assignment symbol of a
function / process interface indicates that there is a link to another model. The linked / assigned
models can be opened by double-clicking on the assignment symbol.
12.2.7 Supply Chain Modelling / Mapping assignment symbol
This can be classified into two different navigations as shown in figure 12.4.
Fig. 12.4: Supply chain modelling
a) Vertical Navigation: The vertical navigation is the navigation on different levels. Starting on
the Work package level and going downwards into more detail, the first models of processes are
found on the Sub-Process level.
b) In the model Process Overview SCMo those processes are assigned to the functions on
Level 2. In the models there can be assignments for some functions, e.g. for a Function
Allocation Diagram or a sub-process that describes that function. These two examples are
currently the models on the lowest level.
c) Horizontal Navigation: The horizontal navigation is all on one level. Some processes have a
link to other processes, which can be at the start or end or even in the process itself, when
another process is imbedded in the process. Those links are represented by Process Interfaces.
True or False
1. The intent of this document is to define the structure of the Documentation System, its
content, the method of content generation and to attain common documentation of all standard
processes of ODETTE.
2. One of the objectives of the process documentation is to allow flexible and quick adaptation in
case of process changes or enhancements and to provide the super-ceded information
immediately.
3. The entry level of the process documentation structure is the function tree that shows the
hierarchic structure of the process documentations.
4. The Process Chain describes a process based on the technological interdependencies.
12.3 Methodology and Concepts
Let us now have a look at various methodologies adopted:
12.3.1 ARIS Web Publisher
The task of the ARIS Web Publisher is to create HTML-pages of the models (Web Publish) that
can be released in the internet /intranet and displayed via the Internet Explorer or web browser.
Let us look at the attributes with respect to Web Publish given in figure 12.5. The following
chapters give support for the navigation in the Web Publish in order to look at the modelled
processes:
Fig. 12.5: Navigation in web publisher
Home page: The Home Page is split into three sections as below:
Below the header you can find a brown bar with a link to the document. Below the bar you can
find the Model selection and the Model list.
In either one or all models can be found but in a different structure.
The models in the Model selection are structured in folders like in Windows Explorer and the
models in the Model list are grouped by their type and within a type are listed alphabetically.
Navigation in the Model selection: Folders can be opened by clicking on the +/- symbol.
Models can be opened by clicking on the model name The Web Publish allows the standard
Internet Explorer-functionalities, for e.g., the function key to get back to the previous page.
Model Page: On the model page the Model graphic is displayed. Depending on the size of the
model, scroll bars may be found on the right hand side and at the bottom of the model. With
these scroll bars you can scroll to the parts hidden in the current view of the model.
The graphic of the model can be enlarged or shrunk. To enlarge the model graphic, click the
white background of the model graphic and press the = key. Clicking on an object in the model
graphic you can open the object page with further information concerning that object. Clicking
on the assignment symbol, the assigned model is opened.
Object Page: On the Object page you can find information on the following points:
Object attributes: ARIS offers a variety of different attribute fields. On this page only attribute
fields containing information are displayed. These are, standard attributes of the object such as
name, last change and creator on one hand and on the other hand attributes such as
remark/example or description with detailed information concerning object, in particular
functions.
Object relationships: Information concerning the edges between this particular object and the
ones it is linked to
Object occurrences: A list of the models / processes is considered. Object hierarchies, master
object, variants and feedback are not relevant here.
12.3.2 Master Global Materials Management Operations Guidelines
The following are the objectives of the document:
Produce a common Materials Planning and Logistics evaluation that can be used by all business
partners, both internal and external.
Enable Materials Planning and Logistics continuous improvement plans to be developed and
prioritised, thus enabling time to be spent on those activities that offer the greatest benefit.
Establish the components of Materials Planning and Logistics system for suppliers of goods and
services within the automotive industry.
Drive continuous improvement within the organisation.
Improve delivery performance within the supply organisation.
Prepare basis for benchmarking activities and to identify Best Practice Criteria of materials
planning and logistics processes for driving continuous improvement plans.
12.3.3 Strategy and Improvement
Figure 12.6 describes four important elements of strategy and improvement Vision and
Strategy, Objectives, Measurement, Analysis and Action Plans and Supply Chain Development.
They are also briefly explained below:
a) Vision and Strategy
i. The organisation has a strategy that ensures the Materials Planning and Logistics vision is
achieved
ii. Key Performance Indicators (KPIs) shall cover objectives for all areas of the Materials
Planning and Logistics process.
b) Objectives
i. Objectives relative to the Materials Planning and Logistics function are defined, communicated
and understood within the organisation.
ii. Key Performance Indicators (KPIs) shall cover objectives for all areas of the Materials
Planning and Logistics process.
Fig. 12.6: Elements of strategy and improvement
c) Measurement, Analysis and Action Plans
i. Objectives are measured, analysed, and action plans created where necessary
ii. Corrective and preventive actions, identified by KPI analysis, to improve performance are
documented.
d) Supply Chain Development

i. Internal customer satisfaction objectives related to Materials Planning and Logistics are
identified, measured and communicated within the organisation.
12.3.4 Work Organisation
This is again divided into four different aspects of the organisation structure and planning. This
is described in figure 12.7 and explained below:
Fig. 12.7: Work Organisation
a) Organisational Processes: Materials planning and logistics processes are described starting
from customer interface, through internal production until supplier interface.
b) Organisational Procedures: Organisational procedures exist for all functions within

Materials Planning and Logistics.
c) Resource Planning : The following action points are considered:
i. Resource flexibility and availability are optimised.
ii. Contingency plans shall exist to avoid disruptions when something unexpected happens in the
supply chain.
iii. A system exists for highlighting and communicating with both customers and suppliers
within the plant, any incident or deviation from the production plan.
d) Work Environment and Human Resource: The following are the points considered:
i. Plans exist for the control and improvement of the work environment.
ii. The roles and responsibilities within the Materials Planning and Logistics function are clearly
documented.
iii. There is a process identifying current and required skills within the organisation.
iv. A training and development program exists for each employee in the Materials Planning and
Logistics function.
v. Actions are taken to improve employee motivation and empowerment in the Materials
Planning and Logistics function.
12.3.5 Capacity and Production Planning
The following are the factors considered under this section. This is also depicted in figure 12.8.
a) Product Realisation: The organisations Materials Planning and Logistics function shall
formally participate in, and sign off/on, the product Realisation Process.
b) Capacity Planning: The organisation shall perform a comparison of its resources against the
customers long, medium and short-term requirements. A process shall be in place that ensures
prompt communication to the customer of any risk that could affect their operations.
c) Capacity: The organisations capacity planning process has the flexibility to ensure that the
Product Approval Process (PAP) requirements are available in a timely manner to support
customer change-over/launches.
d) Implementation:
i. The organisation implements measures to minimise obsolescence of raw material, Work in

Progress (WIP) and finished goods.
ii. There is a process to ensure the availability of service/spare parts.
Fig. 12.8: Capacity and production planning
e) Production Planning:
i. A process shall exist to plan production requirements and to maintain the parameters of the
production planning system
ii. The production scheduling system supports lean manufacturing (e.g., pull systems)
f) System Integration
i. The customer information shall be processed directly into the organisations planning and
scheduling systems
ii. The organisation sets the timing of the Material Requirements Planning System (MRP)
process to coincide with the receipt of the expected customer requirements
12.3.6 Customer Interface
The attributes of customer interfaced with the system are
Communication:
i. The organisation maintains a process to ensure a co-operative communication based on actual

and adequate information for both the parties.
ii. The organisation shall receive requirements planning and shipping information electronically,
when available from the customer.
iii. The organisation shall have a process to ensure that any potential problems that could impact
the customer operation are communicated as soon as they are identified.
Packaging and Labelling:
i. The organisation shall have a procedure for packaging development, coordinated with the
Product Approval Process.
ii. The organisation manages the container process to ensure that the availability of
returnable/non-returnable containers is adequate to support the material flow requirements.
Shipping:
i. The organisation controls its processes to assure that the physical shipments correspond with
the customer demand
ii. The organisation shall have a process to ensure complete and accurate data content and timely
transmission of all Advanced Shipping Notices (ASN)
iii. The organisation inspects and calibrates all shipment quantity-determination equipment at
planned intervals to an acceptable accuracy level, as defined by the customer.
Transportation:
i. The organisation shall assure the transport of finished goods satisfied customer requirements
(e.g., carrier, mode, special equipment, cost responsibility)
ii. Optimisation of transportation capacity should be considered during the supply chain design
phase
Customer Satisfaction and Feedback: The organisation has a process to assess customer
satisfaction whether or not the customer provides feedback.
12.3.7 Production and Product Control
The following elements and processes are considered in production and product control:
a) Material Identification: There shall be a process/method in place to ensure that all parts are
labelled accurately and identified easily.
b) Inventory Process: The organisation may have one integrated system encompassing both
perpetual inventory and associated financial functions (e.g., one set of books). There are
systems in place to facilitate access to a management of all types of inventory finished goods,
Works-in-Process (WIP), and raw material.
The organisation has various processes in place to optimise the material flow. The organisation
also has a process that ensures that all material records are maintained and accurate. In addition
to this they also have checks on deviations and are appropriately corrected.
c) Inventory Maintenance: The organisation has a process in place to coordinate phased out
inventories (e.g., those affected by engineering changes and programs) with both supplier and
customer.
The organisation has a process to continuously evaluate and optimise inventory buffers. In
addition to this, they have a process to identify and route defective/obsolete material in a timely
manner. This process shall ensure that defective/obsolete material is segregated and disposed off
properly (e.g., reworked or scrapped)
d) Engineering Change Control: The organisation shall manage engineering revision levels
with documented procedures for customer, supplier, and internal changes. The organisation
manages the life cycle of tools to ensure customer requirements are met at all stages of
production.
The organisation shall use a process to obtain written customer authorisation for deviation
whenever the product or process is different from that currently approved through Product
Approval Process (PAP)
e) Traceability: This is an important aspect where regulatory body and/or the customer require
traceability into scheme of things. Usually a system that supports lots and/or serial traceability
shall be in place.
12.3.8 Supplier Interface
Earlier we learned about the customer interface and importance of communication. This section
describes the process for suppliers:
a) Supplier Selection: Materials planning and Logistics criteria is considered when selecting
suppliers or other business partners for new or existing products or services.
b) Materials planning and logistics agreement/instruction: Documented

agreement/instruction shall exist with suppliers and sub contractor/outside processors regarding
Materials Planning and Logistics. This is a legal agreement and plays a pivotal role in case of
any conflicts or disagreement.
c) Communication: A method of communication exists among suppliers, sub-contractors and

logistic providers covering day to day issues and emergency situations. Procedures for data
exchange shall be implemented with Suppliers and Logistics providers.
d) Packaging and Labelling: There is a documented procedure for packaging development.

Packaging management and control is organised in an efficient way.
e) Transportation: Procedures exist regarding management and cost optimisation of inbound

transportation. There are various models which attempt to optimise routes and warehouse and
suppliers location.
f) Material Receipt: Sufficient capacity and appropriate equipment in the material receiving
function is ensured and optimised. A process exists to verify labelling and documentation against
Materials Planning and Logistics requirements for procured parts.
g) Supplier Assessment: Partners (suppliers, sub-contractors and logistics service providers) in

the supply chain are assessed regularly according to a defined procedure and guidelines. These
are revised on continuous basis.
Fill in the blanks:
5. The task of the ______ Web Publisher is to create ______-pages of the models that can be
released in the internet /intranet and displayed via the Internet Explorer.
6. On the Object page one can find information on the following points namely _____, ______
and _______.
7. Organisational procedures exist for all functions within Materials ________ and _________.
8. The organisation shall manage engineering revision levels with _________ for customer,
supplier, and internal changes.
12.4 Project Management using Software
The Microsoft Project family of products offers tools to work on a project from management
point of view. Microsoft Project is designed for people who manage projects independently and
dont require the capability to manage resources from a central repository. Microsoft has a team
project management solution that enables project managers and their teams to collaborate on
projects.
After creating a fairly complete final project plan it is a good idea to create a baseline version to
compare the original project plan with actual events and achievements.
The following is the typical process followed for project management through this software as
shown in figure 12.9.
Fig. 12.9: Project management using software
12.4.1 Reviewing the Baseline
The Baseline created can be used to compare the original project plan with actual events and
achievements. This will display the days required for each task and project phase. For actual
operating instructions please refer the Microsoft Project User Handbook.
12.4.2 Tracking Progress

After creating a baseline, if the project has begun, it is necessary to enter actual dates for the
tasks that are being completed and the resource utilisation used to complete them.
Again review different views and the cost and summary tables before proceeding to the next
section. Return to the Entry view of the Gantt chart before proceeding.
12.4.3 Balancing Workloads
At times people and equipment may be assigned more work than they can complete in normal
working hours. This is called over allocation. Project can test for this condition and reschedule
(or level) their workload to accommodate completing tasks during a normal day.
12.4.4 Monitoring Variances
After a baseline has been established and the project has begun, it is desirable to determine if
tasks are being accomplished on time and /or if cost over runs are occurring. We also need to
keep monitoring the performance to detect early deviations.
12.4.5 Creating Reports
Project has many different built-in reports and has the capability building custom reports and
exporting data to other MS Office applications for integration into other reporting venues. These
are often intelligent reports.
12.5 Summary
After going through this unit, you have understood the structure of popular Project Management
Software Solutions. You also gained a significant idea as to how software is structured.
You have understood the key processes within the industry which may be IT-enabled and
integrated effectively. You also learnt how to analyse key features and functions of such
application software. In this unit, a detailed description is provided on different ways an IT-
enabled approach could benefit organisations and enhance productivity and efficiency as part of
their Project Management Systems.

1. Explain the structure of the documentation systems as required by supply chain monitoring.
2. Explain the three levels of SCMo documentation.
3. What are the objectives of document in global materials management operations?
4. Explain the various customers attributes in the systems interface.
5. What is meant by baseline? How is it reviewed?
1. True
2. False
3. True
4. False
5. ARIS, HTML
6. Attributes, relationships, occurrences
7. Planning and Logistics
8. Documented procedure
9. True
10. False
11. True
1. Refer 12.3.1
2. Refer 12.3.4
3. Refer 12.4.2
4. Refer 12.4.7
5.Refer 12.5
Copyright 2009 SMU
MB0049-Unit-13-Support Software A
Supply Chain Monitoring Perspective and
Utility of Software
Unit-13-Support Software A Supply Chain Monitoring Perspective and Utility of
Software
Structure:
13.1 Introduction
Learning Objectives
13.2 Introduction to Supply Chain Monitoring (SCMo)
13.3 Writing a Business Plan
Why create a Business Plan?
Writing a plan
The process
The key to success
How to prepare?
Outline of various sections
13.4 Overview of Process Documentation System
13.5 Support Software
The Arrow Project

Why Arrow?
Why Fedora?
VITAL
PILIN
13.6 Summary
13.1 Introduction
The entire inter-company supply network is driven by customer demand. The increased reaction
speed coupled with the flexibility of the supply network offers the necessary benefits. Wherever
applicable, the multi-tier concepts should be enabled. Integrated inter-company processes are
also needed to collect and share relevant data. Information relevant for decision making should
be updated in an appropriate period of time for quick responses. Scenarios can be simulated due
to the global availability of information.
All these lead to effective Supply Chain Monitoring which enables win-win partnership. Supply
Chain Monitoring also helps in finding the root causes rather than cures for the symptoms. In this
unit, we will look at the importance of Supply Chain Monitoring from a project management
perspective.
In addition, we will learn about the application of various support software in project
management. These software support several business processes and improve automation and
employee level productivity.
This unit also touches upon an important aspect of business writing business plans. We will
look at the outline of various sections of a business plan.
Learning Objectives
Explain the supply chain philosophy in project management
Explain the key processes of inventory

List the key functions of Supply Chain Monitoring (SCMo) model
Explain the utility of various support software in project management
List key business processes within the industry which can be supported by these software
solutions
Recall the ways and means of integration of main and auxiliary software solutions
Describe the way any enterprise would effectively implement a project management system
with substantial automation and member level productivity
13.2 Introduction to Supply Chain Monitoring (SCMo)
It is possible today to establish a monitoring system aligned with an organisations supply chain.
Supply Chain Monitoring (SCMo) can be an add-on to existing ERP systems. SCMo makes it
more efficient to master difficult to manage supply networks.
To meet its objectives, SCMo runs on certain principles. The main principles behind SCMo are
shown in figure 13.1
Fig. 13.1: SCMo principles
Now that we know the purpose of SCMo, how do we set it up? Let us list the steps involved in
initiating SCMo.
The main steps for the set up SCMo include:
a) Determination of the potentially critical part of the supply network criteria
b) Mapping of structures such as high shortage risk and effect, long lead and reaction times, high
total inventory cost, and frequent engineering changes
The main features of such a system are
i) Releases and iterations planning It is a simple way to create project plan. A methodology
for iterations planning is given later in this section.
ii) Dashboard It is a quick project status reporting tool.
iii) To-Do lists These lists help in identifying and documenting the integrated assignments.
iv) Integrated QA The quality analysis includes bug tracking, test cases management, user
story-to-bugs traceability, QA stats and charts.
v) Time Tracking It is an efficient way of creating more accurate estimates of time.
As discussed above, iterations planning is an important feature of SCMo implementation. Figure

13.2 presents a typical iteration plan methodology.
Fig. 13.2: A typical iteration plan methodology
True or False?
1. Prevention of stock-out and over supply is one of the main objectives the SCMo system which
is an add on to existing ERP system.
2. The main principles behind SCMo is the integration of supply chain participants, exchange of
demand and inventory information, transparency and visibility of inventories and demands for
multi-level supply chain.
13.3 Writing a Business Plan
It might sometimes be difficult for an organisation to straightaway launch into a project

management exercise, even if they are well equipped. This holds particularly true if the project is
too large for example, development of a new product, expansion of capacity, modernisation of
facilities, diversification into a totally new business area, getting into a joint venture and so on.
In such cases, the core project team itself might feel the need to have some major inputs before
even a tentative plan could be drawn up. A well-drafted business plan would ideally serve this
purpose, provided it is handled systematically and professionally.
13.3.1 Why create a business plan?
The actual process of planning is documented in a business plan. A business plan is essential
because of several reasons as listed below:
1. It communicates several things including:
Strategic direction
Tactical agreements
Company objectives
Department objectives
Budget requirements
Common agreement & buy-in
2. It consolidates management direction
3. It provides a scope for debate and reaching a finally consensus
4. It works as a guide when speed bumps appear
5. It is a managers professional and personal scorecard
13.3.2 Writing a plan
Writing is something that many people dread. Naturally, writing a plan is not everyones cup of
tea. It is tough because of the following reasons
1. It requires disciplined balance
2. It is visionary, but flexible
3. It needs to be logical
4. It should be financially perfect not only for today, but also for next 3 years and beyond
5. It is formal plan which should be easy to read
6. It requires creativity and at the same time it follows certain rules
13.3.3 The process
Now that you know writing a business plan is not easy, here are some tips that can aid you while
drafting a business plan.
a) Pay attention to the Dos and Donts
b) Be compelling
c) Be brief, focused, and deliberate
d) Focus on sales pitch

e) Focus on cash breakeven
f) Provide market research and hard data
g) Be innovative and describe barriers
h) Create an experienced management team
i) Be direct and detailed
j) Get to the bottom line quickly
k) Identify the immediate business
l) Identify the immediate business model
m) Focus on your customers (Who? How big? Where?)
n) Define the sales model immediately
o) Define metrics of sales productivity
p) Define whats compelling & unique
q) Be realistic with yourself
r) Remember, you are investing your career
s) Define long term objectives for 3 to 5 years
t) Describe the 3 to 4 primary strategies
u) Make realistic, but exciting projections
13.3.4 The key to success
The key to success of a business plan depends on how well you answer the following questions.
a) Whats my Vision?
b) Can I explain it to others?
c) What business are we in today?
d) What about in 3 years?

e) Are we really innovative?
13.3.5 How to prepare?
To prepare a business plan you need to follow the steps shown in figure 13.3.
Fig. 13.3: Steps to write a business plan
13.3.6 Outline of various sections
A traditional business plan has 7-9 sections with an Executive Summary. It can be 20-30 pages
long after including financials.
Irrespective of the page count, it should satisfy the following criteria:
a) Does it provide clear details?
b) Does it bring out the richness of the business idea?
c) Does it detail the market opportunity and complexity
d) Does it list the business and sales models?
Lets now find out what are the various sections included in a business plan.
a) Executive Summary
b) Introduction to the business
c) Definition of products and services
d) Overview of markets
e) Overview of sales and marketing plans

f) Overview of product roadmap
g) Summary of manufacturing & operations
h) Management team bios
i) Four pages of financials
Having listed the sections, let us move on to analyse the outline of a sample business plan.
Section 1: The Executive Summary

The content of executive summary includes:
Clear definition of the business markets
The business and the sales models
Competitive advantages
Management team
Financial and use of funds

Section 2: Whats the Business?
The content of this section includes:
The Business Opportunity
The Markets
The Technology & The Products
It must define.
A clear vision and clear strategies
A well defined business & economic model
A strong sense of management experience

Section 3: Sales & Marketing
Customer analysis: pain and needs

Worldwide market size and trends
Competitive strengths and weaknesses
Whats the value creation?

Section 3.1: The Sales Plan
Whats your sales strategy?
What channels will you use?
Is there an innovative channel?
What are your penetration tactics?
Whats your sales model?
What are you metrics?
Whats your hiring & training plan?

Section 3.2: The Marketing Plan
What are your marketing strategies?
What are the data points to measure success?
What is your price positioning and why?
What are you primary tactics in years 1 & 2?

Section 3.3: The Customer Support Plan
Primary objectives Delivery and Response metrics
Primary policies & tactics
Outsource or not?
Future services?
Section 4. Engineering The Development Plan
What are your core technologies?
Provide sufficient, not numbing detail.
What is your development status?
Describe your primary milestones.
Be conservative. development will be late.
What are your core technologies?
Provide sufficient, not numbing detail.
What is your development status?
Describe your primary milestones
Be conservative. Development will be late.
What is the roadmap?
Detail the technical teams background.

Section 5: Operations & Manufacturing
Customer focus is the key
Outsource or not? Why & Why not?
Primary metrics
Quality, costs, delivery
What is core in manufacturing?
What are unique capabilities & processes?

Section 6: Senior Management
This section contains the profiles of the senior management.
Before writing the profiles of the senior management, think over the
following issues:
Why business plans fall apart
Why investors do not invest
How the experience, dedication and ability to rapidly learn relatively are
placed in the order of importance
Is too strong an ego negative?

Section 7: The Financials
This section is one of the most crucial one. Here the rule is everything must
sync.
Your vision and strategies in text must tie in.
Your market growth objectives must tie in.
Your business and sales models must tie in.
Your margin percentages must tie in.
Your cost of goods must tie in.
Your expenses must reflect standard %S.
To complete this section you will need
P & Ls
1st year by month
2nd year by quarter
3d year by year
Balance sheets for each year
Cash flows for each year
3-4 pieces of paper to list your
Primary assumptions
Primary categories for use of funds

Primary risks other than the normal
Whats your exist strategy

Section 8: The appendices
In this section, you need to provide ony the compelling things such as
Product data sheets for primary products
Any critical publication.
Always remember not to provide resumes or include patents in this section.
Fill in the blanks
3. A well-drafted _________ would ideally serve this purpose, provided it is handled

systematically and professionally.
4. Writing a plan is tough because, It requires __________.
13.4 Overview of Process Documentation System
The process documentation system is intranet based to provide immediate access to current, up-
to-date process documentation. The system allows users to navigate through graphical structures
to relevant documentation and processes which were created with the ARIS-Toolset.
The content of the process documentation system includes the area supply chain management
from the Odette Supply Chain Management Group. The system includes graphical process
documentation, in the form of process chains, as well as the entire range of documentation
related to the processes. The Process Documentation System gives, according to its objectives,
an overview and a detailed view of the relevant processes for SCMo.
The entry point in the documentations system is the model Process Overview SCMo. This
model is the starting point for the navigation to other models. The navigation between models is
done via the assignment symbol. The assignment symbol of a function / process Interface
indicates that there is a link to another model. The linked / assigned models can be opened by
double-clicking on the assignment symbol.
This can be classified into two different navigations as shown in figure 13.4.
Fig. 13.4: Supply chain modelling
a) Vertical Navigation: The vertical navigation is the navigation on different levels. Starting on
the work package level and going downwards into more detail, the first models of processes are
found on the sub-process level.
In the model Process Overview SCMo those processes are assigned to the functions on Level
2. In the models there can be assignments for some functions, e.g. for a Function Allocation
Diagram or a sub-process that describes that function. These two examples are currently the
models on the lowest level.
b) Horizontal Navigation: The horizontal navigation is on the same level. Some processes have
a link to other processes, which can be at the start or end or even in the process itself, when
another process is imbedded in the process. Those links are represented by Process Interfaces.
Microsoft has a team project management solution that enables project managers and their teams
to collaborate on projects. The Microsoft Project 2002 products in these solutions are:
1. Microsoft Project Standard 2002
2. Microsoft Project Server 2002
3. Microsoft Project Server Client Access License (CAL) 2002.
Fill in the blanks
5. The documentation system is _______ based to provide immediate access to current, up-to-
date process documentation.
6. The ______ navigation is the navigation on different levels.
13.5 Support Software

Having learnt the basics of application software, you would have a fair idea of how and to what
extent project management processes could be automated. However, the challenge of making
things work remains unchanged. While software vendors are confident of making it work,
two yawning gaps still remain:
1. Business processes which are not covered in such software
2. Integration of multi vendor supported software applications
The enterprise is normally in a dilemma whether to look at the same vendors to support such
customisation or not. This normally works out too expensive for their comfort or within their
tight budgets.
Several software vendors have seized the opportunity with offerings that substantially fill these
gaps effectively at a fraction of the costs quoted by the major vendors. The other carrot which
these vendors offer is a unilateral transfer of the facility to customise themselves which is seen as
a huge advantage. The various support software that may be used for managing projects are:
1. ARROW
2. FEDORA
3. VITAL
4. PILIN
5. MS EXCHANGE SERVER 2003
13.5.1 The ARROW Project
It is a consortia of institutional repository solution, combining open source and proprietary

Software
13.5.2 Why Arrow?
Arrow is preferred support software because it:
Provides a platform for promoting research output in the ARROW context
Safeguards digital information
Gathers an institutions research output into one place
Provides consistent ways of finding similar objects
Allows information to be preserved over the long term

Allows information from many repositories to be gathered and searched in one step
Enables resources to be shared, while respecting access constraints
Enables effective communication and collaboration between researchers
The vision of project ARROW: The ARROW project will identify and test software or
solutions to support best practice institutional digital repositories comprising e-prints, digital
theses and electronic publishing.
What did the ARROW project set out to achieve? ARROW project wanted to be a solution
for storing any digital output. Their initial focus was on print equivalents such as thesis and
journal articles among others. It provided solution that could offer on-going technical support
and development past the end of the funding period of the project.
What is ARROW now? Its in a development stage combining Open Source and proprietary
software such as Fedora, VITAL, Open Journal Services (OJS). It is not a centralised or hosting
solution. Every member has their own hardware and software.
13.5.3 Why Fedora?
ARROW wanted a robust, well architected underlying platform and a flexible object-oriented
data model to be able to have persistent identifiers down to the level of individual data streams. It
accommodates the content model to be able to be version independent.
Since the beginning of the project ARROW has worked actively and closely with Fedora and the
Fedora Community. The ARROW projects Technical Architect is a member of Fedora Advisory
Board and sits on Fedora Development Group.
This association is reinforced by VTLS Inc. VTLS President is a member of Fedora Advisory
Board and VITAL Lead Developer sits on Fedora Development Group
13.5.4 Why VITAL?
VITAL refers to ARROW specified software created and fully supported by VTLS Inc. built on
top of Fedora. It currently provides:
1. VITAL Manager
2. VITAL Portal
3. VITAL Access Portal
4. VALET Web Self-Submission Tool
5. Batch Loader Tool

6. Handles Server (CNRI)
7. Google Indexing and Exposure
8. SRU / SRW Support
9. VITAL architecture overview
VITAL is part of creative development of ARROW institutional repositories. VITAL has the
following features:
1. Inclusion of multimedia and creative works produced in Australian universities
2. Limited exposure nationally or internationally
3. Addition of annotation capability
4. Inclusion of datasets and other research output not easily provided in any other publishing
channel
5. Being developed in conjunction with the DART (ARCHER) Project
6. Exploration of the research-teaching nexus tools that will allow value added services for
repositories
7. Integration with or development of new tools that will allow value added services for
repositories (for instance the creation of e-portfolios or CVs of research output of individual
academics)
13.5.5 PILIN Persistent Identifiers and Linking Infrastructure
There has been a growing realisation that sustainable identifier infrastructure is required to deal
with the vast amount of digital assets being produced and stored within universities.
PILIN is a particular challenge for e-research communities where massive amounts of data are
being generated without any means of managing this data over any length of time. The broad
objectives are to:
1. Support adoption and use of persistent identifiers and shared persistent identifier management
services by the project stakeholders
2. Plan for a sustainable, shared identifier management infrastructure that enables persistence of
identifiers and associated services over archival lengths of time
3. Deploy a Worldwide Site Consolidation Solution for Exchange Server 2003 at Microsoft
4. Add Picture
5. Use Microsoft Exchange Server 2003 to consolidate more than 70 messaging sites worldwide
into seven physical locations
In this context, let us look at Microsoft Model Enterprises (MME).
Microsoft Model Enterprises (MME)
Objectives
Maximising the number of management tasks performed centrally
Decreasing the number of sites through the consolidation of the smaller

locations into a smaller number of RDCs
Reducing the total number of infrastructure and application servers
Standardising infrastructure and devices worldwide
Solution
Consolidation of 75 tail sites into 6 regional data centers (RDCs) using

local storage area networks (SANs)
Key Focus Areas
Proactive, detailed monitoring and analysis of WAN bandwidth utilisation

and latency
Effective but flexible approach to project planning, scheduling, and cross-

group coordination
Coordination and control of deployment of successive pre-release

versions of Office System 2003 (including Outlook 2003)
Business Benefits
Four percent overall direct cost savings
Key enabler of the Microsoft ME initiative which through fiscal year

2003 has produced millions in overall consolidation savings including USE
IT Benefits
Improved server utilisation
Improved server management
Strengthened security
Increased reliability
True or False
7. Several Software Vendors have seized the opportunity with offerings that substantially fill
these gaps effectively at a fraction of the costs quoted by the major vendors.
8. The ARROW project will identify and test software or solutions to support best practice
institutional digital repositories comprising e-prints, digital theses and electronic publishing.
9. Support adoption and use of persistent identifiers and shared persistent identifier management
services by the project stakeholders is one of the objectives of FEDORA.
13.6 Summary
In this unit, concepts have been provided for you to understand the supply chain philosophy in
Project Management and the key processes of inventory. You learnt how to analyse key
functions of SCMo model. Various examples have been provided so that you can learn the utility
of various softwares in project management and understand key business processes within the
industry which can be supported by these software solutions. You must have learnt how any
enterprise would effectively implement a Project Management System with substantial
automation and member level productivity.
1. What is a business plan and how is it written ?
2. What does the traditional business plan comprise of?
3. Write a brief note of ARROW.
4. Explain PILIN.

1. True
2. True
3. Business plan
4. Disciplined balance
5. Intranet
6. Vertical
7. True
8. True
9. False
Copyright 2009 SMU
MB0049-Unit-14-Project Management Plan

and Global Delivery Model
Unit-14-Project Management Plan and Global Delivery Model
Structure:
14.1 Introduction
Learning objectives
14.2 Project Management Plan
Project summary
Project scope
Value addition to the customer
Project planning
People
Hardware, software and tools
Training plan
Quality plan quality goals
Reviews
Risk management plan
Project tracking
Closure report
Summary
Risk management
Schedule
Defects
Casual analysis and lessons learned
14.3 Global Delivery Model (GDM)
What is GDM?
Special Features of GDM
14.4 Summary

14.1 Introduction
It is to be expected that the materials and details in earlier units might appear scattered to you.
This might have led to a level of confusion as to how exactly all these concepts could be built
into a practical project situation and how these concepts could be utilised for enhancing the
capabilities of a typical project management process. A systematic IT-integrated (Intranet)
documented approach laid out in a perfectly balanced and sequenced approach would solve the
confusion.
In this unit, therefore, we would attempt to understand project management plan and global
delivery model through a sample project and some details of a typical global delivery model.
Various sections and subsections of this unit would cover the following key aspects of project
management plan and global delivery model:
Project management plan sample project
Projects value addition to the customer
Assumptions made while planning
Standard process followed and deviation from standard process
Requirement traceability
Automated estimation process
Scheduling and estimation of resources
Quality plan quality goals
Project tracking
Defect control system performance summary
System driver risk management
Global delivery model as the latest trend in project management
Learning Objectives
By the end of this unit, you will be able to:
List the key elements of project management plan and global delivery model
Identify the key practical constraints within the industry
Relate various concepts to a comprehensive plan
Explain key processes of a project management plan and global delivery model
Recall the steps to track project
Explain the special features of GDM
Describe the way a typical plan can be drafted and structured
14.2 Project Management Plan
The key to a successful project is in the planning. Creating a project plan is the first thing you
should do when undertaking any kind of project.
Project management is an art of matching project goals, tasks, and resources to accomplish the
goal as needed. One can think of a project as a process. Figure 14.1 shows this process as a
simplified block diagram.
Fig. 14.1: Project as a process
Let us look at a sample project to understand project management plan and global delivery
model:
14.2.1 Project Summary
Let us consider a firm XYZ as a stockbroker/ dealer firm. XYZ needs a support software. The
support software will have applications supporting the following components:
First, a brokerage account opening application on XYZs website that will allow any internet
user to open a brokerage account online with XYZ
Second, an account opening and maintenance application, which is primarily for XYZs
representatives to open accounts for the applications received in paper format
This is an intranet application. The application will have features to view account history,
account balance, status, and activity information. This will allow XYZ to effectively evolve to a
client account servicing application besides being an account-opening engine. This is an
enhancement of an existing application.
Based on the above information a project summary is developed. Table 14.1 shows the project
summary of XYZ project.
Table 14.1: Project summary of XYZ project
14.2.2 Project Scope
While a project summary gives an overview of the project, the project scope, which is the next
component of a project plan, sets the project goals. Let us look at the project scope of XYZ
project as shown in Table 14.2 below.
Table 14.2: Project scope for XYZ project
Project Scope
To provide an effective, efficient means of amount maintenance activities
To allow representatives to provide information
To provide a complete picture to the client representatives for account

status, valuation, order status, and trade activity
To increase the intelligence of the update process
To provide an interface that can display required amount history
14.2.3 Value addition to the customer

This project will allow XYZ to effectively evolve a client account servicing application besides
being an account giving engine. To ensure value addition to XYZ, the project team decides on
the objectives, commitment and assumptions. Table 14.3 shows the objectives, commitment and
assumptions of the XYZ project team.
Table 14.3: Objectives, commitment and assumptions of XYZ project
Objectives Commitment Assumptions

made to the
customer
Strengthen Delivery as per Intelligent update to business
relationship with specifications partners will be incorporated in only
XYZ by delivering the maintenance part of the
high quality On time delivery application and not in the account
software on time opening engine.
Within budget
Become preferred Qualified people will approve
vendor by Warranty period Rational Unified Process
developing methodology for implementing this
expensive on XYZ project.
product and
systems Changes in functional and technical
requirements during the life cycle of
the project may have an impact on
the schedule. Any impact on cost or
schedule due to these changes will be
intimated to XYZ.
XYZ reviewers will take seven days

to approve a milestone document. If
no comments are received within this
time period,
it will be considered as approved.
14.2.4 Project Planning
Project Processes
For this project, the standard development process of XYZ will be followed. However, since
each project demands some customization, the team needs to decide on the deviations required
for the project.
Tailoring notes: The process starts with preparing tailoring notes as a part of requirements
change management. Table 14.4 shows the tailoring notes prepared for the project.
Table 14.4: Requirements change management process
Deviation from Standard Added/Modified Reasons for

Process /Deleted Deviations
Only those cases that are going Modified Iteration based
to be taken up in a particular development is
iteration will be elaborated at being done
that point of time
Development of logical object Modified Conformation to
model will be done RUP methodology
incrementally in the first few
iteration
Development of physical object Modified Conformance to
model will be done RUP methodology
incrementally in the first few
iteration
Physical database design may Modified Conformance to
be refined in later iterations RUP methodology
Development of unit test plan Modified Conformance to
will be done in each iteration RUP methodology
Development of unit test plan Modified Iterative approach is
will be done in each iteration being used
Logging of defects will be Modified Iterative approach is
iteration wise being used
Requirements trace ability will Modified Conformance to
be done through the requisite RUP methodology
pro-tool
No vision document and Modified Deviation from RUP
business case as we started with
the scope document, which
serves the same purpose
Change request tracking: Changes requested by customer will be logged in change request
form and analyzed for impact on the project. The change request form will be submitted to
customer for approval. Change request that are approved will be attached to the project contract
as agenda. Figure 4.2 shows the summarised the steps in change request tracking.
Fig. 14.2: Change request process

Major change usually has an effort/delivery-on-time impact on the project. The customer needs
to formally approve these changes.
As this is a short duration project, if any one or a group of changes request takes more than 2%
of the total estimated effort for the project, re-estimation of the project schedule and effort will
be done.
Requirement Traceability: A requirement needs to be traceable all the time to a project team. A
requisite tool such as requirement traceability matrix or RTM needs to be used along with
estimated size and effort. RTM is very important especially for major enhancements because of
the volatility of the requirements as the enhancement progresses and also to ensure all functional
and non-functional requirements are taken care of during all the stages.
Based on the RTM matrix, the project manager needs to estimate the effort for each enhancement
request. The estimation is done based on certain criteria as shown below.
a.
Estimated build effort The project manager estimates the effort required in man days for each
program or function of the project. This helps in estimating the total build effort.
b. Phase Wise effort estimation Then he estimates the total effort with respect to each activity
and effort for each phase of a project expressed as percentage of man days.
c. Schedule Finally he prepares a list of items as deliverable to the customer and indicates the
date of completion or delivery of the item to the customer. This is specified in the form of a table
indicating various milestone of commitment to the customer.
14.2.5 People (Communication Plan)
The project manager makes a list of the people required for each role in the project along with
the number of members required for each role. The list should consist of skilled and unskilled
people, depending upon the role and experience of the individual. The project manager also
prepares the requirement plan of people as to when and how many of each type would be
required on the project.
He then creates a document showing people who need to be kept informed about the project and
how they will receive the information. The most common mechanism is a weekly/monthly
progress report describing how the project is performing, milestone achieved and work planned
for the next period.
14.2.6 Hardware, Software and Tools
A project manager needs to indicate the hardware and software resources required in the project
at every stage. In this regard he performs the following tasks. He/She:
Prepares plan for procurement of hardware and software depending upon the need at various
stage of the project
Prepares a date wise plan of procurement
Prepares a Tool List that has to be prepared phase wise and activity wise
Specifies the tools to be developed on the project along with the house tools to be developed in
project
14.2.7 Training Plan
Training is a critical success factor for any project. Comprehensive training should be given to
the team members on three domainstechnology, business and process.
a. Technology Domain: Resources should be trained on technology involved in project. Table

14.5 shows the training plan for technology domain. It lists the technologies required in the
project and the duration required to train the resources on each of these technologies. It also lists
the training waiver criteria, if applicable for a technology.
Table 14.5: Technology training plan
Technology Duration Waiver criteria

Java Language 7 days If already trained
Visual Age for Java 3 days Exposed as part of initial
training
Java Applets 4 hrs If already trained
Java Swing 4 hrs If already trained
Persistence Builder 8 Hrs Mandatory
OOAD 1 day If already trained
b. Business Domain
Resources working on a project should be trained on business domain to have adequate

understanding of the project. Table 14.6 shows a business domain training plan.
Table 14.6: Business domain training plan

Business Area Duration Waiver criteria
System appreciation 7 days If already trained
c. Process Related
Resources should be aware of the process followed during the life cycle of the project and should
be trained. Table 14.6 shows a plan for process training.
Table 14.6: Process training plan
Process Area Duration Waiver criteria

Quality system 3 hrs If already trained
Configuration 2 hrs If already trained for CC. For
management others, on the job training
Group review 4 hrs If already trained
Defect prevention 4.5 hrs Mandatory
SPS tool 4.5 hrs If already trained
RUP methodology 2 hrs Mandatory
14.2.8 Quality Plan Quality Goals
Quality control is a crucial aspect of successful project execution. Hence it should be properly
planned. The quality plan includes the following phases as shown in 14.3.
Fig. 14.3: Quality plan for XYZ project
First, the project team identifies the project quality goals. Table 14.7 lists the quality goals for
the XYZ project.
Table 14.7: Project quality goals

Goals Value Basis for Setting Goals Org-wide Norms
Total number of 145 0.033 defects / Man-hour. 0.052
defects injected This is 10% better than defects/Man
Synergy, which is 0.036 Hour
defects/Man-hour
Quality 5 3% or loss of total 6% of estimated
(acceptance estimated number of number of
defect density) defects defects
Productivity 57 3.4% productivity 50
improvement over
Schedule Delivery 10%
on time
Second, the team estimates the number of defects in project life cycle. Table 14.8 shows the
number of defects estimated in life cycle of XYZ project.
Table 14.8: Defects handling plan

Review/Testing Estimated % of defects Basis of estimation
stage number of to be defected
defects to be
detected
Requirements and 129 20% Referenced similar project
design review estimations (synergy)
Code review 29 20 % Referenced similar project
estimations (synergy)
Unit testing 57 40% Referenced similar project
Integration And 25 17% Referenced similar project
Regression Testing estimations (synergy)
Acceptance testing 5 3% Referenced similar project
Total estimated 143 100%
number of defects
to be detected
Finally, the project manager prepares a strategy for meeting quality goals indicating the expected
benefits.
14.2.9 Reviews
Reviews are important components of a project development process. The project manager
prepares a table of important review points. The table should contain the review item and the
type of review required for each of the review item. Type of review could be one-person review
or group review.
To get as much as possible out of project review, the following steps should be kept in mind:
Describe a step
List the activities involved in completing a task
List tips and tricks to help you succeed
Identify the tool and methods to assist you in delivering your project review
Figure 14.3 depicts a project review process.

Fig. 14.3: Project Review Process
14.2.10 Risk Management Plan
Risk management is an important part of project management. Although often overlooked, it is

important to identify as many risks to your project as possible and to be prepared if something
bad happens.
A project manager prepares a table of risk management plans to indicate the risk type,
probability of each risk, impact of the risk on the project, risk exposure and a risk mitigation plan
for each risk.
Here are some examples of common project risks:
Time and cost estimates too optimistic
Customer review and feedback cycle too slow
Unexpected budget cuts
Unclear role and responsibilities
Poor communication resulting in misunderstandings, quality problem and rework
Lack of resources commitment
Stakeholders input is not sought or their needs are not properly understood
Stakeholders changing requirements after the project has started
Stakeholders adding new requirements after the project has started

14.2.11 Project Tracking
A measurement plan for tracking the project is an absolute necessity. The plan must indicate the
appropriate metric to be used, the unit of measurement and the tool to be used. In addition to the
project tracking plan, the project manager also prepares the procedure for task tracking.
Similarly, he prepares a table for tracking various issues of the project like logging details,
review by, review time, floats and so on. Other tasks that need to be performed as part of project
tracking include:
Obtaining customer feedback on the various items of the project
Determining the actions for each quality activity
Planning for a review by senior management at a preplanned frequency
Verifying status report about each activity of the project
Preparing a list of tolerances for the defects observed in items and monitoring such items
Preparing reports to be given to the customer which may indicate milestones reports and weekly
status reports, and issues requiring clarification or escalation
Preparing Report to be given to the Business Manager which should contain customer feedback,
milestones and weekly status reports, issues requiring clarification/attention/escalation, number
of requirement changes and estimated effort for them and major changes in plan
Preparing the project organisation chart as applicable to the project under consideration
Preparing a table that lists the project team members along with their roles and responsibility,
starting date and completion date of the activity
14.2.12 Closure report
At the end, a closure report table is prepared indicating the necessary project phase/entity along
with project code and corresponding status. Project closure report helps in taking the right steps
needed to formally wind-up a project.
The report helps a project manager undertake project closure phase within a project, by
documenting the entire task needed to complete the project and hand over the deliverables to the
customer.
It is critical that a project manager completes the project closure properly. The manner in which
these closure steps are taken will determine the final success of the project.
14.2.13 Summary
After the closure of a project, the project manager prepares a summary of the various
performance parameter used in the project with respect to each of the actual, estimated and
deviated activities. He also furnishes the reasons for deviations, if any.
14.2.14 Risk management
The risk management plan needs to be updated with the type of risk, actual elapsed time,
estimated time, percentage slippage and reasons for slippage. A thorough analysis should take
place.
14.2.15 Schedule
A schedule consists of a list of a projects terminal elements with intended start and finish dates.
The items are often estimated in terms of resources requirement, budget and duration.
A project can be broken down into a number of tasks that have to be performed. To prepare the
project schedule, the project manger has to figure out what the task are, how long they will take,
what resources are required, and in what order they should be done. Each of these elements has a
direct bearing on the schedule.
The schedule prepared should be achievable and appropriate for the business needs. Efforts to
accelerate project schedules will usually increase project risks. Innovative techniques must be
used to achieve orderly schedule compression without creating unacceptable risks and quality
impacts. The project manager prepares a table of effort distribution over life cycle stage of the
project.
14.2.16 Defects
To produce high quality deliverables, the final product should have few defects as possible. A
defect distribution table is prepared to analyse the number of actual defects and estimated
number of defects found in deliverables. A defect distribution table can be prepared as indicated
in table.
Table 14.9: Defects distribution table
Stage Actual % of Estimated % of total %

defected number of total number of estimated deviation
defects defects defects defects
found
Reg. and 11 10 29 20 -62
design
review
Code review 58 50 29 20 100
Unit testing 15 13 57 40 -73
Integration 29 25 25 17 16
and system
testing
Acceptance 3 2 5 3 -40
of testing
Total 116 100 145 100 -20
14.2.17 Casual analysis and lessons learned
In the XYZ project, there were very few large deviations in the process performance. The actual
performance was close to what was expected. The reasons for the deviations where they were
large are recoded along with deviation. This is known as causal analysis.
Some key lessons learnt in this project are:
1. Incremental or phased development is extremely helpful in achieving higher quality and

productivity because data from the first phase can be used to improve the remaining phase
through defect prevention.
2. Defect prevention can be substantial in reducing the defect injection rate. In terms of effort
also, defect prevention pays off handsomely; by putting in a few hours of effort, up to 5 10
3. If a change request has a major impact, discussion with the customer using a detailed impact
analysis can be very helpful in setting the right expectations as well as doing a proper cost
benefit analysis.
4. The defects removal efficiencies code reviews and unit testing are very low. Processes for
both, and implementation of these processes, need to be reviewed to improve these numbers. In
this project, system/integration testing compensated for the poor performance of reviews and unit
testing. However, for larger projects, this may not be possible and poor performance reviews and
unit testing can have adverse effects on quality.
True or False?
1. Changes requested by customer will be logged in change request.
2. In estimating the phase wise effort, the total effort with respect to each activity and effort for
each phase of a project expressed as percentage of production.
3. If a change request has a major impact, discussion with the customer using a detailed impact
analysis can be very helpful in setting the right expectations and doing a proper cost benefit
analysis.
14.3 Global Delivery Model
The term Global Delivery Model is typically associated with companies engaged in IT
consulting and services delivery business. These companies adopt GDM since they execute a
technology project using a team that is distributed globally. While the commonly understood
meaning of the term implies globally distributed resources, the term itself has acquired a broader
definition. It is one of the latest trends in project management.
14.3.1 What is GDM?
The Global Delivery Model (GDM) enables an industry or business to plan, design and deliver
products and services to any customer worldwide with speed, accuracy, economy and reliability.
GDM enables its customer to leverage varied locations across the globe that provides optimised
value for every component of delivery. The key features of GDM are shown in figure 14.4.
Fig. 14.4: Features of GDM
Let us discuss each key feature of GDM.
a. Standardisation It includes ingenious design and development of components and features

which are like to be accepted by 90% of world-wide customers. GDM heavily depends on Global
Standards of Design focusing on highly standardised methods and processes of manufacture or
development. It adopts plug-and-socket concepts with minimum adaptable joints or connections.
b. Modularisation GDM requires product or solution to be split up into smallest possible

individual identifiable entities. These entities will have limited individual functioning capability
but they can become powerful and robust in combination with other modules.
c. Minimum Customisation GDM mandates only minimum changes or modifications to suit

individual customers.
d. Maximum Micro Structuring GDM encourages splitting of the Product Modules further
into much smaller entity identifiable more through characteristics rather than application
features. These Microbial Entities are standardised even across Multiple Modules. Application of
these Microbial Entities rest within multiple Projects or Products or even as add-ons to suit
customer needs later.
14.3.2 Special Features of GDM
In addition to the features discussed above, some of the special features of GDM are
A global presence with a knowledge of the local language and culture (it helps in better
understanding of customer requirements)
A global access implying that the organisation has access to resources of varying costs (it helps
in delivering services to its customers at an optimal cost, typically a mix of costlier on-site
resources combined with cheaper offshore resources)
A global delivery model implying that potentially, a firm can work round the clock for its
customer, handing off work from one location to another at the end of the day shift
Unimaginable speed of response and introduction
Common pool of Microbial Components
Largely independent of skill sets required at delivery stages
Highly automated processes
Quality Assurance as a concurrent rather than a controlled Process
Near-Shore development, manufacture and delivery for better logistics
Mapping of economical zones rather than geographic zones
Continuous floating of virtual inventory to save time and efforts
True or False?
4. The Global Delivery Model is adopted by an industry or business such that it has a capability
to plan design, deliver and serve to any customers or clients worldwide with speed, accuracy,
economy and reliability.
5. Unimaginable Speeds of Response and Introduction is one of the special features of SCMo.
14.4 Summary
After going through this unit you would have understood the key elements of Project
Management Plan and Global Delivery Model. Concepts have been explained in this unit in
order to help you understand the key practical constraints within the industry and how to expand
various project management concepts into comprehensive and effective Project Management
Plan and Global Delivery Model. You also learnt how a typical plan can be drafted and
structured.
1. Write down a brief outline of any assumed project management plan.
2. Explain in detail GDM and its key features.
1. True
2. False
3. True
4. True
5. False
Copyright 2009 SMU
MB0049-Unit-15-Case Studies and Practical

Exercises
Unit-15-Case Studies and Practical Exercises
Structure:
15.1 Introduction
Learning objectives
15.2 Practical Case Study No. 1
15.5 Exercises
15.6 Summary
15.7 Bibliography
15.1 Introduction
After gaining the fundamental knowledge of project management, it is important for you to
attempt converting your study into a practical mode. This unit provides you with an opportunity
to convert concepts into practical project working models. In this unit, therefore, you will
understand a few case studies related to project management. You will also attempt some
practical exercises for putting these structured concepts into standardised formats and analyse
them. For this purpose, a few practical examples have been provided with generic input data,
typical of such projects.
Learning Objectives
Analyse a case
Apply the concepts learned in previous units into structured Project Management Documents.
Analyse key options to freeze on acceptable key project management practices.
Describe the way an interface between Project Data and a complex IT integrated PM System
can be developed.

Table 15.1: Development of an ERP system for a Pharmaceutical Company in XYZ
country
Modules available Sales, Financials, Inventory, and

Purchase (estimated as 40% of Total
Content).
Modules to be developed Production-Planning-Control,
Manufactur-ing, Quality Control,
Warehousing (50% of Total Content)
Modules to be offered later as HR (available), Maintenance (to be
addon developed)
Budget indication from customer 45,000 US$
Manpower estimate
New development 30 man months
Customisation of available modules 10 man months
Schedule
First phase of implementation Within 3 months
Completion Within 7 months.
Payment Terms
Advance 10%
Against submission of compliance 15%
document
Against completion of phase I 35%
Against completion of phase II 20%
Against completion of add-ons 10%
At the time of handing over 10%
Penalty 5% for every month of delay
General 1) Third party software budget limit is
10,000 US $
2) Any additional software expenditure

is to be borne by the vendor
3) Cost of travel to be borne by the

vendor but free guest house accom-
modation, transport and boarding will
be provided
4) System Administrator and Data

Administrator will be provided by the
company

Table 15.2: Development of a Television Media Control System for Germany
Description 1) The system is required by a media solutions company in

Germany who is an intermediary between a Television
Content Development Studio Company and a TV
Broadcasting Company.
2) System requirement covers a Remote Device Solution

controlling Delivery of Media Programmes in Real Time
Mode from the archives of the Media Centre to the TV
Stations based on a day to day programme schedule. Length
and duration of the Programmes should be modified based
on the time slots with gaps for local commercials which
vary geographically. System should also provide slot for
local interruptions like news capsules and emergency
announcements.
3) Vendor can recommend suitable technology. However,

preference is for Modular Solutions of CISCO. Prevailing
back end systems are BORLAND and LINUX.
Commercial Price is 45 US $ per hour with a gross margin of 40%.
Terms
First Phase 20,000 Euros as advance
10,000 Euros on submission of a Study Report and Proposal
20,000 after installation of solution at the Control

Second Phase 10,000 Euros after installation at the media centre
Third Phase 20,000 Euros after installation at the TV Station
Fourth Phase 40,000 Euros after system integration and handing over
Table 15.3 Development of a new Healthcare product by a Pharmaceutical Company for

Treatment of Hypertension
Available Basic Bulk Drug Formulation, Blenders and

Additives (estimated as 80% of Total Material
Content)
To be developed Herbal Extracts (30% of Total Content)
Basic Problem USFDA has rejected the earlier product
Present Status MOU has been signed with a leading Research and
Development centre in India which has developed
the Extract. Nearly 80% of the non-compliance
factors in the USFDA Rejection Report have been
taken care of.
Schedule and Cost
Estimated time for 4 Months
completion of
research
Estimated cost for 500,000 US $
completion of
research
Estimated time for 6 months
completion of clinical
trials
Estimated budget for 800,000 US$
completion of clinical
trials
General hints Competitors offer two varieties of products one for
primary Hypertension Symptoms and the other for
advanced Symptoms. The latter is priced at five
times the former
USFDA Rejection Report refers to points which are

valid for the Advanced Symptoms version alone
Time cycle required for generation of a Market

Research Report is two months and cost for such a
report is 90,000 US$.
15.5 Exercises
1. Try some of these exercises to build your proficiency with starting the scheduling process.
(Use the MS project software)
a) Go into the project information dialog box and set either your start date or your finish date.
b) Go to options dialog box and change your time unit labels.
c) Start with the tools drop down menu and change the default unit for duration of your project
from days to weeks.
d) Find the way to change the default working hours and set them for your project.
2. You have started a new project and want to be sure all the underlined scheduling elements are
properly set. You also want to understand the effects of these elements yourself. Try the
following:
a. Open the project file and change the way project displays start and end dates so that you can
also see time values.
b. Set the project start time to 7 am. Then set that task default stop time to 7 am. Notice how
many tasks change to a 7 am start time.
c. Change the standard base calendar to set working time for Monday through Friday at 7am.
Notice if the start fields for the remaining tasks change.
d. The task reduce lab scale product requires special scheduling since the lab is exclusively
reserved for Research and Development department on Mondays. Create a base calendar named
lab marking Mondays as non working day and assign it to a special calendar task and duration
of 10 days from April 3, 2007 to April 13, 2007 at 4 pm. Notice if this new task impacts the
schedule and try to think of a reason.
3. Try these exercises to further build your proficiency in working with resources and costs.
a. Define some of the resources for your project on the assign resources dialog box.
b. Go to a couple of materials resources in the resource sheet.
c. Create a couple of material resources in the resource sheet.
d. Use the resources information dialog box to show that one of your resources will not be
available during the first month of your project.
e. Go to the cost tab of the resources information dialogue box and show a 5% increase in the
standard rate and overtime rate for a resource one year from now.
4. Start a new project document to experiment with and create three tasks named fixed units task,
fixed work tasks and fixed duration task. Create two resources named work resources and
material resources. Then conduct a series of experiments by assigning a resource to one of the
tasks. After each assignment, review how the project reacted to the assignment and then undo the
assignment before making the next assignment.
For each resource and task contribution add the following assignments:
a) Assign the name only and see how project uses default values.
b) Assign the name and a unit value other than 100%.
c) Assign the name and a work value.
d) Assign the name, units and work.
15.6 Summary
After completing this unit you would have learnt to expand various concepts into structured
Project Management Documents. You would have also learnt to analyse key options and freeze
on acceptable key project management practices. This unit has described the ways as to how an
interface between Project Data and a complex IT integrated PM System can be developed.
15.7 Bibliography
1. Project Management for Business and Technology : Principles and Practice, 2nd edition,
Authors John M Nicholas, Prentice Hall India.
2. The Project Management Handbook- For engineers, construction professionals, and business
managers, Tata Mc Graw Hill, Authors-Uddesh Kohli and K K Chitkara.
3. Corporate Software Project Management, Dream tech Press, author Guy W Lecky
Thompson.
4. Text book of project management, Mac Millan India Ltd., Authors-P Gopalakrishnan and V E
Rama Moorthy.
Bibliography
1. Eugene F. Brigham and Michael C. Earnhardt, Finance Management, 12th Edition, Cengage
Learning, 2007.
2. Prof. Prasanna Chandra, Finance Management, 7th Edition, Tata McGraw Hill Education
Private Ltd.
3. Khan and Jain, Basic Financial Management, 2nd Edition, Tata McGraw Hill Education Private
Ltd., 2005.
4. I. M. Pandey, Financial Management, 9th Edition, Vikas Publishing House New Delhi, 2005.
5. Shashi.K. Gupta and Neeti Gupta, Financial Management, Kalyani Publishers, 2005.
6. Dr. M. K. Rastogi, Financial Management (a planning and control approach), USP, 2010.
Copyright 2009 SMU

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MB0049-Unit-01-Basics of Project

1.3 Need for Project Management

1.4 Project Management Knowledge Areas and Relationship

1.5 The Project Life Cycle

1.6 The Project Manager

1.7 Knowledge Areas, Process and Connection

1.8 Phases of Project Management Life Cycle

Analysis and evaluation phase

Inspecting, testing and delivery phase

Post completion analysis

1.9 Project Management Processes

Process groups and knowledge area matrix

1.10 Project Failure

1.11 Essentials of Project Management Philosophy

Project parameters for negotiation

How does project management add value ?

1.12 Project Management Principles

1.13 Roles, Responsibilities and Teamwork

Roles and responsibilities of project team

1.15 Terminal Questions

1.16 Answers to SAQs and TQs

Answers to Self Assessment Questions

Answers to Terminal Questions

By the end of this unit, you should be able to:

Recall the basics of project management.

Recall the definitions, terminologies and concepts in project management

Recognise the importance of project management in business

Describe the scope of project planning and its phases

Describe the role of project manager

Recognise the reasons for project failure

Self Assessment Questions

Project Cost It is the budgeted expenditure of the project.

Commissioning a new industrial unit

Launching a new product in the market

Self Assessment Questions

1.3 Need for Project Management

Project management is necessary because it helps an organisation execute a project successfully

d) Managing Risks: A project is vulnerable to various risks. A project is affected if the

Self Assessment Questions

Fill in the blanks

1.4 Project Management Knowledge Areas and Relationship

Self Assessment Questions

a) Understanding the scope and objectives of the project

b) Formulating and planning various activities

d) Executing the project

d) Monitoring the project and controlling the project resources

Self Assessment Questions

Fill in the blanks

1.6 The Project Manager (PM)

Budgeting and cost control

Tracking project expenditures

Ensuring technical quality

Managing relations with the customer and company

Self Assessment Questions

Fill in the blanks

7. The ________ is responsible to carry out all the tasks of a project.

1.7 Knowledge Areas, Process and Connection

Fig. 1.1: Project management knowledge areas

Let us know about each of these 9 project management knowledge areas.

7. Project Communication Management: Deals with the processes concerning communication

1.8 Phases of Project Management Life Cycle

The various phases in project management life cycle are

Analysis and evaluation

14. Project process is classified into and _ process.