TRNG Handouts For Project PLNG & MGMT Wkshop 27 Nov 1dec 1 50

i 2 P 2 M Ministry of Statistics and
in te rn atio n a l
In stitute o f In collaboration with Programme Implementation
Projects & Program Management
(a not for profit company) Government of India
pioneering project management certification
5 Days Workshop on
Project Planning & Management
27thNovember - 1st December2017
NSSTA, Greater Noida, Uttar Pradesh 201310
Project Planning & Management is a very comprehensive and widely used program that equips professionals to get to know the latest
concepts in Project Management.
This program leads to the Certificate In Project Management (CIPM) credential which has received outstanding applauds from global PM
leaders, academia and participants across the world, and is delivered by professionals who carry impeccable global hands on work and
trainingexperience.
“What makes Certificate In Conceptualize

Project Management (CIPM)
program world class is its c Plan
Change if Required
o m p r e h e n s i v e s yl l a b u s Organize
Plan & Deliver
covering 8 project life cycles

phases, 36 knowledge areas Implement
and 117 concepts with an Control

extremely robust certification process. I myself
have gone through the CIPM and in my opinion, Integrate
i t s ho ul d be a p r e - r e q ui s i te f or al l PM Deliver & Closeout
professionals globally.”
Knowledge Leverage
- Dr. B. Nag, Professor, IIM Calcutta (2015)
Trainingby:
Centre
for Excellence in Project Management (P) Ltd.
building professionalism in managing future
M: + 91 9999684632/ 9999684622, Tel : (0120) 2420444, 3124566, Email: info@cepm.com

Website: www.cepmpl.com, eLearning Website: www.pmguruonline.com
CourseContentsDesigned,Developed,DeliveredandOwnedbyCEPM(P)Ltd.
5 Day workshop on
at
National Statistical System Training Academy
27th November - 1st December 2017
Agenda
Day 1
• Inauguration
• Project Management Knowledge Quotient (PMKQ) assessment
Project Life Cycle - Knowledge Leverage & Conceptualize

Project & PM Fundamentals
- Project, Programme, Project Management, Project Life Cycle
• Need Analysis
• Business Case
- PESTLE analysis
- Payback Period, NPV, IRR
• Project Charter
Project Life Cycle – Plan & Organize
• Managing Stakeholder Expectations
• Planning Management
- Why Plan?
- Project Management Plan
• Success Criteria
• Scope Management
- Work Breakdown Structure (WBS)
Day 2
• Time Management
- Logical dependencies
- Network Diagrams
- Critical Path Method (CPM) analysis
- Gantt charts
- Program Evaluation Review Technique (PERT)
- Standard Deviation
- Crashing
- Fast Tracking
- Organizing the resources
- Resource Histograms
• Cost & Finance
© Centre for Excellence in Project Management (P) Ltd. (CEPM)

A - 48, Sector - 5, Noida - 201 301, India Tel.: (120) 242 0444, 242 0463 Mob: 9999684622 / 9999684632
Email: info@cepm.com / rjain@cepm.com Training Website: www.pmguruonline.com
5 Day workshop on
at
27th November - 1st December 2017
Agenda
Day 3
• Earned Value Management System

• Quality Management
- Planning, Assurance, Control
- Quality Tools
• Organization Structures
• Roles & Responsibilities
• Communication & Information System
• Health, Safety, Security, Environment Management
• CSR
• Internal and External Interfaces
Day 4
Project Life Cycle – Implement & Control
• Risk & Opportunity Management
• Issue Management
• Procurement & Contract administration
• Negotiation
• Change Control
• Configuration Management
• Team Performance
• Leadership & Motivation
• Conflict Resolution
• Problem Solving
Day 5
Project Life Cycle - Integrate / Deliver & Closeout
• Project Integration
• Product Integration
• Administrative & Contract Closeout
• Lessons Learned
• Practice Test
• Wrap-up of workshop
CIPM Exam (2.5 hours)

The CIPM examination is administered by the
International Institute of Projects & Program Management (i2P2M),
a not for profit company.
© Centre for Excellence in Project Management (P) Ltd. (CEPM)

A - 48, Sector - 5, Noida - 201 301, India Tel.: (120) 242 0444, 242 0463 Mob: 9999684622 / 9999684632
Email: info@cepm.com / rjain@cepm.com Training Website: www.pmguruonline.com
Mrs. Ruchira Jain, Certified Senior Project Manager
Mrs. Ruchira Jain, Managing Director, Centre for Excellence in Project Management (P) Ltd.
entered the field of computers in the early 70’s when it was a relatively new field. After graduating
from Loreto College, Calcutta, she took Masters classes in Computer Science as a non-degree
student at the well known University of Waterloo, Canada in 1970.
After working for 2 years in Canada in the budding field of IT on IBM 360 series in the early 70’s she
returned to India in 1973. Mrs. Jain joined Bokaro Steel Ltd. as an IT professional where she worked
for a number of years and later joined Ballarpur Industries Ltd. at their head office in Delhi.
Since 1992 she is with Centre for Excellence in Project Management and from 1995 is deeply
involved with various facets of project management dissemination in the company.
In 2007, Mrs. Jain became the first person in India to be certified as a Certified Senior Project
Manager (IPMA Level B). There are only 39 IPMA Level B professionals in India as on date. She was
also the first Asian woman to have been certified as an IPMA Level D certified project management
professional in Dec. 2000 from APM, UK.
Since 2001 Mrs. Jain has conducted a large number of very highly appreciated workshops. A noted
trainer she has trained professionals from companies like ABB, Adani, AAI, Afcons, Areva, BG India,
Birla Mgmt. Centre, BPTP, CITEC, Churchill India, DRDO, EdCIL, Essar Oil, Fortis Healthcare, GAIL,
HPCL, Idea Cellular, Indian Oil, IRCON, Infineon Singapore, Jindal Steel & Power Ltd., JCB, Jubilant
group, Johnson Controls, L&T Infotech, L&T Construction, Lanco, Min. of Statistics & Programme
Implementation, NHPC, Nuclear Power Ltd., NTPC, ONGC, Power Grid, Punj Llyod, SAIL, Siemens,
Tata Projects, Tata Power, Tecnimont ICB, Teri Hydro, Thermax, RVNL, etc.etc.
Mrs. Jain is one of the Subject Matter Experts of the globally well known and top-rated Project
Management e-learning site – www.pmGURUonline.com which was/is used by leading companies
like NTPC, Infosys, WIPRO, Genpact, HCL Technologies, Headstrong, i-flex solutions, IREL, SJVNL,
Indian Oil Corp., NHPC, Oil India, SAP, L&T, AAI, Agilent technologies, Adobe, Ernst & Young, ESC
France, US Bureau of Census, Veltech, IIM Calcutta, IMT, IMI, IGNOU etc. etc.
Mrs. Jain was an Invited speaker at the IPMA World Congress in Panama, in Sept. 2015 and was
also invited to be the Keynote speaker at the IEEE seminar held in New Delhi in March 2004 and
again at the IEEE–Jamia Millia Islamia ENCOMIUM 2004 all India Meet in September 2004.
She has also been a speaker at various international and national project management conferences
including the Global Symposiums on Project Management held in 2002, 2003, 2004, 2006, 2008,
2009, 2010, 2011, 2014 and 2016.
Mrs. Jain is the first Asian woman to become an Assessor for the IPMA International Project
Management Award for 2005 which is based on the internationally acclaimed European Foundation
for Quality Management (EFQM) Excellence Model. In February 2006 and October 2006 she was the
co-trainer for the IPMA Award Assessor training with Otto Zieglmeier of Germany.
In 2007 Mrs. Jain was elected as a Board Member of IPMA’s prestigious Education & Training
Board and served for 3 terms from 2007 – 2012. She was the only Indian member in the E&T Board.
She has written a book titled Totality Of Project Management which was released in Dec 2013
by Dr. V. Moily, Former Minister of Petroleum, Government of India.
5 Day Workshop organized by
Ministry of Statistics & Program Implementation (MOSPI)
in association with
International Institute of Projects & Program Management (i2P2M)
on
at

27th November – 1st December 2017
Course contents Designed, Developed, Delivered and owned by CEPM (P) Ltd.
Centre
for Excellence in Project Management (P) Ltd. (CEPM)
Accredited Training Organization of i2P2M
info@cepm.com / rjain@cepm.com
+91 9999684622 e-Learning website: www.pmguruonline.com
© Centre for Excellence in Project Management (P) Ltd 2017
About Centre for Excellence in Project Management (P) Ltd.
 Is India’s most well known Project Management Training

and Consulting company
 Our clients include over 650 public and private sector
companies
 Have trained 30,000+ persons covering classroom and
internet based e-learning
 Have conducted over 500 workshops / seminars in India
and outside India covering CIPM preparation, General
Project Management, Advanced concepts in Project
Management, Agile PM, Critical Chain, MS Project, Risk
Management, EVMS, Real Time Simulation etc. etc.
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© Centre for Excellence in Project Management (P) Ltd
About Centre for Excellence in Project Management (P) Ltd.
 CEPM provides top-rated PM training through:

 Instructor led public workshops where companies
can register their participants or individuals register
 Instructor led in-company workshops
 Web based training through our widely used, top-
rated, user friendly training website
www.pmguruonline.com
 Users can access the training 24x7 from any
where, any time at their pace and convenience
 Standalone CD for laptop/desktop also available
for CIPM
Some of our clientsare:
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A brief profile of Faculty - Mrs. Ruchira Jain, IPMA-B
 Worked in USA/Canada in the field of mainframe computing in 1970s
 Worked in the IT Department of SAIL & Ballarpur Industries
 Was first IPMA Level D certified professional in India in the year 2000
 Became the first IPMA Level B certified professional in India
 Has trained over 6800 professionals from India Inc.
 Invited Speaker for IPMA 2015 World Congress in Panama in Sept. 2015
 Was invited as Keynote Speaker twice by IEEE
 Has given many presentations in Global Symposiums
 Holds Certificate in Project Risk Management (CrtPRM), Cert. in Complex
PM (CrtCPM) and Certificate in Earned Value Management (CrtEVM)
 Was IPMA Board Member for 3 terms of IPMAs High Powered
Education & Training Board – was the only Asian in the E&T Board
 Is one of the key architects of www.pmGURUonline.com
 Has written a book titled Totality Of Project Management which was
released in Dec 2013 by Dr. V. Moily, Former Minister of Petroleum, GoI
 Managing Director of Centre for Excellence in Project Management (P) Ltd.
“Congratulations for conducting the outstanding program. I am sure it

will directly impact results in terms of cost, time lines and deliverables.”
- Sanjiv Bosamia, CEO, SOHM (India)
“Dear Madam, This is one best training programme we had in therecent
times. Personally I have also learned many new things.”
- K Muthukumar, Head, Project Management, CITEC India
“The programme was superb and Mrs. Jain highly knowledgeable and
excellent.”
- Anurag Garg, CPWD
"The training programme was excellent and the presentation and
explanation skill of the faculty was superb.”
- Anup K Sinha, Jindal Steel & Power Ltd.
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Overview
Totality of Project Management leading to CIPM

extensively covers Hard and Soft sides of PM with
cutting edge tools and techniques and extensive
behavioural skills
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CIPM Comments from global PM experts
“CIPM will be a major step forward for the profession and for
the enterprises to create a common understanding in managing
change.” - Dr. Hiroshi Tanaka, President, PM Association,
Japan, and PM Advocate of JGC Corporation (2008)
“Eight project life cycle phases cover the totality of the PM

profession and it is well structured methodology.”
- Dr. Vladimir Voropajev, President, Russia Project
Mgmt. Association (2008)
“I myself have gone through the CIPM and in my opinion, it

should be a pre-requisite for all PM professionals globally.”
- Dr. B. Nag, Professor, IIM Calcutta (2015)
Certificate In Project Management (CIPM)

 Widely recognized PM credential
 15,000+ CIPM holders across 570+ leading companies
 Comprehensive content covering entire project from
Concept to Delivery & Closeout
 Covers cutting edge tools, techniques and all
behavioural aspects to enhance team performance
 Improves your career opportunities
 Most cost effective PM certification globally
 Very robust exam administered by i2P2M
 CIPM used in 23 countries
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Some of the 570+ Leading companies having
CIPM certificate holders
 Adani Group  HPCL
 Afcons Infrastructure  HCL Technologies
 Airport Authority of India  Indian Oil Corp.
 BHEL  Indian Aviation Academy
 BPCL  ITD Cementation India Ltd.
 BG Gas, India  Idea Cellular
 Bridge & Roof  ITDC
 Coal India Ltd.
 Jindal Steel & Power
 Cochin Shipyard
 Jubilant Group
 DRDO
 JCB
 Engineering Projects India Ltd.
 Mazagon Dock Ltd.
 GAIL
 Max Healthcare
 GENPACT (worldwide)
 GETCO  MECON
Some of the 570+ Leading companies having

CIPM certificate holders
 NTPC  Punj Lloyd
 NAA Shimla  Rail Vikas Nigam Ltd
 Numaligarh Refinery  RITES Ltd.
 Neyveli Lignite  ONGC Ltd.
 NPCI  Power Grid Corp.
 Nuclear Power Corp.  SAIL
 NEEPCO  Satluj Vidyut Nigam Ltd.
 NHPC
 Shapoorji Pallonji
 NBCC
 Tehri Hydro Dev Corp.
 Oil India Ltd.
 Wartsila, India
 Asia Pacific Institute  IMT, Ghaziabad  IMI  Veltech
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CIPM Exam – Consists of 1 Paper
 Total Time : 2.5 Hours
 Total Marks : 200
 Total Questions : 150 multiple choice Questions

in below 4 Sections across the PLC
Section 1: Knowledge Leverage + Conceptualize phases
Section 2: Plan + organize phases
Section 3: Implement + Control phases
Section 4: Integrate + Deliver & Closeout phases
 Passing Score : Overall 60% across all 4 sections

50% in each section is Must
CIPM Exam – has 3 Types of Questions
 Type 1: Has 1 answer from 4 options.

Carries 1 mark
 Type 2: Has 1 answer from 5 options.

Carries 2 marks
 Type 3: Select 1 answer from 4 options.

Needs calculations. Carries 5 marks
Most Robust Examination process with

Negative Marking: 25% of Marks allotted for question
deducted for wrong answer
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CIPM Exam – Break-up of Questions
Type 3 Type 2 Type 1 Total Pass marks
Question Questions Questions marks in 50% Each
Section s 2 marks 1 mark Paper Section
5 marks 60% Overall
Paper
1 2 (10 20 (20
6 (12 mks) 42 21
KL+Concept mks) mks)
2 4 (20 36 (36
9 (18 mks) 74 37
Plan+Org mks) mks)
3 32 (32
- 6 (12 mks) 44 22
Impl+Control mks)
4 30 (30
- 5 (10 mks) 40 20
Integ+Deliver mks)
Total Qstns. 6 out of
in Paper 26 out of 150 118 out of
150 200 120
Qstns 150 Qstns
Qstns
Let us agree on some ground rules for the Program

1. ‘All men by nature desire knowledge’ by Aristotle -
demanding quest to learning and humility
2. You have different background- appreciate other’s
background and try not to dominate
3. Ask questions anytime
4. No titles or designations in this workshop
5. Laugh and smile all the time
6. If feeling sleepy, do some exercise
7. No cell phone – pl put on silent or off
8. Focus – no roaming of mind (difficult but possible)
9. +ve energy all around and no stress
10. Answers can be supplemented by others
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Project Life Cycle Phase
– Conceptualize and Knowledge Leverage
What is a Project?
Means of converting Vision to Reality
A set of activities undertaken to meet specific

objectives for changes
A temporary endeavor undertaken to create a

unique product, service or result
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What is a Project?
Projects are undertaken to create:

• New products / services / Business processes /
Infrastructure
• Changes in existing products and services
Projects are undertaken for diverse reasons across:

• Business • Government
• Industry • Social sector
What is a Project?
Projects have the following characteristics:
 Temporary – have a definite beginning and end
 Unique – no two projects are identical
 Predefined goals & objectives – financial/ social /economic
 Budgets & schedules – prefixed budget and timeframe
 Uses Resources & Manpower – both are limited
 Quality / Performance – determined at beginning
 Face Risks – known and unknown risks

 Have a Project Life cycle – many phases from start to end
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What is Operations?
Routine, Ongoing,
Repetitive work
Carrying out the day-today work of

the organization
Operations Vs Projects
Operations are used for:
 Sustaining existing business

 Improving efficiency of existing operations
 Routine, Ongoing, Repetitive work
 Operations NOT used for Change

Management
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Operations Vs Projects
Differences between Projects & Operations
Projects Operations
Unique Repetitive
Temporary
Ongoing
(Start and End time)
Aim is to achieve the
Objective of operation is to
objectives of the project &
sustain existing business
then close the project
Future orientation Present Orientation
Create new things Maintain existing things
Project Management
What is Project Management (PM)?
Project Management is the processes and body

of knowledge of specific skills, tools and
techniques used to bring structure and planned
order to deliver projects successfully
 PM combines “Hard” and “Soft” skills

 Hard skills – tools & techniques
 Soft skills – the human aspects e.g. people, team
work, leadership, motivation, conflict resolution,
communication
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Project Management – an Art & Science
Science (17%) Technical e.g.
Easily see & WBS, Networks,
measure Histograms, Bar
charts
ART (83%)
– difficult to see e.g.
Leadership, Motivation,
Conflict resolution
© CEPM (P) Ltd.

Project Management
Project Management manages and controls project work by:
 Understanding specific requirements of stakeholders
 Managing the triple constraints of Scope, Time and

Cost to required Quality/performance criteria
 Planning the work in detail : ‘Why’, ‘What’, ‘Who’,
‘When’, ‘Where’, ‘How’ and ‘How Much’
 Making one person, generally the Project Manager
accountable for the project
Project Management is most efficient way to manage

change and deliver projects (not for routine work)
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What is a Programme?
A Programme is a coherent group or

collection of projects that are related to a
common objective to achieve organization’s
strategic goal which cannot be achieved
through a single project and deliver
additional benefits to the organization
What is Programme Management?

Programme management can cover:
 A group of projects related to a common objectives
e.g. business aim
 An interdependency between a number of projects
 Creating more benefit for the organization
 Resource allocation amongst a portfolio of projects
 Achieve overall benefits for the business not just for a
project
 An organization’s business strategy required to be
implemented through projects
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Project Life Cycle
Project Life Cycle (PLC):
 A PLC is a sequence of phases from project start to
project end - a start, a middle and an end
 Each phase associated with major processes and
deliverables
 Length of each phase will vary
 Nomenclature used to describe each phase will vary
 Generic phases - Start or Concept phase, Intermediate
phases & a Closeout phase
 Number of Phases in PLC may vary depending on the
industry or sector
Project Life Cycle

In CIPM, the PLC is divided into these 8 generic phases
 Conceptualize
 Plan
 Organize
 Implement
 Control
 Integrate
 Deliver & Closeout
 Knowledge Leverage
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Project Life Cycle
Some Advantages of a Project Life Cycle are:
 Allows better planning, scheduling, estimating

 Better control of project
 Work can be broken up into manageable blocks or
phases - each phase has specific deliverables
 More efficient allocation of all resources – key

resource requirements vary with the phase
 Better cost control – funds needed for next phase,
procurement can be planned & released as needed
Characteristics Of A Life Cycle
Opportunity to add Value

High
Low Cost to make change
Life Cycle of Project (Time)
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Characteristics Of A Life Cycle
Uncertainty of Success
High
Low Amount at Stake
Life Cycle of Project (Time)
How do Projects Come into Existence?
A New Project
requirement Feasibility Approved
Need Business Project
Analysis Case Charter
Deliver & Implement Project

Detailed
Closeout & Control Management
project project Plan
Planning
The change required can be due to internal or

external demands
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Need Analysis
A Need assessment is done for new projects. The
analysis goes through the three phases of:
 Needs Emergence
 Needs Recognition
 Needs Articulation
Need Analysis is done to see whether a

project/programme is needed
Need Analysis
 Needs Emergence
A project need commonly arises to fulfill strategic goals
and vision e.g. a new market demand, customer
requirement, new legislation, technology upgrade etc.
The need can arise from any level in organization
 Needs Recognition
The Need is recognized by the organization.
- it’s validity and urgency is discussed with the
stakeholders, studied and rated against other needs
 Needs Articulation
The Need is studied, evaluated and detailed out to
check it’s viability in financial and non-financial planes
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Business Case
A formal Business Case is developed to detail out different
aspects of proposed project before it is approved. It:
 Identifies all stakeholders, their needs and expectations
 Shows key project requirements to achieve the stated
business goals
 Links project to the business/corporate strategy and
shows priority of proposed project in overall business
plan of organization
 Documents project’s high level scope, timeframe, cost,
quality, risks, assumptions, constraints etc
 Documents project’s financial and non-financial
feasibility
Business Case
Business Case is “owned” by the Sponsor &
Sponsor is responsible for it’s development.
 Is a key document that shows the justification for
undertaking the project i.e. the “why” of the project
 Is developed from the Need statement
 Provides the information required to make an
informed decision on whether to invest in the
proposed project or not - it justifies the investment
 Is also used to review and revalidate the investment
or at significant changes to the context, project, or
business function
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Contents of Business Case
 Executive summary of project
 The business Need for taking up the project
 Objectives of the project – what will be achieved
 Product / service to be delivered by the project
 Rough Cost of implementing the project and the
income expected from project after it is completed
 The project’s success criteria and Key
Performance Indicators (KPIs)
 Investment appraisal data
Contents of Business Case
 PESTLE Analysis – Political, Economic, Social,

Technological, Legal and Environmental analysis
 Major risks perceived and opportunities
 Organization’s strategy for implementing project
 Assumptions and constraints
 Project’s overall time, cost and quality objectives
 Key resource requirements
 How project will be financed
 Expected benefits from project
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PESTLE Analysis
 Political
- Policies of host country, foreign suppliers, governments
- National politics, tax laws, employment laws, media
- Attitudes and interactions of the project’s stakeholders
 Economic
- Micro economic factors under Sponsor/PM’s control
- Macro economic factors at national level
- Supra economic factors e.g trade tariffs at global level
 Social
- Population growth, age-wise population, income,
literacy level, male-female ratio
PESTLE Analysis
 Technological
- Technical feasibility of project, is technology tested
or new, availability, reliability, drawings, availability
of spare parts, service providers, competitors
 Legal
- Local laws that will impact the project, laws
binding foreign partners, contractual disputes
 Environmental
- Environment such as water, climate, terrain
- Environmental issues and regulations related to
industrial effluence, pollution, legal requirements
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Investment Appraisal – Payback Period
Payback Period is the time expected to be
taken by the proposed project to get a financial
return equal to the original investment made
 Payback Period is achieved when the cumulative

cash flow becomes equal to the initial investment
 Does not consider the whole life span of the

product - calculation stops once the original
investment has been recovered
Investment Appraisal - Payback Period
Cash Flow up to year 4 Initial Investment = $100,000

= 85K.
Shortfall of 15,000
(100K - 85K)
Cash Flow in year 5
= 70K
Per month cash Flow in
year 5
= 70K / 12 = 5,833
15K / 5833 = 2.57 mths
Cash Flow = 100,000 in
4 years 2.57 months
Payback period for Project A is 4 years 2.57 months
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Investment Appraisal - Payback Period
Advantages Disadvantages
 Is simple to use  Ignores Time Value of
money
 Good as an initial filter
 Does not consider
 Standard technique project cash flows once
Payback Period has
 Favors projects with been achieved
faster returns, better for
company liquidity  Not good for long term
project
 Effective for high risk
situations
Discounted Cash Flow (DCF) method
DCF relates future cash flows over the project’s life

to a common base value
 DCF is based on concept of Time Value of Money i.e.

purchasing power of money falls or depreciates with time
 Cash flows expected to accrue in future are adjusted for
money over time and brought to what they would be
worth in today’s monetary terms by discounting it
 Discounting of the Cash Flow gives a more realistic
picture of potential project’s feasibility
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Investment Appraisal - Net Present Value (NPV)
 Very popular and widely used technique globally
 Net value of potential project quantified in today's

monetary terms. Considers entire life of product/service
 Future cash inflows and outflows discounted

and converted to their Present Values (PV)
 Shows project’s net value in today's monetary terms -
what the future cash flow will be worth in today’s terms
 Higher the NPV, more profitable the investment
 Negative NPV shows investment is loss making
Investment Appraisal - NPV

Present Value (PV) = FV / (1 + r)n
FV = Future Value; r = Discount rate; n = No. of years
NPV = ∑PV - Initial Investment
 Calculate PV of cash flow for each year - discount cash
flow (income - expenses) by the given Discount Rate
 Sum up all the Present Values
 Subtract project's Initial Investment from cumulative
Present Values to obtain the project’s NPV
Discount Factor (DF) can be used for easier calculations.

To calculate PV, the Future Value is multiplied by the DF.
Discount Factor (DF) = 1 / (1 + r)n
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Year 0 = Initial Investment Discount Rate is 10%
Year 1 = 25 x .91 or Discount Factor @ 10% is given
25 / 1.10 =
22.7
Year 2 = 25 x .83 or
25 / 1.210
(1.10 x 1.10) = 20.75
Year 3 = 20 x .75 or
20 / 1.331 = 15.00
(1.10 x 1.10 x 1.10)
Year 4 = 15 x .68 or
15 / 1.464 =10.20
Year 5 = 70 x .62 or
70 / 1.610 = 43.40
PV for Yr 1 to Yr 5 = 112,100
Less Initial Inv = 100,000
NPV = $12,100

Advantages Disadvantages
 NPV is more realistic –  Accuracy depends on
considers time value of how well future cash
money flows and discount rate
is predicted
 Considers whole life
span of product / service  Does not consider non-
– from project beginning financial data
to product termination
 Has bias towards short
term projects
Higher the Discount rate, Lower the NPV
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Investment Appraisal – IRR
Internal Rate of Return (IRR)
IRR is calculated to nullify impact of time value of money
on proposed project. IRR is the discount rate that makes
the proposed project’s Present Values of future cash flows
equal to the project’s initial investment.
 IRR is that Discount Rate which, when applied to the

cash flows of a project gives a nil NPV i.e. NPV = 0
 IRR technique gives an idea of the percentage return on
the initial investment
 IRR expresses profitability in percentage while NPV
expressed profitability in absolute terms
Investment Appraisal - IRR
 IRR arrived at by trial and error
 Shows Discount Rate at which project will break even
 Higher the IRR, better the project
 IRR compares projects in percentage rate of return.

NPV compares projects is in absolute value
Select project if IRR greater than cost of capital.

Reject project if cost of capital higher than the IRR.
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 26
Project Charter
After Business Case is approved a Project Charter is
issued formally authorizing the project go ahead
 Sponsor is responsible for issuing of Project

Charter but it can be issued by an outside person
/ organization associated with funding
 A contract can also act as the Project Charter
 Project Charter forms the link between project and
the on-going work of the organization
Project Charter gives the PM authority to use

organization's resources for the project
Key contents of Project Charter

 Name of Project Manager with level of authority
 High level description of the product / service to be
delivered by the project
 Milestone schedule showing summary of required
completion dates
 Expected project budget
 Stakeholders
 High level risks
 Manpower and other resource requirements
 Organizations/departments involved and their roles
 Assumptions / constraints impacting project
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 27
Project Stakeholders
Who is a Stakeholder?
Any individual, group, organization, statutory

body directly involved in the project or that may
be affected by the project activities and the
project outcome is a stakeholder
Understanding stakeholder needs

critical for project success
Key Stakeholders
 Project Manager - is overall responsible to ensure
project meets it's goals and objectives
 Project Sponsor – represents top management. Is
responsible to ensure funds available and to provide
overall, high level guidance to project
 Team Members – perform the work. At core of
success
 Customer / Client – individual /group /organization that
will use the deliverables. Can have one or many
 Company / Contractor – employs the people engaged
in project work - Internal or external
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 28
Other Stakeholders
Key stakeholders are easy to identify. Other stakeholders
cover persons/groups such as:
 Financiers
 Direct and indirect customers
 Regulatory bodies
 Environment
 Society at large
 Local community
 NGOs
 Media
 Labour unions
 Employees
Managing Stakeholder Expectations

 Different stakeholders have different expectations from
same project - on time, on budget, more profit etc.
A stakeholder can be:

 Passively involved in the project
 Actively involved in project work and project outcome
 Negative about the project and opposed to it
 Positive about the project
A Stakeholder can help or hinder the project
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 29
Managing Stakeholder expectations
PM should understand all stakeholder requirements
and identify ways to manage each stakeholder’s
expectations, attitude, interest and influence in project
 Identify all the stakeholders and determine:

 All their requirements that must be met
 Their expectations from project
 Level of influence and interest in project work
 Their attitude regarding the project

 How to communicate effectively with each
stakeholder
Strategies to manage stakeholder expectations

Provide required
Engage
information to keep
High stakeholder closely
stakeholder fully
& actively
satisfied
Power
Provide minimum Ensure
information. Monitor stakeholder
Low for changes. kept informed
Low Interest High
 High interest, high power – Engage stakeholder actively

 High interest, low power – Ensure stakeholder kept informed
 Low interest, low power – Minimum information. Monitor
 Low interest, high power – Ensure stakeholder fully satisfied
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 30
Project Life Cycle Phase
– Plan & Organize
Project Plan
The Roadmap to Successful Delivery
A project without a
plan is like
a journey without
any destination
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 31
Project Management
Involves
• Planning
• Organizing
• Implementing
• Controlling
• Integrating and
• Delivering & Closing
Out
….The Work Results
They constitute the most important
responsibilities of a project manager
Triple Constraints of Project Management
Project Management – focused on balancing SCOPE,

COST and TIME within the frame work of QUALITY,
meeting customer expectations
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 32
Why Plan the Project?
To know:
 Why are we doing the project?
 What will be produced?
 What work must be done?
 What costs will be incurred?
 How and when to perform the work?
 What risks are involved and how to minimize them?
 The Quality requirements & Acceptance criteria
 What resources will be required?
 Who will perform the work?
Project Management Plan (PMP)

Shows the project’s
 Why - from Business case / Project Charter
 What - ”
 Where - ”
 Who - who will do the work & responsibilities
 When - the schedule
 How - Resources, tools &
techniques, IT needs, Technical issues, Quality,
validation & testing, Risk management, Procurement,
Change mgmt. etc.
 How much – project costs and budget
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 33
Project Management Plan (PMP)
Detailed planning done for different aspects of project &
integrated into the Project Management Plan (PMP)
 PMP is the key document of the project
 Is ‘owned’ by the Project Manager
 Is used to control and guide project execution
 Forms the baseline for the project progress & review
 Is developed by Project Manager with project team
 Should be accepted by Sponsor & project team
 Is approved by the Sponsor / client
 Facilitates communication amongst stakeholders
Project Management Plan (PMP) – Key Contents

 Executive summary with key aspects of the project
 Project's Success Criteria
 All deliverables ordered by time with responsible owners
 The Work Breakdown Structure (WBS) and the Product
Breakdown Structure (PBS)
 Assumptions and Constraints
 Guarantees, Liabilities, Exclusions, Pending issues
 Technical & Commercial details
PMP guides the project execution
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 34
Project Management Plan (PMP) – Key Contents
Individual plans for different areas are detailed out
e.g.:
 Scope, Schedule, Cost,  Baselines - Scope,
Quality Management Plans Schedule, Cost, Quality
 Staffing (HR) Plan  Registers - Stakeholder /
Risk / Issue / Change
 Communication
Management Plan  Resource Calendars
 Procurement Management  Change Management Plan
Plan
 Configuration Management
 Risk Management Plan Plan
 HSSE Plan  Process Improvement Plan
Project Planning
The project plan is used in the project to:

 Document the assumptions made in planning the
project
 Document the project planning decisions made in
regard to the alternatives that have been selected
 Facilitate communication amongst the different

stakeholders
 Define key management reviews as to content,
extent and timing
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 35
Project Planning
The project plan:
 Provide the baseline for progress measurement and
project control
 Provide guidelines to team and management on the
development phases and estimates related to cost,
schedule, resources etc.
 The project plan provides a reference regarding the
quality expectations in the projects output i.e. the
product of the project
Baselines are used to monitor project performance
Project Planning
Rolling Wave planning maybe required

i.e. work in near future is planned in more detail and
high level planning is done for activities in distant future
The Scope and the Plan is progressively elaborated
as details become more clear over time
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 36
Project Success Criteria
Success Criteria are the Qualitative and Quantitative
criteria by which project success will be judged by the
stakeholders
 Should be clearly defined with stakeholders in

Conceptual phase. Includes Internal & External
parameters
 Traditional view - a project is successful if completed
on time, within budget and meet's required
quality/performance criteria
 The measurable values of success criteria are
known as Key Performance Indicators
Project Success Criteria

 Benefits are materialized
 Owner satisfied
 Shareholders gain
 Project is completed on time / within cost
 Project meets the functionality / stipulated quality
 The project team is satisfied
 Benefits reach end users of the product/service
 Project contributes to the economy
 Project benefits the local community
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 37
Project Success Criteria - Example
 Total project cost does not exceed X% of initial budget.
 Actual delivery is within X % of the initial deadline.

 All high-priority functionality defined in requirements
specification is delivered in the first release.
 The estimated number of residual defects does not

exceed X per function point.
 Load testing confirms successful scale-up to X

concurrent users, with page download times no longer
than Y seconds over a 56K dialup connection.
Project Success Factors

Factors required for success – more within control of the
Client ,PM, Sponsor, team, top management etc.
 Goals and Objectives are clear and agreed with
stakeholder
 Support from senior management
 Clear Scope from client / sponsor / users
 Timely communication with all stakeholders
 Motivated team / Positive attitude of team members
 Subject matter expertise
 Realistic Schedule and Cost Estimates
 Continuous Risk assessment and management
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 38
Project Success Factors
Key factors cited for project failure are:
 Scope not well defined
 Poor management
 Poor planning
 Breakdown in communication between engineering
and construction
 Unrealistic scope, schedules and budgets
 Many changes at various stages of progress
 Lack of good project control
Scope
Triple constraints of PM:

Scope, Time & Cost
Scope is the base - what is to be delivered?
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 39
Scope Management
Scope is the totality of work and only the work

required to complete the project successfully.
It is the constraining factor within which the

project has to perform.
If any major Scope change is made during project

execution the Scope Baseline and the PMP will be
revised
Scope Management
 Scope consists of two aspects: Project Scope &
Product Scope
 Product Scope – Elements of the product/service
to be delivered by project. Covers detailed
characteristics, specifications, inclusions/ exclusions
etc. defined without any ambiguity.
 Project Scope – All the work and only the work
needed to successfully deliver the product / service
Rolling wave may be needed

Work package details are progressively elaborated as
they become more clear with time
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 40
Collect Scope Requirements
 Project Manager and project team must have clear
understanding about the project’s scope
 Ensure every effort made to obtain "ALL" requirements
from each stakeholder before Scope finalized
 Requirements should cover how stakeholders want the
product of the project to function, plus their
communications requirements
Poor scope definition and poor communication leads

to scope creep i.e. uncontrolled changes in scope,
without increase in time and budget allowances
Scope Management
Scope Management Plan
Scope Management Plan describes the various steps
needed to manage project’s scope and scope changes
 How total scope will be managed & controlled

 How scope will be identified, defined, classified,
documented, managed and integrated into the project
 How WBS will be developed
 How scope changes made after WBS is finalized will
be managed & integrated into project
 Define the acceptance criteria for the deliverables
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 41
Defining the Scope
Begin by developing a Scope Statement
Scope Statement is a write-up that elaborates the

details of the project’s product / service + the work to
be performed to deliver the product / service.
 Scope statement is used as input to develop the

WBS
 It creates a common understanding and acts as an
agreement between project team and customer
Scope Statement – How to Develop?
 Use Project Charter, Business Case, Stakeholder inputs

 Product analysis e.g. systems analysis, requirements
analysis, value engineering, product breakdown
 Alternatives analysis e.g. brainstorming
 Cost benefit analysis
 Seek Expert Advice
 Dig into historical records
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 42
Scope Statement – Suggested Contents
 Product description – product characteristics in more
detail
 Project objectives – success criteria e.g. cost, schedule
and quality
 Assumptions & Constraints
 Acceptance criteria - what conditions need to be met
 Major deliverables including interim deliverable,
reports, documentation
 Project Boundaries (what is not included in scope)
Defining the Scope

Begin by developing a Scope Statement
Scope Statement is a write-up elaborating details of

the product / service + the work to be performed
 It creates a common understanding and acts as an

agreement between project team and customer
 Scope statement used as input to develop the WBS
 Use Business case, Project charter, stakeholder
inputs
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 43
Scope Statement – Suggested Contents
 Product description – product characteristics in more
detail
 Project objectives – success criteria e.g. cost, schedule
and quality
 Assumptions & Constraints
 Acceptance criteria - what conditions need to be met
 Major deliverables including interim deliverable,
reports, documentation
 Project Boundaries (what is not included in the
scope)
Scope Management - PBS

Product Breakdown Structure (PBS)
 PBS is a structured, hierarchical breakdown of the physical
components of the project’s final product / deliverable
 Provides a graphical presentation of the physical elements

of each deliverable and how they relate to each other
 Top level is the final product broken down into sub-products

and components
 Shows interfacing needs between components
 Helps to know details of the products required to build final

deliverable and then plan the work
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 44
Scope Management - PBS
Car
Engine Body Interior Control
Radiator Doors Seats Steering wheel
Spark plugs Windows Arm rests Clutch
Piston Boot Break

Doors
Carburetor Hood Accelerator
Dashboard
Tyres
Scope Management - WBS

 After scope statement is made, entire scope is reviewed and
all deliverables are decomposed into smaller more
manageable components giving rise to what is known as the
Work Breakdown Structure
 WBS developed by project team using collective experience

and by brainstorming with other stakeholders
The WBS is a task or deliverable oriented hierarchical

decomposition showing all the work to be done by
project team to deliver the project’s product / service
and achieve the project objectives.
Is foundation or backbone to plan and control project
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 45
Decomposition
 Entire project is broken up into smaller, more
manageable elements of work
 Decompose higher level elements to lower level – each
descending level provides more details
 Decompose to level where work can be estimated,
assigned and controlled
 Verify that level of decomposition is correct and adequate
 Different deliverables decomposed to different levels
Nothing is particularly hard if you divide it into small jobs.
- Henry Ford

WBS Levels
 Level 1 – Top most level is the project or deliverable
 Level 2 – can be developed based on project phase,
product deliverables, department or a mix of all.
Different approaches are followed to develop WBS
 Lowest Level – known as Work Package Work
monitored and controlled at this level
 A unique number is assigned to each WBS element
known as the Code of Accounts
Work not reflected in WBS is considered
out of scope
---------------------------------------------------------------------------------------------------------------------------------------------------------------- 46

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