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Savitribai Phule pune university

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** As per New Credit SystemSyllabus(Rev. 2019) of Savitribai Phule Pune University with
effective from Academic Year 2021-2022

Project Management
(Code: 304193)

EQUckRead Series
Semester VI- Electronics and Telecommunication Engineering .

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EPE145A Prce ? 120/-

TechKnowledge
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 Project Marnagement (Code: 304193)
(SemesterVl-Electronics and Telecommunicatlon Engineering) (SPP

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 Table ofContents,

Chapter 1 Fundamentals of Project Management 1 to 5

Chapter 2 : Project ldentification, Selection and Planning 6 to 24

Chapter 3: Project Organizational Structure and Issues 25 to 40

Chapter 4: Project Scheduling 41 to 58

Chapter 5: Project Risk and Financial Management 59to 72

Chapter 6 Product Development and Entrepreneurship 73 to 84

O00

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 SYLLABUS
ModüleNo
Topls rs.
Fundamentals of Project Management 06
5asics of Project Management : Definition of Project, The Project Life Cycle, Deflnition|
of project management Need of Project management, Project Mänagement process an

E importance, The Project Manager (PM), Phases of Project Management Life Cycle,
Project Management Processes, Impact of Delays in Project Completions, Essentlals of
Project ManagementPhitosophy,Project Management Principles.
2

Project Identification. Selection& Planning 06

Project Identification and Selection: Introduction, Project ldentification
2.0 Project Inítiation, Pre-Feasibility Study, Feasibilitý Studies, Project Break-even point
Project Planning: Introduction änd need for Project Planning, Project Life Cycle, Roles,
Kesponsibility and Team Work, Project Planning Process, Work Breakdown Structure|
(WBS)
Project Organizationalstructure&Issues 07
Onganizadonal Structure and Organizational Issues: Introduction, Concept ot
3.0 organizational. Structure, Roles and Responsibiliies of Project Leader, Relationship
between Project Manager and Line Manager, Leadership Styles for Project Managers
Conflict Resolution,Team Management and Diversity Management, Change management
4 Project Scheduling 04
PERT and CPM: Introduction, Development of Project Network, Time Estimation,|
4.0 Determination of the Critical Path, PERT Model; Measures of variability, CPM Model,
Network Cost System
Resources Considerations in Projects: Introduction, Resource Allocation, Scheduling
Project Cost Estimate and Budgets, Cost Forecasts
Project Risk& Financlal Management 07
Project Risk Management: Introduction, Risk, Rísk Management, Role of Risk|
Management in Overall Project Management, Steps in Risk Management, Risk
Tdentification, Risk Analysis, Reducing Risks
5.0 Introduction to, Project Management Tools such as:.Trello, JIRA and Asana..
Financial Management in Projects: Project Finance structure, Process of Project
Financial Managenment: Conducting Feasibility Studies, Planning the Project Finance,
Arranging the Financial Package, Controlling the Financial Package, Controlling Financial
Risk, Options Models.
'

ProductProductDevelopment& Entrepreneurship 07
Product Development: Introduction, Development Process and organizations, product|
planning identifying. customer needs, Product Significations, concept generation.
selection, testing, Design for Manufacturing, Prototyping, Robust Design
Entrepreneurship: Concept, knowledge, and skills requirement; characteristic of
6.0
successful entrepreneurs; entrepreneurship process; factors impacting emergence
of
entrepreneurship
Legal issues related to Product development and Entrepreneurship: Intellectual
propertyrights- patents,trademarks.convrights.trade secrets. licensing,franchising.
Total
Total 39
 Savitribai Phule Pune University
Semester VI(Electronics & Telecommunication Engineering Engineering)
PROJECT MANAGEMENT

Chapter 13Eundamentals of Project Managem

Q1What is Project ?.State its characteristics. (2 Marks)
Ans.
Project
A project is a temporary work done with a definite start ànd end. It is generally
unique in nature unlike a regular
operation. It is planned and executed keeping a specific problem or oPportunity in'mind. The
aim is always to
achieve a specific goal that helps solve the problem or avail the opportunity
present
For example: Building a bridge or a building, developing a software, launching a product,
conducting an event,
Doing a market survey etc. Almost every day around the world large no. of
projects is initiated.
We can see projects being executed all around. In fact, more
fortune 500 companies around the world, today,
prefer executing many of their activities in the form of projects. Many organizations' main business
is to execute
projects for others.
Project Characteristics
There are five key project characteristics to consider
Projects have a clear and distinct plece ofwork.
:

Every project is slightly different and unique.

Projects are temporary activities.
Projects have a final delivery at the end
Projects have a clear objecave
A
a.2 Whal are the objectives ot Project Management 2
5 Marks)
Ans.: Objectives/Necessity of Project Management
Successhul development and implementation
i Planning of project's phases project generally involves ditterent
A
phases such as Initiation, and Design, Construction and Execution, Monitoring and Control, Completion.
The smooth and uninterrupted development and execution of
all the above.phases ensures the success ol a
project.
Productive guidance, efficient communication and supervision:The success or failure of a
project is highly
dependent on teamwork which requirescollaboration among
its members. Proper guidance, Good
communication and regular,supervision are of major importance as information needs
to be articulated in a
clear, unambiguous and complete way so everything comprehended fully
is
Achievement of the project's main goal: Project management has the responsibility of achieving
the set goals
of a project even with the presence of all constrains.
Optimization of the allocated resources: The success of the project also depends on
the opimum uilization
of all the resources. This is a major objective of Project management. The identification and proper utilization of
the resources areto be doneto achieve the goals.

. '
'
 Quick
AProject Management(SPPU Read
I nis might mean that.
and objectivesi need
exclusive needs objectives,
objectives.ta
petion of project as per the client's as regards the project's to modify them
negotiate with them
nto feas eclient's visfon oraims
to
are clearly defined they usually
impact on all decisions made
by the
Once the client's
0als.
profects stakeholders.

Dlainmportance of Project Management 7

5 Marks
Ans.
nportance of Project Management
o Plang n project manage
early defines the plan of the protect before it begins: The importance chaos. One ofproject management's
cannot be ignored. The more complex project, the more scope here is for
out a clear plan of the project irom beginning to end.
Primary functions is to tame the chaos by mapping
eliminate delays or overruns and provide aa plan
EStablishés an agreed schedule and plan: Schedules help to
to
be foltowed for allthose involved with the project
are required to work in a team on a project: 1his is due to team sv.
reate a base for teamwork: People Bringing people together in this way insni
enents through the sharing and support of knowledge and skills.
teammembers to collaborate ona successful project.
expensive. Project tracking
aximization of Resources Both human
ensure
: and financial resources tend to be
resources are efficiently and are accounted for economically.
and
proect risk management that all used

acilitates Integration: Projects that are completed within an organísation are generaly integrated with wide
and thneir management.
Dusiness processes and systems. Integration forms the value aspect of projects
scope of the project, some projects can incur organisan
EPSCOnrol of the cost: Depending on the on budget and to control spending. Project
manageman
gniicant costs. It is important therefore to keep
greatly reduces the risk of budget overruns.
Projects, durino
Manages Change: Today, more than ever, change is something which all organisations face.
Profee
changes and must be prepared to face such deviations from the original plan.
neir running also face effective change management and makes it less of a complex task.
management allows for
management helps to
Ensures Quality: More so than ever, it is important to produce quality results. Project
manage and control quality. Quality results make clients happy, which is a win-win siítuation for all
identity
inölved.
4 Wte shortnote on role and responsibility ofthe Project Manager.7 5 Marks
AnS: 2

Role and Responsibilities of the project manager

The project manager, operating within agreed reporting structures, has the following role and responsibilities:
Designing and applying appropriate project management standards.
Managing the production of the required deliverables
Planning and monitoringthe project.
Adopting any delegation and use of project assurance roles within agreed reporting structures.
Preparing and maintaining Project stages and exception plans as required.
Managing project risks including the development ofcontingency plans.
Liaison witi prograni nianagement and related projecis i cisu
duplicated.
o
s aciher crctacked ror

es Cas5dutfons
 Project Management (SPPUJ
Monltoring overall progress Qulck Read
and use of resources, initiating
change control and configuration corrective action where
management processes. necessary and applying
Reporting through agreed
, lines on project progress through
reports and end stage assessments.
Lialson with appointed project
assurance representatives assure
project. Malntaining an awareness to the overall direction and integrity
of potential interdependencles wlth of the
other projects and their impact
ldentlfying and obtaining
support and advice required for the management,
managing project administration. planning and control
of the project,
Conducting a project evaluation
review to assess how well the project
action recommendations. was managed and preparing
any follow-on
a.5 Explain phasesot Project
Management Life Cycle
?
Ans.: Phases of Project Management
Life Cycle 5 Marks)

In project management
there are. five phases: initiating,
phases ofa project constitute planning executing, controlling and closing.The
the Project Management Life Cycde. five
Let's take a closer look
at the five phases of a project
1. Initiation: This is where
all projects begin. Here,
Before the project is approved the value as wel as the feasibility
or rejected, these two documents of the project is determined.
sponsors: are created to sell the work to stakeholders
or
Business Case : Here is where you
justify the need of the
investment. project, which includes analyzing
return on
Feasibility Study: You need to evaluate what
much the whole endeavour will the project's goals are, the timeline to completion
cost. You also note what resources and how
ifit makes financial and business sense. wil be required to fulfil
the project, and
2. Planning: Once the project is approved,
the next step is to assemble a project
so that it can achieve its goals within team and start the planning phase
budget
and allotted time.
The project plan incudes what
resources, financing and materlalsare
direction and the following: needed. The plan also gives your
team
Scope There will be a written
scope statement that reiterates
deliverables and objectives are. the need for the project, and what
its
Definition: Here you break down the larger
deliverables into smaller ones,
them. which will help with managing
Tasks: ldentify whattasks are necessary
to produce the deliverables, figure
on other tasks. out if any tasks are dependent
Schedule: Determine the duration
of the tasks and set dates for their completion.
Cost: Estimate the costs involved across
the project and formulate abudget,
Quality: Make surethe quality objectives
are met throughout the project
Organization: Note how the project will organlzed,
be including reporting on progress.
Staff: Determine roles and responsibilities
ofthe project team..
Communications: Decide how informatlon
will be disseminated, whom
to and with what frequency.
Risk: Determine what risks are likely,
how they'l impact the project
and then plan how to resolve them.
Procurement: Decide what work or materials
wil be contracted. Define those contracts and who they'l go
o
Ces18y-SDIUonS
 Quick
Project Management (SPPU) project. This is
where Read
the the ubber
planning, it's
time to start procesebber
detailed hits
3.Execution: Now that you'vedone your up of these sses: tha
This phase ls made
mea you're Just crulsing.
road, but that doesn'ttmean the tasks to team members and manage
assign
you created, board.
:
Executing the Plan Follow the plan
management tools,
like a projectdash and
er progress withcontracts
project
secured in the project
all aspects of the
Administrate: Manage the being acualized,
.

plan ís projectmust
the project
4Monitor and Control: To that
e processes: be
follow thesé
monitored and adjusted as needed. To do this, an instrumant
ot the project and
measure the progress
Have a metric to
information.
Scope:Monitor scope and control changes. ned quality is belng met.
deliverables and make sure
tnar
of if-
Quality: Measure the quality not,
evaluate how improve
to the quality.
timeline of the project and adjust to sh
impact the ontráck
Schedule: Keep track of delays or blocks that
changes.
Cost: Monitor expenses and control cost accordingly.
project and respond
KIsk: Note changes in risk throughout the
project goals and objectives have been
met. of the
ihe last phase of
et. The the project s
The project isn't over till the
lose: processes:
closing it out. This involves another set of planned.
deliverables have been completed as
Scope: Make sure the project ,
contracts and administrative matters, archive the paperwork
Administration: Close out all outstanding

and disseminate to proper partlcs.

a.6 Explain Impact of Delays in Project Complotion ? 5Marks)

Ans.
Impact of Delays in Project Completion
a project/business: Some of them are
The delay in project completion can have severe impact on
project. Any delay in project compleio
Over Costing: The first problem encountered Is the over costing the
of
the prolit margin. At times, the delays also makes
will surely increase the cost of the project which will reduce
project loss making.
ot resources such
.Unavailability of Resources for other projects: Every project requlres lhe services various
resources occupied for a longer tlme As
as manpower, equipment & tools, etc. Delay In a project will keep these
project or business activity which will create
the resources are scarce, they will not be available for any other
more problems.
timely
Litigation Delay in project completion may result into litigation issues. As the clients, generally, like
:

completion because of their heavy stake In the preject any delay may create înncial and other problems they

may drag the project organization into court. There are numerous such exaraples
Liquidity Problem: Defay in project completion wul keep cash engaged for longer time. The organizatóin will
may
not be able to get returns on time. Cash ow turn negative which will reate a liquidity problem whleh has
further repercussions.
Reputatton at stake : Delay in projects often brand an organization ineficient. If the delay is once a whle t does
not matter but a regular delay poses serious qiestions on the ability of the organization to execute projes
propeiy.

Ces&asyESotutions
F Project Management(SPPU).
Quick Read
n
a.7.Explaln nPrinciples
Project Managoment Princlples ?
(5 Marks)
Ans.

Project Management Principles:

Project management principles are a general guideline for how to operate.

They can't provide all the answers or
tell you precisely what to do, but they can give you direction.The
project management principlesI am sharing here
aren't hard and fast rules. You may need to adapt some of our suggestions for
your context, but these basic principles
of project management should set you on the right path.
Integration - This is covered first in the PMBOK Guide, but ir's about bringing together
everything you know so
that you are managing your project holistically and not in individual process
chunks.
Scope -It is the way to define what your project will deliver. Scope
management is all about making sure that
everyone is clear about what the project is for and what it includes.
It covers collecting requirenients and
preparlng the work breakdown structure.
Time It relates to how you manage the time people are spending
on their project tasks, and how long the
project takes overal. This knowledge area helps you
understand the activities in the project, the sequence of
those activities, and how long they are going to take.
Cost It is all about handling the project's finances.
The big activity in this knowledge area is preparing your
budget which includes working out how much each
task is going to cost and then determining your project's
overall budget forecast.
Quality This area is where you'll learn about how
to set up the quality control and quality management
activities on your project so that you can be confident the
result wll meet your customers' expectations.
Procurement -It supports all your procurement and supplier
work from planning what you necd to buy, to
going through the tendering and purchasing process
to managing the work of the supplier and
contract when the project is finished. closing the

Human resources Human resources are vital to complete

your project so you need to put your team together.
After that, it's all about managlng the people on
the teaim Includlng giving them extra skills to do
their jobs.
Communications- Glven that a project manager's Job Is often
said to be about 80% communication, in there, the
PM writes communications
plan for the project and monltor all the Incoming
and outgoing communications.
Risk management It involves identifylng 'risks
and understanding how to assess risks on your project
includes how you perform quantitative and that
qualitatlve risk assessments. Risk management
activity, it covers controlling your project risks isn't a one-ofl
going forward through the project life cycle.
Stakeholder management - It is one of the most important
groups which take you through the journey of
identifying stakeholders, understanding
thelr role and needs in the profect and ensuring that
those. '
you can deliver

OU

esL1EnD
 Oulck
Project Management (SPPU) Rea
C Selection ane ahnir
Chapterr 2
ProiectTdentificaulo

eMako
a1Wite short note on Project initlation
Ans.: Project Initiation reso
ningresources,
ana scoping tO assigning
to its success. From estimating defint
rt of a project is critical with the client, there are number.of tasks out
a
therewhich
requirements, briefing in your team, the lirstmeeing
can shape how your project develops.
A project generally has tive
steps to 1 initiating, Plannin
very project has to start somewhere. a project life cycle. Kecuting
initiation is the first phase ot

.
Orng &Controlling and
Monitor Closing. Project
and
opportunity or reason for the project Initiation is identified
at this point where the
phase ot the project that a
1s nat a teamiOfect
team assembled
developed to take advantage of that opportunity. It is during this is
and business case is
a created to define the project in detal.
clfent, from any background research is gatheredtogether
ny intormation such as request for proposal from the your
cost. This is the core set up for your profect
n order to set and define the project's scope, tlmings and whereyou
identify the stakeholders, the team, goals and objectives and dellverables.
A good way to focus on your Project Initiation and to really drill, down
on what you need to outline
Processes and Product These are cent
for o
project is to work through it in terms of three areas: People, toany
profect.
People
1. Team
Planning Your Team Shape
In the Project Initiaton phase, you need to define and set up your team based on your review of the prot
and deliverables and work out what team shape you need. The following checklist helps whenforming
form
your
team:
Skills (what will they need to do)
Experlence (what will they need to have worked on before)
'

o
O Stakeholders (howwll they need to communicate) -
Availability (will they have to the time to dedicate)
oBudget (can you afford them)
Getting the Team Involved
It's good to have an internal kick-offsession with your team members. This helps to get thelr Involvement ina
the project early. When setting requirements, team shape and objectives it's best keeplng people involved
and aware. The best ay to initiate a project in the right way is to set and manage expectations early. By
getting your team involved upfront, they will feel more included and involved in the decislon making and
therefore have a much more positive impression of the project as a whole
2. Stakeholders
Defining Who Is Involved and When
As part of Project Initiation, outline and define the
stakeholder involvement Whether this is díent or
internal stakeholders, it's really important to be clear on who is
doing tasks, signing off deliverables or
reviewing and feeding back.

CeS casysoidtions
FProject Management (SPPU
Quick Read
Setting Project Communications
It's very useful to define when and how communications will take place with the stakeholders.
If there is
clarity about the project then communicating and updating them is a good way to
approach this. Then widen
this out to others in the team and when their involvement should be.
Stakeholder Meeting
It's good to introduce yourself to the client or stakeholders involved prior to the meeting, either over the
phone orideally in person. Make sure you have a clear agenda, and aren't inviting
the wbole world to the
meeting. Always remember to keep a meeting contained and relevant
Process

There are some core areas to set out when you inítiate a project.
1. Methodology
You review the project, deliverables, team to find a process that will
suit the needs. Often it's a blended mix of
different methodologies. Rather than trying to force to fit a
certain methodology it is Important to think what
bestforthe project. Following are helpful when considering the methodology is.
What isthe size of your project?
How fixed are the scope, timings and budget?
What team do you have to work on it?
Do you have a full-time team or are they shared with other projects?
How does the client currently work?
Will you have a fully invested client project lead?
Answers to the above questions should give a clear idea of
what type of project it is and therefore how it should
bern
2. Tools
Avold throwing lots of unnecessary tools into
the mix, and consider how well they integrate. Some areas to,
consider when selecting what tools you need are:
Resource planning and management eg. Float or Resource Guru
ProjectPlanning and managing timescales e.g. Microsoft Project or Gantt
Pro
Collaboration with stakeholders eg. Google Sheets or Confluence
Communication with your team and stakeholders
eg. Slack or Workspace
Project managlng internal tasks eg.Jira or Trello
Whichever tools you use, ensure your internal team
and stakeholders are in agreement, and know how to use.
them effectively. Avoid over-complicating things, and you
can always reline the tools later in the project if you
find things aren't worklng
3. Risks
Thinking ahead is one of the best things that you can
do in the Project initiation phase when you start a
Establishing risks that might keep the project from delivering Is project.
extremely important to do upfront. Create a lo8
to highlight Risks, Assumptions, Issues and Dependencles,
and also work through how you will mltigate these.
Make sure you involve your team, and consider
holding a pre-mortem session with your team where you
brainstorm areas of risk, as they are often likely to come up
with things you haven't even thought of.

CeseasESOIUuous
 Project Quick
Management(SPPU)]
Red
Product
Requirements
important berore initiating
fating the
the project
Gathering requirements for your project in the initial phase is user needs? This properly
IE's good are the business, cllent and helps you
to outline what you know already. What tohave
ha
a clear understanding of the background and context for tne po
Scope and Deliverables
to ile
deliverables are.NOWS the time start
he project, you have an idea of what the nis out
and n5 perimeters around them, in order to be
able to agree to nese
0me
Setting Delverables
through the deliverables with vo
aking the information'you have organlze an internalmee our team, make sure you
have these ar
Make sure you get people to feed into these. When you review wiy areas
mind to review per deliverable: in
What is it?
o What format will it be in?
o willrounds of amends be necessary?
o Who will be involved?
oWhen should this be delivered?
O Does it have dependencles on any other deliverables?
Budgets and Timings
Following on from your list of delivérables, you now have a rough project scope and need to put timings an
roles agalnst this. Work to estimate timings and the team shape aganst this. Make sure you work with the team
on these to set the right perimeters. Again, don't force a process onto a project, make sure the processits
the
project. Agree the team shape, and then put costs against this. At this stage, you dont need a detaliled breakdow
down
ot timings but more an overview of phases of time.
Measures of Success
Your project needs some sort of measurement so that you can review and understand where things worked
or
didn't work, and how successfully you delivered., Therefore, create some measurement cnteria thatyou'll review
at the end Conider areas such as
Core KPis e.g. increasing visitors to a site
Client satisfaction ie. how happy were the client with how the profect went?
Team satisfactlon 1.e. how happy were the team wth how the project went?
o
. Timings variance
o Budget varlance

a.2 Explain the process of Initiating a Project (6 Marks)

Ans.: The Process of Initiating a Project
1. Business Case : A business case is used to explain the reason for starting a project. The business case shows how
the use of financial and other resources are in support efa business need. A business case is adaptable, ftting the
size and risk of the proposal, but it is structurally the same from project to project. t deals not in technicalisues
but the business concerns of the project, and It heeds to be comprehenslve.
ldeally, the business case should be easý to understand, clear, loglcal and relevant. The key aspects need to be
tracked and measured and justifed. There also must be accountability and commitment for the delivery and
costs involved.
Ceseasy Solutioas
 Project Management (SPPU)_ Quíck Read
The structure of a buslness case should follow as such:
o Preface
Table of contents
Executive briefing, which includes what the project is, what the results of that project will be and why it
should be undertaken
Introduction explaining the business drivers, scope of the project.and financials
Analysis with assumptions, what the costs and benefits will be, inchuding risk
O Conclusion noting what the next steps will be
o Appendix
Feasibility Study: Once the business case has been approved, the next step is taking a feasibility study, which
documents potential solutions to the opportunity or business problem that the projectis proposed to address. It
directs you to the right way to approach the project.
A feasibility study researches the opportunity and documents what is required to complete a successful project
It will also identify any other solutions, if available. Risks and issues are outlined at this time, as well as what the
proposed solution to each will be if they occur.
3. Project Charter: A project charter outlines the purpose for the project and how it will be structured and
executed. In it, the vision, objectives, scope and deliverables for the project are all detalled. Responsibilities for
the project team and stakeholders are also described.
This next step helps to identify the project vision and objectives clearly. It defines the scope of the project and
lists all the deliverables.
The project charter will also list the roles and responsibilides of the project team and identify
the project's
customers and stakeholders. It is at this point that the project is organized structurally, documenting the project
plan and listing all risks, issues and assumptions.
4. Building Team: A project cannot be initiated without a team. So, the next step is the job descriptions for
the
people who will implement the project plan. This includes their role and responsibilities.
Creating a project team requires defining the roles for each member as clearly as possible to keep the work
flowing smoothly. Begin by listing all the responsibilities for a position and who the
person in that role will be
reporting to.
Making a detailed organizational chart can help. By listing the skills and experience needed
for each position, it is
easier to fill that position. It also is helpful to note if there are any qualifications required. Of course,
a
performance criterion, salary and working conditions must also be deflned.
5. Setting up Project Offlce: A project office is a physical space in the oifice
manager and support staff are located during the project.
or work síte where the project
It houses the communications infrastructure and ,
whatever tech is needed for the project.
The first thing to do is to figure out where the project office should be,
and then make sure that the infrastructure
there is properly set up vwith the right tools and equipment
6. Review the Initiation phase: Get in the habit of always reviewing any process
to make sure no steps were
missed, and this is especially true with the project initlatdon phase as
it is so critical to the success of the project.
Jt is at this time that it is decided as to whether
the project initíation requlrements have been met.
It's also important to look over the risks that had been identified and
see if any have occurred, and if so how they
were controlled and resolved. There are going to be changes in any project, so review if
these changes were done
correctly to keep the project on track.

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 Prosect Management(SPPU. 10 Oulck
Rcad
sExplain Importance of Project Feasibility Study an neport 8Marks
Ans.: Project Feasibility
Study and Report Feasibility Repor feasibility
studying a detailed Project
.
after preparing and
Simply an
ascee
the
tarted
practicality ofa proposed plan or
method. For example, it asks
yon
s
ntof Do you have the
the people, tools and the other ave
inology to do what you propose? resources
necessary? And,will the project get you the ROI you exp
of a Project o anterent parameter ach
report is prepared after analysing the viability
oy assocla
economic, technical, etc. tells us the investment as n some cases aprojectr
p
erc. It tells us whether a project is worth
project is not
reguiring too many resources,
Viable inyestment. There can
prevents those resources from
be many reasons tor tni
also may cost more tnan
which
ah organization wo
no
be a
performing other tasks but
by taking on a project
that isn't profitable.
Thefeasibility study is the foundation upon which your oject esides: If it doesnt support your proier yo
dont have a project. A feasibility study is in the project life cycle ater the business case has been completodect
A well-designed feasibility study background ot the business relating to
ofersa detailed and sound the n
project, such as a description
of the product or service, accounting statements, details of operations and manposed
agement,
marketing research
and policies, financial data, legal requirements, and tax obligations. Generally, such
precede technical developmentand project implementation studies
Objectives

Tounderstand thoroughly all aspects ofa project, concept, orpla

become aware ofany potential problems that couldocurwhile Implementing the project
determine whetherthe project is viable,worth undertaking after considering all signifßicant factors,
Advantages
The advantages of the feasibility study in project management are
It ..
helps tomeet theobjectives ofthebusiness.
oIt also helps to meet the expectations of the stakeholders.
: more predlctabilityabontih project
.

re
oIt incréases the chances of project success.
heps an organization in deliverlng the right products at the right time.
It identifles and rèsolves the pötentlal problems and Issues much earlfer. t
o It helps organizatíons to responds to rlsks on time.

It helps organizations in optmizing the use oforganizational résources.

o It helps in managlng constraints such as scope, quality, schedule, costs,
resources which stops a project from
failing or suffering losses
o It aids in deciding whether to start or cancel the project
Components of Project Feasibility
A feasibility analysís evaluates the project's
potential for success. There are five major components feasibility
study. These are separate areas that a feasibility study examines. They of
are .
Technical Feaslbility : This assessment focuses on the technical
resources available to the organization. It helps
organizations determine whether the techpical resources
mect capacity and whether the technical team s
capable of converting the ideas into working systems.
Technical feasibility also involves evaluation of the
hardware, software,and othertechnicalrequirements of
.
the proposed system.

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FProject Management (SPPU)_
11 Quick Read
Economic Feasibility This assessment typically involves a cost/ benefits analysis of the
project, helping
organizations determine the viability, cost, and benefits associated with a project before financial
resources are
allocated. It also serves as an independent project assessment and enhances
project credibility-helping
decision-makers determine the positive economlc benefits to the organization that
the proposed project will
provide.
Legal Feasibility: This assessment ínvestigates whether any aspect of the proposed
project conficts with legal
requirements like zoning laws, data protection acts or social media laws. Let's say an organization
wants to
construct a.new office building ín a specific location. A feasibility study might reveal the organization's ideal
location isn't zoned for that type of business. That organization has just saved considerable
time and effort by
learning that their project was not feasible right from the beginning
'

Operational Feasibility : This assessment involves undertaking a study to analyze and determine whether
and
how, well the organization's needs can be met by completing the project. Operational seasibility
studíes also
examine how a project plan satisfies the requirements identifled in the requiremens analysis
phase of system
development
:

Scheduling Feasibility: This assessment is the most important for project success; after all, a
project will fail if
not completed on time. In scheduling feasibility, an organization estimates how much time the
project will take
to complete.
When these, areas have all been examined, the feasibility analysi helps identify any constraints
the proposed
project may face such as;
o Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
:
oInternal Corporate Constraints Financial, Marketing, Export, etc.
o Extermal Constraints: Logistics, Environment, Laws, and Regulations, etc.
Conducting a Feasibility Study
Following steps are used while conducting a feasibility study:

Conducting a Preliminary Analysis

The study begins by outlining the preliminary plan which focuses on an unserved néed,
a market where the
demand is greater than the supply, and whether the product or service has a distinct
advantage. It also
determines if the hurdles are too high to clear.

Preparing a Projected Income Statement

This step requires working backwards. The organlzation determines the expected
income from the project and
then the investment needed to achieve that goal. This is the foundation of an
income statement. Things to take
into account here include what services are required and, how much they'll cost, any
adjustments to revenues,
such as reimbursements, etc.

Conducting Market Research

This is an important step to decide the success of the feasibility study. So, it
houlu be done as thoroughly as
possible. It's so important that if the organization doesn't have the resources
to do a proper one, then it is
advantageous to hire an outside firm to do so. The market research gives a clear picture of
the revenues that can
realistically be expected from the project. Certain important considerations are
the geographic inluence on the
market, demographics, levels of competition, vlue of market and organization's expected market share if the
market expands. .

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 Qulek
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Project Management (SPPU
12
nera
pe tdons
Creating Business Organization and
managin8 to me the.
to šet up e organization and
groundwork of the previous steps has been lald, ir's tme
include start-up
ssts,
fixed
investmentoratlo
costs, fixeetate,
pere era
onsot
the thorough and estate, personnel,
venture It should be
ss ventire.
the planned business merchandising metnods, real supply
equipment,
things such as
oStSThese costs address
availability, overhead, etc.
ae
Preparing an Openíng Day Balance Sheet project is going
to create. lt should be
ate
assets and liabilties the tinancing is created.
Liabilities
includes an of
estimate the available
5 source, cost and nslde
hinancing for assets and accounts
possible. T do this, a list that includes item, buildings and equipment,
land,
as leasing or purchasíng of
hings
Teceivables.
Revlewing and Analyzing AlI Data
analysis are especíally
important to makesure that n
review and over nlng
ese steps are important, but the take a moment to look
tweaking. So, one should
or
is as it should be and nothing requires previous steps such as the income statement should be
changes re
Re-examination of managing. and come nd
wOK One last time. think about risk, analyzing and
expenses and liabilitfes. This is also the time
to up
pared
with any contingency plans.
Making a flnal Decislon or not. That sounds simni.
whether the project is teasible
Youre now at the point to make a decision about things to consider
decision-making moment. A couple other
of
alt the previous steps we're leading to this money and is it alignedwith
commltment is worth the time, erort and
making that binary choice is whether the
aspirations.
the organization's strategic goals and long-term
Feasibiity Report Template
a feasibility report:
Finally, here is an outline for the nine parts of
o Executive Summary
o Descriptlon of product/service

'o Technology considerations

o Product/service marketplace
o Marketing strategy
oOrganization/staffing
oSchedule
o Financial projections
o Findings and recommendations

Q.4What is Project Break- Even Point ? (4 Marks)

Ans.
Project Break-Even Point
A break-even analysls is:a fînancial tool that helps determine at what stage a company, or a new service or a
product, wil!l be profitable. It's a financial calculation for determining the number of products or services a
company should sell to cover its costs (particularly fixed costs). Break-even is a sinuation where you are nether
making money nor losing money, but all your costs have been covered.
Break-even analysis is useful in studying the relation between the variable cost, fixed cost and revenue
:Generally, acompany with lowixed costs havealowbreak-even point ofsale.
wil
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 Project Management (SPPU)_
13 Quick Read
Breakeven analysis ls useful for the following reasons:

the
It helps to determine the unused capacity of the company once the breakeven
is reached. This will help to show
the maximum profit on a particular product/service that can be generated.
t helps to determine the impact on profit if operations are changed to automation from manual
Jthelps to determine the change in profits if the price of a product is altered.
It helps to determine the amount of losses that could be sustained if there is a sales
downturn.
Q.5What is Project Planning ? :

2 Marks)
Ans.:
Project Planning
Project planning is the most important part of the project life cycle. It tells what is to be achieved
and how. The
planning phase is when the project plans are documented, the project objectives and requlrements
and the project schedule is created.
are defined,
It involves creating a set of plans to help guide youthrough the implementation and
closure phases of the project.
The plans created during this phase helps manage time, cost, quality, changes,
risk, and related issues. They also
help control staff and external uppliers to ensure that the project is delivered
on time, within budget, and within
schedule.

a.6Write Shortnote on Project Planning ? (4 Marks)

Ans.
Project Planning
The project planning phase is often the most challenging phase of project management as you need
to plan the
staff, resources, and equipment needed to complete
your project. You may also need to plan your communications
and procurement activities.
Need of the Project Planning
To clearly identify and describe business requirements
..i of deliverables,
To establish cost, schedule, list

.
and delivery dates
Resources planning for their effective utillzation
Obtaining management approval and proceeding'to
the next phase
The Contents of a Project Plan
Scope, schedule and cost: Project Planning needs to outline
the scope and slze of the project, the scheduling of
the tasks and activities, which means planning them out along
a timeline. The plan also needs to include how the
costs are going to be spread óut and covered.
Quality, human resources, communications
and risk: The quality of the outcomes needs to be established
the plan so that they can be measured throughout the in
project progress. Team members need to be allocated
tasks before the project begins so that they are aware.
of what is expected of them. The way in which
communications will be held also needs to be.outlined along
with the potential risks and bottlenecks of the
project
Requirements plan: In the project plan format, a project may haye several
location, space etc. It is important to plan requirements such asinfrastructure,
and organise for the avallability of these requirements
project begins before the

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 Qulck
Project Management (SPPU) 14 Read
and uncertainty. Planning for these changes
nange management plan : Any project can face changes nroject. itis important
im nd
their negative impact on the project. So itis
Creatinga way in which they will be dealt with reduces
manage chänge correctly and establish a plan for its management.
t
management. It is impo
improvement plan: Improvement and learning is essentlal project
in
Process can be learned from previous projects and applied to future ones, heigh
strive for quality results. Lessons enlng
the potential for increased success

Q:7What are the Responsibilities and Teamwork ofProject.Team &Mark

Ans.
Responsibility & Teamwork
A Project Team is an organized group of people who are Involved in performing shared/individual tasks of the
project as well as achieving shared/individual goals and objectives for the purpose of accomplishing the project
and producing its results.
The team consists of the full-time and part-tüme human resources supposed to collaboratively work on
producing the deliverables and moving the project towards successhul completion
Successful projects are usually the result of careñul plannlng and the talent änd collaboration of a project's team
members. Projects can't move forward without each of its key team members.
The project team is a group of people who have a role in the project. Team members can be grouped but each
individual has a certain role and function and thus can be asslgned certain tasks.
The project team fulfills these roles and functions within the time frame of the project and is usually dismantled
after the project completion. During that time, the project team works towards the common goal of delivering
the project's scope within time and budget/costs. Each team member has certain responsiblitles based on thelr,
role, functions and assigned tasks.
Project teams are multi-disciplinary. Team members aré bought together from diferent departments and may
include experts from external compantes or suppliers.For an effectve team, project team organization structure
is vital and the Project Manager must have sufficient senlority and authorlty to lead the project team.

For the duration of the project the team should report to the project manager and the organlzation structure of
the project team should refect the ownership of the project manager.
An example project organization structure is shown below. The Project Manager heads the team with a direct
reporting line to senior management.
Company
Customer managemen

Customer Project.
Project
manager
Manager

Development Business Purchasing

Costruction Testing
team
manger marager Process manager
managor Management

Corstrurien Tes Test Buslness Gontract

Test Develepers Buyer OperationsS
engineer crgineer Analys Marager.
nmaniaatinn

Fig. 2.1
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FProject Management (SPPU)_
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Organization of the project team is the responsibility of the project
manager who is committed to building a
productive team of professionals in order to guarantee that the project deliverables
will be produced on
schedule, under budget and as per specifiration.
Successful implementation of this task requires the manager to acquire,
develop and lead a group of people who
are supposed to do the project. A group of people turns into a team
when every person of the group is capable of
meeting the following condilons: .

o Understanding the work to be done within the endeavor

Planning for completing the assigned activities
o Performing tasks within the budget, timeline, and quality expectations
o Reporting on issues, changes, risks, and quality concerns to the leader
o Communicating status of tasks
o. Being a person who can jointly work with others

Conventional Roles
Every team, regardless of the project type, size and nature, has three roles
defined as convenional. These roles are:
Leader:A project team leader is a person who provides leadership and guidance to the
team and takes
responsibility for the results of teamwork. The team leader role involves
the development and encouragement of
the team through training, leading, motivation, recognition, rewarding and other activities that stimulate
team members to do the required tasks. or force

Member: A project team member is a person who is involved in doing assigned tasks.
access the project and actively Team members directly
evolve its processes. They're subordinated to the team leader.
Contributor: A project team contributor is a person or an organization
that participates in teamwork but is not
actually involved in performing tasks and carrying out
project team respunsibilities. Contributors help improve
the project through giving valued suggestions, expert judgment
and consultation. They have an interest in the
project, so they facilitate its successful completion.
Responsibilities and Duties
A team can be responsible for a variety of duties and responsibilities,
depending on the project they're involved
in. Here're several common responsibilities and duties
of a project team:
Gaining the right understanding of the amount and scope
of assigned work
Following the planned assignments.
Increasing the details level per task and activities, if needed
Completing the assigned tasks within the constraints of scope,
qualty, tinme and cost
Informing the leader of any issues arisen
Proactively communicate and collaborate with
other teanm members
Key Team Members and Their Roles

Roles, responsibilities, approaches and

practices sigaiflicantly deperd on the particular
project, its goals,
environment, and requirements. While this is true, there are
several typcal roles that work for literally any
project team
Sponsor: Sponsor is the most senior member of projeet a team who has crucial responsibilties and is
accountable for the project performance. He is the key
person ir communication of the team with the company's
management and key stakeholders. This is also the
person who provides recessary resources for project
performance and approves or rejects the outcome.

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Project Management(SPPU) 16

Key responsibillties ofa sponsor are

Defining project's goalsand expectedoutcome;
Providing necessary resources;
Managing communlcation between project team and key stakenolde
Translating company's strategy and vision to the team:
Approving or rejecting the outcome
ome project teams have a project steering committee that consists of the sponsor ana Key stakeholders
proceso
i
epresents the interests of parties involved in project implementation, provides leadership the work rocess,
in
and resolves issues escalated by project managers and team leads.
Project manager: Project manager is the team member who defines the framework and course oE the project
sets estimates and milestones, defines required resources, and manages projectactivities.Theresposibilitles of
4project manager can include a wide range of activities that depend on specific project. In general, the kev
:

activities are:
Defining project milestones and estimating upcoming work scope
dentifying resources necessary for successful projectimplementation
o Scheduling projectactivities and coordinating team members' work:
problems and issues that appear in the course of the projectimplementation:
OSolving
oManaging change;
o Monitoring work progress and results
Team leader : In smaller projects, this role is merged with the projectmanager'sone. In larger ones, team leader
takes on team management responsibilities that mostly require softskillssuch as
o Initiating work processes;
Identifying and handilngpossibleissues in work andteam environment
Providing and receiving feedback
Coaching team members and maximizingtheir potential
Leading by exampleby performing their share ofwork
Team members: A team member is the heart of any project By participading in project activities and
performing their work assignments, regular team members contribute tothe expected outcome.ofthe project
Alongside with that, their projectresponsibilities Includes
Clearly understanding projectgöals and contributing to their achievements
i
o Following project plan and meeting deadlines;
o Escalating issues related to their responsibilities to the team lead
Qualities of Project Team Members
An effective project team is oné which possesses both professional and soft skills. They ensure better
communication, teamwork, and outcome of the project work. Beow glven are the key parameters to pay attention to
when hirlng and building a project team.
Skills and experlence : This is a very important criterion for most positions. Relevant previous experience and
related skills are critical for a smooth start ofa project work
Willingness to learn new skills: Some hiring expert advice that it might be.useful to look beyond the skills
needed for the role. Employees need to be wiling to get out of their comfort zone to help the team and learn
something new.
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 F Project Management (SPPU)
17 Quick Read
Personal tralts: Personal traits are often a reason why a team professionals
of turns out to be dysfunctlonal.
They are nearly as important as professional skills, experdence and expertise.
Unwillingness to help, arrogance
and other types of toxic behaviour impalr teamwork. So irs better to
prevent this on the first step of building a
project team.
Cultural fit:lt's a matter offact that professional cultures are very different
many other factors. Making sure all
and depend on
industry, region and
your employees it in your office culture not only simplifies
their on-
boarding process, but also prevents work environment issues in the future.
Q.8 How to Building Etfective Project Team?
Ans
(0 Mark)
The following five steps will lead to an effective
project team.
Establish the Team: The first step is to establish the project
management team. The best project teamsinchude
stakeholders at all levels, from executives
to those individuals at the front line. These individuals have
knowledge that will be critical to the success the inside
of the project.
The most important element about
team composition is having a team that ís effective
Collaboration and communlcation skills working together.
are two of the most critical personal skills demanded of
all members
Facilitate Effective Communication: Accurate, useful,
timely and credible communication
maintaininga cohesive team environment is crucial to
and achieving project success. All project information
communicated consistently throughout each stage should be
of the process so all team members are equally informed.
Open sharing of information should be
encouraged and a variety of communication mediums should
used. Team members respond dilferently also be
to written and verbal methods of communication.
Busy schedules and multiple projects can
become obstacles to effective communication. Recurrent
face to face
meetings must be scheduled to encourage
ongoing discussions and ensure that deliverables are completed
within project time frames.
Encourage Collaboration: Groups that plan
together are typlcally more successful, therefore project
must realize the importance of collaborative planning and goal Jeaders
setting. This collaboratve goal setting allows
team members to achieve individual successes,
while contributing to the overall project goals.Collaboration
the vehicle which: is

oGenerates the most creative solutions

oGets the greatest membership support
o Produces the greatest amount of personal growth
By matching each team member's incentive to the overall goals,
the enttre team is motivated furtherto achleve
Success. It is also the project manager's responsibility
to manage the team's development to ensure a cohesive
integrated team is founded.
Accept and Manage Problems: Bringing
a group of people together does
especially not an effective working not necessärlly constitute a team,
team. One of the biggest mistakes made
recognizing this as a fact and then by project managers.is not
expecting their project team to do well
from day one.
Project leaders facilitate relationshlps
among pëople of very different backgrounds.
common goal of the project. Conflict However, they all share the
within projects can manifest itself many
manager will intercept and take
action when conflict occurs.
in different a
ways but good project

Recognition and Reward: A recognition

and reward scheme will help reinforce the importance of the
project deliverables and focus the team key
on the important aspects of
steps along the way can be very the project. Completdon ofa project and tne
rewarding for team members.
:'

es casy-sotutions
 Management (SPPU) milestoner
Project team. Wnen project ched,
motivating for the they
successes is quite stakeholders
ghese project tëam members and
communicated at tho
shou
De communicated
to the
fornis.They should be
established and at
thestart
oftheprole
various
come in
EWanis can
may impact on other areas to the
ey
project, such as costand
time.
eta
The planning Process overview establish and communicate what tasks
step mechanism to are
Project Planning process is a step by
resources are tobe allocated to complete those tasks. Thus proiec to bedo
process
organizational
and which needed to be done to deliver the
project on time.
a document collecting all the work
ome to ensure timely ani.
's
many tasks, and each task has a start and end
A project is made up of room, or shared spreadsheet oplei
calendars on a shared wall in the water-cooler
past had printed today
most teams use online project scheduling tools
one within a larger project management software solution,
solie
ypically project planning is just feature place. andthere
scheduling takes
are many diferentplaces in thesoftware where
oc
review the fundamentals to it. Project planning
Beforegoing deeper into project planning let's ringthe
questions to start:
initiation phase of the project. You have to ask yourself three
oWhatneeds to be done?
Whenwillitbedone?
Who willdo it?
Onceyou've get answers to these questions you can egin to plan dates, link activities, set the duration
milestones and resources
Basic Processes of project planning
Scope planning Itspecifies the scope requirements for the project to help in creating the work breakdrun
structure
Preparatton ofthe workbreakdowm structure: Here,the entire project is divided into tasks and sub-tasks
better handling and execution
Project schedule development: Here, the entire schédule of the activities of the project
is prepared detailing
thelr sequence ofimplementation '

Resource planning This process identifies and then plans the effective utilization of the all the resources
Tequired duringthe project implementation.
ntation.
Budger
Budget planningIt specifiesthe budgeted cost to be incurred at the completion of the project
Procurement planning: It plans to identify the right vendors outside the company for procurement o
materials and resources
Risk management: Inthis process, planning is done to prepare against all possible risks by devising opiona
contingency plans and mitigation strategles
Quality planning: n thisprocess, quality criteria to be used for
the project are assessed and finalized.
Communication planning Here, communication strategy
with all project stakeholders designed tor mooth
implementation ofthe project plan. is
.
::.
:
'

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 Project Management (SPPU)_ 19 Quick Read

Steps of Planning Process

The following are the steps needed to plan a project:
1. Deline Actlvlties
ldentify and define the activites that you have to do in the project By using a Work Breakdown Structure (WBS)
and a dellverables diagram, you can begin to take these activities and organlze them by mapping out the tasks
necessary to complete them in an order than makes sense
2. Do Estimates
After you have the activities defined and broken down ínto tasks, the next step to determine the time and
is
effort it will take to complete them. This is an essentlal piece of the equation In order to calculate the
corret
schedule.
3. Determine Dependencies
Tasks are not an island, and often one cannot be started until the other is completed. That's called
a task
dependency, and your schedule is going to have to reflect these linked tasks. One way to do this is by
putting a bit
of slack in yourschedule to accommodate these related tasks.

4. Assign Resources
The last step to finalizing your planned schedule is to decide what resources are going to
be required to get those
tasks done on time. For example assembling a team and scheduling their time just like the tasks.

a.9 Explain Work Breakdown Structure in detall ?:

(8 Marka)
Ans.
Work Breakdown Structure (WBS)
The WBS is a method for getting a complex, multi-step project done in
an easy and effective way by dividing it
into smaller units so that you can get things done faster and more efficiendy.
Work breakdown structure (or WBS) is a hierarchical tree structure
that outlines your project and breaks it
down into smaller and more manageable units. Today, software is also available which you can
use to build a
WBS by creating folders and subfolders, and can even go further to
divide individual tasks into subtasks.
The goal of a WBS is to make a large project more manageable by breaking down
it into smaller chunks so that
separate but interconnected units can be done simultaneousily by different team members leading
to better team
productivity and easier project management overall.
Following are a few reasons for creating a WBS in a project
o It creates an accurate and readable project
organization.
o lt creates accurate assignment of responsibilities to the project team.,
o It learly lays down the project mlestones and control points.
o It helps the project team to estimate the cost, time and risk.

c It clearly illustrates the project scope, so the stakeholders

can have a better understanding of the same.
Characterlsties of a Work Breakdown Structures
A well-designed WBS facilitates planned outcomes instead of planned actions. Outcomes are the desired ends
of
the project, such as a product, result, or service, and should be predicted áaccurately, Actions, on
the other hand,
may be diffcult to predict accurately. A wel-designed WBS makes easy
it to assign elements of the WBS to anyy
project activity. A good WBS should exhibit the following characteristics:
o Definable: It is easily described and well understood by
project participants.

eseasy-solutions u .1
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.
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 Quick Read
20 autho
Project Management (SPPU
method where specifiC responsibility and ority are
project planning
Manageable: It is a meaningful
assignedto responsible individuals. ín terms the
project and separate units can be estimated of
EStimated: Using WBS, duration of
the whole
resources required to complete the proter
ect
to incurred in
and the cost likely be
time required to complete, dependence on other ongoing elements (Le, asslgnaki
gnable
with or
Independent: It allows minimum interface hable from other work packages
distinguis
account, and clearly
toa single controlfacilitates integration with other profect
work elements and with
higher level cost estimattes
Integration: It
and schedules to include the entire project. dates and measurabla
progress; has start and completion
:
OMeasurable WBS can be used to measure
interim milestones.
addition/elimination of work scope, can be readily
Adaptable It is suficiently flexible so the
accommodated in the WBS framework.
Advantages of WBS
it's time to review why you should use this
youihave the complete work breakdown structure,
nat
approach to project management. Using a work breakdow
structure delivers numerous benefits including:
to wrap to execute let alone plan from start to
mproved planning: Large, complex projects can be dificult making it easy to visualize the scope of
finish. Using work breakdown structure helps improve planning by
milestones. As a result, work breakdown structure
the profect and break it down into more manageable gets duplicated or overlooked and it
allows you to set clear timelines earlier on. It makes sure no work
understands the level of output at any point in the project timline.
breakdown structure
Smarter budget and resource allocation : By improving project planning, work
all budget.and time
allows for smarter budget and resource allocation. Specifically, it ensures that
. a munually exclusive rule
requirements get accounted for at the very beginning of project. Additionally, the
guarantees that no duplicate work will take place, which eliminates wasted budget and time
identily
Simplifled risk identificatlon: The visual nature of work breakdown structure makes it easier to
areas of risk so that you can get ahead of problems and remedy them faster.
identified by work
Improved accountability : The clear work assignments, timelines, and budgets
among team members. That's because everyone involved
breakdown structure improve accountability
should have a clear understanding of what they are responsible for and the time they have to complete that
work
every
Enhanced visibillty: Finally, work breakdown structure provides a high level of visibility into
project. This visibility makes it easy to communicate expectations to stakeholders and team members and
track progress throughoutthe project.
A work breakdown structure is a helpful method for managing the challenges that accompany
large-scale
enterprise projects and enjoying successful outcomes.
Work Breakdown Strueture Dlagram
The Work Breakdown Structire (wBS) is developed to establish a common understanding of project
scope. It is
Each
a hierarchical description of the work that must be done to complete the deliverables of a project.
descendinglevel ín the WBS represents an increasingly detailed description of the project deliverables.
The first two levels of the WBS (the root node and Level 2) define a set of planned outcomes that collectively and
exclusively represent 100% of the project scope. At each subsequent level, the children of a parent node
n oda uora is'2 Wor Braakdown
collectively and exelusively represont 100 f*ho *enno f hoir pr
Structure example:
Ces0asySolutions
 Project Management (SPPU)
vQuick Read
Helfo World System

Jndiation. Planning Executlon and Contro

Closeout
Develop Business Caose Perlom Pnmary Planning Manage communkatons Documert Coseout
Assign Project Manager Develop WBS HManaga Procurement Transter Projeci

Devalpp Projecl Charte Plan Schedule Track and Manage Tasks

Plan Resource Execute Project Tash

Plan Budgel. Buid Subsystem A

Perlom Supplcment Planning Buid Subsystem B

HPlan Ris*Mgmt. Manage Changes

Plan Change and Feronn UAT ;17:

LConiguraton
.
Fig. 2.2

This above example includes three levels, which is the most common
setup. The structure can be extended to
four or five levels if needed. Each deliverable should be a project milestone
not a specific task.
The tasks requlred to meet each deliverable are known as a "work package."'Finally,
each deliverable must haveea
work and budget allocation. You an also choose to include team asslgnments and
start and end dates for each
deliverable.
Different Forms of Work Breakdown Structure
Generally speaking, there are three typical ways in structuring works
with a Work Breakdown Structure (WBS).
They include phase-based structures, deliverable-based structures
and responsibllity-based structures.
Phase-based structures
It defines and structures project activities based on the project phases.

Lbrary Managoment
System
Project Phaes
****** **
Planning Exocution and Control Closeout
*****************************t***************:***********-- --*---- -.
Devclop Work Brcakdown Conduct Execulon KIckoft Conduct Closeoui Mcotng
Stnuclure Meelinig

Develcp Project Schodule Document Lessons Leamedd

Support Searching E-Resourcos
Dovelop Aosource Pan Creale Clos6out Repo
Supporn Searchlng
Compre Projoct Pian E-Iheses Archive Prolect Ärtifacts

Supporn Searching
Approve Project Plan
E-journalS
ror m '

Support Androld Integrlian

Improve Sile Performarco

Porform UAT
i
Fig. 2.3

es CasSV S0lUian
 Oulek
Rea
Project Management (SPPU
déllverables agreed to deliver
Deliverabie-based struetures
activities based on the
project
tt defines structures Insuranco DAT-3300

Manual
Dellverables
Back-Ofice
Sulte User *******
Unitied CRM *****************
******1
Update CRM System Manual
*********
********* Hardware
HSetup
HPerfom CRM System Update Back-Olfice Suite Manual
Integration Modilicallon
Software
Perform
Migrate Database
Legacy
Phasing Out
Perfom System Intogratlon
,esting Manage Staff
Training

Manage Staf Tralning

Fig.. 2.4

Responsiblity-based structure organlzation units that will work on

the nroject.
the
actívitles based on
deimes and structures project
Online Sho

Teams
********************
**- Testing Team
Core Project leam
Prolect Management Team
---********* HTest ShoPping Sita
Design Team
Develop Profect Plan
HTest Admin Panel
Design New Web
Ul
Report Status
Develop Testing Roport
Design Admin Ui
H.Report Rlsks
wwwww

Manage Communication Programmng Team

Activitles
Develop Shopping Site
Manage Procurement
Activities
Develop Admin Panel
Document Lessons ww.w

Leane0

Flg. 2.5

Breakdowi Structurë ? Y(O Merko)

a.10 Explain Process to reate a Work

Ans.:
Process to Create a Work Breakdown Structure
When you're comfortable with the overall process of creating a work
breakdown structure, youll be abte
building a complex database with 75 os
adapt the practice to any project, from moving your house to
teams. the
b
But before you go off and start creating these documents and on-point estimates, you
should walk throug
followtng process that will belp ensure a solld, workable estimate.
CaSV-s0latioas
es
 FProject Management (SPPU) Qulck Read
Step 1:List high-level deliverables
you've got a project scope, getting started on your work breakdown structure should be easy.Starting any
f
project without a scope is dangerous because it sets the stage for what will be delivered and when.
First, sit down with your team, and list out what you'll need to deliver to meet your project's end goal. For
instance,if you're building a new webslte, your deliverables might include:
Sitemap
Wireframes
oPage designs
Front-end code
Back-end code
Be sure to include all asks and that you're not leaving anything out. For instance, if you're working on a website
redesign project, have you accounted for content? If you miss a deliverable now, you'l regret it later.
That's why listing things out as a team is so helpful. A team conversation not only ensures all your bases are
covered. It also helps you set expectations for who will be responsible for deliverables and tasks, all while
engaging the team on the overall process of the project.
Step 2:Think about tasks
Once you've identified the high-level deliverables for your project, it's time to take a deeper look into what
actually needs to be done within each individual deliverable.
This lin't just a simple exercise where you just identify the right person and time period for completion. it goes
much deeper than thatand that's a good thing because that's how you'll be able to create a better estimate.
.

Therefore, as you dig into each high-level deliverable, ask your team:
o What needs to be done to créate this deliverable?
oWhat other related project tasks will contribute to successfully completing this deliverable?
What are the task requirements?
As you conduct this exercise, keep in, mind that you truly want to list every possible task
that could go into a
high-level deliverable. Remember, the point here is to account for all time so you can create a reasonable
estimate. You won't be able to do that if you're not thinking it through properly.
Using the website redesign as an example, here's howyou might break up the "Sitemap" deliverable:
Review current site

Test the current structure with 5 site users

Review test findings
Organize the sitemap in a spreadsheet

o Review the first low-fidelity version with the team

Revise the structure using the team's input
Create a visual version of the sitemap
oAnnotate sections
Write description of the new sitemap

oPresentthe sitemap to clients

o Review client feedback
Implement feedback

Ces CaSy01DTIons
 Ouick
Read

Project Management (SPPU

Dellver v2
Conduct meeting with cllents t to a finalizedsiteman
in ordert
need to bedone
oFinallze sitemap that will
downtwith your team to
Thls list of tasks is an estimatefor all
ofthe work fine. When you slt SCusS esa
and that'sjustunderstanding how things are done
anding of how done. Listing
This might not be the way you'd do it common deliverable.
operating with a to complete the
sure you're operat
tasks, just be Sire effort lt willtake
youspellout the
help
Step 3: Get granular detailed as possible. The
only waytoto dotha
thatistoexamine
breakdown structure as nd determining thework
elaborating effort and
should make your work about tha
Ou out subtasks. It's all
every task you've identified and list
the deliverable m you'll find ta
be done to successfülly complete an investment to do this,
wil need to
and thought,but if
you make
stepn and
wha0omfor h
and detail out what will goin
process that takes time overages the long term. So, take the next nto
in
missed expectatitations and budget
each task: might break down the Test
the current stries are
redesign as an example, here's how you wit
sing the website
5 site users" dellverable even further:

o Recrult users
à Schedule sessions
Write test script
o Conduct 5 sesslons
o Compensate users for time
any single line item In a scope can
findings and recommendations. This one task is proof that
Write up a item that requires paymernt
include subtasks!t also incfuded line
expensive one! Not only did this example
party outside of the project your clients will too. Bee sure
expensés before scoping your project, and sie
You're going to want to know about any knee-deep in your project.
so comes as a surprise when you're
to account for them early on nothing
Step 4: Format and estimate
structures presented in flowcharts that resemble website sttemane aps.
Tradltonally, you'll fAnd work breakdown and referred back to
a hlerarchy of tasksand Is easily numbered
That format works well because it shows
But, some people like to list them out
on whiteboards or put them in spreadsheets. The format isn't what matters
structure
accuracy of the tasks Included. You can create your work breakdown
here-It's the completeness and
in any format that makes you comfortable.
sense, you'll want to revlew lt agafn and
When you've listed all of your tasks and subtasks in a format that makes
make sure you've included all of the possible tasks and subtasks.

that's conflrmed, go through the list'and discuss each task in terms of level of effort. This
could be in
Once
minutes, hours, days, weeks. It really depends on how granular you need to get and how your
organlzatlon
estdmates projects. Assigning an increment of ttme to each task will help you add upa total esttmate of tdme (and
a
possible cost) and sets you up to create project plan when you're ready for that step in your project.
When you're done, you'll know if you're in
scope, out
of scope. You might run thls exercise and Aind you've
articulated too much time or effort to do everything within the scope of the project. The good thing is, you've set
the baseline for what's needed, and as a group, you can seale hack on tasks to At the scope or the timeline.
OO0

Ces Casysotations
 3 Project Management (SPPU) 25 Quick Read

LChapter3 Protete
Q kauOnalsrugEure andIsSues
Q.1Explain Line.and Staff Organization ? (5 Marks)
Ans.
Line and Staff Organization

In this type of organization, the functional specilalists are added to the lHine, thus giving the line the advantages of
specialists. This type of organization is most common in our business world and especially among large
enterprises.
Staffs are basically advisory in nature and do not possess and command authority over.
line mangers, The staffs
consist of two types:
General Staff: This group has a general background usually similar to executives and serves as
assistants to topp
management. They are not specialists and generally have no authority or responsibility
of their own. They may
be known as special assistants, assistant managers or in a college seting as deputy
chairpersons.
Specialized Staff: Unlike the general staffs who generally assist only
one line executive, the specialized staffs
provide expert advice and service to all employees on a company wide basis. This group
has a specialízed
background in some functional area and it could serve in any of the following capacities
a) Advisory Capacity: The primary purpose of this group is to render specialized advice
and assistance to
management when needed. Some typical areas covered by advisory staff are legal, public relations and
economic development.
b).Service Capacity: This group provides a service that is useful to the organization as a whole and nöt justto
any specific division or function. An example would be the personnel department serving
the enterprise by
procuring the needed personnel for all departments. Other areas of service include research and
development, purchasing, statistical analysis, insurance problems and so on.
c)Control Capacity : This group includes quality control staffs who may have the authority to control the
quality and enforce standards.
The line and staff type of organization uses the expertise of speclallsts without diluting the unity of
command.
With the advice of these specialists, the line managers also become more effective and. develop a .
sense of
objective analysis of business problems.
The line and staff type of organization is widely used and is advantageous as the specialized advice
împroves the
quality of decisions resulting in operational effectiveness. Staff specialists are conceptually
oriented towards
Jooking ahead and have the time to do strategic planning and analyze the possible effects of
expected future
events.
Its main disadvantages are the confuslon and conflict that arises between line and staff,
the high cost that is
assoclated with hiring speclalists and the tendency of staff personnel to build their own image
that is sometimes
at the cost of undermining the authority and responsibillty of line executives

a.2 Describe Matrix Organization In detail. Marks)

(5
Ans.
Matrix Organization
A matrix structure can be said to be a combination of project and functional structures and ís created to
overcome the problems associated with project and functional structures. The key features of a matrix structure
are that the functional and project lines of authority are super-imposed with each other and are shared by both
functional and project managers.
 OuckRea
26
Management (SPPU Chlef
Project Execulive

Manager of
Funcilonal
Manager |Project Managers
Funcliona
Functiona Manager
Manager Project Manager
Stal
Stai ProjectManager
Staff
Sta

lan Project Manager

Lstalt
Project
project aciviues. coordinatlon
represent staf engeged in
(6/ack boxes
Fig. 3.1 integrati
ation ofactivitiesandTesources
direction and
responsible for overall schedule and with the prescrlbed
managers are generaly accomplishing work on
The project project They are responsible for
lared to the functiona:managers to accomplish the proje and
budget.
integrating the efforts of all the operatio
hey are also responsible for activity, The functional managerS are concerned with
recting and evaluating project
theproject. responsible tor
The functional structure is primarily
o Providing technical guidance for the
project
are skilled and speclalized.
'

O.
Providing functional staffs that
prescribed technical specifications.
OCompletingthe projectwithin as a respónse to growing complexity associatei.
organizatión cross-functlonal teamis are used, (mark
In a' matrix technology) as well as external rkets,
organizational growth. These complexities, bothi internal (size, matrirt
the pröcesslig and communication that are best dealt by
Competitors), create problems'of Îhformation
oforganization.:9
there is pressure for shared resources. For example, a
company
Matrix organizational design is most useful when marketing specialists. The matriv
resources.only hire four
to
may need.eight product groups, yethave.the
éelght groups to share the sklls of the four specialists.
provides a convenientway for the
relatdonships:
Each matrix contains three unique sets of role
who is the head and balances the dual chains of command
Thetop manager or Chief Executive Officer
subordinates.
Themanagers offunctional and project (or product) departments who share
specialists who report to both the respective functional manager and project manager.
The
Skils; Roles anid Responsiblities ? (8 Mark)
Q:3Explain RiojectLeadershipQualities,
.
Arns.
.
Project Leadership
Aprimary concemofmostorganizations today is the attraction and retention of talented people. However, ne
generally want to work for goodleaders in an open environment where they can sveak their minds treely 0
treated with respect, and where leadership promotes clarity and honesty. Often, the lack of positive and eliecue
leadership is akey reasonwhy manytalentedworkers leavetheorganization.
 Project Management (SPPU)_
27 Quick Read
The importance of good leadership is not a recent phenomenon. Leaders have, been critical to effective
organizations ever since people first started working together. However, the nature of this leadership has
undergone some changes.
We can define Leadership as a process whereby individuals infuence groups ndividuals to achieve shared
goals or commonly desired outcomes. Leadership has the capacity to infuence others by unleashing their power
and potential for the greater good.
A good leadership infuences people by providing purpose, direction, and motivation, while operating to
accomplish the mission and improve the organization. The leadership role in an organization is assumed when
an individual or group of individuals has a clear vision of what needs tode accomplished and is able to get the
members of the organization to strive willingly for common goals.
The capability of the organization's leadership to channelize the energy of the members of the organization to act
on what needs to be done determines the organlzational effectiveness.
Leadership Skills
Although it's true that some people are born with greater natural gifts than others, the ability
to lead is really a
collection of skills, nearly all of which can be learned and improved. The capacity to develop
and improve their
skills distinguishes leaders from their followers. Some of the skills of leader are
o Interpersonal Skills: A good interpersonal skill has become a key skill for
the leaders. It improves their
ability to get accepted and then followed. It improves the organizational effectiveness.
o Clarity of direction: An effective leader needs to gain the kind of perspective on the future that leads to
an
anticipation of change and a planning for what is expected to come. Their clear image of the future pulls
them forward.
Ability to inspire others to high performance: Every leader must know how to energize people to go the
extra mile. A leader can positively influence people to be more energized and motivated.
o Good Communication: The ability to communlcate clearly so that you can create understanding
between
yourself and others is perhaps the single most important leadership skill to possess. It isn't of much value
for a leader to have a vision or sense of direction if he or. she can't communicate the value
or meaning of that
vision to others and inspire them to buy into it.
.
o Effective Listening : Listening effectively is a. particularly important communication skill
that can be
learned. It helps build relationships, solve problems, ensure understanding, resolve conflicts,
and inmprove
accuracy. At work, effective listening means fewer errors and less wasted time.
oCollaborative& team building Skill: Collaboration is a competency that usually needs to be developed,
since it is not part of our normal way of dealing with organlzational activity. The attitude
and competency of
a leader in dealing with others can greatly help set the tone for collaboration
and teamwork within a group
or within the organization as a whole.
c Creative Thinking : The ability to think creatively enables leaders to contribute innovative
insights that can
open up new oppertunities or alternatives for an organlzation. People moving
into leadership positions
should develop the ability to think innovatively.
c Intelligence and learning agility: Effective leaders are those who are capable of
and interested in
continuous learning and improving, both for themselves and for their followers.
c Condict Resolution Skills : An eflective leader is able to recognize
and use his skills that move
organizational interaction through conflicts and toward positive and valuable
outcomes for all involved.
Since all human interaction is fundamentally based on conflict,
leaders need to,accept this reality and learn
how to vork with Ít.

esDSVSOlUTOIS
 Oulck
R
28
Management S Following are someoft
ve. Follown
Project effective.
qualitie
qualitles to be integral to
integral toalall other ies is the
Leadership Qualitles essentlal ablity
certaln qualities hat ís
that is Without. trust, there s no inluence
requlres together.
Every good leader leadership
Trustworthy:One
key
holds
organization
an desirable results. va
1Being trust that nevergetthe ently is viewed as aving
consistenti
generate and sust she Inte
means a leaderwill or
unless he circumstances. Integ ity also ínvolves consj ntegity
tners, which generate trust sistency
all
cannot times and in principles.
Integrity: A leader therightthingat all the same set of
2. means doing everyone by demonstrated leaders.
It refersto
egrity whichmeans treating important
quality
what one does well and not
Denavior, Selfreflection is
another weaknesses, and at and: so well,
Self-Reflection. strengths and take the time to reflectand learnfrom Por
personal they need to tho
determine his ststage of development
nderstanding one'sfollowers a good direction, leader to
in baseline for a
eaders totake their establish a
introspection can
experiences. This Before one
to head
towards. belief in one's ability to succeed. canleaq
and the direction Self-confidence is an
otimístic
optim Self-confident leaders
lers have the boldness
capabilities.
Self-confidence: one's own goals. They try new thingsofferldeax,
their goals
tb
confident in
necessary to meet
others, one must be tasks and challenges their
colleagues.
undertake the difcult collaborate with default.t. They
Thews
energy, and cooperate and own design, not by tend havea
positive to lead by their
l
Self-Directed:
Selfdírectedleaders choose
purpose affects
pertormance In a very meaningful ul wav
way.
values
i
Leaderswha
5. purpose. Working with a true to their es.
and try to remain
clear sense of their actions and behavior done and Drodse
self-directed areaware of reactive. Getting things ducing p
are Results-Oriented:Leaders
are proactive, not organizatoosithe
ofproductivitysets the
standard for the rest of the tion
6. Actlon- and Thelr high level
Tesults is thelr mantra.
Responsibilities However, a very bigdliferece
dit
Leadership Role and an effective organization. manaper
cruclal to the success of ot people, whereas a
managing are
Bothleading and always leads a group
management is thatleader organization.
between leadership andresponsibility for the operation of the
only be concermed
with
management focuses on doing
thíngs right. A mana nanager
ls
things while budgeting, assigning Work
focuses on doíng the right like planning
A Jeader In harmony,
organlzational processes work organization to accomplish whatk
involved,in making the making decislons. This all helps an
measuring performance, and
hiring staff,
authoriartan
expected ofit
effective leadership will tend
to be traditlonal and
understond the
However, a manager who doesn't control. On the other hand,
leadership is possible only when
and a focus on
which leads to over-managing
enough.
organization is managed well dutles may be delegate!
responslbillty for managlng Lots of the managerial
Includes exists bor
A good leadershlp always that appropriate and effective management
responsible for ensuring
through others, but the leader is
the situation or group concerned. and change. It has bea
consistency and order, whereas leadership aims at movement
A manager usually alms at something D
future as something to create, while
traditional managers see it as
well said that Leaders see the
organizations
management and leadership are needed in the life of healthy
react to. But both
the roles played by managers ard leaders:
The following are the distinctions between
Themanager adminicters *while tho lagdor innntae
on people.
o The manager focuses on systems and structure while the leader focuses
tasyeSolutians
(es
Project Management (SPPU) 29 Quick Read

oThe manager relies on control while the leader inspires trust

o The manager has a short-range view while the leader has a long-range perspective.
o The manager asks how and when while the leader asks what and why.
o The manager has his eye always on the bottom line while the leader has his eye on the horizon.

oThe manager imitates while the leader originates

o The manager accepts the status quo while the leader challenges it.
manager does things right while the leader does the right things.
oThe
a.4 Explain the relationship between he project manager.and the line manager. s o5Marks)
Ans.:3
Relationship between Project Manager and Line Manager

.Within an organization the Project manager and line manager have got workng relationship to get project
activities accomplished within constraint of limited time, allocated cost and specified quality
performance.Project manager is fully responsible to achleve the project objectives within the parameters
(constraints) of time, cost and quality standard.
Project manager needs all types of human and non-human resources like money, man-power, materials,
equipment, information and technology etc. for the successful completion of a project through smooth operation
of.project activities. But project manager does not control the resources directly except the project budget. The
resources are collected by line managers, they are often called as resource manager. They assign directly to
resources to projects. Project managers control only those resources which are temporarily loaned by line
managers. S/he reminds the line managers that there are also time and cost constraints of the project. This is the
starting polint for better resource control. Therefore, project manager must negotiate with all line mangers for
pooling require resources on time.

Project manager always requires to interface with the line mangers for the following major purposes.
o To get needed resources from functional department on time.
oTo get good support of line. managers, whlle negotiating with various parties in connection with project
work.

oTo achieve harmonization between project works and line department's work.

oTo get technical and managerial assistance

o To solve the project related problems.
The efectlye project management and project success is highly dependent on working relationship between
project manager and line manager. So, there imust be better coordination, reporting, communication and
negotation berween them for good working relatonship. Moreover, to promote good working relationship,
project manager should help a proper understanding of;
Quantative tols and techniques for planning, scheduliag and controlling work..
o Organization structure, own job.descriptlon.
Open communication with line managers including effective coordination.

o Organizational behaviour to tackle the problems of dual reporting system.

CesCSVSOUIDIS
 e Quick Read
Management(SPPU) 30
Project Marks)
5
2
a.5Describe different Leadership Styles
Ans.
Leadership Style
behaving. A style describes the
way a particular leader serve as role
A leadership style reflects a distinct way of
experience. The leadership style is also affccted by the
models and the style is influenced strongly by this strong, is the personality of the leader. The
purpose or goal of the leaders. Another influence, which is often quite
major styles of leadership are the follówing:
accomplished can be described
Authoritarian Style: Leaders who focus primarily on getting specific tasks rmanaging
authoritarian. The authoritarian leadership style is al about control and the completion of
as tasks. They tend to use their power to dominate their followers.
Decision-making for the authoritarian
In the authoritarian style, most policies are determined by the leader.
until after the decision is made. This often
leader is usually autocratic, which means no input from otherscan ultimately hurt the performance of the
which
results in the, lack of creative solutions to problems,
organization.
which people have a high level of trust in the
Authoritarian leadership is very effective in those situations in the
a decision needs to be made quickly, and when
organization, When the task is straightforward, when
leader is given responsibility for directing action.
styleassumes that the power of leaders is granted by the group they
2. Democratic Style: The democratic so
and creative if they are motivated to do
lead, and that people can be basically self-directed group discussion and
tends to be more participative. Policies evolve from
The democratic style of leadership groun
group decislon-making process.By sharing decision-making and other responsibilities, the
from a Furthermore
and indivídual self-ésteem tends to increase.
makes full use of all the potential of its members goals of the
them creates a 'clear picture of the
member's participation in making the decisions that affect
group. It develops the group's cohesion and commitment
transactional leadership ássumes that people
Transactional Leadership Style: Another leadership style,
This style is related ta the autocratic style.
are motivated primarily by reward and punishment.
chain of command is definite and clear, and that
The belief is that employees perform their best when the
focus of the transactional leader is on maintaining
reward or punishment is based upon performance.The
to obey the instructlons and commands of the leader,
the status quo, and the primary goal of the followers is
transactional leáder is more a manager than aTeader, andIs Highly focused on getting tasks
The
overseeing productivityin detail.
accomplished, providing very clear direction, and
leadership grows out of the assumption that
4 Transformational Leadership Style: Transformational
motivates them. In this leadership style, the leader motivates
people will follow a leader who inspires and relatlonshlps
selling that vislon, and focustng on developing
and inspires by develóplng a compelling vislon,
with followers as a teacher, mentor, and coach.
A transformationa leader focuses on continuous learning and
relationship building. He or she engages
subordinates by spending a great deal of time building trust and demonstrating a
high level of personal
integrity.
which leaders focus on increased
5. The Servant Leader Style: Servant Leadership is a style of leadership in
to enhance the growth of
service to others rather than on increasling their own power. The goal is
individuals in the organization and increase teamwork and personal involvement
 Project Management(SPPU)_ 31 Quick Read
Q.6 Explaln Conllct Aesolution in Details
? (5 Maiks)
Ans.
Confllcts Resolutlon

Contlicts ocur In our daily lives. Organizatlonal Confllct is a state of disagreement or misunderstanding
resulting from the actual or perceived dissent of needs, beliefs, resources and relationship between the members
of the organization.

tactivities
ranges from minor disagreement to a major problem which at tímes threatens to disrupt organízationa
and progress.At the workplace, persons conflict occurs when opinions
whenever, two or more interact,
with respect to any task or decision are different
Organizational activities are executed by human resources in order to achieve objectives as set by the
organizations. While managing human resources, conflicts occur naturally but sometimes it leads to quarrels,
fights and even a breakup of the teams.

In the organizational environment, conflicts are:

O, Inevitable
Can build the team

Can destroy the team

oMustbemanaged
Causes of Conflict
Once you have a team of people, conflict may arise because of varíous causes. Some of them are:
oSchedule,
Project Priorities
Resource Competitions
Cultural differences
oTeam Formation
o.Technical Issues
Personality Conflict
Poor Planning

Factors Influencing Organizational Conflict

Vague Role & Responsibility: If there is lack of clarity regarding the role of a person with respect to a task or
project, conflict takes place. And, to avoid this situation, the roles and responsibility of
the team members should
be stated clearly and also agreed upon by all.
Personality Conflict: Conflicts at the workplace are often caused by interpersonal issues between the members
of the organization.Every member of an organization possesses different personality, vihich plays a crucial role
incausing or resolving conflict in an organization.
Scarcity ofResources: One of the main reasons for conflicts in an
organization is the scarcity of resources like
time, mony, materials etc. due to which members of the organization compete with each other which leads to
confict between them.
Conlict of Interest:When there is a difference between the personal goals of
the individual and the goals of the
organization, conflict of interest arises, as the individual may
work more for his personal goals, which hinders
the overallsuccess of the project.
es BASTESUDns
 Project Management (SPPU) 32 Qulck
Ren
Ways to Manage Conflcts ln Organlzation

Handle the confict positively.

Formatlon of oMcial grlevance procedure for all members.
Concentrate on the causes rather than thelr effect, to assess conflcts
Partes to conficts should be given an equal voice, irrespective of thelr postion, term or poltical inflhuence
Active participation of all the parties to conflict can also help to counter it.
In an organtzation, conflict is inevitable and so varlous means are to be discovered to resolve them or use t
in a way that can help the organization to increase its productivity
hem

Techniques to Resolve Conflicts

Following are some of the techniques considered to use in managing contlicts.
Withdraw/Avoid Conflict: It is retreating from an actual or potentlal conflict situation; postponing the
issue to be better prepared or to be resolved by others.lf you are a prone to outbursts of anger
withdraw/avoid can be an exellent technique. By withdrawing. you have the opportunity to come up with
better ideas to address the conflict.
o Smooth/Accommodate Conflict: This is about conceding one's position to
the needs of others to maintain
harmony and relationships. This approach recognizes the Importance of professional relatlonships. Areas of
agreement to emphasize will vary depending on the context You can look at shared
commitment to a
project and how disagreement impacts others on the team. You may àlso want
to reference areas ot
agreement that surfaced during other stages of the project.Successfully usíng
smoothing and
accommodating requires understanding of tie parties in conflict.
o Compromise/Reconcile Conflict : This is about searchlng. for solutions that bring some
degree.of
satisfaction to all parties in order to temporarily or partially resolve the conflict. The compromise
technique
recognizes that some conflicts cannot be fully solved.
o Force/Direct Conllct: it is about pushing one's viewpoint at the expense of others; offering only win-lose
solutions, usually enforced through a power position to resolve an emergency. From
time to time, project
managers have to take a stand and apply their power.
o Collaborate and Solve Conlct: lt is about incorporating multiple viewpoints and Insights from differlng
perspectives; requiring a cooperative attitude and open dialogue that typlcally leads to consensus and

.
commitment. The collaboration and problem solving approach to conflict is the most productive technique.

a.7 Explain Diversity Management. Suggest some of the ways to manage diversity at work place Marks
Ans.:
Diversity Management
Cultural diversity in the workplace is the existence of a variety of cultural or ethnic people and groups. Culhire is
considered to be the underlying values that direct how people behave. Cultural diversity in the workplace is a.
result of practices, values, traditions, or beliefs of employees based on race, age, ethnicity, religion, or gender.
For years, economic globalization has been one of the major drivltng forces of creating cultural diversity in the
workplace. The modern workforce is made up of people of different genders, ages, ethnicity, religions, and
natlonalities.
As the workforce diversity has become thenorms employers have started realizing that workforce diversity
provides both material and intangible benefits. For the employers, it is important to reap the beñefits of cultural
diversity in the workplace. They must show their commitment to addressing the challenges of a diverse
Workiorce. Employers must be seen to be celebrating their employees' diversity to avoid workplace issues

Bs LaSVSolutions
 RFProject Management (SPPUJ
33 Qulck Read
Couses of Workforce Diverslty
The followlng are some of the different
causes of diversity in the workplace:
Education There can be tension between employees who have undertaken
the academic route to
a
employment and those whose experience is of vocational
nature. This cultural difference could result Ina
conflict where it's disputed whether practical' or theoretical experience will
help the company achieve
maximum growth. "

Ethnicity : A
cultural diversity based on different ethnicity at work can be apparent
when there are
language barriers or a difference in how business
is carried out.
Generational gap: The new generation millennia), and traditionalists are some ofthe different generations
that make up a diverse workforce. This diversity is characterized by differences
in how work is viewed. For
example, the new generation is known for seeking nexibility
in their work and doing jobs that align with
their personal values.
Gender: According to a report, nearly 36% of women had a bachelor's
degree by the age of 31 in
comparison to 28% of men. However, research has found that,
in 2017, women earned 82% of what men
earned. Thus apart from the pay disparities, women also face
other workplace issues such as harassment.
oReligion : Various religious beliefs may be over in the workplace, fox example, different dress, dietary
requirements, and requesting particular days off. However, religion may be more
understated, for instance,
how the person interacts with their team members.
O Workers with disabllltdes This group is very diverse in relation to the challenges
they face and their
needs. The range of disabilities can include vision, learning and mental health.
As a result, companies need
to ensure that their diversity and inclusion programs recognize
and make provision for the wide spectrum
of disabilities.
Workplace Issues Involving Cultural Diversity
Every company that's emerged as a positive example
of cultural diversity has faced issues in relation to
facilitating people from different groups to work cohesively. HR
personnel and the company's leadership should
be responive to these issues.The following are some diversity
workplace issues:
o Conflict: This occurs when discrimination, prejudice, lack of respect,
and racism are allowed to crop up in a
workplace. Intolerant attitudes can turn into open conflict if
companies don't take the correct steps to show
that any type of discrimination won't be tolerated.
o Harassment: This Issue can present itself in a diverse
workplace where leaders fail to recognize the signs
and how to deal with perpetrators. Training should be provided
as to what constinutes harassment
Employees who harass others should be dealt with
according to company procedures. Like all the other
issues arising from diversity in the workplace, harassment can have a
devastating effect on employees and
the company as a whole.
o Disregarding needs : Some companies ignore the needs of disabled
employees by failing to provide them
with the necéssary equipment to access all facillties and to
undertake their jobs. Employers need to lead the
way in creating a comfortable workplace for all of
its enployees, irrespective of whether they have a
disability
Managing Diversity at Workplace
The workplace diversity can be well managed if effective
steps are taken by employers. Here are some of the
ways to manage diversity:
o Create written policies: Companies should include their policy in relation
to diversity in their employee
handbook. The policy should contain information about non-discrimination
laws, the code of conduct and
the compensation and benefits pohey.
es 01S1 Sotutions
 Quick Read
34
Project Management (SPPU) training to create better a
provided with sensitivity
Employees should be different, understand
sensltivity training: value views that are
o Provide employees to
training can help
workplace culture. Sensltivity done if they've been
offended.
actions that cause offense and what necds to de about diversity
words, and handbook and training
After employeeshavo recelved the Employees should be
policy:
oImposeazero-tolerance the tone about how violations will be dealt with.
taken serlously.
issues, the company needs to set every reported Incident will be
behavior will not be tolerated and
aware that inappropriate

Advantages of Workforce Diversity have slmilar ldeas. In

company is from the
same background, they're likely to
everyone in a unique
Innovatdon: Where diverse workforce brings
companies need new ideas and cocepts. A
order to remain competitive, edge.
innovate to gain a competitive
perspectives on how to solve problems and differences in others because of the
enables team members to appreclate the other, they
Respect: A diverse vorkforce to learming from each
different people bring. Where co-workers are open mutual respect for
positive contribution that better as a team. Therefore,
gain a
them to function
appreciate that diversity enables
colleagues who are different. fairness and equality. These
demonstrates that a company values.
Reputation: A commitment to
diversity consumers. A company that openly
its reputation twith suppliers and
loyalty and a
characteristics have a positive effect on in, will gain customer
irrespective of which group they are
job,
recruits the best candidates for a
productive its employees will be. research
A
good reputation.
a company is an indication of how diversity programs.
Productivity: The diversity of measure to gauge the success of
companies used productivity as a productivity due to a
has found that 77% of have experienced an increase in
their companies
Respondents in the research advised that
with
diverse workforce. themselves to build relationships
diversified workforce, they position uise to
Growth: Where a company has
a
companles about the best
strategies to
Diverse employees can advise the norms of
people from different cultures. aware of the. cultural
Employees who speak, different languages and are
gain new customer, bases. -
company's growth:
international markets can be vital to a organízation's diverse workforce is key
a
seekers advised that an
Recruitment: Research shows that 67%
ofjob a key aspect when recruitlng
These findings demonstrate that diversity is company
offer:
factor when they evaluate a job of a diverse workforce
and want to be part of a
aware of the importance
the best talent. Job seekers are
appreclate their difference
that will value and practices
from carrying out discriminatory ensures
Companies need to comply with laws that ban them law and also
Compliance: helps companiés to obey the
where everyone is respected
Promoting a diverse workplace
that every employee is
treated with dignity.

Managing Workforce Diversity

Employees
With reference to Disabled diversity
different positions, They add to the
people with physical disability working în
Organizations also have encourages equality and better
must manage all such employeés in a way that
of the workforce. An organization
are
can commonly be used
team spirit. Some of the ways that disabled employees to be
workforce is also an empowered workforce. For
o Build Awarenes: An aware familiar with the affirmed
essential that all employees are
fully integrated into a workplace, it is
being disabled-friendly.
commitment of their organizaion to
full-bodied employees gain mo0Te
training: Sensitizing trainings and etiquette dasses will help one
Provide
co-workers. Quality training will help dispel the notions if
o
insight into how to best deal with disabled
Ces0asySotutions
Project Management(SPPU) Quick Read
35
has against all such employees. Employees should also be given basic informatlon on how they can help
helr disabled colleagues in cases of emergencyRelevant and ongoing training are of utmost importance.
Training should also be a cruclal part of the entire on-boarding process for disabled employees.

UsC Technology for assistance: Technology that enables disabled people to be an active part of the
workplace has grown by leaps and bounds in the last few years. Most modern jobs require computers and
use ol technology. Investments in the right assistive technology, apps and online tools will help the disabled
cmployees carry out thelr job responslbilties without impediments. Disabled employees should also be
tralned to best use all such technology.
Conslder Outside Support: Companies can also make use of outside support to give continued training to
employees. Several non-profits and government agencies are working towards more inclusive workplaces
that can hold seminars and awareness initiatives at you company. Thís not only improves employee
participation and morale, but also helps bring fresh and new perspectives to approaching the issue.
Make Accessibility a Priority: Free accessibility to the workplace is important to disabled employees. It
helps them move around, get their work done and enjoy the time spent at the workplace.Disabled-friendly
parking wheelchalr accessible doorways, ramps at entries and exits of buildings and cafeterias, wide
corridors and easy access to workstations, accessible operating buttons and/or Braille in lifts, and accessible
washrooms are some of the basic necessities required to make a workplace disabled-friendly.
Honest Appraisal and Feedback: Another key. factor for improving inclusivity at workplace is to provide
honest and air feedback to employees, irrespective of any bias.If managers tend to show leniency to
disabled employees during appraisal, this may affect their ability to detect drawbacks and improve their
performance. An honest feedback will help the disabled employee feel as responsible for his or her work as
other employees.
With Reference to Women Employees

In today's business world, the number of women workforce is very high. Their contribution is as good as that of
men. That is why the treatment toward them should be as good as that for men. Women being from a different
gender have different needs and therefore they must be managed differently in order to manage the workforce
diversity.Managing gender diversity is an important HR management aspect. Following are some of the ways:
oGive equal opportunity: Women being as good, dedicated and loyal as men should be given equal
opportunity in terms of the job profile and challenges. In every field women have done very well and
therefore it is quite fair to give them equal opportunity. This is also a hall mark of a good organization.
Working time Mexibility: Women have many other responsibilities apart from the professional one. For
exampte, they are mothers and wives and therefore if an organization wants to take full advantage of their
talent they should be given lexibility in their working time. This will improve their productivity.
oBuild talent and not hire : More women participation in the workforce is always a good sign. As they are
capable of learming just anything encouragement should be given on developing their talent
female workforce Women should be valued for what they are. Whether it is houseteid natters
Value
professional ones, women are a
:

force.
or
great Their promotion is good for the whole society and the country
So, they must be valued for their contribution.

o Have a gender neutral outlook: Por an organization to grow and succeed it must develop a gender neutral
outlook. Women should not be discriminated on any basis.

esesyeirDT
 Qulck Read
Project Management (SPPU) 36

With reference to ageing people

people from all age group workin
basis of demography. We have
In every organization, there is diversity on the dlfference and that brings diversity to the
significs gencrational
in different roles. The age difference at times workforce. Following are some of the
ways to
well order to have an eflcdent
workforce. This must be managed in
manage aged people within the organization:
organizations carry vast experience whlch must
Giving Value to Experience: Aged people working In the
deciston making or policy formulation.
be valued and utilized. Their experience must be used in ways.
whole work Hfe working fn certain
Respecting their way of working: Aged people have spent thetr
same way or not they must be respected y
Whether they suit today's requirement in the
more than the younger people.
oEnfordng change gradualy: Aged people naturally tend to resist changes
So, changed should not be enforced at once rather it should be done
slowly. They must be given due time to
adapt to changes.
passage of time, technology has taken
OProviding Training to make them techno-savvy: With the
Instead of calling
precedence. Aged people are generally not very comfortable with the latest technology.
them backward and not including in the scheme of things they should be trained properly so that they
become acquainted with them and understand thelr value. This way they become techno-savvy and
contribute more.

O.8 What is Organizational Change ? Explain is Importance and Management ? 8Marks)

Ans.:
Organizational Change and Its Management
Organizational change can be defined as the alteration in structure, technology
or people in an organization or
way of life and any variation
behavior by an organization. Generally people are accustomed to a well èstablished
in or deviation from that life may be called a change.
technological
Change may be very simple just like to shift the location of an office or it may be a more complex
change which may even threaten the very existence of
some people in the organization.
some interal1o
Another definition of Organizational change is "When an organizational system is disturbed by
or process
external force, change frequently occurs. Change, as a process, is simply modification of the structure
of a system. It may be good or bad, the concept is descriptive only."
An organizational change occurs due to two major factors namely -
External factor: External factors are those factors that are present outsid the firm but' force the firm to
change or implement a new law, nule etc. For example, all banks are bound to follow the rules laid down
by

the RBI.
an
o Internal factor: Internal factors are those factors that are caused or introduced inside organizätion that,
forces a change. For example, no smoking in the workplace
Importance of Organizational Change
Change in an organization is required because there is always a chance for further development and order to
in

survive in a competitive market the organizations need to be updated with changes.

Below given are some reasons as why changes are deliberately made and carefully planned by the organization
before implementation.
o It improves the means to satisfy the economic requirements of people.

promotes employee satisfaction and well-being.

t Ce's CaS-Soluions
 Prolect Management(SPPU) Ouick Read
37
Types of Organlzatlonal Changes
Reactive changesand
.

Proactive changes (Also called Planned changes)

A brief description ofthesefollows:

eactive Changes Reactive changes occur when forces compel organizations to implement changes
wthout delay. In other words, when demands made by the forces are complied in a passive manner, such a
change is called reactivechange,

roactive Changes : Proactive changes occur when some factors make organizations think over and finally
decide that implementation of a particular change is necessary. Then, the change ls introduced in a planned
manner
Difference between reactive and proactive
changes
O Reactive change involves a reflexive behavior whereas proactive change involves purposive behavior.
.
Reactive change covers a limited part ofthe system but proactive change co-ordinates the various parts of
the system as a whole.
While reactive changes respond to immediate symptoms, proactive changes address to underlying forces
creating symptoms.
Planned Change
Planned change is a klnd of alteration or modification which is done in advance and diferenty for improvement
Need For Planned Change

Planned change takes places in an organization when there is a demand for change due to two types forces.
of
These forces are grouped into internal and external.
. Internal forces that lead to a planned change in an organization include obsolescence of production and
service, new market opportunities, new strategic direction, increasing workforce diversity, and shiftin
socio-cultural values.
O External forces that lead to a planned change in an organization include regulators, competitors, market
force,customers, and technology. Each of these forces can create pressing demand for change in small or
big, public or private, business or non-business organizations.
Process of Planned Change
.

Once the management decides to implement some changes in

the organization, it needs to be done carefully as
the success depends on whether all the employees adapt to changes or
not According to Kurt Lewin, the planned
organizational change is implemented in three different stages. They are
Unfreezing: In this stage, the organization studies ifthe change is required or not, what and why is the
cChange
necessary. Considering the entlre situation, the organization decides for
'.
appropriate change. Thusa
plan and strategy is fornmulated as required.
o Changing : In this stage, the organization executes the plan and program for change.
For this purpose,
proper precautions are taken in order to malntain cooperation and coordination between
the employees
and management,avoiding miscommunication or disputes. Adequate supervision and control is arranged as
needed.
Refreezing : This is the final stage, in order to bring organizational change. By
way of supervision, the
organization tries to evaluate the effectiveness of change. Collecting all this
information, the management
interprets whether to continue or replace change by some other alternatives or to make
further minor
changes.

es CSTEsdNons
 Project Management (SPPU]
38 Qulckh

Types of Planned Change lasslfied three typ

classitied into three ypes. They are
requirenment planned change is
On the basis of an organization's
o Change in structure
o Change in technolog
Changein people.
1. Change in Structure. following
structure when development is required the
in areas
Planned change is required in
t
o Change în management
o New management
oChange in position orlocation
Change in objective, rules, regulations ete.

oLaunching new branches

2. Change in Technology
in the following areas
Planned change is required in technology when development is required
o Need of office automation
o Installing new hardware and software
o Executing newworking procedures
o New methods in production funcion
o Producing new products and devices
oNew training, research and development program
3. Change in pople
Planned change is required in people whendevelopment is required in the following areasS
o Manpower requirement
o Promotion or demotion
o Transfer to other location
Suspension or dismissal .,
r.
Deputation
o Training and development

a. 9 Expaín Factors Affecting Organization Change 7 EMarta

Ans.:
.

Factors Affecting Organization Change

There are a number of factors which 'affect organizational functioning. external
They are both internal and e
Changes in these factors mak it mandatory to brlng change in an organization.
Let discuss in briefthese
External Factors
facto
There are external factors lying outside the organization, y an
indirectlv. The organizations do not have any
which affects the organizations both u
control over these factors,

eas-solulion
.** *
Ces
 Project Management (SPPU)_
39 Quick Re20
ne organization cannot change these
factors rather must change itself to align with these factors. A few of these
factorsare:

oogyo Technology majoi external factor forcing an organtzation to change. The invention and
is a

on new technology telecommunicatlon

such as computers,
operations has profound impact on the organizations that adopt them.
manufacturing
systems and lexible

he use of computer for direct

supervislon has resulted into wider spans of control for managers and flatter
organizatlons. Sophisticated information technology is also making organlzations more responsive. It has
made both the organizations and their employees
to become more adaptable
echnology has made changes in a lot of jobs. Many jobs have become obsolete and new jobs have been
created. Individuals, who do routine, specialized and narrow jobs are replaced by workers who can perform
multiple tasks and actively participate
in decision making.
As a result of all this, managements will have
to încrease their investment in training and educatíon of the
employees because employees' skills are becoming obsolete more quickly.

Market : Market conditions

are never static. They go. through rapid changes as the needs, desires and
expectations of the customers change rapidly and frequently. On top of it, there is tough competition in the
market as the market is flooded with new products and innovations everyday. New methods of advertising
are used toinfluence the customers.
So, today the concept of consumerism has gained considerable importance and thus, the consumers are
treated as the kings. The market forces every organization to address the changing conditions by
responding as quickly as possible. It has made organizational change a mandatory process.
oSocial Changes : Social and cultural environment also suggest some changes that the organizations have to
adjust for. There are a lot of social changes due to spread of education, knowledge and a lot of government
efforts. Soclal equality, eg, equal opportunities to women, equal pay for equal work,
has posed new
challenges for the management The management has to follow certain social norms in shaping its
employment, marketing and other policies.
Political Conditions: Political environment within and outside the country have an important
impact on
business especially the transnational corporations. The interference of the government in business has
increased tremendously in most of the countries. The corporate sector is regulated by a
lot of laws and
regulations. The organizations do not have any control over the political and legal forces,
but they have to
adapt to meet the pressure of these forces
In our country, the new economic, policy has liberalized the economy
to a large extent. Many of the
regulatory laws have been amended to reduce the interference of the Government
in business.
Internal Forces
in
.
Organizations are also affected by the world politics particularly because we are living a global
world.

Internal forces are too many and it is very dificult to describe them comprehensively. However,
major internal
causes are explained as follows:
Nature of the Work Force: The nature of work force has changed over a passage of time. Different work
values have been expressed by dilferent generations. Workers who are in the age group
of 50 plus value
more loyalty to their employers while those in their mid-thirties to mid-forties are loyal more themselves.
to
The youngest generation of warkers is loyal to thelr careers.
The profile of the workforce is also changing fast. The ne generation of workers have better
educational
qualifications. They place greater emphasis on human values and question
authority of managers. Their
behavior has also become very complex and leading them towards organizational goals is challenge
a for the
managers.

Ceseasy solutionS
 Qulck Read

management
put strain on the
Project Management(SPPU
the industrles, which again
across employees
also very high percentage ofwomen
employee turmover is increase in the brings about
he force is changing, with a rapid personnel is another force whlch
The work Change In managerial promotion, retirement
Management levels: managers because of
in are replaced by new organízation. The
Change organization. Old managers and way of working in the
change in Each
manager brings his own ideas personnel. Sometimes, even though
there is
dismissal. managerial
transfer or changes in accordingly.
relationships changebecause of the organization has to change
informal As a result, existing8
their attitudes change. of some
deficlencles in the
nochange in personnel, but are necéssary because
may be. in the form of
Sometimes change
OManagement Structure: arrangement and processes. These, deficiencles co-ordination among
organizational.structure, managerial levels, lack of
management, larger number of uniformity in policy
unmanageable span of committees, lack of
obstacles in communication,
multipllcity of such cases
departments, so However, the need for change in
various on.
between line and staff and
decisions, Ilack of cooperation occurs inflexibility.
some major crisis developing inertta or
goes unrecognized until place fust to avold
cases; organizational changes take because any single
In many organlzation should be dynamic
ertia:
Conscious managers täke into
account this view
every
that
Thus, changes are incorporated
so that the personnel
ofmanagement ime. in the organizatlon
method is not the best tool unneessary, resistance when major changes
liking for change and there
is no
develop
are brought about.

.
-

CesGaSy-saiutians
 Project Management (SPPU)_
Quick Read

PEe rojectScheduling
a.1 Explain Basic Concepts of NetworkDevelopment7
Ans. B (5 Marks)
Basic Concepts of Network
Development:
Activity:
projects may be viewed as being
All
composed of operations or tasks called activities, which require
expenditure of time and resources the
for their accomplishments. An activity is depicted by a single arrow
the project network. The activity (F) on
arrows are called arcs. The activity arrow is not scaled; the
time is only a matter of convenience length of the activity
and clarity and does not represent importance of time.
The head of the arrow shows the sequence
or flow of activities. An activity cannot begin until the completion of
the preceding activities. It is important
that activities be defined so that beginning and end ofeach activity can be
identified clearly.
Activity

Start
O
End
Fig. 4.1
Generally, there are three types of activities found
in a network, which are:
o Predecessor activity: It is an activity which must be completed before
one or more otheractivities start
o Successor Activity: This is an activity that cannot be started untll one
or more of the other activities
completed but immediately succeeds them.
o Concurrent Activity: These are the actlvitles which can be accomplished
concurrent activities.
concurrently are known as
Dummy activity: This is an activity whlch does not consume any kind
of resource or. time is known as
dummy activity.A dummy activity is added ina network only
to establish the given precedence relationship
among other activities of project ln following two situations:
(a) When two or more parallel activities In a project have
same starting and finishing points.
(b) When two or more activities have some (byt not all)
common.
of thelr immediate predecessor actlvities in
A dummy activity is generally shown by a dotted line in network dlagrams:

Dummy
Dumny actvity
aclivity
H
Fig. 4.2
Event
An event in a network diagram is a specific ínstant of time which
marks the start, or the end of an activlty. Event
consumes neither time nor resources. It is represented by a circle and
the event number is wrltten within the
circle. The event circles are called nodes. Therefore, the major difference
between activities and events is that
activities represent the passage of time whereas events are points In time

Cescasy-solttons
 Quick Read

42
Management(SPPU) 4.3.
Project event nodes as tn Fig.
begin andend with
arrows must SlartActiviyFinish
All activity
eve
event

Fig. 4.3
categorles:
followving three
can be further classified into
The events Sv
CVentsS

:
Merge
and
Burst
Merge
event event Burst event

Fig. 4.4 merge

more than one
activity is known as
completion of
which represents the joint
Merge Event: An event
as burst event.
.

event beginning of more than one activity is known

represents the activities
An event which for some other
o Burst Event: may merged for some activities and burst
An event be
Merge and Burst Event:
simultaneously.

Merge and
Burst Burst event
Merge
event event
Fig. 4.5

Development
Advantages of Network sequence of activities required to
network analysis specifies the logical
Schedule relationships.
Sequence of Activities dependencies to establish activity
sequencing and
achieve project goals. It uses CPM and PERT to
identify the critical path of a
techniques like "Critical Path
network analysis uses
Critical Path: Schedule a schedule network diagram.
Refer to paragraph
is the longest path of
project Thecriticalpatr
Scheduling tounderstand other features of
critical path.
Method (CPM) cannot complete.
estimates the minímum duration before which the project
analytically
Project Duration: lt Activities on critical path are critical
àctivities can start and finish at the same time.
CHdcal Activitles:Not all activities need maximum attention of
project
schedule network analysis indicates exactly which
activities. Hence
team. mathematical
on critical path. It uses
permissible delay in activities that are not
Schedule flexibility: It is each activity.
finish, late start, and late finish of
calculations to establish early start, early
process. The schedule model helps to conduct
risk and scenarlo
Schedule Model It is the output of analysis
analysis of projectschedule.
like What-if analysis, scenario analysis and
Schedule Analysis: The schedule model allows further analysis
schedule compression techniques.

. s 0 antions
 Project Management(SPPU)_
Quick Read
a.2 Writo Shorthote on PERT2
Ans. : (5 Marks)
PERT Computation

PERT (Program Evaluation and Review

Technlque) was developed by a navy sponsored resource team
composed of Messrs. DG. Malcolm, J.R. Roseboom,
C.E. dark and W.Fazor in about
1950..
This Is eSenially a management technique
used with advantage for responsibility accounting in addition to
attaining other well defined objectives.
It is a method in which we try to exercise logical discipline in planning
and controlling projects.
PERT is deslgned for scheduling
complex projects that involves many fnter-related tasks. It Improves the
planning process because:
It forms the planner to define the projects various
. compónent activities and events logically.
2. It provides a basis for normal time estimates
and yet allow for some measure of optímum or pessimism in
estimating completion dates. .
3. It shows the effects of changes to the overall
plan as they contemplated
4. It provides a built in means for
on-going evaluation ofthe plan. .

5.t facilitates the process ofcommunication between planners management by either adhering organisational
lines or crossing overthem. In essence, PERT makes the clear cut assignment of responsibility possible
After the project has been planned and its implementation is underway, PERT
continues to be of use in
controlling the project:
1 It provides all parties involved a cómmon basis of progress
reporting, both, within organisation and outside
::.
2.
ofit .
It identifies likely troubles pots before they are encountered.
3. It provides data specially tailored to each level of management.
It focuses management attention on thecritical path, where it is most needed, as well as on other no-critical
activities that finish resources essential to the completion of activities of the critical path.
S.tpermits. the effects of various reallocation alternatives to be simulated such that the impact of any
proposed changesin the overall project can be predicted. In other words PERT answers 'the what' if
questions. '.
:.
. .

Because of these planning and controlling features, PERT is especially effective in

projects with many distinct
tasks in which the complex Inter relationships between tasks and projects with respect to personnel
scheduling
and time constraints areof criticalimportance.

Q.3How is time estimation done in PERT? (5 Marks)

Ans.:

PERT System of Three Time Estimates

The main objective in the analysis through PERT is to find out the completion for a
particular event within
specified date. If yes, what are the chances of completing the job?. The PERT
approach takes into account the
uncertainties. In this approach, three time values are associated with each activity of the
optimistic value, the
pessimistic value, and the most likely value. These three time values provide a measure
of uncertainty associatedd
with that activity.
1. The optimistic time: This is the shortest possible dme in which the activity can be finished. It assumes that
everything goes very well. Thisis denoted by t0 or a.
' Ces ba5V3mians
 Quick Read
44 to complete an
Project Management (SPPU probably the actual time required denat ty
as
likely time or breakdown etc. this is ibyt
Most likely Time
(tm):This is the móst normal way, with a few delays
2 things goin the
case assumes that
it
n this
that everything will go badly.
Thus, it s
th
or m
time is based on the
assumption
not include major catastrophes
like
Pessimistic time (to): This perform an activity.
However, this does
time required to
maximum possible by t, or b.
strikes, acts of God, and unrest It is denoted
labour

:. ?1.

Pessimistic
Optimistic Most ikely
Tima distribution curve
Fig. 4.6

Expected Time or Average Time (t,): some

random variable which is characterlzed by
In PERT activity duration isnot a single time estimate, in fact a PERT uses three
the parameters of B- distrlbution
probability distribution usually B distribution. To estimate
time estimates for each activity.
the expected
time are combined statistically to develop
The optimistic time, most likely time and pessimistic form the end
in PERT is that the three time estímates
time (t) for an activity. The fundamental assumption
points and mode of Beta distribution.
to complete by adding together 1/6th of
According to B-distribution, we can get the expected time for an activity
pessimistic time estimate.
the optimistic, 2/3rd of the most likely and 1/6" of the
Mathematically,

te

Variance (o
Variance for an activity is estimated on the basis of analogy to the normal
distribution where 99% of the area.
fall within the range approximately 6a in length
under the normal curve lies within the t 3a from the mean or
6g of a symmetric distribution. Thus, if
therefore, the interval (to. t) or range (to- to) is assumed to enclose about
denote the standard deviation, then
60tp -to

Or

Variance of activity time, o2 =

,
Ces CasyESOlutions
 a. 4 Describe Crtical Path Method (CPM 2 (8 Marks)
Ans.:
Critical Path Method (CPM)

CPM method developed was by E.. du Pont de Nemours Company (USA) in 1958 and named as criucal pau
method (CPM) to schedule and control the project. CPM is applicabje to both large and small projects, taking
from space programs to wedding or horse shows.
mostversatileand potent management planning techniques. The objective o
It critical
is widely recognized and is the
path analysis isto estimate the total project duration and to assign starting and finishing times to a
activities involved in the project.
This Method Involves Following Steps
1. Break down the project intovarious activities systematically. Label all activities. Arrange all the activities in
logical.sequence. Construct the network diagram.
2. Numberalthenodes (events) and activities, Find the time for each activity considering it to be deterministic.
Jndicate the activity times on the arrow diagram.
.i.:i
3. Calculate earlieststart time,earliest fnlsh time, latest starttime and latest finish time. Tabulate activiy normal
times, earliest timesand latest times.
4. Determine the total float for each activity by taking diference berween the earliest time and latest time for each
node ,

5. Identify the critical activities(theactivities with zero float) and connect them with the beginning node and the
ending node in the network diagram by double line arrow.This gives the critical path.
6. Calculate the total project duration.
7. Itis intended to reduce thetotalproject duration, crash the critical activities of the network.
8. Optimize the cost. .1 : . *
.

9Update the network and smooth thenetwork resources.

Time Estimate li CPM.
The basic objective of the time analysis is to get a planned schedule of the project for which the following factors
shouldbe known:
Total completion time of the project..
oEarliest timewhen each activity can begin.
oLatest time when each activitycan be started without delaying the total project.
Float for each activityi.e, amount oftime by which the completion of an activity can be delayed without
delaying the total project completion time.
oldentification ofcriticalactivities and critical path.
The basic scheduling tomputations can be grouped into the following heads:
.

1. Forward pass.method (For Earliest event time)}

Based on fixed occurrence time of the initial network event, the forward pass computatíon yields the earliest
start and earliest inish times for each activity and indirectly the earliest expected occurrence time for each
event

. es easy:s0lutions
 Quick Read

Management (SPPU)
Project this, the forward
steps: node. To accomplish
This consists of the following move to the end
initial project
event
start node and time ofzero for the
computation begins from the occurrence
1. The assumed earliest
computations start with an
pass occurrence
1e.E 0:1=1 event i, This is equal to the earliest
i etart for each activity
which begins at
Calculate earliest start time for starung
ESi=E forallactivity (, J activity plus the
timeofeventi (Tail event) ié, which is the earliest start time of the
(1
activity. j)
finish time of each
3. Calculate earlíest
duration oftheactivity,e.
EFy ESy + tiy= Etti earliestfinish times of all
time for event j 0>1) which is the maximum ot the
occurrence
4. Calculate earliest
activities ending into that event, ie.
E Maximum (ESy+ ty) Max [Eit t
each event
The computed values are
put into the lower left portion of
allowable time):
2. Backward pass method (For latest
begin from last event L
In this method calculation
The various steps are as
follows: event obtained
event L which is equal to the earliest occurrence time of that
1. Set the latest occurrence time öf
last
from forward pass method.
i.e., AssumneL =E tor enalng
equal to the latest event time ofeventj,
i.e, LF=L
Latest finish time for activity (i,j)
2.
minus the activity timel.e.
activity (6,j) is the latest completion time of (ij)
3. Latest starting time of
LSj LFg-tij=Li=tj
event.
time ofall activities originating from that
,

eventi is the minimum of the lateststart

4. Latest event time for .
Minimum (LS,)=Min LF-) .:

Thus L
= .Mín(Ly)
The computed values are put into the lower
rlght pórtion of each event.

CPM Systems

Activity-On-Arrow (AOA) Network

: arrow represents
the
In this type of network representation activity is
represented by an arrow.Thetailof the
activity is written above the
arrow represents the end ofthe activity. The description of
start and the head of the arrow.
arrow, Events are represented by circles or nodes at the
start and the end of an activity
may start. The
These diagrams have a single starting node
from which all activities with no predecessors
come together with
ending node, where all activities
diagram then move from left to right, ending with single
a

no successor.

Advantages of AOA Network

Many computer programs are based on A0A network.
:
a
A0A diagrams give a better sense of the flow of time throughout project
A0A diagrams can he sunerimposed on a time scale with the
arrow diagram, the correct length indicate the time
requirement.
casy Solutions
eS
 Project Management(SPPU)
Activity-On-Node (AON)
Network 47
Quick Read
.In AON nerworKS
activitles are
dependencyrelationship represented by
between the clrcles or
nodes and arrows
ending node activity nodes. are used only to sno
forthewhole project. The Generally these
diagrams have no particular
the.
understand lack of dummy
activities ingdiagrams stanug
makes them easier to draw
Advantages of AON Networks and
AON diagram
does not required
mmy actlvities.
They are easier to draw
and understand.
They areeasier to revise
and update.
Comparison between
the representatlon on AOA and AON
networks
Table 4.1
Point
AOA Network
AON Network

() Actvity A

() B must follow A

0+00
(ii) B and C must follow A

:v) Cmust followA and B

O
(v) C must follow A
and D
must follow A and B

Rules of AOANetwork Constnuction:

Following rules have to be followed while
* . constructing a network:
on network diagram arrow represents activities
significance.
and circles the events. The length of.arrow.has
no
oEach activity should be represented by only one arow and must start and end in a circle
tail of an arrow represents the start and head the completion called event. The
of work.
The direction of arrow indicates the direction of work flow.
The normal convention is to go
from left toright
. All networks are constructed logically on
the basis ofprinciple ofdependency.
An events cannot occur until all the incoming activities into have
it been completed.
An activity cannot start until all the preceding activities
have been completed.
No set ofactivities cannot form a circular loop.
Numbering the Events (Fulkerson's Rule):
After the network is drawn in a logical sequence, every event
is assigned a number. The number sequence
be such so as to reflect.the flow of the nerwork- A number is placed inside the circle. The rule devised bymut
D.R.
Fulkerson is used for numbering.

es0asV soluuons
 Quick Read

48 gradually convertingth
EProject Management (SPPU) event and then
consists of identifying the initial assigned only when b
applying this rule preceding events. A numberis
The procedure for arrows from the previous
deletíng the steps:
Succeedingevent by event It involves the following
converted into initial
suchdeletions anode is
unique
oEvent numbersshould be out on a sequential basis
from left to right
numberingshould be carried arrow is memberedas.
oEvent outgoing arrows with no incoming
initialeventwhich has all one new start eyent out of
oThe emerging from all the numbered events. This will create at least
ODelete allarrows
events any
the proceeding
. Repeat this process until all terminal event without
2, 3 and so on.
Number all new. start events suitably.
successor activity is reached, Number the terminal node
8 Marks)
Project Alocation What are ts benents ?
Q5Explain
-
Ans.
Project Alocation
writers, developers,
various resources such as skilled professionals(eg creative
Every project requires everything done. In
tools (eg. software, hardware, meeting rooms), and time to get
construction workers), and on budget
resource allocation is key to delivering projects on time
virtually every type of industry, effective
the resources requlred
define resource allocation or resource management as the scheduling of activities and
We project time.
consideration both the resource availability and the
by project activities while taking into
:
ro
The basic types of
resources you might need or encounter In managing a project:
writers, editors, user
People are the key to successful completion of any project. They may be
People: contract resources,
account people, traffic managers, freelance or
experience (UX) designers, art directors,
developers, testers. You need people with varied skills to
getyour project done.
project over
o Time: This is the total amount of time
(days, weeks, months, years) you require to bring your
may already be decided, you can divide increments of time
finish line. While the end date of the project
the on ..
that period to ensure. your project stays track
in carry, out any work Access to specific equipment is
o Tools and capital: Tools and capital are essential to
or have to be planned for during the resource
always required to create special featurés products. These will
allocation phase of project management and allocatédappropriately.
resources, a project or program manager is responsible. The project
For the planning and then allocation of the
manager needs to assess what types of people, time, and tools will be needed throughout a project's schedule.
role the successful execution and completion of the project becomes quite vital.
Therefore,

. his in
Benefits of Project resource allocation

As you can see, following the right processes and usíng a complete resource management tool,
resource allocation easier and benefit from it in many ways:"
you can make

o It improves visibility ofall resources across the company

o You can avoid under and over utilization easier

o It helps to keep bookings more accurate

o It's easier to negotiate bookings with other PMs

Ces CasV s0lutions

 Project Management(SPPU)
Process of Effective Project 9
Resource
Allocation Read
Quick
1. Understana the
Project Scope:
Scope.You should try to The first step of
know more an efective resource allocation
the resources the project about the final
goal, is tounderstandthepro
your resource allocation will need with a clear timeline. project size, duration,budget,etc. to understand
plan. This knowledge can about
further helpbuildthe,
2. List the Required Resources:
The next
of
foundadoO
involved in the
projectorganizations step is to definethe objective, duratíon,
have all the organization often work on budget,resources ana
resources available múltiple projects simultaneously. tne
which may include for the Therefore, you w
people, skills, machine, project at all times.Check not
see whether they are materials and space. the resourcescurrently
freely available If avalaoe
the resources before you could or maybe your organization the project requires materials or equipmen
allocate them. needs to purchase them.You
should first have
3. Divide Project into Smaller
and allocated not on
the project level
:
Tasks A good resource
allocation
plan ensures that the resources
every task has a fixed but the task level. Hence, divide aremanaged
timeline, budget, your project into smaller
tasks. Ensure
deadline. f the organization
reallocation at some
and
is carrying out
allocation of the resources
various
required to complete it within
projects simultaneously
at
the set
part of the project. resóurces will mostly
need
4. Allocating Resources : Different
tasks require a
miscellaneous resources set of people, materials, equipment,
to get completed. facilities, and other
conflicts at the time of Therefore, It is important to give special
their allocation. This attention to avoid resource
be fully aware of all the resources practice will help all the managers
available. An automated resource involved in diferent
projects to
process more efficient and scheduling toolcould help
accurate. make this whole
5. Track Resource Utilization: While
the resources are being
utilization. You should be aware used you also need to analyze their.effective
of the exact resource utilization especially by giving
resources, time, and budget. attention to human
This practice will help
effectiveness of your resource planning you evaluate the team members
strategy.Moreover, this can also and also increase the
with the client as you will be able help in improving your communication
to provide accurate details with
regards to project completion.
Resource Allocation using Resource
Optimization
Resource optimization is the set
of processes and methods to match
financial) with the needs of the the available resources (human, machinery
organizatlon In order to achleve
desired results within a set timeframe the established goals. Optimization brings
and budget with minimum usage of the
resources is particularly evident when the resources. The need to optimize
the organization's demands tend to saturate
currently available. and/or exceed the resources
In Project Management, Resource
Optimization Techniques are utilized
.
implementation and completion dates of to make adjustments in the.
.
the projects, modify the organized resource 2.
accessibility. Used as a part of the Schedule used and.resource.
Network Analysis to calculate
project, Resource Optimization Techniques includes the schedule compression of the
the scheduling of activities and the resources
those activities while considering the accessibility required by
of resources and the task time.
Benefits
Resource Optimization Techniques helps to evaluate
how well your entire resource pool utilzed on daily,
weekly or monthly basis. is a
It ensures that the revenue is utilized to maximum effect
and balance the workload.
By enhancing your resources management
procedure, you will have the capacity to distinguish the shortage of
skilis and preparing prerequisites, reducing any future resourcing clashes
and thelr unfriendly impacts,
**..'*
Ces easy:s0luionsS
 Quick Read

50 demonstrates that
Management (SPPU edges. Research
Project expenses and. increment Professional Services
delivery will help
diminish
reduced costs, and for
nG
mproving or
project
executed PMO have
significantly
a
organizations that have component the most astounding performers.
of authorltative expénsés
Organization, itis a typlcal resource pool, you will diminish the resources to
breakthrough perspective of your whole enhance income, enhance the
with a up these outdated
frameworks, Ålso, you can
related to keeping
achieve success and sustain
ustomer relationships. modify resources to
report the principal
management is intended to ideally
resource optimízation ín project resource requests tor an ideal
empowers organízations to gratily
he affecting the activities in the task. It
ISSues organization's objectives.
design and allows you to accomplish the
Utilization
Challenges to Project Resource on multiple projects
several challenges especially when the organization is. working manage them
Resource Allocation faces aware them properly allocate resources and
manager. needs be to of to
simultaneously.A project
throughoutthe project actually the
Changes to the scope, timeline or budget can affect project delivery. t's
Requirements changes: smoothly adjust
an up-to-date resource calendar will help you to
same withresource allocation too. Thus, having
resources once the changes appear.
resources you need
availability of resources: While working on a single project, you could use any you have to
Limited case, multiple projects are being executed at the samé time
your company.
thatare available atsame resources with another Project manager. So, resource availability keeps changing and
In
negotiate over the
you have to monitor itall the time to spot threats to your project's delivery. dependencies
dependencies: For allocating resources you need to know about the project
Complex Project IT projects there
tasks or activities in the project. For example, in
which area form of arelationship between the
ones are completed, so there's no point to hog resources early
are tasksthatcan only bedone after some other you require specific resources.
on. Thishelps you understand the exact time and place when
boxes when starting off a project, agreed on the
Project risk &uncertainties : Even if you've checked the
all
you can't predict. Thus, it is important for you to be
timeline,the budget and the scope,there're always things resources from other projects or re-assigning them.
eg.
able to respond to project uncertaínties, by shifting peers may
your organization is workingon several projects simultaneously you and your
Multple Projects If very often in a similar timeframe. But even if you manage to negotiate over
have tó share limited resources, projects
resources you both need, there may,bea change in priorlties regarding one of the
EE 5 Marks)
Q6 Explaln Projec Scheduling How is itdone

Ans:
Scheduling
a mechanism to communicate what
Project schedúlíng is an important part of profect management. It provides
resources will be allocated to complete those tasks. Thus project
Casks are to be done and which organizational
on time. It helps a
scheduling is a document collecting all the work needed to be done to deliver the project
of the work to be done
project manager and all other people associated with the project a proper understanding
in a timely andsequentially manner.
A project is made up of many tasks, and each task has a start and end time to ensure timely
finish. People in the
past had printed calendars on a shared wall in the water-cooler room, or shared spreadsheets via email, today
most teaisuseonline profectscheduling tools.
Typically,profectseheduling is just one feature within a larger project management software soution, and there
are many different places in the software where scheduling takes place.
es 0astsolüti@ns
 Project Management
(SPPU)
How to Schedule a Project
Before going deeper Qulck Read
scheduling into project scheduling,
ocCurs during
theplanning let's review
o What needs to be done? phase ofthe project the fundamenta ntals to project scheduling.
You have Project
o When will itbe done? to askyourself three questions start:
o Who will do it?
Once you've got answers
and resources. to these questions you can
milestones
The followingare begin plan dates,
1. Define Activities the steps needed to plat link activities, set the duration,
Breakdown Structure ; ldentfy and define to schedule a project:
the activities that you
(WBS) have to do
them by mapping and a deliverables in the project. By using a
2. Do Estimates
out the tasks necessary diagram, you
to complete them
can begin to take these wo
activities and organize
After you have in an order than makes
determine the the activities sense.
time and effort defined and broken
order to calculate it will take to down into tasks,
thecorrectschedule complete them
This is an essential
the next step, 1s to
3. Determine Dependencies piece of the equauon
completed. Tha's Tasks are not an
called a task dependency, island, and often one
cannot be started
One way to do this and your schedule until the other is
is by putting a bit of slack in is going to have to reflect
these
4. Assign Resources: The last step finalizing your schedule to accommodate these related linked tasks.
to be required to to your planned tasks.
get those tasks done schedule is to decide
just like the tasks. on time. For example assembling what resources are going
a team and scheduling
their time
Q.7 Explain SchedulingTechniques
in Detail
Ans.:
6 Marks)
Scheduling Techniques
The first two
techniques used by project managers
Review Technique (PERT). are Critical Path Method
You can usethesemethods (CPM) and Program
Evaluation and
known scope ofthe project. to calculate the assumed start
and finish dates, based on
the
1. Critical Path Method (CPM)

The Critical Path Method

helps jyou uncover the longest
shortest one. With the CPM you'll possible timeline
also be ableto mark critical for the project, as well as the

To use the CPM, you need ,.

the latter's delivery won'taffect schedule,
the
to know your project's scope and list
tasks and the ones that
may float. Changes in
.
all of the tasks necessary for its completion.
Next estimate how long each
task may take. After that, you should
tasks. This way you know which ones can also note all dependencies
be done separately, and which ones between the
completed. Lastly, add mllestones require previous tasks to be
and deliverables toyour project.
A critical path
helps to visuallze the project flow
deliverables are known. This technique may and calculate its duration when all
dependencies and
not be so handy if there are many uncertainties
2. Program Evaluation and Review Technique in the project.
(PERT).
Similar to a critical path, PERT away
is to visualize tasks flow the project
in and estimate the timeline based
on their assumed duration. This technique
also illustrates dependencies between
tasks.

es casy SoluionS

..
:
-

'
 Quick Read
52 bae?
Project Managenient
(SPPU). define tasks and their order first, sed
to
PERT, just like in CPM
you will need
consisting of these tasks, you caan
project using CPM,
To schedule a Using a network
framework similar to
your project's milestones. confidence:
on estimate different
timelines for a project depending on the level of

Optimistic timing
Most-likely timing
Pessimistic timing than estimates to
to CPM, PERT uses weighted average duratlon rather
Although it looks very similar
calculate possible timeframes. dependencies betweern them in order
this approach is also a need to know the tasks and
A disadvantage of
to fully benefit from this technique.
5 Marks
different cost components.
a8What is cost estimate of a project? Explain

Ans.: Cost Estimate

successfully finishing a project from initiation to;
A cost estimate is the sum of all the costs involved in classification divides
of ways but the simplest
. completion. These project costs can be categorized in a number
costs into two main categories:
costs: They are broadly classified as the costs that are directly
associated with a single area such as a
oDirect are expenses billed exclusively to a
specific
department or a project. In project management, direct costs products, fuel for
can include project team wages, the costs of resources to produce physical
profect They
risks.
equipment, and money spent to address any project-specific a number of
a specific cost and are instead incurred by
oIndirect costs : They are not associated with amounts. In project management, quality control, security
profects simultaneously sometimes in varying costs slnce they are shared across a number of projects
costs, and utilities are usually classified as indirect
and are not directly billable to any one project
expenses fall into more specific categortes.
Beyond the broad classiflcations of direct and indirect costs, project
Common types of expenses include:
objectlves.
oLabour: The cost of human effort expended towards project
Materials: The cost of resources needed to create products.
work.
Equlpment: The cost of buying and maintaining equipment used in project
any (vendors, contractors, etc.).
Services: The cost of external work that a company seeks for given project
o Software: Non-physical computer resources.
oHardware: Physical computer resources.
locations.
o. Facilities: The cost of renting or using specialized equipment, services, or
Contingency costs: Costs added to the project budget to address specific risks.

a.9 Discuss diterent Project Cost Estimation Techniques ? (8 Marks)

Ans.: Project Cost Estimation Techniques
Many factors affect project cost estimation making it dificult to come up with precise estimates. Luckily, there
are techniques that can help in preparing more accurate cost estimation.
Analogous Budgeting: Here, experts who have experience in similar projects are approached for help
Tho uo nm hintoinnl dot ha nornee * olnt hictoria! dato, try analogeus budgeting
which can show precedents that help define what your future costs will be in the early stages of the project.

CesC8SVSotutionsS
 Project Management (SPPU)
Statistical odeling:
drivers and then Statistical
modelíng, or
calculates parametri Quíck Read
changed. what those parametric budgeting also uses
cost would historical data of key cost
ThreePoint
Po Estimate: be if the duration
Another . or another aspre
aspect of the project is
most likely,.optimistic approach
Pproach is the three-point estimate,
andpessimistic ranges.
estimation. estiT which comes
Theseare up with three scenari0s
Reserve analysisThis then put intoan equation eve cost
approach tries to technique determines
wrangle uncertainty. how much contingency
oCost of quality: This techniquesuses money reserve must
be allocatea.
after the Project
comparingbids to address failures. This can
spent during the
project to avoid failures
fromvendors can help fine-tune and moneyapp ed
Bottom-up Analysis: also help figure out costs. your overall project
cost estimation. BUa
This technique
package is ofprime importance. supports the ideathatthe
individual cost each
be estimated to the Smallest By using the method, individual of activity or entire work
detail. scheduled activities
into a summary table that All estimates are
grouped and sorted or a work package can
isused fortracking, by categories and then gatherea
Top-down Analysis : control and reporting
This technique opposite purposes.
is
is determined at the projecr's beginning and to the Bottom-up Analysis. It assumes
the expert team needs that the overal budget
The technique allows determining to identify the costs of each
BreakdownStructure) the number of required work item.
which relects activities
the necessary work and tasks referringto the WBS
By using the WBS, the items and work packages. (Work
expert team can determine
within the fixed budget. They the quantity of the work
may decide to add items that can be delivered
budget or remove certain iteims
în the WBS in order to fit the
Cost EstimationProcess fixed

Determine Estimate Basis :

This step focuses on obtaining
developed projectscope and project information including
schedule details and all previously
The level of scope detail data from which a projectcost estimate can
varles depending on the be prepared.
include the design matrix and project phase, project type,
criterla,allassumptions and and project complexity but would
pertinent scope details.
The estimate basis should be clearly
documented and forms
prepared for each estimate. Each the beginning
of the following steps will add information of the estimate file that should be
a complete traceable history foreach estimate. to this file with the end result being
Prepare Bas Estimate: This step develops the estimatedcosts
escalation. These components may for all components of a
be estimated using different techniques dependingproject, excluding future
definition and the size and complexity on the level of scope
ofthe project.
The number and detail of components, estimated
may vary depending on the
inputs to this step inchude project scope detalls, project development phase. Key
Historical Databases and other
Market Conditions, and use ofInflation Rates. cost databases, knowledge of
A required
component of the base estimate step is. the preparation
of a Basis of Estimate document
describes the project in words and includes underlying that
assumptions, cautionary notes, and exclusions.
Review Base Estimate:This stepisnecessary to ensure that
o Assumptions and basis are approprlate for the project .

o The base cost estimate is an acçurate reflection ofthe project's scope of work
oScope, schedule and cost items are calculated properly and required components are
not missing or double
counted
Historical data, the cost based estimate data, or other data that was used reasonably reflects
project scope
and site conditions.
es basysOJUtion
 Quick Read
prot
management plan for a
Management (SPPU) a risk
Project i
step is part of developingmanagement ís an active and on
: This
Set Contingency management planning Risk minimizino
Determine Risks and component project events (opportunities and
integral of consequences of positive risk
andis an maximizing the probabilityand (threats) to the project objectives
process of riskevents cost
consequencesof negative included to derive a total project
probability and must be
the cost impact ofproject risks communicated to both internal
and
context of cost budgeting. the data is
In the Cost estimate should be
Estimate Communication Approach: determines what estimate information
Determine approach communicated, and when
constituencies. The communication information should. be
external how the
receive this information,
communicated, who should
should be
communicated. as part ofthe project
the information communication plan is developed
should be included when
the
Basis ofEstimate
documentcan be
information numbers. The
Cost estimate
words are as important as the the projectto others
management process. Often the convey key information about
as a communication tool to products ot the
used effectively Management Endorsement: Estimates are key
Review and Obtain decisions are baséd.
Conduct Independent documents upon which key management
process and are fundamental reconciled and revised
project management an independent review and then be
estimates should receive
Given their importance, all comments
independent reviewer presented to
as needed to respond to satisfactorily incorporated,estimates should be or baseline
comments have been developed for initial budgeting
Once independent review Management approval of estimates
management staff for approval. management process.
defined step in the project developed, should also be
definition is a
requirements change, or as design is
developed if project management comments, and then
approved
Revised estimates, typically necessary to reflect
staff, revised as
reviewed by management
Advantages of cost estimates businesscost
project specific cost, in turn also the overall revenues.
It helps in controlling the
costs accordingy work towards the expected
expenses and and
One can predict the future
as recordsfor the business.
Predefined costs can be maintained operations aim at
necessary to assurethat the. resources and business a.+ .
those actions that are
It helps in taking '
goals.
attaining the chalked objectives and
business.
term trends ofthe 2
is spending
:

Ithelps in analysing the long see if any componént of the busíness

can be compared to the budgeted to
The actual cost incurred
more than expected. component
terms of making an acquisition' factoring the cost
in
It helps in analysing the business positioníng
involved.

Improving Cost Estimates andcompleting it within the budget

challenges in controlling project cost
Project-based industries face major project. However, accurate
estimation at the beginning
mainobjectives of a
This issue is critical as it impacts the been found to be a major reason to
inaccurate cost
complexity, very often has
of the project isdifficult. Project
estimation. willassist for more
different complexity dimensions in cost estimations
Thus, identifying and consídering frame are the high-
results show that, risk, project and product size, and time
accurate cost estimation. Study
complexity dimensions, which need
moreattention in cost estimatlon.
..
impact
 Project Management (SPPU)
Below given is a summary
1.Knowledge of theidentified
five
55
themes that Quick Read
sharing system:A help in improving
to addresS complexity knowledge the cost estimaion
sharing
identify potentialriskS in cost estimation. Having a
system includes templates
templates, guidelines, and techniques
could be one
major role accurate way of knowledgestructured approach to go through
in cost
project examples,essons estimation. Hence, a basic
sharing, Also, item by
using and providing reliabie
learnt, and knowledge sharing system aa Pa
contingency calculation. quick questions answer couldincude
caused by thecomplexityThis system will act as a communication to ves/noor low/medium/high piev
2. Appropriate staifing
dimensionssuch
as degree of medium and reduce cost o
inaccurdi
: trust,
Because the efficiency It been found that project complexity
has
of thestaff has an
communícation quality, and rnisk.
reduces staff effciency and
implications.Therelore, impact on the time team fexibility.
appropriate staffing frame of the project which
caused by the complexity reduces the risk of coula ungB
dimensions such cost overruns. Mostly, the
stakeholder interaction, as knowledge inaccuracles a
and degree of trust. and experience, risk, projectand
impact on cost estimation Experience of staff product siz
ofthecomplex and capacity of the organization
Network projects. thus has an
3. enhancement: Meeting
cost and time constraintsrequire stakeholders' requirements is the ultimate
the estimator goal ofany project. Howeve,
overruns. Hence,
nework enhancement is to prioritize and manage those requirements to avoid cost
assumptions and restrictions the key to recognize
of the project can those requirements, based on
beidentified. which
4. Risk management : Conventionally,
risk
andhuman judgment. It has a potential management is mostly based on experience, assumptions,
complexity dimensions. Risk to cause costmisrepresentation.
plays a major rolein Risk is one of the high impact
consider all intangible risks linked cost averruns of complex
with projects as it is a challenge to
form risk team with the involvement of project complexity in cost estimation. Therefore, it is advisable to
project manager and cost
plan that shows the risks and how they estimator. The teamcould come up
with a
affect the cost.
5. Circumspect estimation
There is a relationship between accuracy of
complexity. Generally, costestimations
are prepared in the perspective the estimator and project
looked at in the perspective of recovery. of expenditure. But, they can also be
Time value of money and
the project is completed in a shorter span oftime. This would its recovery period can be capitalize if
bring in better returns on investment. d,
a.10 Explan ProjectBudgeting ? What are its characterislics?
Ans.:Project Budgeting 5 Marks)
Project budgeting is defined as the process of determining
the total expenditure of the projectL The accuracy
the project budgeting depends on the accurate of
and detailed cost estimation ofthe
delines any constraints like date, resources or budget. The project scope. The scopé also
expenses made behind the contingent action risk register helps to calculate types
of costs, the. :

and the expenses made to cope up with risks.

A well-researched and planned cost estimation and
budget is necessary for the successful completion-of any
project. Project managers need to thoroughly scope the project in order to secure
sufficient funding. Scoping
involves estimating labour hours, materials, supplies and other miscellaneous
expenses. Cost estimations and
budgets are a work in progress and should contain room for change.
Characteristics

Unbiased: A good budget is unbiased. It should not be made by someone

who would over or under-state the
numbers. The budget should clearly define the purpose of the project, what it will accomplish, what assumptions
are made, how long the estimâte is valid, and how much the project will cost.
tshould show all interested parties, everything relevant witheout holding back information. The budget shouid
beflexible, adaptable and provide a range of the costs involved. It starts out broad, and as various stages are
Completed, they are more accurately defined.

esDaSysolutions
 Quick Read
expense can
Unanticipated
(SPPU and budgets.
Project Management assess the accuracy of
cost estimates
are overstated also have negative
Management needs to estimates that unaffordable
Ccuracy: abandoned. Budgets and Cost by making itlook
being viable profect
resu in. theprojectaretooliberaltheycan killan otherwise understanding technical
diffi.
difficulties
consequences.Ifthey enough, not
thoroughly
fto cost estimates
and budgets
times not scoping the project not adhere
Considerations At common reasons why profects
do
making chan are the most
and can never be too detailed. other phases
Budgets and Cost estimates Management should consider how changesaffect
estimate, and keep all of
the
should be documented thoroughly, prepare the cost
EVery change to use a spreadsheet to
project A'simple, yet effective toolis .'
the t
importantdata visiblein cells, instead of
hidden in formulas.
prepare a project budget is
simple way to estimate costs and
An effective and phasing
Project Management Software: Most software has features that identify the types, quantities,and
use project management software. capabilities estimating the costs for individual
project pieces and
todifferent types of labour. It also has for large phases
of The pieces can differ in size and number froma few
projectbudget.
adding them togëther to reach a or thousands ofsmall tasks.
.
known cósts to hundreds
ofa projectwith Marks)
(5
11Write Shört note on Methods ofBudgeting 2
Ans.: Methods of Budgeting
Bottom-Up Budgeting
.
Bottom-up is a projectbudgeting
management techniqueinwhich the people who are going
to perform the work
are the employees, vendors and other project team
take part budgeting process. Typically those people
in the
members (WBS).
the project manager to develop estimates for tasks in the work breakdown structure
:They work with you combine them into
duration and cost at the task level lets
Setting the estimates of the amount of work,
.

estimates of higher-level deliverables and the project as' a whole.

cost and duration of project tasks. It also
Bottom-up budgeting is the most accurate approach to estimating the
team the opportunity to take part in
requires more time. This, budgeting technique gives the entire project
.
developing the budget used to measure their work
team commitment than other
As a result bottom-up budgeting tends to developa higher level of project
more time than.other methods.
methods. The drawback of the bottom-up approach, however, Is that it takes
Another problem is that you must wait. to know who will be on your team before you can do the bottom-up
budgeting
Bottom-up budgettngis away to estimate an overall value by àpproximatng values for smaller components
i

used to ereate aschedule or budget ..

and using the sum total ofthese values as the overall value. In project management, this type of estimatingis

Typically, the project work is broken down into smaller components and an estimate of duration and cost is
assigned to each component, The scheduleis determined by aggregating the individual duration estimates, while
the budget is determined by aggregating the individual cost estimates.
The advantage of bottom-up budgeting is that itleads to greater acuracy because ittakes into consideration
each component ofthe projectwork Accuracy is alsoachieved because the estimates for each component are
given by the individuals responsible for these components: the ones who know the work well.
The primary disadvantage of bottom-up budgeting is the time it takes to complete.
In order to take into

involved. N
:
.
consideration each component of the project work, these components
decomposition. This process is long, and can be even more
: i :
. .
must first be identified, through
so when a large amount ofwork or complex
work is
 Project Management (SPPU
vantage of bottom-up
nother dísadvant 5
budgeting
is not free. itionally, the
estimation is thát it can Quick Read
done be costly.Thet
completing the components. for each component The time spent decomposing project
work
ln general, bottom-upbudgeting
isis given by the individuals responsible
is not the best choice for
or projects that nave contracted resources for projects
that that do notallow for long periods
work golng to be completed.
is typically do not start on the of plannig
project much earlier
thanwhenne
Top-Down Budgeting
Top-Dowm budgeting
Is a project
individual tasks are apportioned budgeting technique in which
from it Youstart the overail project is estimated
from the first, and.
This type of project budgeting usually top of the pyramid and work
occurs when downwards.
fit within a predetermined funding level, particularlythere is a fixed budget and/or the scope
whenprojects ofthe project must
Top Down is the opposite of Bottom Up aren't blessed with rich resources
Budgeting, whereby
into the overall project estimate. Individual tasks are estimated
first and "rolled up"
In top down budgeing individual task
estimates are only as
derived from. If the overall esimate is accurate as the overall project
incorrect, nothing will estimate they are
make the individual task estimates accurate.
And because projects are normally tracked
via individual tasks, this
individual tasks are incorrectly apportioned, could lead to issues during the project when
even though the overall estimate
is correct
Advantages

Top-down budgeting can be very useful when cost

estimates are needed in the very early phases
This is typically when not much is known about the of a project.
project and very little information, if any, is available.
Since this technique is based on high level information, the estimated
cost can be calculated faster and with
fewer resources and effort. Therefore, it's a less expensive qulck method
for etablishing the projectbudget than
other cost budgeting techniques that require more detailed information, involving more
time and resources.
Another good advantage is that top-down budgeting gets greater commitment for the
project from upper-level
management, while relaying to the lower management staff expectations for the budget.

Most used Top-Down Methods

At the strategic level top down budgeting is used to evaluate the project proposal.Somedmes much of the
information needed to derive accurate time and cost estimates is not available in the initial phase of the project
Consensus Methods: This method simply uses the pooled experience of senior and/or middle managers to
estimate the total project duration and cost. This typically involves a meeting where experts discuss, argue, and
ultimately reach a decision as to their best guess estimate.
'

or
Ratio Methods : Top-Down budgeting usually uses ratios to estimate project times costs. Top-Down
cost estimate for
budgeting is often used in the concept or "need" phase of a project to get an initial duration and
the project
Apportionment is used when projects
Apportion Methods: This method is an extension to the ratio method.
historical data, budgets can be made quickly with
closely folow past projects in features and costs. Given good
little effort and reasonable accuracy. or
projects that are relatively standard but have some,Small variation
his method is very common in exposed to this process.
.

borrowed money froma bank to build a house has been

stomization. Anyone who has

eseasy-$olutions
 Quick Read
58,
(SPPU
Project Management 5 Marks)
used to forecasting Cost?
Describe strategles
a12 during a time of increased
uncertaintyty.
Forecasting Cost forecast thecost ofyour project
Ans.: strategies can be used to want in a
TheFollowing is never easy to know exactly the need or
wants of the stakeholders It of the needs and wants it's
almost
Knowthe true needs and Because of non-understanding
may seem simple upfront. can lead to unidentified goals and
expectations
project even if it project. This
requirements of the a deeper
impossible to identify the exact important to put in as much time as is required to get ensure
both sides of the table.
Therefore, it's to
on
understanding of stakeholder's expectations. So the first step to
an effectivly forecast project cost is
stakeholders and that these
identified, documented, and confirmed with all
project requirements are accurately
involved.
are communlcated toall parties without leaving any
While forecasting costs it's important to be realisttc
Know the changing circumstances: circumstances change, make sure to get input from all
applicable-
room for unforeseen changes, When time such as à pandemic
companies discover that during adverse
stakehiolders. This step is essential as most resources, labor, financing
your control can ímpact the cost such as the pricing of supplies,
Manyfactors beyond sure that the vendors
currency exchanges, and so on. Thus, it is important to make
product/serviceshortages, .
same time getting inputs from other stakeholders
on promises and a backup plan is ready. At the
deliver their
way in setting a more realistic cost
that can be met, even when
vendors can go a long
and vetting suppliers and
impact costs.
thereareunforeseen circumstances that you become aware of changes that might
Maintain effective communication with
the stakeholders Once
know what's changed, how it
your projects and stakeholders, it's critical to loop them in and let them
impact close to budget as
outcome, and what's being done to keep the expenses as
affects them and thefr project should know the root cause of any
maintaining the current project cost is not possible, stakeholders in
possible. If The important poini here is that uncertainty
overrunsto make informed decisions about proceeding. need to be made
potential sense, leaving other cost-related decisions that
broader such as a pandemic, is unavoidable, may circumstances
the manner. Stakeholders such as the customer need to decide whether the time or
in a timely
altogether.
are rightto continue, defer, or stopa pröject underestimated areas when managing
Manage Change: Change management is one of the most
dentify and communlcation and how processes
management specialists understand the importance of,
projectsProject process yet can significantly increase
costs
stakeholders. Something may seem like a slight change in any document,
impact specialists should work with project teams
to identify,
throw off budgets. Change management can push costs over
and internal and external changes that
communicáte the precise strategies to deal with
and
budget cost without establishing key
Key Performance Indicators You can't effectively forecast a project
Develop extent to
performance fndicators (KPIS). KPIS help you'
ascertain how much has to be spent on a profect, the
a few commonly
was planned, and so on. Here are just
which the project's actual cost could differ from what
essential to effective project cost forecasting:
knownand used project KPIs that áre
(ACWP). shows how much money has been
oActual cost (AC),also known as actual cost of work performed
Spent on a project to date.
estimated project cost is above or below the set baseline.
Costvarlance (CV) indicates whether the (BCWP), shows the approved budget for
Earned value (EV), aka budgeted cost of work performed
performed project activities up to a particular time.
(BCWS), is the estimated cost for project
Planned value (PV), aka budgeted cost of work scheduled
activíties planned/scheduled as of the repórtinig date
benefits have exceeded the
Return on Investment (RON shows a profect's profitability and whether the
COsts : O00
,

es 0aSSolutions
 Project Management(SPPU)n
59
. Quíck Read
P Oject Riskand
.

Financial Management
Q. 1 Dellne Risk ? *****

Ans.: Risk
Risk is inevitable 2Marks
condition that
in abusiness organizatlon
:

has a positive or when undertaking

negative effect on projects.
can affect your project for a project's objectives. PMI definesrisk as an uncertain
better or for worse. Basically, risk is eventor
However, the project manager any unexpected event
needs to ensure that
management in a that risks are
project. Risk Management kept to a minimal.
problems that may negatively is the process used This can be done having
impacta project's timetable. by project managers by a risk
to minímize any potential
Risk could be any unexpected
event that might affect
in a project. Unike the people, processes,
isSues, which are technology, and resources
certain to happen,
to tell when. Because of this uncertainty, risks are events that involved
project risk requires could occur but you may not
eficiently serious preparation be able
in order to manage them
Risks can be mainly
divided between two types,
project managers face only negative impact risk
negativeimpact risks as and positive impact risk. It is
identified, project managers there are not that
need to come up with mitigation positive impact risks too: Once the risk is
risk a plan or any other solution
.. to counter attack the
a.2 Explain RiskManagement?
Ans.: Risk Management '. 5 Mark)
Risk management is a set processes
of used to mínimise risks in the project
project is evaluated, and its strengths, weaknesses, execution. By Risk management
opportunities, and threats a
threats, a risk manager helpsmitigate are determined. After identifying
those threats and uncertainties to
any losses.It helps organizations ensure ensure that a project does not

. that they are aware of and well prepared result in

processes are to face risky situations. The
Risk management Planning
o Risks Identification
o.Qualitative analysis
o Quantitative analysis
Risk responses Plan i
Risks Controls
We will explore the inputs, tools and technliques and outputs (ITTOs)
of the risk management processes here:
1. Risk Management Planning
In this process, the risk management activities are defined, and
the major output of this process isa risk
management plan. This process is started when theprojectisconcelved and it continues through the
project. The goal here is toincreasetheprobablityofthesuccess of other risk management processes.
The major inputs to this processare theprojectcharter(thedocument which appoints the project manager
and provides high level description of the project),the project management plan (which includes the
schedule, scope and. cost baselines), and the stakeholder register (which contains all the project
stakeholders, and theirroles).

eS casy Solutions

.
 Project Management(SPPU)
60 Qulck
Read
n planning risk management, the project manager
must analyze the varlous risk attitudes (risk appetlte
thresholds, ànd tolerances) of stakeholders order
management activitdes in to determlne the appropriate resources and rlsk
requlred for the profect.
2 Risks Identilcatdon
The risk ldentiflcation
process involves determining
events. This helps the and documenting the rlsks that can atfect
project team to anticipate uncertaintles. project
The inputs to this process
include key elements of
quality, human resource the project management plan such as
and schedule management plans, the risk, COst,
stakeholder register, and scope baseline. Other inputs include
procurement documents and all the
about the risks that other project documents that can provide
a project may face. insights
To ldentify risks, the
project documents should
employed. Some ofthe be reviewed. Also, information gathering
recommended information methods should be
o. Brainstorming:This gathering techniques include:
involves bringing together multi-disciplinary
facilitator (usually the a team of experts,coordinated a
project manager) to generate ideas by
risks that might occur that are used to identily and categorize
on a project. the
Delphi Technique :
This is a way to gather consensus
independently. The goal of experts by seeking thelr
here is to ensure that the experts are opinlons
experts so as to eliminate not influenced by the decisions
bias. of other
Interviewing: This involves performing
one-on-one interviews with stakeholders
Root cause analysis : This to identify risks
involves analyzing a problem to determine
problem and to determine the underlying causes of the
if these causes are still project rísks
3. Qualitatlve Risk Analysis that should be documented.

The qualitative risk analysis

involves prioritizing risks for
The key here is to determine further analysis (quantitative analysis)
the most important risks so the or action.
risks. This is done by determining the project team can focus their attention
probability of occurrence of the on those
The major inputs of the qualitative risksand their impact on the project.
risk analysis process are the identified
plans and the scope baseline. Other risks, the project management
inputs can include industry studies and
projects. prior information from previous
Quantitative risk analysis
This process involves quantifying
the effect of the risks on the overall
, i

to have risks that have effects project objectives. It is notuncommon

that cannot be accurately measured
decide howmuch time and effort can and in this case a project manager
be spent exploring these risks. has to
The major inputs to this process include
the risk register, the risk management
schedule management plans. Other plan, and thë cost and
inputs to this process include external
internal organization information from factors in the industry and
prior projects.
5. Risk Responses Plans
After all the above analysis,
the project team needs to create a plan
that they occur. The pan risk process involves to respond to these risks, in
designing actions to take
the event
(opportunities) and to reduce threats advantage of positive risks
to the project objectives.
The core of planning risk responses are
the strategies for addressing
manoger wculd empoy lor the risks. The strategies
adticiaing iiuns is usuuy that a project
the resources (time, human and material pciiuii ui ine idkure of tihe risk, the inpact,
resources) available to the Project Manager. and

es bissotutions
 ProjectManagement (SPPU)
Quick Read
RisksControl
6.
The Risk controlprocess involves Implementing
rísk responses, identif
and secondary risks and ensuring that the ntfying new risks, monítoring esidua)
risk process ls effective
throughout the project
Inputs to the process would Include the project
manageme plan, the
performance information. ment risk register and the work

To control riSKS, TISKTeas5essments, audits and

analysis are carried out throughout the course of the
to determine.the impact ot the rlsks and the effectiveness proj
of their responses. A for effective control,
yariance analysis 1s also carried out,to
measure deviatlon from rsk
technical, Pertormance,of the project team the initial project baselines.
is measured regularly
to ensure that no quality 1Ssues have
occurred due to risk factors,

ceribe the role pi, RISK Management in Project Management ? (5 Marks)

Ans.
Role f Risk Management in overali Project Management
Risk management is an integral part of overall Profect Management. It plays
a prominent role in ensuring thar
n
the project is complerea the desirable way and problems that are encountered
are resolved in time. Folloing
are the roles played by Risk Management:
Evaluation of a
project: The first and the most vital importance of risk management is that it helps in
evaluating a project. Each step In the project is analyzed by risk managers
that help in the detailed
evaluation and exposes problemsand risks that are solved before the
project starts
oSuccessful Completion of a Project: Risk Management ensures probable problems are identified well in
time and handled ina planned wayifencounters. All this result into the successhul completion ofthe project
in terms of its deliverables.

Meeting the budgetary constrailnts: Delays and unwanted troubles have the potential to fail the project
budget out of control resulting Into financial losses. Risk management ensures that every possible trouble is
aken care of so that project cost doesn't cross the budgetary allocations.
o Maintaining Proactive approach: Risk management helps a project manager in maintaining proactive
approach towards project management asthe likely risky areas and situations are identifñed in time and the
soutions are prepared and placed at theright place and at right time to mitigate the risks.
t
Meeting the deadline : Because of riskmanagement a project is able to meet its deadline. The risks never
delay a project as they are handled in sucha way that their impact is minimum.
o Avoiding Losses:Because ofeffectiverisk management approaches, a project is completed successhully and
in the given deadline. All this ensures that the project does not suffer any losses. It remains profitable by
geting the expected returns.
5 Marks)
,4List the Steps in isk Management. 2
Ans.:

Stepsin Risk Management

.
a can
roject risk management plan is set of steps that identify, anticipate, and employ solutions in case the
project runs into issues/problems. A good project risk management plan can face unexpected problems that
arise, as the planner has taken into consideration all the possible scenarios that can go wrong while executing
theproject

esCasy-soluions
Project Management (SPPU). Quick Reac
aftecting the project by aro
An excellent project risk management plan can decrease the level of problems n
80%-90%, which is a good range to bein ae
It is essential for any project on the line to include a plan to manage the risks antcipated tor that project. A
projects have a percentage of risk hovering them and it alvays fals In need to have a project risk managemej
plan at hand.
The project risk management plan should contain the following attributes and elements:
Process: A process is adopted in order to ldentify, analyze, evaluate, and mitigate risks throughout the
project life cycle.
Budget: There is always risk on costing of the project as when the project starts there are bound to
be
changes as the project's proceeds. The method of dealing with such a change needs to be elaborated in the
project risk management plan.
Work Breakdown Structure: The strategies involved in the project risk management areto be transferred
to the WBS such ashow and when needs to be included in the project risk management plan.
Risk Register: The frequency of reviewing the risk register is an important part in the project risk
management plan. '

Roles and Responsiblities: When the project runs into an issue with risk attached to it, the plan will
let
the project member know about the in-charge of different scenarios.
Reporting Structure: This is the same as with the roles and responsibilitles butbriefly elaborates on the
reporting structure in the situation of encountering a risk and in whose hands do the decisions need to lie.
Risk Categories: Risk needs to be carefully categorized and slated for proper organization of information.

a.5 What is Risk ldentification?

5 Marko
Ans.: Risk Identification
As a project manager working on a new project, it's necessary for you to cary out a thorough risk management
analysis to ensure that the project is deltvered by an agreed deadline and at an agreed cost. Risk management
will ensure that the core functionalities of the project will be delivered and that the design standards willnot be
compromised.
.

The risk management process on a project consists of four steps:

o Risk identificatlon .
Risk assessment
oRiskresponse development, and
response control
oRisk
Risk identifcation is the process of listing potential project risks and their characteristics.The results of risk
identification are normally documented in a risk register, which includes a list of identified risks along with thelr
sources, potential risk responses, and risk categories.
This information is used for risk analysis, which in turn willsupport creating risk responses. lderntiñed risks can
also be represented in a risk breakdown structure, a hierarchical structure used to categorize potential project
risks by source.
Though the major work on risk identification is usually done in the beginning of a project it's important to
remember that risk identfication is an iterative process;, new risks can be identifed throughout the project lilfe
cycle as the result of internal or external changes to a project.

es easSolutions
 Quick Readd
anagement(SP
SPPU)
Project
ldentifyRlsks
Howto those events
volves preparing checklsts of potental risks and evaluating the Jikelihood that
invol
proc
pen on
experlence from
This happen on tthe project. Some companles and industries develop risk checklists based on
might :
projects.
on the
past can be helpful to the project manager and project team In identifyingboth specific risks
Thechecka sts experienc
Aid and expanding the thinking of the team. The past experience of the project team, project
on a
company, and experts in the industry can be valuable resources for identifyng potential risk
chethe
within
project. ome
sourcesof risk by category is another method for exploring potential risk on a project.
of risk
dentifying the
categories for potentlal risks include the following
examplesof
Technical,

Cost
Schedule
Client
Contractual
Weather
Financial
o
o Political
Environmental
o
o People
concentrated. This approach helps the project team
The result is a clearer understanding where risks are most
ot
identifying unknown risks and risks not easily
identify known risks, but can be restrictive and less creative in
WBS.
found inside the
Identification Essentials
continuousimplementation as new phases,
Risk identification is a.process of brainstorming. It involves
some essentials to
experlences, and viewpoints are íntroduced. Being vital to the management process, there are
risk identification that guarantee maximum results.
Participation: Face-to-face interactions between project managers and the team promise better and
Team
. more comprehensive communication. The team must feel comfortable to share and find hidden or
elusive

risks.
and appears as the risk management process proceeds. Keeping identifñed .

o Repetition: Information changesthe system is focused on mitigating the most prevalent issues.
risks current and updated means
method
Approach: Certain objectives require distinct approaches to best combat identification failure. One
causes, undesirable events, and map their potential impacts. Another is to identify
is to identify all root
essential performance functions the project must enact to be successful then find possible issues with each
function or goal.
DoCumentation: Consistent and exhaustive documentation leads and reliable solutions
to comprehensive
Most communication is recorded by a
1or a speciñc project or future risk management team's analysis.
risk prevention.
Project manager and data is copied, stored, and updated for continued
of a instead
ORoots and Symplums: Itis essential in the risk identification phase to find the root causes risk
the root cause, making it critical to
OI mistaking them with the symptoms.A symptom can be confused with
discover the orlgin of risks and denote what their symptoms are.

Ces c8sVsolitions
 Oulck Read
develop mltgari
EProject Management (SPPU) assessment tool that helps Sc
PDRI Is a risk within the defined project ope
(PDRI): assessment
Definition Rating Index magnitude, represented
roject the team's risk
high-risk areas. It faclitates detail ofindividualrlsks and their
PrOgramsfor further
and deadlines. It also provides
dget eventrees represent
a score. probabilistic rlsk assessments,
studies and Is supported by
Commonly used in reliability top the tree is the event andit
ventirees: faults related to it. The of
an event followed by all factors andevent, helping with likelihood visibility.
any condition that may lead to that (8 Marke)

a:6Describe Risk Analysis ?

Ans.
Key
Risk Analysis could negativelyimpact
process identifying and analyzing potential Issues that risks.
is the. of organizations avoid or mitigate those
ISK analysis projects. This
process is done in orderto help
ousiness initatives or
Risk analysis is done in two
ways:
oQualitative Analysis
oQuantitative Analysis
. Qualitative Risk Analysis It
a project from a particular risk.
analysis is the process of evaluating the potential losses to the underlying
Qualitative risk situatfon, knowledge about
known information about the
is analyzed using a combination of understood.
information that is not known or well
process, ànd judgment about the scale. Risks are
the identifñed project risks using a pre-defined rating
A qualitative risk analysis prioritizes on project öbjectives.
probability or likelihood of occurring and the likely impact
scored based on their equating to a 30%
ranked on a zero to one scale (for example, 3
Probability/likelihood is commonly
probability oftherisk event occuring)
a one to five scale, with five being the híghest
organizationaly defined (for example,
The impact scale is
as budget, schedule, or quality).
impact on project objectives-such
risks, either source-basedor
risk analysis also includes the appropriate categorization of the
A qualitative
effect-based.
Anälysis
1."Reasons to Perform QualitativeRisk more work to be done in
with competing demands there is often
as
Project managers and teams have to deal
ourwork becomes importánt
less time: Therefore,prioritization of necessary to discriminate
one or the other risk possible, the evaluation of risks becomes
As there is always analysis. This helps us
createsthe necessity for performfng a qualitattve risk
between different risks.Thus, it many risks, sometimes we also
responding to our risks. With
determine the time and budget to invest in response. Thus, we simply
probability and impact are not great enough to merit a
choose to do nothing if the
accept the risk.
necessary after risk factors have been entified. It should be performed for
Qualitative Risk Analysis is
or quality.
every project, no matter the size, deadline,
analysis examines every single risk that could lead to project disaster.
The reason being that qualitative risk
case scenarios" and how to avoid or handle the risks if they do happen.
It prepares the team for "worst

CesCasv-solutions
 (SPPUn
EProjectManagement
Methods of Qualitative Risk Analysls
scale istextual.
Here
coded, numeric, or
You
calculate
Quick Read
a combination
of all. " 10W, medium,
In this respect, the
e measurement or high probability.
is more detalled It also can be colour
in monetary (funding. expenses,
measuresini
than wíth
A.properly conducted
cted qualitatlive costs) and quantitative
schedule(days, risk
sk analysis. Quantitativ
risk analysis weeks,months
progres: With qualitative
quali highlights and years)term
risk analysis, potential
create a proper plan of action. you'll note fssues in
the complexity a project
ject that can or will limit
We consider fiveof themost of the risk,
usefulQualitative prob
robability, and
impact to
which are as follows: Risk
Analysis
techniques
o Delphi Technique: appled
pplied in project
management
Ths is a form ofrisk
toidentify, analyse and evaluate brainstorming.
risks on an individual Delphi Technique
other expert's risks,;and a risk makes use ofexpert
register is produced and anonymous ba opinio
the experts. through continuous basis, Each expert then
reviews
swIFT Analysis: Standing review and consensus
for "Structured
between
sWIFT applies a, What-1f Technique",
systematic,
investigates how team-basd
approach in
a
this is simplified
version of aHAZLOF
changes irom an a workshop
approved design, environment, where
Whatif considerations. This or plan, may the team
technique is affect a project
Risks. particularlyuseful through a seneso
in evaluating
the viability of Opportunity
Decision Tree Analysis:
Similar to Event
output, Decision Tree Analysis Tree Analysis,
but without providing
is most often used
there is uncertainty in the outcome to help determine a fully quantitative
of possible the best course
the initial proposed decision events or proposed of action wherever
and mapping the plans. This is done
occurring from the initial different pathways by starting with
decision. Once all and outcomes as
respective probabilities pathways and outcomes a result of events
evaluated, a course have been established,
most desirable of action may be selected and their
outcomes, associated
events and probability success. based on a combination of the
o Bow-tie Analysis : This is of
one of the most
mitigations. Bow-tie Analysis practical techniques available
starts by looking in helping identify
To the left, all the potential at a risk event and then risk
causes of the projects this in two directions.
consequences of the event are listed and,
event are listed. It is then possible to the right, all the potential
each of the causes and to identfy and apply mitigations
consequences separately, (or barriers) to
occurrence and the effectively mitigating
subsequent impacts, should the both the probability
risk still occur. of risk
2. Quantitative Risk Analysis
Quantitative Risk Analysis
is a project management process
identified risks on the that numerically analyzes
entire project objectives. The benefit the effects of
the quantitative risks to support of this process is that it creates
the decision-making information of
of project managers minimize
projects. to the uncertainty of the
This particular
project management process is used on the risks
that have been identifñedand
the Perform Qualitative Risk Analysis prioritized by
process that can substantially impact
project. the competing demands ofthe
Thus, Quantitative Risk Analysis
is used to analyze the effects of the risk on
in evaluating the the project objectives. It is used
aggregate effects of the risks that affect the project. It is important to take note
process is used that the
to provide numerical priority rating to the individual risks.

es Casysoluions
 Quick Read

66 comes to the assisti the

Management (SPPU) importance when it
ZProject
risk analysis is of
fundamental
action at the onset or r
prlor to
concept of quantitative team leader to take the level of risk that so maay
management approximate
:The
project
management team or the project appropriately ascertain the
and
project to adequately of projects.
the onset ofthe
the given project and or series
conduction of
exist in regards to the But
:
Analysis qualitative risk analysis.
Importance of QuantitativeRisk Individual risks are
evaluated in the
1 Risk Analysis: from the
individual risks.
Better Overall Project allows us to evaluate the overall project risk information or data we
desire
quantitative analysis made with all the
the decisions are rarely data than the
Decisions: Business moreobjective information and
Better Business analysis provides
decisions, quantitative risk still an estimate.
For more critical While the quantitative analysis is more objective, it is
profect manager estimated
a
qualitative analysis. estimates. For example,a
accurate
helps in preparing actually took twelve months and
Better Estimates: Tt months with a cost of Rs. 3 million. The project did a Work Breakdown
profect's duration at eight the fact that the project manager
for this variation is consider the potential
cost Rs.3.8 million. The reason work. However, the project manager failed to
Structure (WBS) and estimated the
on the schedule and budget.
impact of the risks (good and bad)
Analysis
2 Usage of Quantitative Risk
Quantitativè Risk Analysis is more often used for
Contingency Reserve for the schedule and budget.
Projects that require a times in a project).
Go/No/Go decisions which may occur multiple
Large, complexprojects that require the probability of
completing the project on
upper mànagement wants more detail about
Projects where
schedule and within budget
& Techniques
Quantitative Risk Assessment Tools limited to:
techniques include but are not
Quanttative Risk Analysis tools and values to determine
optimistic, most likely, anid pessimistic
This technique uses the
Three Poirnt Estimate:
thebest estimate choosing one or other alternatives.
the implications of
Decision Tree Analysis:Itisadiagram
that shows
reserves for a project
used to establish the contingency
Expected Monetary Value (EMV)- This method is
budget and schedule estimates to determine
This technique uses.optímistic,most likely, and pessimistic
Monte Carlo Analysis. the probability of
cost and project completion dates. For example, we could estimate
the total project company have an 80% probability of
wanted to
is a
completing project at a cost of Rs. 20M. Or what
a cost to achieve 80%7
ächieying its costobjectives. What is the
which risks have the greatest impact on a project.
Sensitivity Analysis: This technique is used to determine
identifies
analysis of a structured diagram which
* FaultTree Analysis (FMEA): This technique uses the
elements that can cause system fäilure.
(2 Marks)
Q7What is Finaciál Management ?

Ans. 1;
Introduction to Financlal Management

Forany business to establish and grow, finance as a resource plays a significant role. Large number of individuai
and group fail to get tinancing for their businesses even when ivey have d goui ousless uiuiei. ianý uc
who get financing at times don't know how to'effectively manage this scarce resource.

CBsbakIatins
 Project Managemcnt (SPPU)

Thus, it iS Of utmost imnor tance 67

thatal those
heir business need tohave good
h
who are
a understanding eitherwilling
costly sources of finance
inance nling to establish Quick Rea
less andt thesame
a
offinancial
time mnagement their businesses
The aim of this cha investmoney
With ora
or are running
and your huc 2ware of f judiciouslyin
udiciously
inthelenep
stablishing and running
running yourbusiness the they can ldentify the
effectivelu theirbusineses.
aa ems andconcepts
Describe Project Finance Structure that play an important
0.8 role in
5.:Project Finance Structure
Ans
Themostbasic and practicalthing required (5 Marks)
activities of any iness or project. to startaproject
source
ous sources. It is thefoundation ismoney.Capita
be obtained from various of project
apital is the
fund required
But it is finance. to inítiate the
come at a cost. important Finance
tobe judicious e nrequired for
any
aboutthe selecti project can
The finance structure decribes how a firm finances ection of the sources
as they
funds In short, project înance Structure its overallproject
isthe mixture operations
. From a technical spective,the project oflong:term by using different sources
sources o
finance of funds..
iect uses to finance its assets, structure
is the
day-to-day carefulbalance
Owner's funds and borrowed funds. operations, betweeneequity and
and future growth. debt that a
Capital Structure
FUNDS Owner's funds + is the mix between
Borrowed funds.
Owner's funds Equity sharecapital+Preference
EQUITY
sharecapital
+reservesand
surpluses+
+retained earnings
Borrowedffunds = Loans+Debentures+
Publicdeposits=DEBT
Project finance Structure is considered
optimal when
the value of the equity share the proportion ofdebt
and equity is
of the company
understanding of the cost and lowers the risk. Therefore, such that it maximizes
and risk associated with finance structuring
Debt and Equity. depends on the
Debt vs Equity '

Cost of Debt is lower than

the cost of equlty but Debt is
riskier thanequity.
oLender earns an assured interest and The reasons for
this are
repayment ofcapital.
o Interest on debt is a tax-deductible.
expense so brings
dividends are paid out down the tax liability
of profitaftertax. for a business whereas
o Debt is more dangerous for
the business as it adds to
reference to the payment of the financial risk faced
by a business. Any failure
interest or repayment of principal with
company. amount may lead to the liquidation
of the
Financial Leverage

The proportion of debt in the overall capital

of a firm is called Financial Leverage.
increases, cost offunds When overall debt
declines as debt is a cheapersourceoffunds. in the firm
When the proportion
of debt in the total capital is high then the firmis
calledhighlyleveredfirmbutwhen
proportion of debts in the total capital the
is less, then the firm will be calledlowleveredfirm.

4.9Explain Factors Affecing Project Finance Stricture

and itsImportance1
Ans.: Factors (5 Marks)
Affecting Project Finance Structure
Lash Flow Position A
: firm's ability to pay expenses and loans detemines debt capacity. Some firms
operate in
latiie financial environments affecting their ability to meet financial obligations. Ifa company has a fluent
cash
1Ow position it may
raise funds byissuingdebts. ".: 3
escasY SolutionsS
 Project Management(SPPU) QuickRead
58
erest Coverage Ratdo: (nterest Coverage Ratio is the number of times earnlngs before interest and taxes a
companycover the High-Interest coverage
of
interest obligation. ratio indicates that company has a sound financial
condition to pay interest
nterest Coverage Ratio (ICR) =Earnings Before
Interest and Tax (EBIT)/ nterest.
- Control Public issues damage the reputation of the firm and make vulnerable
it to takeovers. Debt generally
.does not cost dilution of control. To have
control, the firm must issue debt. So, there is a constant struggle over
whether to give up control or pay
more for capital.
eur on lnvestment: will be beneficial for a
Investment is higher than the
It firm to raise finance through borrowed fünds the return on
it
sure if it can cover rate of interest on the debt. But if the return is uncertain andthe company not
the fixed cost of interest, they should is
opt for equity.
Floatation Cost: The cost of issuing
securities, brokers' commission, underwriter's fee, cost
he lotation cost of public issue.Flotation of prospectils etc is
cost must be understood while selecting the sources of
thecost ofthe public issue is more than the floatation finance because
cost oftaking a loan.
Flexibility: Issuing debentüre and preference
shares introduce flexibility. A good financial structure flexible
and sound enough to have scope for expansion or contraction capitalization is
of whenever the need arises.
Stock Market Conditions: Conditions of
the stock market influence the determination of
depressíon, people do not like to securities. During the
take a risk and do not take interest in the equity shares.
investors are ready to take a During the boom,
risk and invest in equity shares.
Tax Rate : Interest on debt is allowed :

as a deduction; thus, in case of the high tax rate, debts

equity but in case of low tax rate are preferred over
more preference is given to equity.
The importance or Significance of
Project Finance Structure
Increase in value of the firm: A sound finance structure
of a company helps to increase the market price of
shares and securities which, in turn, lead 3

to increase in the value of the firm.

Utilisation of available funds:A good finance structure enables a business enterprise
funds fully. A sound finance structure to utilise the'available
protects the business enterprise from over-capitalisation
capltalisation. and under
Maximisation ofreturn:A sound finance
structure enables management to increase the profits
the form of higher return to the equity shareholders i.e., increase in of a company in
earnings per share. This can be done by the
increase in the proportion of debt capital in the finance
structure which Is the cheapest source ofcapital
Mininisation ofcostofcapital: A sound finance any
structure of business enterprise maxímises
wealth through minimisation of
the overall cost of capital. This can also be
shareholders
capítal in the finance structure as the done by incorporating long-term debt
cost of debt capital is lower than the cost of
capital sinc theinterest on debt is tax deductible. equity or preference share
Solvency or liquidity position:A
sound finance structure never allows a business
raising of debt capital because, enterprise to go for too much
at the time of poor earning, the solvency is
interestto the debt-supplier. disturbed for compulsory payment of
Flexibility: A sound finance structure provides
a room for expansion or
according to changing conditions, reduction of debt capital so
adjustment of capital can be made. that,
Q.10 What ís Project Feasibility Study?
How is it done?
Ans.: Project Feasibility (8 Marks)
Study
.
4 Eveiy new project is siarced
diier ptepainng atnd
is simply an assessment stuuyng a detaied roject feasibility
ofthe practicality otfa proposed Report. A feasibility study
plan or method.
 Management (SPP
Project you whether
example, it asks you have or can Quick Read
For ols and the otherTesources you create
peo the technology
havethe necessary?And, to do what you prop
willthe project oer propose? Do
you

,afeasibility
report
ea technical,
conomic,
is prepared after
uswh
hnical, etc. It tells us
te's
analysin
ysng the
a
whetner project
a the project get you
the ROlyou
project on different parameter
is worth the such as social,
le investment There can be many reasons investment as some
for in cases ject may not
be
onlyprevents
those resources from performing other this, Includingrequiring too many
a projec
tasks but 2any resources, which not
project that isn't profitable. DUt also also may
rn backby m cost more than an organization
woula
study is the foundation upon which your
pToject. A feasibility
project. std in
feasibility sthudyis project resides.
If it doesn't support your pro
don't have a i
the project life cycle
after the business case
well-designed feasibility study offers adetailed and completed.
has been cor
as a description sound background
of
project such marketing ot the product or service, the business relating to the propos
accounting statements,
manage research and Poicies,
policies, financial details of operations an
data, legal requirements,
rede technicali
precede technical development and tax obligation. uenesay
suchstudies and project implementation.
objectives
. ..
derstand thorougniy all aspects ol a project, concept, or plan
To ware of any potential problems
that could occur while implementing
To De the project
nine whethe
determine whether the project is viable, worth undertaking
To after considering allsignificantfactors,
Advantages
ntapes of thë feasibility stidy ln project management
are:

Jt helps to meet the objectives of the business.

t also helps to meet the expectations ofthe stakeholders.

project
O It creates more predictability about the
sucess.
. Itincreases the chances of project
It helps an organization in delivering the right products at the right time.
It identifies and resolves the potenial problems and issues much earlier.
o. Ithelpsorganizations to respondsto rlsks ontime.

oIt helps organizations in optimizing the use of organizational resources

It helps in managing constraintssuch asscope,quality, schedule, costs, resources which stops a project from
failing orsulfering losses

oIt :aids in deciding*' whether to start or cancel the project,

Components of Project Feasibility
success. There are ive major components of feasibility
A feasibility analysis evaluates the project's potential for
vamin are
study. These are separate areas that a feasibility study examines. They
available to the organization. It
Technical Feasibility: This assessment focuses on the technical resources
resources meet capacity and whether the technical
helps organizations determine whether the technical
systems. Technical feasibility also involves evaluation
team capable of converting the ideas into workling
is
technical requirements of the proposed system.
of the hardware, software, and other the project, helping
assessment typically involves a cost/ benefits analysis of
COnomic Feasibility; Thisviability,cost, and benefits associated with a project before financial resources
8anzations determine the project assessment and enhances project credibility-helping
ae allocated. Italso serves as an independent the proposed project will
economicbenefits to the organization that
eciS1on-makers determinethepositive
provide. : **
es bas)-S01uon
 Qulck Read
Project Management (SPPU) 70
aspect of the proposed project confllcts with
Legal Feasibility: This assessment investigates whether any say an organization
requirements like zoning laws, data protection acts or social media laws. Let's
egal
wants to construct new office building in specific
a a
location. A feasibility study might reveal the
organization's ideal location isn't zoned for that type of business. That
organization has just saved
was not feasible right from the beginning.
considerable time and effort by learning that their project
and determine whether
Operational Feasibility: This assessment involves undertaking study to analyze
a
Operational feasibility studies
and how well the organization's needs can be met by completing the project.
aiso examine howa project plan satisfies the requirements identified in
the requirements analysis phase of
system development
success; after all, a project will
Scheduling Feasibility: This assessment is the most important for project
much time the project
fail if not completed on time. In scheduling feasibility, an organization estimates how
will take to complete.
any constraints the proposed
When these areas have all been examined, the feasibility análysis helps identify
project may face such as
Internal Project Constraints: Technical, Technology, Budget, Resource, etc
etc.
o Internal Corporate Constraints: Financial, Marketing, Export,
Regulations, etc.
o External Constraints: Logistics, Environment, Laws, and
Conducting a Feasibility Study
Following step are used while conducting a feasibility study:
preliminary plan which focuses on
Preliminary Analysis: The study begins by outlining the or
Conducting a
greater than the supply, and whether the product
where the demand ís
an unserved need, a market
if the hurdles are too high to clear
service has a distinct advantage. It also determines orgánízation
Income Statement: This step requires. working backwards. The
Preparing a Projected needed to achieve that goal. This
from the project and then theinvestment
determines the expected income services are
income statement. Things to take into account here include what
is the foundation of an any adjustments to revenues, such as
reimbursements, etc
much theyll cost,
required and how success ofthe feasibility study. So, it
This is an important step to decide the
Conducting Market Research: Important that if the organization doesn't have the
possible. It's so
should be done as thoroughly as advantageous to hire an outside firm to do
so. The market research
resources to do a proper one, then it is importane
can realisticaliy be expectet froni theproject Certair
reveniues that competitíon, value of
gives à clear picture of the market, demographics, levels of
iníluence on the
considerations are the geographic expands.
market share ifthe market
market and organization's expected Once the groundwork of the
previous'steps.
managing Operations:
Creating Business 0rganízation and operations of the planned business
venture. It should
up the organization and things
has been laid, it's time to set investments and operation costs. These costs address
costs, fixed
be thorough and include start-up personnel, supply availability,
overhead, etc.
methods, real estate,
such as equipment, merchandising assets and liabilities the
Sheet: This includes an estimate of the
Preparing an Opening Day Balance includes item, source
o
accurate as possible. To do this, a list that
project is going to create. It
should be a consider are such things as leasing or purchasing of
created. Liabilities to
cost and available financing
is
receivables:
buildings and equipment, financing for assets and accounts are
land,
these steps are important, but the review and analysis
Reviewing and Analyzing All Data Al changes or
:

verythlng is as t shoud bé and nothing requires

opeiiuly iungiiuul io iüiuke sure iat look over the entire work one last time.
Re-examination o
moment to .':
tweaking. So, one should take
a
 (SPPU
Management
Quick Read
EProject 4
previous Steps
such as theincome statement
shouldbe done
aboutri analyzing xpenses and liabilities. This is
and compared expe
time think and managing,
up
alsothe
and come with any contingency plans.
Decision: You're now atthe point
to make a decision about
the project s
Makhat sounds simple, but all the previous steps we're leading whether decision-making moment A
to this i
fother
oherathings to consider belore making that binary choice
coupleof is whether the commitment is worth the
money and is it aligned with the organfzation's
elfort and strategi goals and long-term aspirations
time,
Financial Risk ? (5 Marks)
the types of
11List
ANS. FinancialRisk
Typesof marketrisk
A market risk is any risk that comes out of the marketplace in which your business operates. Ii
MarketRisk:probability of incurring a loss due to things like market volatilíty,
nrobability of hikes in interest rates or raw
to the
relates fluctuation in foreign curency values, etc.
costs,
material
Credit rrisk is the probability of the organization failing to pay to a creditor (such as a bank or a
redit Risk::

ther party (a supplier).

anothe, You may also incur credit risk by extending credit
to omers due to the
lender) or
them defaulting on payment
possibilityof
Liquidity risk is a situation of cash crunch. It affects your ability to meet short-term financial
Liquidity Risk: your
igudemands to
execute business transactions. Key sources of risk are probable cashiow problems, because ol
seasonal down in revenue, lack of buyers lor your assets or inefficient market.
like the
likelihood ofincuring a loss due to the negative effe cts of procedures,
0perational Risk: k: Operational risk the
is

policies you have in your business. Common sources include technical failures, fraud activity,
systems or
etc.
employee errors,

Financial Risk
Control
your business out of trouble. Financial risk
to control the nnancial risk in order keep
to
is important
Through a series of plans of action, we can
management, thus, becomes important for every organization.
organization. There are practices, procedures and policies your
identify and reduce the effect of risks on the
take on more risk than it is prepared for.In order to take
control of the
business can use to ensure it doesn't
financial risks, you need to:
identify and measure the risks
willing to accept
decide on the level of risk you are
identify cashflow problems
creditors
reviewyour înancial arrangements with
o be careful if extending credit to customers
diversify your income sources
regularly reassess your risks
(5 Marks)
Q.12 Explain Steps to control sinancial risks
.
Ans.:
sources or
identilying the financial risks, and their
Risk Exposure: Risk management starts by
ying company's balance sheet. This provides
a snapshor of the debt,
liquidity,
Causes good place to start is with the company is lacing You
foreig oA exposure, interest rate risk and commodity price vulnerability the
and cash flows
ExChange to see how income
should also examine the income statement and the cash fiow statement
so 1

organizattor S TISk pretie

fuctua
Ver tüme, and the impact this has on the
es kuliions
Project Management(SPPU) Qulck
:
Read
on the risks you
nrying the expoure: The second step is to quantify or put a numerlcal value
identified. Of eourse, risk is uncertain, and puting a numberon risk exposure will never be exact. Analysts tend
use statistical models such as the standard deviation and regresslion method to measure a company's exposti
tovarious risk factors. These tools measure the amount by which your, data points differ fromthe average or.,
mean

reparing plans of action After you've analysed the sources of risk you must decide how you wl act on this
intormation.Generally. you might consider the following actionsteps:
o Reducing cash-flow volatility.
o Managing operatingcosts
o Managing yourpaymentterms

oPutting rigorous billing and credit control procedures in place.

Understanding your commodity price exposiure, that is, yoursusceptibility to varíationsin the price of raw
materials.
aking sure the right people are given the right jobs with the right degree of supervision,toreduce the risk
offraud.
Performing due diligence on projects

'.

CesCasy-solutions
 Management(s
73
Project Qulck

ChapteroProduct:Daelopment
and Entrepreneurs
processof product Development.
o.1Explainthe
t (5 Marks)

Ans. Development
product
develelopment is the rocess of bringing an original product idea to market Although it differs by
Product
can essentially be broken down into five stages: ideation, research, planning, prototyping, sou
industry, it
costingB
and Many aspiring entrepreneurs get stuck on ideation, often because they're waiting for a stroke o
Ideat
ation:
1. reveal the pperfect product they shoud sell While building someching undamentally "new can be
nius to fulfhllin,
creatively ling, many of the best ideas are the result of iterating upon on an existing prodt
roduct.
yourproductiidea in mind, you may feel inclined to leapfrog ead to production, but that
arch: With a
become tep if you fail to validate your idea firstProduct Validation nsures you're creating
a misste;
an an won't sell.
aduct people will pay lor and that you won't waste time, money, and effort on idea that
and
you decide to go about validating your idea, it is important to get feedback from a substanial
However, compiled from doing
ence as to whether they would buy your prouct. The informatior
unbiased audienc also the
will allow you to gauge the demand for your product and
ation and market research
validati
product before you start planning.
of competition that exists
level take the ime to
produo
duct development can quickly become complicate it's important to
Planning:Since planning with a hand-drawn sketch
prototype.The best place to begin is
3. before you begin to build your possible, with labels
explaining the
plan
Will look like. The sketch should be as detailed as
product
of what your
and functions. you will need in order to
various features different components or materials
create a list of the components, but it should
Try to use
your diagram to be inclusive of all potential
does not need to
product to life. The list theproduct.
bring the you will need in order to create
begin planning what well before you
allow you to your materials should be considered as
quality of îmarket your product to
labels, and overall effect on how you
The packaging, stages. These will have an
consideration during the
to the sourcing and costing aspects of your product into
continue to take these
target customer, so it's important
your finished product
planning phase too. product developmentis to create a
phase during verstons of
goal of the prototyping Involves experimenting
with several
The final
4. Prototyping:
usually
mass production. Prototyping until you feel satisfied with a
sample for improvements
to use as a slowly eliminating options and making
your product, .*
materials
time to start gatheringthe
sample. satisfied with, itis chain # the
product prototype you're to as buildingyour supply
Once you have a also referred customers' hands.
5. Sourcing: production. This is
and securirs the
partrers
and
needed for
resources that are
needed to create a
product
manufacturing
and
.
getitinto a
related services,
you may also factor in
vendors, activities, for
involve looking
While this phase
wil! mainly choices at this
stage.
clearer pictureof
warehousing into your you should have.a
storage, shipping, and sourcing is done, information gathered
prototyping, and taking all of the retail price
planning, process of
After research, Costlng is the youcan determine a
LOSang: produce your
product
sold
(COGS) will be, so
that
wil! cost to goods
nat it adding up wtat
your cost of Solutions
4,and ese9s '**.
and gross margin.
 Project Management(SPPU) Quick
Read
Begin by creating a spreadsheet with each addltional cost broken out as a separate line item. Thicl
should
fnclude all otyour raw materals, factory set up costs manufacturing costs, and shiplng costs. costsl
It
importint to factorinshipping importfees,and any dutles you will need to pay in order to get your is
product into the customers hands, as these fees can have a significantimpact on your COGS dependin final
where you are producing the product on
Once you hav your total COGS calculated, you can come
up wlth a retall price for your product and subtra.
the COGSfrom that price to getyour potential gross margin, or profit, on each unit sold. act
a 2What isPoject organization? State its advantages K
&disadvantages.
i

Ans. 5 MarkK.
Product Organization
Production organization rèfers an organizatlonal
to structure formed as per the
kinds of departments can operate autonomously. product or service line. These
In a Product organization grouping of sales
efforts of a business is done as per and production
the line of products and services of the business.
chosen bybusinèsses when they have different This kind of organízation is
product lines and requir special
distributing them. expertise for marketing and
Such a structure offers better, co-ordínation which a key adväntage.
barriers among functíonal.specialists is It helps in reducing communication
working on same product or service.
according to: Product organization is
created
oThe particularline ofproducts or services
theyproduce:This is the most common
structure. Divisionsmanage product organization.
different products separately, ánd managers
chiefofficer or vicepresident. This product report to the relevant
model allows a company to up
that apply onlytoaspecific productor productline. scale efficlently and make quick decisions
oThe customers they deal with: large companies often meet the heeds of customers
or
motivations.Your businessmight
produce several products marketed
and decideits product organization should reflectthat. to different
with different incomes
portions of the market
oThe geographical area they,serve large
geographical area within a country companles have their businesses
or globe, For the easé spread in more than one
geographicalareas. of business divisions are created as
per the
The structure may have severali
layers.of managers and employees.
marketing team, own Each layer (divisíon) can
its sales team, and so manager have its own
product type, e.g sporting goods, house waresonA typically reports to
the head of the company by
human resources) may provided and general merchandise.
be Certain key functions
centrally, (e.g. finance or
mportance

It focuses on specifi market segments

Itis able tö meet customer
needs more éffectively
Knowledge or expertise can
be extended within spécialised
This structure divisions
responds to market
changes more flexibly
Itencourages positive and quickly
competitdon between
each department
t
coordinates andmeasures
the performance of each
Advantages division directly
.

Product organization
:
results Intobetter is based on particular
focus on developing
product lines
that are substantially
speciicmarket different from each
segments other wna
 Management (SPPU
Project
structure rs specialised expertise
This lor productlon Quick Read4
a few major customers that makeu and distribution
Ithelps mostof ofspecificproducts.
Disadvantages yourbusiness.

into duplicatior
tion of functions
may esult
resources and resources,
It eg, a different
wastage of sales team for each division which Is a
Technical pertise across maller unitshas to be developed
rivalries which is tedious
nurtures negative among a job."
divlslons
often
t
Aproduci organization over-emphasises on divisional, rather
than organisational
goals
results into losing central,control over each
Italso
separate division

process ofProduct.Planning.
3Explain the 5Marks)
Planning
Product
Ans. :
nlanning is the process ot ldentilying and creating a new product with
Product plann. its features, price, promou
distril ian. etc.
It also involves the tormaton of product policies and strategies. The purpose fit is to achieve
business goals.
lanning is comprised ot both the corporate plan as well as the marketing plan, based on which the
Product plan
made. Product planning invoives various other dedsions like designing, packaging and
product plans
pricing,and making alterations in the productas per the equírements of the customers.
labeling, branding,
alsoincludes
i improvements in existing products as well as removal funprofitable or marginal
Product planning Product
ludes product deslgn and engineering which is also called productdevelopment.
includ
products. It also with full scale
all activities starting with the conception of product ea and ending up
planning comprises
introduction of the
product in the market

objectives planning is to determine customers

Customers" Needs: The first objective of product
and Fulfil
To ldentify and efforts of the fim.
1.
the required products and services by uilizing the resources
design product planning is to
needs and then The second objective of
Weaknesses of the Firm:
Strengths and develop such products which reduce the.
2. To Determine weaknesses of the firm so as to effectively
and
determine the strengths strength.
empower its
weaknesses of the firm and third obfective is to ensure
optimum utilization of
Resources: The minimum cost lével of
To Ensure
Optimum Uilzation of product. Here, the objective isto maintain the
3. production
for designing and developing the manufacturing the product so as to make the
resources resources In
production whille allocating firm's
the survives in the
ensure that the firm
process cost-effective. product planning is to
to survive
Survival:Another objective ofperformanceofits productsinthe market. In order services.
4. To Assure Firm's depends on the in its productsand
firm's long-term survival incorporate innovationand renovation profit. For
future. A
level for earning
firm needs to
-

of time, the to enhance their sales effective its sale

for a longer period motive ofallthe firms is the product are
Sales: The main because when
a tool
To Enhance Level of product planning as
S objective, the firm uses
dcieving his
services at
will increase. goods and
,

customersquality integral part

províding are an
Importance planning helps in quality and delivery improving
Service: Product timeline.Properproduct repeat orders, and
1. Better Customer profltable
promised delivery customers, promoting
reasonable costs as
a per the confidence of
ng that wins
the .
eseasy-sojutions
ofproduct planning
relations with customers.
 Qulck Read
Project Management(SPPU 76 nventory at proper levels
in managing
planning and control helps and lowe
2.
er Control on Inventory: Product
inventory. It requires a mlnimum
inventory of
work-in-progresS

ereby reducing investment incustomer support. Product planning also helps in exerclsing better
control over
to give efficient
stock
raw-materials, which contributes to more effective purchases assessment of the needs and
totally based on the
Satisfaction: As product planning s to the
in Customer offered by the firms. This leads
Es products and services are
ns of the
Saistaction.
customers, only reasonable
Obsolete or useless products
are also eliminated through product
satisfaction is the end result
planning
of an effective product planning
which

mately helps the customers. Thus, customer

Product planning helps to fulfl custonmers' needs
making prolts out of it. PFor
*rontbility of the Product: Know the change in the taste
from time to time to
profitability, the firm undertakes various researches goes
cSring the customers. Based on the results
of these résearches, [irm
ana prererences, needs, habits, status etc. of
for product modification.
results in the effective and appropriate utilization of
Optimum Resource Utilization: Good Product planning resources
into the production process. Avoiding wastage of available
avalable resources and inputs which go
product planning.
and optimum use of required resources is one of the benefits of
. Good brand Image: A good productmakes a happy customerand creates
brand loyalty. Companies need a
systematized. This will help to meet its
proper system of product planning that helps in keeping everything profits, increased sales,
leads to customer loyalty, increased
orders in time, making its customers happy which
industrial harmony, and ultimately a good brand image of the business
(5 Marks)
a.4 Describe the ways to identity customer's needs.
Ans.
Identifying Customer's Needs
identified, selected and developed. Some give good
Every year and everywhere large number of products are very
reasons for both success and failure of a product but one
results while some others fail. There are many
important reason is the way you identify customer's needs.
benefit both in terms of earning profi and
Products are basically means to serve the needs of customers. They
of customers becomesa key when we look at several
solving an underlying problem. Thus, identifying the needs
that help us identify the right product such
possible products available for selection. There are several specific factors
encourage them to purchase it
as the added values that the product offers to consumers to
F am explaining some key approaches to identify the needs of the customers:
Here,
Observing Trends:
In almost every business area, there is a pattern of growth in terms of customer's changing preferences,
These
launching of new products, etc. Thus, it is important for you to observe and study these changes.
India
changes set trends. For instance, the latest Pay Pal report points to the fact that mobile transactions in
are
set to grow from 10% to 20% rate from 2020 particularly after the current pandemic. Such informatlon
that there is both a desire and a trend in our markets for mobile based shopping and other usage. So,
shows
an entrepreneur might fînd in this case an opportunity to buid a mobile application that help users get a
better experience and ease in doing transactions from major local stores.
Observing such trends can also be done through statistical reports which are published frequently based on
research done by specíalized companies and institutions. Some reports are free and some may not be free
particularly those which usually contain more valuable and detailed information.
 fSP
Profectanagement
Problem
Solvinga Quick Read
organizations
Very oftecess face problems
process of getting over,such whichhinder
in the problems. their growth
elrgrowth prospect and
specific product. Thus, recognízing proble The problems force prospectan therefore, they are always
areat way o identitying
them to think
kof
ol a
solutionby launching a
them is a great way of opportunities Cstomers and developtng
to invest.As entrepreneur, innovative products to solve
faced by customers ofspecificindustries an
and come one
one can ldentify the problems
timeof pandemic, up with a
During the virtual meetng soluio.
applications are
faced by people in perfonming their day-to-day being developed
professional as a solution to the prou
replace the existing clasSTOom style ching vrork. They
are also provit
proving a great tool to
dentifying Gaps in the Marketplace:
en observed over a
been 10ng pernod
It has companies
of time that there
always exist
customers that other do not serve because certain very speiic segmen
ity to create a niche they prefer target
opportunity, product or service to broader groups. This givesan
that serves
important toidentify the gaps that exist in the market to a small group of customers.
between theproducers Theretore, t
and the buyers.
Analysis of the pertormance of existingindustries:
dy of existing industries
n terms their profitability
ot
nities which are profitable and relatively risk free. utilization
An
can indicate promoting investinert
sries provides information about the potential for further examination of capacity utilízation of vencus
investments. Such
done region wise. Paricularly 1o proaucts study is more usefui if it is
which have high demand
production. for consumption and wide scope for
Analysis of economic and social changes.
A study of economic and social trends is helpful in projecting
demands for various goods
economic conditions and consumer prelerences provide and services. Changing
new product development
greater awareness of the value of opportunities. For example, a
time is dawning on public. Hence the demand
prepared food items, ovens and powered vehicles for time saving products like
has been increasing. The other change
analysis isthe increasing desire for lelsure that can be seen during
the and recreational activities. This
has caused a growth in the market
for recreational products and services.
6. Review of imports and exports: .

Analysis of import statistics for a period of five to seven years helpful

js in understanding the trend ofimports of
various goods and the potential forimport substitution. Indigenous manufacture
of goods currently imported is
advantageous for several reasons.[1 inproves the balance
t of payments situation. [2]lt generates
employment, and [3] It provides market forthesupporting industries and services. Likewise,
an examination of
export statistics is useful in learning about the export possiblities ofvarious products.
*

5 Explain Prototyping.and its advantages

? (5 Marks)
Ans.:Prototyping

tPrototype isan example ofaproduct you intend to manufacture on a much larger scale. Compared to
production.prototypinghas a high costperindividualunt.However,because you are only manufacturinga
al number of prototypes, your overall costs are significantly lower.
pes allow for design testing and evaluation; identifying and therefore eliminating potential problems

emass manufacture. Prototyping highlights any

Orelectronics, functionality and manufacturingprocess
challenges with the initial design, associated mechanisms

.
 Management (SPPU)].
78
Project Ouick
Advantages/Need/Purpose/Importance Read
a
the user experience.
When you have physical
you'understand in h
A prototype will help
way that isn't possible. if
a
it's just theoretietc
Just a theoretical
idea y
pròtotype design in a written
comprehend the
inventor's journal.
Can
Out
inan
consumer with a
research. When you present a potential havisualprototypo
A prototype facilitates market glean formation
informati
hands, you can
usetheir reactions to about your target
a physical object in their audiencoplace
Remember that your prototype is just a
passind ce.
final design.
A prototype improves your
next level of success, you'll need to identify flaws in tha in the overal
production process. To reach the
some hard work to remedy those flaws d
putin
ideas. Le's say youTe working on a prototype for
A prototype can spark other invention
realize the car should be controlled by a mobile app. Suddent Contro
and in the testing process you
importantly, you've identified an additional product thar
sh haveto
i0S and Android coders, but more ld exist
Prototyping Process
step în creating a prototype is to create a detaila
1. Createa detailed diagram or sketch: The first on sketr
as many ideas as possible în a visual manner ePt
or diagram. Your objective should be to capture erch
transter your concept sketches to a 3D modal
2. Create a 3D model: The next (optional) step is to
This will help youvisualize the product bette. You can also use this model to ereate a 3D printed 5Software
copy
your
prototype.
3. Create a proof of concept: How you build your first proof of
concept will depend on a numho
have a simple product that you've already modelled in a 3D software,
you can simply get it 3D printed
your "proof of concept".
4. Create your first prototype: Your proof of concept shows that your product works. Your 3D model showe
it might look like.Your next step is to combine the learníngs from the proof of concept and 3D model to
your first prototype.

Q.6 Define the Concept of Entrepreneurship? Explain ts charateristics and Benefits

ark
Ans.: Concept of Entrepreneurship
The word "entrepreneur is derived from the French verb enterprendre, whichmeans "to undertake This rer
to those who "undertake" the risk of establishing new enterprises. An enterprise is created by an entreprenenr
The process of creation is called "entrepreneurship"
.
Entrepreneurship is a process of actions of an entrepreneur who Is always in search of something new and :
exploits such ideas into gainful opportunities by acepting the risk and uncertainty with the enterprise.
Characteristics of Entrepreneurship:

Entrepreneurship is characterized bythe following features

oEconomic and dynamic activity: Entrepreneurship is an economic activity because involves thecreaton
it
and operation of an enterprise with a view to creating value
or wealth by ensuring optimum utilisation 0
Scarce resources. Since this value creation activity is
performed continuously in the midst of uncertal
business environment, therefore, entrepreneurship is
regarded as a dynamic force
o Related to innovation: Entrepreneurship involves a cóntinuous
search for new ideas. Entreprene
compels an individual to continuously evaluate nore
the existing modes of business operations so
efficient and effective systems can
be evolved and adopted. In. other. words, entrepreneu
continuous effort for synergy (optimization
of performance) in organizations.
,

CesCasysofutions
 ent(SPPU)
ManaKement
oject 19
tential:Profit potential isthelikely
rofit
Profit Quick Read
Pt
on the
rlsk
developing
nuld
an 1dea into
level ofreturn
an actual business or ensation to theentrepren for taking
remaln
eneurs would remaln only
ntrepreneur only an
an abstract and. venture.
abstractand Venture, Without
Without profit
a theoretical potential, the efforis o
profit pote
bearing: The essence
of entrepreneurship leisure activity.
Risk implementation of new
ideas. New ideasthe'willingness
is
ugness
and are always to assume risk
risk arising out of the creauo
instantaneous and positive "aays tentative and their results may not DE
oneur has to have
paience.to see
in entrepnnception his efforts
andimplementation of EIOTS bear fruit.
the intervening
In the
hetweereneur does not have an idea and intervening period (time gP
thewilingnesstoassume its results), an entrepreneu
sTesults), entrepreneur has to assume ris
risk, entrepreneurship
hip offers
offers the following benefits: reneurship would nnever succeed.
Eptrepreneurship

Development managerial capabilities : The biggest

significance
entifying and develop
developing managerial of entrepreneurshiplie
p lies in the fact that it
capabilities of entrepreneurs.
helps
oroblem,
ntifies
identifies its alternatives, compares the
alternatives
An entrepreneur dies a
in tems of
tnebest alternative nefits implications, and
cost and benefiis
imp
finallychooses
helbs
exercise helps in sharpening the decision making skills
This of an entrepreneur. Besides,
re used by entrepreneurs
are er in creating new these mane
abilities technologies
and products in place of older technologie
arnducts resulting in higher performance.
and
organisations: Entrepreneurship results into
eation f creation oforganisations
physical,
nhysical, when they assembie an
coordinate human and hpancial resources and direct them
towards achievement of objectives througn
managerial skills.

14
Standards of living: By creating productive organisations,
entrepreneurship helps in making a wide
h
variety of goods and services ava)lable to the society which results into
higher standards ofliving for the peop!e.
cession of luxury cars, computers, moDile phones, rapid
growth of shopping mals, etc. are
pointers to the
living standards of people, and all this is due to the eforts of
rising entrepreneurs.
feans of economic development: Entrepreneurship involves creation and
Mear use of innovative ideas,
maximisation of output from given resources, development of managerial skills,
etc, and all these factors are so
essential for the economic development ofa country.

0.7 Describe Entrepreneurship Skills ? (5 Marks)

Ans.: Entrepreneurship Skills

These are some of the necessary skills an aspiring or a-would-be entrepreneur should possess in order to
succeed as an entrepreneur.
Ability to Solve Problems: in this world, there is no entrepreneurship that will succeed perpendicularly.
Problems do arise but we should apply different tactics to handle them. Belore winning a battle, failures are
guaranteed. Have the skills to predict risks and come up with risk management plans to sove the problem.

Ability to Manage Money: An ultimate goal ofdoingbusiness is to make a prefit. How do you expect to manage
a business if you don't have the skills to manage money? Budgeting tor the bustnes wii alse be a big chalienge to
any business which is not well handled will result in a loss.
Networking with the Right People : Belore venturing into any business, you must set goals for it. Create the
gnt inkages and fish out resourceful people to acquire business ideas. Out ot the entrepreneurs, you spend
frum succressful ones and ask
In, define your role model and work towards achieving that Leom more
how they manage. Share as many challenges 2s possitle to get solutions to the prebieius allecting the
E
business.
 Project Manágement (SPPU) 80
oulck
Bullding Relation with Customers: In a real sense, business without customer is like de ReadA
In h
engagements, we either sell services or products. Make sure the Ideas he doei00d.
you employ, the decision
you
services offered meet customer needs. Do a lot of research where necessary to get a viable sol make
attract more customers.
e
and
acquired into the business so as to neskili
Being Resourceful: The moment an entrepreneur knows how to manage money; the next
how he can source for morè to pump the business to a greater profit. Have the capacity to idansteon shoa
funding. This also involves a convinclngvoice to sell out the business and attract more funding soro be
esof
Managlng Stress Emclently: Stress can kil entrepreneurs if not well handled and managed. The
be a time when all options that you try will hit the wall. Frustration occurs in the process of
Don't let stress put you down, instead, turn them into an opporu
t alw
Iways
8oPPIy useful tácties this
growth.
Capacity Building: Limited skills can affect the growth of a business. Enhance the team perform
them in key areas. Identily the gaps in each and every team member and planfor capacity-buildin
ty-building rainin
will give them the strength to handle complicated issues as commitment levels go high. sessions.
This
Learning Ability : The market demands changes and afects business every now and then, Dea
know every detail about your business. A business if strategized well moves very fast.Emerging ume
you
trendsshoul
monitored and applied with îmmediate effect to avoid business disnuption. be
Identifying Strength and Weakness : Nobody is perfect in this world.itis crucial to identify what vos
at (strength). Identify weaknesses so they don't overpower the strengths. Ihis will help making are
decision about your business. Acting on weaknesses with courage and sheer strength will
in ant00d
help you go
way e
a.8 Explain Characteristics of a Successful Entrepreneur
3
Ans.: Characteristics of aSuccèssful Entrepreneur Marks

The important characteristics of a successful entrepreneur are listed below:

Innovation : An entrepreneur is basically an innovator
who tries to develop new technology, prodtiete
markets, ete. Innovation may involve doing new thngs or doing existing things
differently. An entrepDrénent
uses his creative faculties to do new things and explóit opportunities
in the market. He does not believe in
status quo and is always in search of change.
o Assumption of Risk: An entrepreneur, by definition, is a
risk taker and not a risk šhirker. He is alwavs
prepared for assuming losses that may arise on account of new
ideas and projects undertáken by him. This
willingness to take risks allowsan entrepreneur to
take initiatives in dolng new things
and marching ahéadres
in his efforts
.:
oResearch: An entrepreneur is a practical dreamer and does a lot of ground-work
ventures. In other words; an entrepreneur before taking a leap in his
finalizes an idea only after considering a
analyzing their strengths and weaknesses variety of options,
by applying analytical techniques, testing
supplementing them with empirical findings, their applicability,
and then choosing the best alternative.
applies his ideas in practice. The selection an idea,
of
It is then that he
thus, involves the application of research methodology
by an entrepreneur.
o Development of Management Skills: The
work of an entrepreneur involves
which he develops while planning, organtzing, the use of mánageria skIs
staffing, dírecting, controllíng
of business. His managerlal skills and coordinating the activites
get further strengthened when engages
equilibrium betweèn his organization he himself in establishing
anditsenvironment.
,
Huwevel, when the size of busiuess grows considerably, an
managers entrepreneur can empioy pru essioat
forthe effective management of
business operations.

:
.
Ces casysolutiors
 (SPpuj 81 Qulck Read
2agemer
Managenment
Resistano makes
ct tance to Change New innovatlons are peneraly opposed bypeople because it
:

overcoming
roied eir existing
their
behavioural patterns. An ilevel.
entrepreneur always first tries new ideas at hi
change lable
availat
them sucessful impler
implementation of these
ldeas that an entreprene makes these ideas
the
onlyaferther
ioir benefit
Ih this manner, an entrepreneur paves
the way for the acceptance of
his ideas by
tIsothersfor rellelection of hls will power, enthusiasm and energy which overcoming the
a helps him In
to This is chan
ers.
resistance to
society's Developme An entrepreneur accelerating the
pac
Economic. plays an importa role in
madimizingtheir
t ofdevelopment
olapment of-
of a country by discovering new uses of available resources and
economic
utilization. Marks)
ropeity ights. Stalejits diferent forms.
8
IntelectualPr
Explain Propertyk ights
ctual dedicated
continuously
ntelle the world has been caused by numerous individuas who have the world
development.around something new, unique and beneficdal for the people and
theirint
AnS inotheir intellect to develop
The using
themselu sby brain used by the individuals their
The is intellectual property.
concepts, inventons
make human íntellect which includes creativity
property iis a product of
property
to Intellectual
trademarks,,songs, literature, symbols, names, brands, etc.
Thus, Imodels, individuals to contribute to furtier
industria). utnmost importance as it encourages the
property is of the fruits of this
Protection ofthis granted on it that allows its owner to benefit from
Therefore, Rights are by a statute.
tevelopment. a natural right So, it requires recognition
Such bbenefit is not always
give
endeavor.
ellectual leavor. minds. They usually
Intelle given to persons over the creations of their
are the rghts
roperty rights
property creation for a certain period of time
ntellectual over the use of his/her
exclusive right ove basis for crucial
reator an play a
kev role in every sector and have become the
(IPRs) strike a balance
property rights and therefore there is always a challenge to
Intellectual Rs are
exclusive rights
decisions. IPRs at large
invest nent and the interests of the society
o innovators
ts of
interests the interests of innovators
between the legal framework to protect
presence of an adequate further
important factor
is the
will be protected which turn will lead to
other intellectual property
Anot confidence that their
and inspire completely
owner to
innovation. rights, They allow their
not differ from other property
Rights do developed and crystallized.
,latellectual Property Initially an idea that
product which was
his/her product without
prior
benefit from his/her from using, dealing or tampering with
compensate for any
others
entitle him/her to prevent them and force them to stop and
They also fact legally sue
permission from
him/her. He/she can in
damages.
In most
forms of IPR particular product or asset.
declaring ownership of a has its
isn't as simple as protected. Each one
be legally
'Intellectual property protection intellectual property (1P) that can
categories of
countries, there are two
and costs.
Own attributes, requirements
categories, are: models and
Intellectual properties, divided into two industrial designs and
inventions (patents), trademarks,
Property, which includes
Sal source plays, films,
musicals, cartoons
geographic indications of namely novels,
poems,
artistic works,
which includes literary and
YBht, architectural designs.
Pmangs. photographs, statues and CaSy-5olutions
Ces
 Quldk
Project Management (SPPU) Read
:

1 Patents as A government authority

or
most important types of lIPR. It is defned
Patents are oneofthe time. It is the sole right to
exclude others from making
making
using, or
a right or titte for a set period of sellinging
an
invent or come up a
win new way of doin
Invention.":When individuals or organizations process, and get protection forething
them details about the productor
approach the patent office, give years and extensive resources devel2
justified these individuals invest neningsomething
or a fee. This is because
efforts. Patents act as an incentive for inventing
their oducts
and would like to be compensated for growth. Patent protecion
an integral part of a culture of innovatlon and onlyfora
Processes. They form
limited period, say 10 or 20 years.
Process of Securing à Patent
followíng steps
long-term process. It goes through the
Securing the patent of an invention ísa
completely. A provisional
sional application
application for a patent can be made provistonally or
OAn the invention is not finalized. It giveetheapplicantis.a
temporary application which is generally filed when
finer detailsand provide a complete
specifica a
time period of 12 months to finalize the
in China on 1June 2009 and subseoues
:

When a patent application is filed for instance uently

application is filed in India on 5h May 2011, priority date will be considered as 1 itne 0ther
on 1st January 2010, priority date shall be 1st [anuan an
application is only fled in India for instance 10.This
no your invention anywhere, then the date of anni
implies that if there has been application filed for plication
becomes the priority date.
O, Once an application is
filed, it takes about 18 months to have the application enter publication f

However, there are prouieia

application enters publication, a request for examination can be liled.
reduce the time of 18 months generally taken for publication by filing a request for early publication.
A request for examination can be filed within 48 months of the priority date. Indian Patent Ofice wil. not
examine an application until the request for examinatión has been filed, hence lt is an important step.
Once the Indian Patent office recelves a requestfor examinatlon, the applcation is placed in queue for
review/examination. Once examinatión of the applicatonhas been conducted, the patent offce wil ither
be of the opinion that the invention/application satisfles all the requirements and subsequently patent will
be granted or there wtllbe oppositons ralsed via First Examinatlon Report.
applicant ortheir representativeshave a timeframe of6 months to replýto the First Examínátíon Report
An
from the date of its Issuance. Itis always advisable to file a reply as soon as possible so
that
the patent oflice
can examine the response and issue another examination report if needed. This timely response is
imperative snce the applicant or their representatives have à total of 6 month from the date of issuance of

l
the FER (First Examination Report) to respond to the examinatlon reports if there are more than one
oThere is also an additional provision of requesthng a hearing ater the First Examination Report. Past the
hearing/fling response to the examination report, the patent ofice will either proceed with grant of the
patent or reject the application.
If the applicant wants to appeal against the decision of the patent office of rejecting the application, they ca
reach out to the-intellectual Property Appellate Board (IPAB)
who are authorized to hear such appeals
2. Trademarks
Trademark is another important intellectual property right. Among ectual
the different types or
property rights,it holds an important position as it uniquely
. identifies a company or a product
12

es68ssoluions
 Man2gement
(SPPU) Quick Read
33

word or
rolect word or symbol that represents qualiy Jor
trademark Isa a and or a
identifes a product or
brand. To
services of an
and uenthes
Drotection, the productmust
A
mark be
be distinctve; it must distinguis thegoods or
also a
tan from
organization the
from those ot others.irademarks
grant exclustve rights of use the
owmers. is It
ofa
use to
standard and
.ative of a brand companys standing to cOmSumers- an assurance of a certain
representative

quality andmoney o
al property protection isvital for trademarks be e Companies invest a lot of time deceiving
jnt brands. They never ant someone seling its products or services using their trademarks,
designs
devers and leading to loss of moneyand reputation. Trademarks can include1 ames, Jogos and
packaging or t e products themselves.
usedin
Copyrights
epres inchuding but not
protect the
the expression of an idea. The expression can be in various forms,
3 Copyrights pictorial, graphic
imited
to literary, musical and dramatic works, motion pictures ánd sound recordings,
sculpturala , and even computer progran
ands wor
the owner exclusive rights to copy, modlfy, distribute, perform and isplay his/her
hts give
oDYrights last for the lifetime of the creator plus 70 years. You may come acrosS ne
ting the
served' while watching a movie, buying a book or à DVD. This is fust a way of
Reserve can
Rights
movie, book or DVD, and no one
indicating that the copyright is held by the publisher,
ents of the
material in any form without their consent.
use the
to an original work- whether it's a movie, book, music, computer
software o a
vright ís granted the power to
are two aspects to copyright- moral and economic. Moral rights give authors
inting, There nutilated form.
identified as authors of a particular work and to objectif it is prešented in a distorted or
be iden
more tangible and gives the author to control the use of
his or her creation and reap
The
economic right is
from it
economic rewards

TradeSecrets
4. competitive edge or some
intormation that, by remaining covert, offers a business a
Atrade secret is any maintain its secrecy in order for the
reasonable actions mut be taken to
economic value. By definition,
a secret.
information to be considered trade
information which may be sold
or licensed. The unauthorized
secrets are 1P rghts on confldentlal
.Trade contrary to honest commercial
of such secret informaton in a manner
acquisition, use or disclosure.
violation of the trade secret protection.
regarded as an unfair practice and a
practices by others is
suggests, it refers to the secrets of a business,
aspect of lPR law. As the name
Trade secrets are an important
secret is leaked, the business may
advantage over others. In case the trade
which helps it gain an economic
secrets can be in the form of.
suller numerous losses and
ireparable damage to reputadon. Trade
compilation or combination
composition, process, design, method or
confidential information, data, formula,
with the buslness alone
ofone or more, which should remaln claims and
registration. Unlike patents, where all the
secrets are accorded protection without any
Irade application is fled, It is not posslble to follow
the
processes enter the public domaln as soon as the patent Coca-Cola. fact that
same is the recipe of It is a
formidable example of the
Same process with trade secrets. A officials.of Coca-
cause the recipe to be leaked. The
ne recipe of Coca-Cola was never patented, as it
would
onehalf
that the two employees who know the recipe, only know
LOja are so particular about it that it is sald
plece of Information.
ol it each and no one knows the recipe as a single

Ceseasy-solutionS
 Qulck
Read
84
FProject Management (SPPU
company by issuing
Licensing company authorizes another
arrangemernt, wherein a name,
as a business mantufacturing process, brand
Licensing is defined property rights, ie.
under specified
access its Intellectual
a license to temporarily secret, etc. for adequate consideration and
patent, technology, trade
copyright trademark,
conditions is the licensor and
the firm to whom the
its intangible assets for the use of
another firm to use lHicensor to the licensee
Thefirm that permits licensee. A fee or royalty is charged by the
lfcense is issued is the
intellectualpropertyright. and sold, by local bottlers
Coca-Cola and Pepsi are globally produced
licensing system,
For example: Under
in different countries. a company rents out its
product-based
simplest form of business alliance, wherein
In finer terms, it is the entry to the market.
knowledge in exchange for

6. Franchising organisation to an individual or

defined as an exclusive right conferred by the parent
The term franchise is Franchising is a business
model, in stipulated areas.
enterprise to use the former's successful businss business system and
wherein the owner authorises another pårty to use their brand, product,
relationship;
process in return for adequate consideration.
another firm, the nght to
terms, franchising is an arrangement, in which the manufacturer, permits
In finer know-how, designs,
trademark, brand name, technical
use its diverse intellectual property rights such as E.g. Pizza Hut, Mc
to the proven name, goodwill and marketing strategies, for a certain sum.
etc, in addition
Donald's, Domino's, Dunkin' Donuts, etc.
individual or entity to whom the
is called franchiser, and the
In franchising the firm that grants a license franchise by paying initia start-up and
annual
right is conferred is franchisee. The franchisee acquires regular
training and assistance to the franchisee at
icensing fees to the franchiser, whö în return provides
intervalsi are given, and
between both the parties, under which rights
Franchising Agreement is a special agreemnt
franchising are stated clearly.
also the terms and conditions relating to O00