DIFFERENCE BETWEEN A FUNCTIONAL MANAGER AND A

PROJECT MANAGER

FUNCTIONAL MANAGER

1. He is in-charge of a firm’s functional depts. Such as marketing,

engg., or finance.
2. They are more skilled at analysis. Such heads are specialists in
certain areas only.
3. They are analytical in approach (breaking the system into smaller
and smaller elements) and they know something abt. the operation
for which they are responsible.
4. In case of any difficulty, they know how to analyze and attack it.
5. They are administratively responsible for deciding how something
will be done, who is going to do it, and what resources will be
devoted to accomplish a task.
6. He is a direct, technical supervisor.
7. He should have knowledge in the technology of the process being
managed.
8. The FM cannot allow the PM in taking control of the technical
decisions in the functional areas or to control the assignment of the
functional area personnel.

PROJECT MANAGER
1. A PM starts his career as a specialist in some field, later on being
promoted to some higher post.
2. He is required to be more skilled at synthesis.
3. The PM uses a system approach i.e. understanding the organizational
problem, for which the project is a part, the organization for which the
program exists, as well as the environment of the organization.
4. The PM is a facilitator and generalist.
5. He should be competent in the science of project along with having
the technical competence in some aspects.
6. He is responsible for organizing, planning, budgeting, directing,
planning, and controlling the project.
Economic Analysis:

1) Economic analysis is also referred to as social cost benefit

analysis.
 2) It is concerned with judging the project from a large social point of
view.
3) The focus is on the social costs and benefits of a project that may
often be different from its monetary costs and benefits.
4) The questions that are sought to be answered in this social cost
benefit analysis are:
a. What are the direct economic benefits and costs of the
project measured in terms of shadow prices and not in terms
of market prices?
b. What would be the impact of the project on the distribution
of income in the society?
c. What would be the impact of the project on the level of
savings and investment in the society?
d. What would be the contribution of the project towards the
fulfillment of certain merit wants like self-sufficiency,
employment & social order?

Management Design
Design is the meaningful representation of something that is to be built. In
the project management concept design focuses on 4 major areas:
1. Data 2. Architecture 3. Interfaces 4. Components
Project Design is the first of the 3 technical activities that are required to
build and verify the software. 1. the data design transforms the information
created during analysis into the data structure that will be required to
implement the software. The data objects and relationship defines in the ER
diagram and the detail data contents depicted in the data dictionary provides
the basis in data design activity.2. the architecture design defines the
relationship between the structure elements and the design platforms that can
be used to achieve the requirements that have been designed for the system.
3. The interface design describes how the software communicates
with itself and the system and interface implies a flow of information and the
specific type of behavior. 4. the component level design transforms the
structural elements of the software architecture into a procedural description
of software component.

PROJECT TERMINATION

A project is said to be terminated when work on the substance of project has

seized or slowed to the point that further progress on the project is no longer
possible. Following are the types of termination:
1. Termination by extinction: The project is stopped. It may end because it
has achieved its goal. Like the new product has been developed and
handed over to the client or s/w has been installed and is running. The
project may also be stopped because it is unsuccessful. For eg: If a
medicine is prepared for a disease but selling at higher rate and in the
market there are other medicines at lower rate for same disease then
launching of this new medicine may not benefit and this project may be
carried on further.
2. Termination by addition: Most projects are inhouse i.e. carried out by
project team for the use in parent organization. If a project is a major
success it is terminated by the parent organization. For eg: Suppose the
Maths dept creates a BSc[IT] course taken as a project. Now if after
several years the BSc[IT] course can run on its own, then the Maths dept
can terminate this BSc[IT] project which can be considered as a full
fledged dept. now.
3. Termination by intefration: This method of terminating a project is most
common and it is done when the complexity arises. The property
equipment, material, personnel and functions of the project are
distributed among existing element of the parent organization. The output
of the project becomes the std. part of operating system of the parent or
client For eg: The merger of global trust bank with oriental bank is
termination by integration.
Following points must be considered when the project functions are
distributed during integration.
a. Personnel: Where wil the project team go? Will it remain a team.
B. Manufacturing: Is the training complete? Are input materials and
required facilities available? Are new control procedures needed. C.
Accounting: Have the project accounts closed and auidited? Have the new
accounts been vreated and a/c nos been distributed. D.
Engineering: Are all the drawings complete and the files complete? Have
maintenance schedule been adjusted.E. S/w or info System: Has the new
system been throughly tested and is the s/w properly documented? Is the
new system fully integrated with current system. F. Termination by
starvation: In this type a slow starvation arises by budget decrement. Every
one involved with the project has to cope with budget cut. In some firms,
for eg: they don’t want to admit the failure, so the project is continued even
if it is not fruitful. Inshort the progress has slowed down, so the company
may change the employees but the project may continue.

Q. When a project should be terminated?

A. 1. If a project is successfully completed, then it is terminated. 2.
Does the project is consistant with organizational goals. 3. Is the project
useful or is it practical, if not it is terminated 4. Is the mgmt.
enthusiastic about the project to support the implementation. 5. Does the
project represent more advance over current technology. 6. Is the project
team still inovative. 7. Has the project lost its key person.

Project audit
Project audit is an examination of mgmt of a project. Its methodologies and
procedures, its records, its budgets and expenditure. It may deal with the
project as a whole or only the part of project. A formal report must be
presented which takes the following points into account. 1. Current status
of project: Which tells that the work actually completed does match with
the plant activity. 2. Future status: Are significant schedule changes
likely if so indicate the nature of changes. 3. Status of crucial task:
What progress has beeen made on task that to decide the success or failure
of the project.
4. Risk Assessment: Are the risk taken care of. 5. Information from other
project: What lessons are learned from the project autied earlier.
Depth of auditing : To what depth the auditing should be done is decided
by the organization. The factors which decide the depth of auditing are :
1.Cost 2. The clerical time used in conducting the audit 3. The
storage 4. The maintenance of the auditable data.
The general audit is normally carried out by the qualified technicians under
the direct guidance of project auditor.
Timing of audit :
1.The timing of audit will depend on the circumstances of a particular
project. The first audit are usually done early in projects life. The problem is
discovered the easier it is to deal with. Early audits often focussed on the
technical issues inorder to make sure that the key technical problems have
been solved. 2. The audit done later in the life cycle of project are of
less immediate value to the project but are of more value to the parent
organization. As the project develops technical issues are less likely to be
the matter of concern. 3. Post project audits are conducted with several
basic objectived in mind like legal necessity, feedback for manageral level,
to account for all project property and expenditure.
Responsibility of project auditor:
Following steps are carried out in a audit: 1. Essentially a small team of
experienced experts 2. Familiarized the team with the project.
3. Audit the project on site 4. After completion brief the project
management. 5. Produce a written report according to specified format.
6. Distribute the report to project manager and project team for their
response. 7. Follow up to see if recommendation have been
implemented.

Project audit lifecycle.

There are 6 phases in the project audit lifecycle.
1. Project Audit initiation: This step involves starting the audit proces,
defining the purpose and scope of audit and gathering sufficient info. to
determine proper audit methodologe. 2. Project Baseline
Definition: The purpose of this phase is to establish performance std.
against which the project performance can be evaluated. This phase consist
of identifying the performance area to be evaluated, determining std. for
each area for bench marking and develop a program to measure and
assemble the required info. 3. Establishing an audit database: Once the
baseline std. are established execution of audit begins. Depending on the
purpose and scope of audit the database might include the information
needed for assessment for project organization, control, past and current
project status, schedule performance and cost performance. 4.
Preliminary Analysis of Project: After the std. are set and data collected
judgemetns are made. The judgements should be fare enough. It is auditors
duty to brief the PM on all findings and judgement before releasing the
audit report. The purpose of audit is to improve the entire process of
managing projects.
5. Audit Reort Preparation 6. Rpoject Audit termination

Principles of Project Negotiation

1) Separate the people from the problem – the conflicting parties are
often highly emotional. The emotions and objective facts get confused
when it is not clear and the conflicting parties tend to attack one another
rather than to discuss the problem.
2) Focus on interest rather that the position – the negotiator must
determine the concerned of the other party factors such as time, resources,
funds, workload, etc must be clearly discussed.
3) Before trying to reach agreement invent options for the mutual gain –
as soon as the problems are spelled out some effort should be made to find
a wide variety of problem solution.
4) Insist on using objective criteria – instead of bargaining on position
main attention should be given to find the standards such as marked values,
expert option, how company policy that can be used to determine the
quality of the outcome.

Project Review
The project review is meant for evaluating actual performance with the
projected performance with the assurance and cost. When the actual
performance is measured and it is not as per the objectives then the reason
for such performance is evaluated.
Steps in review plan: the review team prepares a formal review plan around
the objectives of the review, the type of evaluation to be carried out and the
time schedule required.
1. Administrative Plan – the review group performs a) user objectives
b) operating cost and benefits
2. Personal Requirement Plan – evaluates all the activities which are
involved with the system personal and the staff that deal directly with the
system. The emphasis is one productivity, moral and job satisfaction.
3. Hardware Plan – the hardware of the project is also reviewed & the target
is comparison of current performance specification with design
specification.
4. Documentation Plan – to evaluate the accuracy and the completeness of
the documentation compiled to date and its conformity with the pre-
established documentation standards.

Contractual Arrangements

1. Most inter-organizational work on projects is contractual in nature. 2.

CONTRACT – A forma; agreement between 2 parties wherein one party –
the contractor obligates itself to perform a service and the other party – the
client – obligates itself to do something in return. 3. Contractual
arrangement is more than just an agreement between parties. 4.
Contractual Arrangement is a codification of the private law - it
defines the responsibilities, rights of the parties in relationship to each other.
5. An ambiguous or inconsistent contractual arrangement is
difficult to understand and enforce. 6. Types of Contractual Arrangements
- Fixed price: price is agreed upon in advance and remains fixed as
long as there are no changes to scope of the agreement. - Cost plus: the
Contractor is reimbursed for all of the expenses incurred during the
performance of the contract.