What is a Project?

 A project is a temporary endeavor undertaken to

produce a unique product or service.

 Characteristics of Projects:
 Temporary – Definitive beginning and end
 Unique – New undertaking, unfamiliar ground.

 Project success:
 Customer Requirements satisfied/exceeded
 Completed within allocated time frame
 Completed within allocated budget
 Accepted by the customer

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Project Failure:
Poor requirements gathering
 scope creep
Unrealistic planning and scheduling

Lack of resources

Définition of Project Management:

 Project Management is the application of skills, knowledge, tools and
techniques to meet the needs and opportunities of stakeholders for a
project.
 The purpose of project management is prediction and prevention,
NOT recognition and reaction.

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Triple Contraint
 Project management process:

Time

Quality
Cost Scope
Triple Contraint
 IncreasedScope = increased time +
increased cost

 Tight Time = increased costs + reduced scope

 Tight
Budget = increased time + reduced
scope.
Key Areas of Project
Management:

 Scope Management
 Issue Management
 Cost Management
 Quality Management
 Communications Management
 Risk Management
 Change Control Management
Project Life Cycle

1. Formulation / 4. Closing/
2. Planning Phase 3. Implementation Phase
Start Phase Termination Phase
1. Formulation Phase:
 Define the need of project
 Return on Investment Analysis
 Make or Buy Decision
 Budget Development
 Determine goals, scope and project constraints
 Identify members and their roles
 Define communication channels, methods, frequency
and content
 Risk management planning

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2. Planning Phase:
 Resource Planning
 Work Breakdown Structure
 Project Schedule Development
 Quality Assurance Plan

3. Implementation Phase:
 Execute project plan and accomplish project goals
 Training Plan
 System Build
 Quality Assurance
 Monitoring and controlling is done

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Closing/ termination Phase:
 Contractual Closeout
 Evaluation of project
 Task or goal achieved
 End process of project
 Profit /loss

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 The 7-S framework provides a comprehensive set of issues that need
to be considered. It also allows classification of tasks within the
responsibility of the project manager, which reduces the complexity of
the role. In addition, classifying issues in this manner ensures that the
project manager will know where to look to find sources of help if novel
situation arises. Knowing that interpersonal problem in a team are
aggravated by the style /culture that a project manager promotes
provides a means for finding solutions to the problem
7-S Framework of McKinsey
 The 7-S framework of McKinsey is a Value Based Management (VBM)
model that describes how one can holistically and effectively organize a
company. Together these factors determine the way in which a
corporation operates. The 7's of McKinsey Framework are listed below:
 1. Shared Value
 The interconnecting center of McKinsey's model is: Shared Values.
What does the organization stands for and what it believes in. Central
beliefs and attitudes. Shared values are commonly held beliefs,
mindsets, and assumptions that shape how an organization behaves its
corporate culture. Shared values are what produce trust. 10
 They are an interconnecting center of the 7Ss model. Values are the
identity by which a company is known throughout its business areas,
what the organization stands for and what it believes in, it central
beliefs and attitudes. These values must be explicitly stated as both
corporate objectives and individual values.
 2. Strategy
 Strategy are plans an organization formulates to reach identified goals,
and a set of decisions and actions aimed at gaining a sustainable
advantage over the competition. Plans for the allocation of a firms
scarce resources, over time, to reach identified goals. Environment,
competition, customers.
 3. Structure
 The way the organization's units relate to each other: centralized,
functional divisions (top-down); decentralized (the trend in larger
organizations); matrix, network, holding, etc. Structure is the
organizational chart and associated information that shows who reports
to whom and how tasks are both divided up and integrated.

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 In other words, structures describe the hierarchy of authority and
accountability in an organization, the way the organization's units relate
to each other: centralized, functional divisions (top-down);
decentralized (the trend in larger organizations); matrix, network,
holding, etc. These relationships are frequently diagrammed in
organizational charts. Most organizations use some mix of structures –
pyramidal, matrix or networked ones – to accomplish their goals.
 4. System
 The procedures, processes and routines that characterize how
important work is to be done: financial systems; hiring, promotion and
performance appraisal systems; information systems. Systems define
the flow of activities involved in the daily operation of business,
including its core processes and its support systems. They refer to the
procedures, processes and routines that are used to manage the
organization and characterize how important work is to be done.
Systems include:

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 – Business System
 – Business Process Management System (BPMS)
 – Management information system
 – Innovation system
 – Performance management system
 – Financial system/capital allocation system
 – Compensation system/reward system
 – Customer satisfaction monitoring system
 5.Staff
 Numbers and types of personnel within the organization.
Staff" refers to the number and types of personnel within
the organization and how companies develop employees
and shape basic values.

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 6. Style
 "Style" refers to the cultural style of the organization, how key
managers behave in achieving the organization's goals, how managers
collectively spend their time and attention, and how they use symbolic
behavior. How management acts is more important that what
management says.
 Cultural style of the organization and how key managers behave in
achieving the organization goals. Management Styles.
 7. Skill
 "Skills" refer to the dominant distinctive capabilities and competencies
of the personnel or of the organization as a whole.
 Distinctive capabilities of personnel or of the organization as a whole.
Core Competences.

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 Complexity of projects
 Assessing the Risk Profile of a Project must take Account of
it’s Degree of Complexity: The word “complex” originates from
the Latin complexus and may be defined as a whole made up of
obviously interrelated parts where knowledge of the degree and
nature of the relationship between them is uncertain or imperfect.
It continues to be a high number of significant project failures
(frequently covered by the media) which suggests that current
project and risk management methodologies are not working.
Simplistically, for construction projects, failure is commonly
reported as schedule and or cost overrun whereas for other
industries such as information management, projects failure may
focus on the lack of realization of user requirements. This failure
is qualified in part to poor management of emerging complexity
which is not clear at project start
 (1)The ability to promptly and successfully manage emerging
complexity will determine project success. As a consequence
there is increasing agreement that an understanding of the
source and following management of this complexity is important
for project goal achievement.
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 Complexity of projects
 This agreement is accompanied by a firm increase in the number
of articles and papers appearing in the project management
research literature associated with the subject of complexity. A
clear message that can be drawn from the literature is that
specific approaches are required to manage complexity. In
addition, as complexity increases, the suitability of linear
sequential management approaches decreases
 (2) and the exposure to unknown risks

 (3) together with the difficulty in predicting the possibility and

effect of potential imaginable risks increases.
Hence while the practicality of applying risk
management at project start (and periodically thereafter) to support
informed rational decision making has been rewarded on simple
projects, on more complex projects a more in depth approach is
required.

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 Complexity of projects
 A further attempt at defining project complexity is founded on two key
concepts differentiation and interdependency, where differentiation refers to
the number of varied elements and interdependency to the degree of
interrelatedness amongst those elements, Baccarini describes technological
and organizational differentiation and interdependency as follows:
 Technological complexity: ‘differentiation’ would mean the number and
diversity of inputs, outputs, tasks or specialties; ‘interdependency’ would be
the interdependencies between tasks, teams, technologies and or inputs.
 Organisational complexity: ‘differentiation’ would mean both the number of
vertical hierarchical levels and the number of horizontal formal organisational
units, division of tasks and number of specializations etc; ‘interdependency’
would be the degree of operational interdependencies and interaction between
organisational elements.
 Amongst the latest contributors to the subject of complexity are Remington
and Pollack(12) who suggest four sources of complexity which will influence
the selection of methods of identifying and managing risks: structural,
technical, directional and temporal, as described below.
 Structural complexity stems from the difficulty in managing and keeping track
of a huge number of different interconnected tasks and activities (commonly
associated with large construction, engineering and defence projects).

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 Complexity of projects
 Technical complexity is found in projects which have technical or design
problems associated with products that have never been produced before, or
with techniques that are unknown or untried and for which there are no
precedents.
 Directional complexity originates from uncertainty related to multiple
potential understandings of goals and objectives and is found in projects which
are characterised by unshared goals, unclear meanings and hidden agendas.
 Temporal complexity is found in projects characterised by shifting and
unexpected environmental impacts, unexpected legislative changes or the
development of new technologies.
 From their research, Remington et al(13) identified a large number of topics
which they grouped under seven complexity headings which they labelled as
‘themes’. The topics under the themes have been summarised here. The topics
included under the theme ‘management processes’ appear to relate
predominantly to procurement and hence the theme title appears
inappropriate. These themes introduce the dimensions of cultural and language
differences, stakeholders and procurement.
 Goals: Unrealistic or unclear goals.
 Stakeholders: The requirement to manage multiple and or changing senior
stakeholders (with corresponding changes in requirements).

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Project environment:
Virtually all projects are planned and implemented in
a social, economic, and environmental context, and
have intended and unintended positive and/or
negative impacts. The project team – starting at the
top with the project manager - should always consider
the project in its cultural, social, international,
political, and physical environmental
contexts. Perception of the project from these
standpoint will help the team prepare for issues, plan
for risks, and better understand that factors at work
around, and possible even against, your project.

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Project environment:
 Factors the project team have to understand:
 Organization Cultural norms and behaviors
 May be a global company and you are given a project
in a different country
 Don't want to make a cultural mistake and not even
know it
 Social environment
 International and political environment
 Physical environment
 Project alignment to strategic objectives

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 Cultural and social environment. The team needs
to understand how the project affects people and how
people affect the project. This may require an
understanding of aspects of the economic,
demographic, educational, ethical, traditional,
religious, and other characteristics of the people
whom the project affects or who may have an interest
in the project. The project manager should also
examine the organizational culture and determine
whether project management is recognized as a valid
role with accountability and authority for managing the
project.

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International and political environment. Some team
members may need to be familiar with applicable
international, national, regional, and local laws and
customs, as well as the political climate that could
affect the project. Other international factors to
consider are time-zone differences, national and
regional holidays, travel requirements for face-to-face
meetings, and the logistics of teleconferencing. This
certainly comes into a bigger view for remote project
managers working with virtual teams stretched across
a country or around the world. This wasn’t nearly the
common occurrence 20 years ago that it is today with
our ability to use technology to collaborate with our
team at a moments notice from just about any
location

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Organizational strategy and projects:
Multiple competing projects, limited skilled resources, single virtual teams,
time to market pressures, and limited capital serve as forces for the
emergence of project portfolio management that provides the infrastructure
for managing multiple projects and linking business strategy with project
selection. The most important element of this system is the creation of a
ranking system that utilizes multiple principles that reflect the mission and
strategy of the firm. It is critical to communicate priority criteria to all
organizational stakeholders so that the criteria can be the source of
inspiration for new project ideas.
Every significant project selected should be ranked and the results
published. Senior management must take an active role in setting priorities
and supporting the priority system. Going around the priority system will
destroy its effectiveness. The project priority team needs to consist of
seasoned managers who are capable of asking tough questions and
distinguishing facts from fiction. Resources (people, equipment, and
capital) for major projects must be clearly allocated and not conflict with
daily operations or become an overload task.

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Organizational strategy and projects:
The priority team needs to scrutinize significant projects in terms of not
only their strategic value but also their fit with the portfolio of projects
currently being implemented. Highly ranked projects may be deferred or
even turned down if they upset the current balance among risks,
resources, and strategic initiatives. Project selection must be based not
only on the merits of the specific project but also on what it contributes to
the current project portfolio mix. This requires a holistic approach to
aligning projects with organizational strategy and resources.
The importance of aligning projects with organization strategy cannot be
overstated. We have discussed two types of models found in practice.
Checklist models are easy to develop and are justified primarily on the
basis of flexibility across different divisions and locations. Unfortunately,
questionnaire checklist models do not allow comparison of the relative
value (rank) of alternative projects in contributing toward organization
strategy. The latter is the major reason the authors prefer multi-weighted
scoring models. These models keep project selection highly focused on
alignment with organization strategy. Weighted scoring models require
major effort in establishing the criteria and weights.

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Project management as a strategic capability:
 In many organizations, implementing an effective and difficult
PDC( project development committee ) structure will require a
major developing an effective strategic capability to manage an
organization's projects and programs effectively is critical to the
creation and preservation of stakeholder value. As a starting
point, the only reason of undertaking a project or program is to
realize some form of value; benefit realization. To ensure the
‘realized benefits’ create strategic value, three elements need to
be brought together:
 1. There needs to be a new product or process created (a
manufactured article);
 2. People within the organization need to make effective use of
the artefact to deliver benefits;
 3. The benefits need to be strategically applicable, associated
and accepted in the ‘wider market’.

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Project management as a strategic capability:
 The role of Strategic management is to determine what products
and services are likely to be accepted or needed by the market
in the future and how the organization will adapt to best serve
these needs. Portfolio management focuses on determining
which investments in projects and programs best meet these
strategic objectives. These decisions will depend on the
objectives of the organization and its essential capability and
capacity to undertake the required work. The generally accepted
role of project management is to create a unique product, service
or result (an output) and the role of program management is to
manage a group of related projects to achieve an outcome more
efficiently than if the projects had been managed in separation.
The realization of sustained value is achieved by the
organization using the new ‘manufactured article’ effectively over
many months or years to fulfil its strategic objectives. The extent
of this challenge is outlined in our White Paper Organizational
Change Management.

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Project management as a strategic capability:
 The four layers of PDC
 •Governance – the organizations directors / leaders have the ultimate
and exclusive responsibility to set the right strategy, define an
acceptable risk appetite, set the organizations objectives and frame an
open and effective culture. Then to ask the right questions and require
the right answers from their executive.
 •Executive management are responsible for creating the capability
and culture of accountability needed to deliver projects successfully and
realize the intended benefits. A key element in this is developing a
rigorous portfolio management capability to select the best projects to
fulfil the organization's strategy, based on consideration of each
project’s feasibility and viability, within the organizational constraints of
capability and capacity.
 •Organizational support processes including opportunity identification
and assessment, plus developing and enhancing the organization's
project delivery capability including: organizational enablers, support
systems, oversight systems, change management systems and value
realization.

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Project management as a strategic capability:
 •Traditional project & program management are the processes
defined in a range of standards needed to deliver the defined outputs
and outcomes. PDC focuses on developing a framework that provides
effective support, leadership and oversight to these functions
organizational change effort and will challenge existing cultures,
particularly the tendency of executives to focus on project failure rather
than organizational failure when their organization fails to adequately
support the management of its projects

28
 Resource coordination: Resource planning is a huge challenge
for project management. Projects require enough staff – even
when things do not go quite according to plan. The staff’s team
leaders or superiors complain about ever-changing
requirements.
 And the PMO (project management officer) is supposed to set
things right. The PMO will never fully resolve this resource
conflict. All the same, it can defuse it by following a strategic and
goal-oriented line of action.
 There is no such thing as a blueprint for dealing with ‘competition
for resources’. And human behavior can always get in the way.
But two words will:
 further resource planning in line with company goals and

 keep conflict low at the same time.

These are ‘prioritization’ and ‘coordination processes’. To

design these well, consider first of all what type of project you are
dealing with.

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 Resource coordination: Coordination of many resources over
many efforts (whether project or operational) is required to
ensure that an organization functions properly. That’s why
resource coordination is one of the main functions of the PMO.
 Through Project Portfolio Management (PPM) techniques, the
typical enterprise or Strategic PMO works with senior
management to start and stop projects, to consider project
investigation and establish project prioritization.
 For people who have a combination of project and work tasks a
common concern is how to balance project tasks and regular
work. Basically, “what do I do now?” It is a great question, but
can be hard to answer.

30
 Resource coordination: Most people want to make
a contribution and be valued. But, without clear
direction, work efforts can become misguided and
unproductive. Envision the impact on someone
expending great efforts on a task only to find the initial
requirement /request had changed and their work was
for naught; extend that thought to a whole team and
imagine the impact on the organization!
 Someone who is working at the “action level”, for
example a developer, does not necessarily have the
time, perspective or bandwidth to balance their work
and project tasks. So where do they go to get
direction and clarification? This is where the PMO
plays a critical role.

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 Project and performance management
 In the past, project managers could focus primarily
on time and task management, stakeholder
relations, and resource allocation. And while these
core competencies are still required, these days
project managers must also be effective -- if not
exceptional -- team leaders.
 Clarizen's cloud-based workflow management
solution gives project managers the information,
insight, tools, and features they need to effectively
lead their teams -- whether they are located in the
same office, or on the other side of the world.

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 Project and performance management
 Key Clarizen features include the ability to:
 Monitor project performance management
 Track issue resolution
 Resolve conflicts by transparently sharing
information
 Motivate workers and work groups by showing
them how their contribution supports the "big
picture“
 Align tasks with goals on both individual and
team-based levels
 Provide ongoing feedback and coaching

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 Project and organizational goals: Setting goals and objectives
for projects is an essential step because they identify your
destination and also provide a road map for getting there.
 Asking the right questions will help you identify meaningful
project goals and objectives
 Why? Why are we doing this project? Why is it important to the
organization? Why is it important to me and the team?
 What? What problems is the project expected to solve? What
are the real issues at the core of the project? What deliverables
do management or the client expect from this project? What
criteria will be used to judge success or failure? If we produce
deliverables on time and on budget what else represents
success?
 Who? Who has a stake in the outcome?
 How? How do various stakeholders goals differ?

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 The terms “goals” and “objectives” are often used
interchangeably. But it’s important to avoid confusion and sort
out the difference between goals and objectives.
 Goals are the project “Destination. . . “ They relate to the
broader project aspirations and identify the project
“destination”. In other words what will the project accomplish?
What is the desired final outcome? Projects may have more than
one goal, and there may be many objectives for each goal.
 Objectives are the project “Road Map . . . “ Objectives define
a set of supporting actions to ensure the broader goals are
accomplished. Objectives are your action plan or high level road
map. They are specific steps or tasks that must be completed to
reach the goal.

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 When we talk about setting goals and objectives for
projects, what does SMART stand for?
 S is for Specific – well defined and clearly understood.
 M is for measureable – you can measure the result of your goal
or objective and know when it has been accomplished.
 A is for Achievable – you have the resources and time to
accomplish the project goals and objectives.
 R is for realistic – goals and objectives must fit within the broad
project and be a reasonable way of proceeding. For instance a
project goal may be achievable, but not realistic, if it is not
aligned with business or organizational goals.
 T is for Time bound – Goals and objectives must have a
deadline

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 Scope Management
 Scope refers to the detailed set of deliverables or
features of a project. These deliverables are derived
from a project’s requirements.

PMBOK defines Project Scope as the "The work

that needs to be accomplished to deliver a
product, service, or result with the specified
features and functions."

The definition of Scope follows from the decision of

setting out the work to be completed during the
lifecycle of a project. Included in this is also the
identification of work that will not be counted in the
ongoing round of the service/product development

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 Scope Management
 The 3 Facets of Scope Management
 Three processes form part of Project Scope
Management - planning, controlling, and closing.

Planning
The planning process is when an attempt is made to
capture and define the work that needs competition.

Controlling
The controlling and monitoring processes are
concerned with documenting tracking, scope creep,
tracking, and disapproving/ approving project
changes.

2
 Scope Management
 Closing
The final process, closing, includes an audit of the project
deliverables and an assessment of the outcomes against the
original plan.
 The Scope Statement
 The scope of a project is the clear identification of the work that
is required to successfully complete or deliver a project. One of
the project manager’s responsibilities is to ensure that only the
required work (the scope) will be performed and that each of the
deliverables can be completed in the allotted time and within
budget.
The documentation of the scope of the project will explain the
boundaries of the project, establish the responsibilities of each
member of the team and set up procedures for how work that is
completed will be verified and approved. This documentation
may be referred to as the scope statement, or the statement of
work, or the terms of reference.

3
 Steps for defining the scope of a project
 To define the scope of the project, it is important to identify the
following:
 Project objectives
 Goals
 Sub-phases
 Tasks
 Resources
 Budget
 Schedule
 Once these parameters are established, the limitations and
parameters of the project need to be clarified and the aspects
that are not to be included in the project identified. When doing
this, the project scope will make clear to the stakeholders, senior
management, and team members what will and will not be
included in the final product or service.

4
 The Project Scope Management Processes

5
 Common problems with Project Scope Management to
avoid
 Often, when performing Scope Management, project managers
bump into issues along the way. The problems that may arise
when defining and documenting Project Scope are:
 Ambiguity: Ambiguity in scope often leads to unnecessary work
and confusion. To avoid this, the scope needs to be clearly
defined and to the point.
 Incomplete definition: Incomplete scopes lead to schedule slips
which lead to cost overruns. To avoid this, the scope needs to be
complete and accurate.
 Transience: Transient scopes lead to scope creep which is the
primary cause of late deliveries and "never ending" projects. To
avoid this, the scope document needs to be finalized and remain
unaltered for the duration of the project.
 Un-collaborative scope: A scope that is not collaboratively
prepared causes misinterpretations in requirements and design.
To avoid this, the scope document should be shared with all
stakeholders at every step of the scope definition process
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Work Breakdown Structure (WBS)
The Work Breakdown Structure (WBS) is an
important element of the Scope management process
and the PMI sets great emphasis on this as many
project manger's often skip this step, leading to
inaccurate plans. The WBS provides the project
manager and his team with the opportunity to break
down a high-level scope statement to smaller,
manageable units of work, called work packages. The
resulting WBS should provide a complete list of all
work packages required to complete the project
Work Breakdown Structure (WBS)
All project activities will be identified and arranged in
sequentially better detail, that is, by levels.
2. For each activity, the type and quantity of each
required resource (including personnel) are identified.
3. For each activity, predecessors and task duration
are estimated.
4. All project signs are identified and located on the
project schedule following their predecessor activities.
5. For each activity, the individual or group assigned/
divided to perform the work is identified.
The project plan and the WBS are baseline
documents for managing a project.
 The Project development Concept Phase
 This phase of the Project Management Methodology
establishes the conceptual view and general
definition of a project.
 This starting point is critical because it is essential
for those who will deliver the technology, those who
will use that technology, and those who have a stake
in the project to reach agreement on its concept and
definition.
 The process is represented in the figure below.

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definition. The process is represented in the figure below.

 The Project development Concept Phase

Internal Users
Stakeholders (Customers)

Project
Concept
Phase
External
Stakeholders Project Team

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 Elements of the Concept Phase
 Defined in this section are general guidelines to assist in defining the
overall parameters of the project. The sections have been organized to
be consistent with how a project might progress through the concept .It
must be stressed that the recommended methods in this section are
standard steps for IT development efforts, since it is here that
agreement is reached on what the project's end product(s) will be.
 The first task in the project concept and definition phase is the
development of the project statement or concept paper. The following
roles are defined:
 Project Manager. To own the project during the concept and planning
stages. Project Team. To perform the initial conceptualization work.
Stakeholders and Customers. To provide input to the project
statement.
 During this part of the concept phase, the project team defines the:
 Project charter and objectives
 Agreement with the state organization’s business plan/direction
 Relationship of the project to the IT strategic plan
 High-level approach and project strategy
 Success factors for the project.
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 Project Management Phases
 Shown below is the relationship between the various project
phases. The concept phase is the first phase and overlaps with
the project planning. Activities conducted during the concept
phase will eventually be integrated into the various planning
documents and/or will drive the planning elements such as
schedule and budget.
 Project Statement
 The Project Statement defines the project’s agreement and
ensures that the project is consistent with the state
organization’s business plan and IT strategic plan. It defines a
high-level approach, project success factors, and other top-level
planning information. Ideally, the information contained in the
Project Statement provides management with the information
necessary to decide if the project should be supported.
 The Project Statement should not be a collection of technical
information, but should state what is to be done, why it is to be
done, and how it will be done.

13
 Project Management Processes

Project Time Frame

Project Initial
Concept Project Project
Start Project
and Start-Up / Project
Concept Planning Baseline
Definition Performance
Operation and
Close-Out

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Major Questions to be Answered During the Concept Phase

What is to
be done?

Why is it to How will

be done? it be done?

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 Business Analysis
 Analyzing project constraints, alternatives, and related
assumptions may also be part of the initial concept phase. Again,
this material should build upon the material already presented in
the project statement. Remember to keep these activities at a
high level so that they do not result in a project design document.
 Concept Review
 This process is currently being defined as part of the initiation
process analysis. This manual will be updated when that process
is complete.
 There may be times when actual reviews need to be scheduled
with the project team and external agencies. These reviews
would provide a forum for information exchange and would be
more timely than written question and answer sessions.
 No separate document exists to refine the review process. The
contents and structure of the meeting will be driven by the
materials generated during the initial statement and analysis
process.
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 Problems during the Concept Phase
 Many problems during the concept phase are due to the difficulty in
getting a project to move forward. This is a direct result of the
atmosphere defined above. The most difficult commitment to obtain is
from the key stakeholders (top management) and customers (users). A
summary of typical problems is highlighted below:
 Scarcity of Resources
 Many of the problems are related to assembling the initial project
concept team. Locating the “right” people is rarely easy.
 Lack of Coordinated Leadership
 While qualified team members may be in short supply, individuals
serving as leaders may be numerous. In many cases, the concept
phase is led by too many people. Such environments create an
atmosphere of bad or disjointed decision-making.
 Lack of Consensus on the Project Objectives
 It is not uncommon to find that there are many different ideas as to what
the project should be and what the project should produce. Rapid
prototyping can be useful when general agreement on the concept is
difficult to reach. Concepts are often easier to integrate when the team
is considering something concrete.
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 Project Process Map:
 A project process map describes every step and every process
involved in the execution of a project - till its final completion.
This visual representation, in the form of a flow chart, using lines
and symbols, helps one to better understand the process. Just
one look at the project process map gives the reader information
like:
 What is the current status of the project, and what is the chance
of the project getting completed within the set deadlines?
 What work is being executed, by whom, and where?
 Which processes are in accordance with the projected schedule,
and which ones are running behind schedule?
 Which sub-processes are more crucial to the completion of the
project?
 What phases or sub-processes are experiencing problems and
require immediate attention?
 Are the available resources being used optimally?

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  Developing a Project Process Map
 Developing a project process map is a somewhat complex and
time-consuming task, but it is worth the effort as it serves as a
valuable project management tool once it is complete. A visual
representation of the process makes it easier to understand,
interpret, and remember the processes that are detailed in
words. Here are the key steps involved in drawing process
maps:
 Identifying the Processes
 To begin with, the management must identify all processes and
sub-processes and the key trigger points that will impact the
project, right from the planning stage till the completion of the
project.
 Defining Standards and Assigning Responsibilities
 The next step requires establishing quality standards and
completion deadlines for each of the processes involved in the
project.

19
  Developing a Project Process Map
 This will, additionally, help in determining and setting the control
points along the process paths. It is at this time that the team
members are allocated to each of the processes and their duties
and responsibilities spelled out clearly.
 Dividing the Processes Further
 With a broad picture of the processes in place, it is time now to
divide each process into further steps, to clearly define where the
process starts and where it ends. Also, information, like tools and
techniques to be applied and the input and output of each step,
can be added during this phase.
 Make the Final Drawing
 With all this information organized, the final step of drawing the
project process map can begin.

20
Establishing check points:
 Using Project Checkpoints to Stay on Schedule (And On
Plan)
 Projects occur as a series of phases, structured along a timeline
designed to produce deliverables, meet stated goals, and utilize
allocated resources. Without this structure, projects would prove
unmanageable as the work effort would just be too massive and
undefined.
 As a project begins, the initial “blank schedule” can be vast.
Phases put the work to be done into perspective, replacing the
blank slate with a framework for planning. “Phase” management
also provides the opportunity for periodic review and reflection –
to examine progress at key points, ensuring that the project is
proceeding as planned and required. To take full advantage of
these potential benefits, each phase must include checkpoints
for management control, also known as stage gates or exits.

21
Establishing check points:
 Using Project Checkpoints to Stay on Schedule (And On
Plan)
 Checkpoints provide a basis for analysis and evaluation, to
determine whether the project is proceeding as planned, and to
take corrective action as needed. Every project phase should
pass through the checkpoint gauntlet to ensure that essential
goals and deliverables are being met, and to identify potential
issues and problems in stages, before they become vast.
 Moving Forward: Checkpoint Planning and Analysis

 For full benefit and impact, checkpoints should be identified

according to specific project phases, and as needed to ensure
the timely advancement of project goals and deliverables.
Checkpoints must be structured to answer one primary question
– are you ready for the next phase? If the answer is yes, the
project proceeds. If the answer is no, other action must be taken,
to include progress with corrective/compensating actions, project
suspension, or outright cancellation.

22
 THE CHECKPOINT MANAGEMENT PROCESS
 To illustrate checkpoint utilization, we can use a project structure
organized into five (5) phases, as follows:
 Phase 1: Requirements. To define technical and business
requirements for the project.
 Phase 2: Design. To design the technical deliverables.

 Phase 3: Development. To develop and test the technical

solution.
 Phase 4: Implementation. To deploy and support the roll-out of
the technical deliverables.
 Phase 5: Closure. To transition the project and deliverables
from project status to operational status.
Continuing with this illustration, the following
checkpoint "decision tree" leads the way through the progression
process.

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 Setting Checkpoints for "Phase 1: Requirements"
 Have all "requirements" tasks been completed?
 Are there any open issues?
 How will these issues be resolved?
 Are the established requirements sufficient to proceed to the next
phase?
 If not, requirements related problems must be resolved, mitigated or
waived before progress can be made.
 Setting Checkpoints for "Phase 2: Design"
 Have all "design" tasks been completed?
 Does the design meet the established requirements?
 Are there any open design issues?
 How will these issues be resolved?
 Does the design function as expected?
 Is the design ready to proceed to the next phase? If not, design related
problems must be resolved, mitigated or waived before progress can be
made.

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 Setting Checkpoints for "Phase 3: Development"
 Have all "development and testing" tasks been completed?
 Does the system perform as expected?
 Are there any open development issues?
 How will these issues be resolved?
 Is the system ready to proceed to the next phase?
 If not, development related problems must be resolved, mitigated or
waived before progress can be made.
 Setting Checkpoints for "Phase 4: Implementation"
 Have all "implementation" tasks been completed?
 Are there any open issues?
 How will these issues be resolved?
 Is the project ready to proceed to the next phase? If not, implementation
related problems must be resolved, mitigated or waived before progress
can be made.

25
 Setting Checkpoints for "Phase 5: Closure"
 Have all "closure and transition" tasks been completed?
 Are there any open issues?
 How will these issues be resolved?
 Have all necessary "closure and acceptance" approvals been obtained.
 Has the lessons learned review been completed?
 Can the project be closed? If not, closure related issues must be
resolved mitigated or waived before the project can be closed.
Checkpoints can present difficult choices. Every checkpoint
analysis requires an objective examination of the project to date. This can
be a difficult task for the project manager and the team who have so much
invested in every project. At times, checkpoints will not be passed, and
unpopular actions must be taken, up to and including project
cancellation. But, when project viability is in doubt, it is better to walk away
than to proceed with a non-viable initiative. In the end, checkpoints can
provide a much needed safety net to prevent wasted time and resources.

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 What Is Project Time Management?
 Project time management is the efficient use of
time by means of good organization, efficient
productivity, and proper planning. Project
managers, who are tasked with overseeing projects
from start to finish, utilize these time management
skills to complete their work in the most efficient,
cost-effective ways possible. For example, a project
manager may develop a sequenced list of tasks that
need to be completed, then track employee progress
through those steps. Project managers may even
implement changes to projects when necessary to
make better use of time, and they may keep notes
on what went well or what needs improvement to
utilize for future projects.

1
 Time planning process :
 Project Time Management Processes
 Project time management in the PMBOK® Guide is
made up of 7 processes. The project time
management processes are:
 Plan schedule management
 Define activities
 Sequence activities
 Estimate activity resources
 Estimate activity durations
 Develop schedule
 Control schedule.

2
 Computer-assisted project planning;
 It has been said, and rightly so, that a computer is nothing more
than a calculating machine, capable of storing and manipulating
large amounts of electronic information. But it is because of this
strength that the computer has become an essential project
management tool. This course illustrates methods for integrating
the traditional tools of project management, such as the WBS,
Gantt and Network Charts and the Critical Path Method with
today's technology. Using computer assisted planning allows you
to quickly calculate early Start and Early Finish dates, Late Start
and Late Finish Dates and create alternative scenarios and
"what-ifs" necessary for accurate planning and distribution of
critical resources.
Anyone who works on a project team, including managers,
supervisors, project managers, team members.
 Expected Duration (hours)
3.0

3
 Lesson Objectives
 Desktop Solutions
 · recognize the strengths and limitations of the computer in
project management.
 · recognize the benefits and liabilities of using the computer to
help plan and track your project.
 · recognize the wide variety of reports that are available to aid
planning, scheduling, tracking and resource leveling.
 · recognize how to use the computer to accommodate different
variables that affect budgets, resources and schedules.
 Project Management Terminology: Level 3
 · match key project management terms with the proper
definition.
 · calculate the early start/early finish dates based on information
provided.
 · calculate the late start and late finish dates for a task.
 · calculate the lead time for a particular task based on
information provided.
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 Resource Loading and Leveling
 · apply resource loading and leveling principles to given
information and situations.
 · recognize the importance of resource loading.
 · recognize the elements that constitute resources.
 · recognize how to use and apply resource leveling in project
management.
 Gantts, PERTS and the Critical Path
 · recognize the critical importance of using your computer to
generate iterative, Gantt charts, PERT charts and critical path.
 · recognize the strengths of a computerized Gantt chart in
planning, developing and tracking your project.
 · recognize the strengths of a computerized network chart in
planning, developing and tracking your project.

5
 Fast-tracking a project
 Fast Tracking is a duration compression technique to shorten the
project schedule usually to meet the target dates. Normally this
will be done by overlapping or compressing some of the project
phases. This will result in over-all shorter project schedule. Most
common method of Fast Tracking is to starting two or more tasks
at the same time that were originally planned to start on different
time schedule.
Fast-tracking is a project development strategy designed to
complete a project in a small time frame. Your small business may
employ this technique for a number of reasons, including bringing a
promising product to the market before the competition can offer a
similar product. Fast-tracking a project can have benefits for your
small business as well as risks depending on how you choose to
structure your workers and management personnel.

6
 Advantages
1. It’s an option to keep the project on schedule
2. Compresses/shortens the project schedule
3. Allows meeting the client commitments
 Disadvantages
1. Increases risk and potentially causes rework
 As a PM, you might be frequently asked by the key
stakeholders to do fast tracking the entire project.
Stakeholders always focus on the target date. But as
PM you must look into all aspects such as meeting
the project objective, resources, quality apart from
schedule. Thus you must focus on the health of the
entire project and analyze to make a right decision.
You should apply your negotiation skills to convince
the key stakeholders with your proper justification.

7
 Cost Planning process :
 The process of managing project costs is an activity for
estimating costs, developing project budget and controlling
spending.
Cost management is the process of estimating, allocating,
and controlling the costs in a project. It allows a business to
predict coming expenses in order to reduce the chances of it going
over budget. Projected costs are calculated during
the planning phase of a project and must be approved before
work begins.
 There are 4 processes in this including :

 Planning Cost Management

 Estimating Costs

 Determining Budget

 Controlling Cost

8
 Four Components to Cost Management
 When you spot down all of the cost related activities on a project,
there are really four key components:
 Estimating costs – accurately determining what costs will be
before the project work is started
 Tracking costs – keeping track of all costs on a project, and
being able to review cost information in a timely fashion
 Controlling costs – being able to influence the spend on a
project while it is in progress
 Maintaining cost data – archiving cost information in such a
way that it can be used for future projects

9
 Cost management – budgets :
 Once you are done with the project, it is important to collection
the cost data as part of your closing processes. This cost data
should be used for future projects during estimation and
planning. The more projects you manage in this way, the better
the organization will become at overall cost control.
 In order to get a project site to run smoothly, someone has to
manage the processes. They have to ensure that the right
people are hired in the right order and that the correct materials
are on site as and when needed, as well as checking that the
work is carried out properly and that the site is left clean and safe
everyday. Project managers have to keep things on the critical
path.

10
Project Cost Estimating Tools & Techniques :
Estimate is usually used in the early phases of a project and is
less accurate than other methods. Parametric estimating uses
statistical modeling to develop a cost estimate. It uses historical
data of key cost drivers to calculate an estimate for different
parameters such as cost and duration.
Project cost estimating scares a lot of people. They don't know
how much something will cost, but they know whatever value they
give, they will be held to it by their manager.
 The challenge with estimating is that it always involves
some uncertainty. Some of the factors that contribute to this
uncertainty include...
 Experience with Similar Projects:
The less experience you have with similar projects, the greater
the uncertainty. If you've managed similar projects, you will be
able to better estimate the costs of the project.

11
 Planning Horizon:
 The longer the planning prospect, the greater the uncertainty.
The planning possibility you are considering may be the whole
project or just a certain phase. Either way, you will be able to
better estimate costs for the time periods that are closer to the
present.
 Project Duration:
 The longer the project, the greater the uncertainty. This is similar
to planning horizon in the sense that if a project is of a shorter
duration you are more likely to account for most of the costs.
 People:
 The quantity of people and their skill will be a huge factor in
estimating their costs. Early in the project, you may not even
know the specific people that will be on the project. That will
increase the uncertainty of your cost estimates.

12
 There are some tools and techniques used by professional project
managers that you can use to develop more accurate cost
estimates:
Expert judgment uses the experience and knowledge of experts to
estimate the cost of the project. This technique can take into account
unique factors specific to the project. However, it can also be biased.
Analogous estimating uses historical data from similar projects as a
basis for the cost estimate. The estimate can be adjusted for known
differences between the projects. This type of estimate is usually used in
the early phases of a project and is less accurate than other methods.
Parametric estimating uses statistical modeling to develop a cost
estimate. It uses historical data of key cost drivers to calculate an estimate
for different parameters such as cost and duration. For example, square
footage is used in some construction projects.
Bottom-up estimating uses the estimates of individual work packages
which are then summarized or "rolled up" to determine an overall cost
estimate for the project. This type of estimate is generally more accurate
than other methods since it is looking at costs from a more granular
perspective.

13
Three-point estimates originated with the Program Evaluation and
Review Technique (PERT). This method uses three estimates to
define an approximate range for an activities cost: Most Likely
(Cm), Optimistic (Co), and Pessimistic (Cp). The cost estimate is
calculated using a weighted average: Cost Estimate = (Co + 4Cm +
Cp)/6

14
 Quality planning process :
 Quality can be defined as meeting the customer's expectations
or exceeding the customer expectations achieved by way of
deliverables and/or activities performed to produce those
deliverables.
 Project Quality Plan can be defined as a set of activities
planned at the beginning of the project that helps achieve Quality
in the Project being executed. The Purpose of the Project Quality
Plan is to define these activities / tasks that intends to deliver
products while focusing on achieving customer's quality
expectations. These activities / tasks are defined on the basis of
the quality standards set by the organization delivering the
product. Project Quality Plan identifies which Quality Standards
are relevant to the project and determines how can they be
satisfied.

15
 Tools and Techniques
 PMBOK Mentioned Methods
 Cost-benefit analysis is a method to determine whether the wished
quality standards can or should be payed.
 Benchmarking may be thought as the process of comparing the actual
project to other projects for "generating ideas for improvement" and
"providing a basis by which to measure performance"
 Design of experiments is a method for investigating the influence of
single factors on the degree of quality of the whole product / process
 Cost of quality " are the total costs incurred by investment in
preventing nonconformance to requirements, appraising the product or
service for conformance to requirements, and failing to meet
requirements".
 Additional quality planning tools may support the quality planning
process. Such tools and techniques are "brainstorming", "affinity
diagrams", "force field analysis", "nominal group techniques", "matrix
diagrams", "flowcharts", and "prioritization matrices"

16
 Quality conformance planning :
 Quality of conformance is the level of the quality of product actually
produced and delivered through the production or service process of the
organization as per the specifications or design. When the quality of a
product entirely conforms to the specification (design), the quality of
conformance is deemed excellent.
 Specifications are targets and tolerances determined by the designer of
a product. Targets are the ideal values for which production is expected
to strive; tolerances are acceptable deviations from these ideal values
recognizing that it is difficult to meet the exact targets all the time due to
variability in material, machine, men and process.
 For example, in case of a service product like maintenance of law and
order by governmental agencies, the quality of design is reflected in the
relevant acts and rules, whereas quality of conformance depends upon
the extent to which these acts and rules are conformed by the
enforcement agencies. In spite of having excellent rules and regulations,
the quality of law and order of society cannot be rated as good, if these
rules and regulations are not followed to properly.

17
 A Gantt chart is a horizontal bar chart developed as a production
control tool in 1917 by Henry L. Gantt, an American engineer
and social scientist. Frequently used in project management, a
Gantt chart provides a graphical illustration of a schedule that
helps to plan, coordinate, and track specific tasks in a project.
 Gantt charts may be simple versions created on graph paper or
more complex automated versions created using project
management applications such as Microsoft Project or Excel. A
Gantt chart is constructed with a horizontal axis representing the
total time span of the project, broken down into increments (for
example, days, weeks, or months) and a vertical axis
representing the tasks that make up the project (for example, if
the project is outfitting your computer with new software, the
major tasks involved might be: conduct research, choose
software, install software).

18
 Horizontal bars of varying lengths represent the sequences,
timing, and time span for each task. Using the same example,
you would put "conduct research" at the top of the verticle axis
and draw a bar on the graph that represents the amount of time
you expect to spend on the research, and then enter the other
tasks below the first one and representative bars at the points in
time when you expect to undertake them. The bar spans may
overlap, as, for example, you may conduct research and choose
software during the same time span. As the project progresses,
secondary bars, arrowheads, or darkened bars may be added to
indicate completed tasks, or the portions of tasks that have been
completed. A vertical line is used to represent the report date.

19
 Estimate the time required for each activity.
 Weeks are a commonly used unit of time for activity completion,
but any consistent unit of time can be used. A distinguishing
feature of PERT is it's ability to deal with uncertainty in activity
completion times. For each activity, the model usually includes
three time estimates:
 Optimistic time - the shortest time in which the activity can be
completed.
 Most likely time - the completion time having the highest
probability.
 Pessimistic time - the longest time that an activity may take.
 From this, the expected time for each activity can be calculated
using the following weighted average:
 Expected Time = (Optimistic + 4 x Most Likely + Pessimistic) / 6
 This helps to bias time estimates away from the unrealistically
short timescales normally assumed.

20
 Scheduling(Schedule activities) :
 Schedule them in such a way that sequential actions
are carried out in the required sequence. Ensure that
dependent activities do not start until the activities
they depend on have been completed. Where
possible, schedule parallel tasks so that they do not
interfere with sequential actions on the critical path.
While scheduling, ensure that you make best use of
the resources you have available, and do not over-
commit resources. Also, allow some slack time in the
schedule for holdups, overruns, failures, etc.

21
 Gantt charts give a clear illustration of project status,
but one problem with them is that they don't indicate
task dependencies - you cannot tell how one task
falling behind schedule affects other tasks. The PERT
chart, another popular project management charting
method, is designed to do this. Automated Gantt
charts store more information about tasks, such as
the individuals assigned to specific tasks, and notes
about the procedures. They also offer the benefit of
being easy to change, which is helpful. Charts may be
adjusted frequently to reflect the actual status of
project tasks as, almost inevitably, they diverge from
the original plan.

22
 Cost build-up:
 In order to get a project site to run smoothly, someone has to
manage the processes. They have to ensure that the right
people are hired in the right order and that the correct materials
are on site as and when needed, as well as checking that the
work is carried out properly and that the site is left clean and safe
everyday. Project managers have to keep things on the critical
path.
 The only way of directly avoiding design costs is to design it
yourself, which in most cases leaves the scheme lacking (at the
very least in Project detail).
 Project management can potentially be carried out by the self
builder. But this is only realistic if they can take a great deal of
time off to carry out this role. The profit elements can also be
avoided by not using a main contractor working on a fixed price,
but in doing so, you take on the risk of the job costs over running.

23
 Analyzing time plans :
 Time management is another key aspect of managing a project.
As such, it is considered to be a core knowledge area, and is
closely join to scope and cost areas. The main purpose of this
knowledge area, as it name suggests, is to build processes and
outputs into the project that assist the manager and team to
complete the project in a timely manner. During the planning
process, outputs are created to illustrate how project tasks will
be sequenced and allocated. The controlling and monitoring
process is concerned with tracking and reporting on the
progress of work, as well as adjusting time outputs to address
shifts and changes in the project plan. Finally, the closing
process includes an audit of time targets. Project managers
reflect on what contributed to time estimates being accurate, too
large, or traditional. This reflective process helps them to build
better time plans for future projects.

1
 The seven processes in the Project Time
Management knowledge area are:
 Plan Schedule Management (Planning process)
 Define Activities (Planning process)
 Sequence Activities (Planning process)
 Estimate Activity Resources (Planning process)
 Estimate Activity Durations (Planning process)
 Develop Schedule (Planning process)
 Control Schedule (Monitoring and Controlling
process)

2
 Tools of Time Planning
 Activity Logs: Activity logs help you to analyze how you
actually spend your time. The first time you use an activity log
you may be shocked to see the amount of time that you waste.
Memory is a very poor guide when it comes to this, as it can
be too easy to forget time spent on non-core tasks.
 You may define all your activities in a up-front style, or define
them in a rolling wave plan. You define required activities for
next milestone when you are reaching end of current
milestone. This can be in milestone basis, or monthly basis.
What makes your planning easier.
 Action Plans: An Action Plan is a simple list of all of the tasks
that you need to carry out to achieve an objective. Wherever
you want to achieve something significant, draw up an Action
Plan. This helps you think about what you need to do to
achieve that thing, so that you can get help where you need it
and monitor your progress.
 To draw up an Action Plan, simply list the tasks that you need
to carry out to achieve your goal, in the order that you need to
complete them. This is very simple, but is still very useful.
Keep the Action Plan by you as you carry out the work and
update it as you go along with any additional activities that
come up.

3
Action Plans Key Points:
Task Lists: One of the basics of effective time management is to
be aware of all that needs to be done. Though many people keep
track of day-to-day activities in their heads, effective time managers
facilitate planning and productivity by making a task list
Task Lists Estimate: This second step is critical, but very few
people do it. For each task on the list, estimate the amount of time
it will take you to complete it. At first you may find this difficult, and
your guesses may be way off. With practice, however, your
accuracy will quickly increase. Major tasks which span several
weeks may pose a problem, but by breaking the work down into
steps, estimating becomes much easier.

4
 Task Lists Prioritization: The next step is to
prioritize — decide what tasks are most important to
do first and number them in rank order. Sometimes
(particularly if you've been procrastinating) there will
be more items on the list than can be realistically
completed in a week. If time is tight you can delegate
certain tasks or postpone low priority items.
Prioritizing forces you to weigh the importance of
each item on the task list, and to make a conscious,
thoughtful decision about what to do when.

5
 Analyzing cost plans : If your project contains cost
information for budgeting or for tracking project performance,
this information isn’t doing you much good unless you can
view and analyze it. Without a solid understanding of where
your costs are going in a project, the project can quickly fail
and become unprofitable.
 A cost benefit analysis is used to evaluate the total
anticipated cost of a project compared to the total expected
benefits in order to determine whether the proposed
implementation is worthwhile for a company or project team.
 If the results of this comparative evaluation method suggest
that the overall benefits associated with a proposed action
balance the incurred costs, then a business or project
manager will most likely choose to follow through with the
implementation.

6
 Generally speaking, a cost-benefit analysis has three parts.
 First, all potential costs that will be incurred by implementing a
proposed action must be identified.
 Second, one must record all expected benefits associated with
the potential action.
 And finally, subtract all identified costs from the expected
benefits to determine whether the positive benefits balance the
negative costs.
 Analyze project performance with earned value analysis :
 An earned value analysis indicates how much of the budget
should have been spent, in view of the amount of work done so
far and the baseline cost for the task, assignment, or resources.

7
 Analyzing quality plans: Quality analysis is a set of steps to
examine and investigate a certain project activity and identify
what enhances the activity’s value. The goal of project quality
analysis is to review quality levels and define necessary
improvements in the existing quality management framework.
 The quality assurance activity allows examining experienced
problems, deviations in constraints, and any activities that
provide a value. It includes root cause analysis, fit analysis,
methods for identifying and solving problems, and techniques for
developing corrective actions. For instance, during right analysis
product testing is used as a method for examining product
features and checking they fit into the user acceptance criteria. A
testing plan becomes a scenario for analyzing, assuring and
validating product quality.

8
 Risk management :Even the most carefully planned project can run
into trouble. No matter how well you plan, your project can always
encounter unexpected problems. Team members get sick or quit,
resources that you were depending on turn out to be unavailable, even
the weather can throw you for a loop (e.g., a snowstorm). So does that
mean that you’re helpless against unknown problems? No! You can use
risk planning to identify potential problems that could cause trouble for
your project, analyze how likely they are to occur, take action to prevent
the risks you can avoid, and minimize the ones that you can’t.
 A risk is any uncertain event or condition that might affect your project.
Not all risks are negative. Some events (like finding an easier way to do
an activity) or conditions (like lower prices for certain materials) can help
your project. When this happens, we call it an opportunity; but it’s still
handled just like a risk.
 When you’re planning your project, risks are still uncertain: they haven’t
happened yet. But eventually, some of the risks that you plan for do
happen, and that’s when you have to deal with them. There are four
basic ways to handle a risk.
 Avoid: The best thing you can do with a risk is avoid it. If you can
prevent it from happening, it definitely won’t hurt your project. The
easiest way to avoid this risk is to walk away from the cliff, but that may
not be an option on this project 9
 Mitigate: If you can’t avoid the risk, you can mitigate it. This
means taking some sort of action that will cause it to do as little
damage to your project as possible.
 Transfer: One effective way to deal with a risk is to pay
someone else to accept it for you. The most common way to do
this is to buy insurance.
 Accept: When you can’t avoid, mitigate, or transfer a risk, then
you have to accept it. But even when you accept a risk, at least
you’ve looked at the alternatives and you know what will happen
if it occurs. If you can’t avoid the risk, and there’s nothing you
can do to reduce its impact, then accepting it is your only choice.
 By the time a risk actually occurs on your project, it’s too late to
do anything about it. That’s why you need to plan for risks from
the beginning and keep coming back to do more planning
throughout the project.
 The risk management plan tells you how you’re going to handle
risk in your project.

10
 Risk quantification techniques: Risk quantification is the process of
evaluating the risks that have been identified and developing the data
that will be needed for making decisions as to what should be done
about them. The objective of quantification is to establish a way of
arranging the risks in the order of importance. In most projects there will
not be enough time or money to take action against every risk that is
identified.
 Risk quantification techniques are:
 Expert opinion
Expert opinion is an extremely useful tool in risk assessment and is
often overlooked as a separate technique in the quantitative actuarial
world. It is particularly useful where relevant data are scarce, for
example where conditions have changed materially (reducing the
usefulness of past experience), or where the risks are very company-
specific as would often be the case for lapse rates. In essence, the
prudent assumption setter was providing one expert opinion on the risk.
However, it will often be appropriate to seek input from a range of
experts across different disciplines.

11
 Historical simulation
A fairly straightforward approach to risk quantification is simply to
gather as much past data as possible and use this history as a
simulation of the future. For example, we can gather the daily
price changes for the last 1,000 days for the shares we are
currently holding in our portfolio. This generates 1,000 different
scenarios for the performance of our portfolio over the coming
day. If we take the 5th-worst performance of the portfolio then we
will have generated the 99.5th percentile portfolio return over a
one-day time horizon.
 Normal distribution assumption
Another way of exploiting past data is simply to observe the
mean and standard deviation of a particular factor, for instance
equity market returns, and assume that the factor is normally
distributed. The basic properties of the normal distribution then
allow us to generate the chosen confidence interval around the
mean by taking particular multiples of the standard deviation.
This approach generally gives far less weight to the outliers in
the data than would a historical simulation
12
 Extreme value theory
Under extreme value theory (EVT) events below a particular threshold
are excluded from the distribution-fitting process. In effect, this exclusion
assumes that small variations in the risk factor are no help when trying
to predict the occurrence of very large changes, and focuses the effort
on replicating the observed large changes. The positive aspect of this
approach is that attention is concentrated on the part of the distribution
in which we are most interested.
 Monte Carlo simulation
Monte Carlo simulation is a statistical sampling technique for solving
complex differential equations. Basically, we assume that the evolution
of a particular item of interest can be described by a probability density
function; the Monte Carlo simulation is then carried out by sampling
from this probability density function and tallying the results. This is a
powerful technique and may not strictly be required if ‘closed form’ (that
is, formula based) solutions exist. However, Monte Carlo simulation is
an approach frequently used in asset-liability modelling, and gives the
user more flexibility in modelling the codependencies between multiple
risk factors.

13
Project Team Member
What is a Team Leader?
A team leader is an important member of a collaborative project
team. This individual or group of individuals is responsible for
planning, executing and promoting the activities that a project
undertakes.
A project may also have several team leaders who split the
duties of a team leader among them.
Project team members are the individuals who actively work on
one or more phases of the project. They may be in-house staff or
external consultants, working on the project on a full-time or part-
time basis.

1
Team member roles can vary according to each
project
Project team member duties may include:
Contributing to overall project objectives
Completing individual deliverables
Providing expertise
Working with users to establish and meet business
needs
Documenting the process

2
Responsibilities of a team leader:
The team leader is responsible for planning, executing and
promoting activities that a project undertakes. At a high level,
the team leader is responsible for:
Encourage all participants to take an active role in the project
Ensure participants have a clear understanding of what they
need to complete and when
Drive the project team for on time delivery
Lead the design, planning and execution validation activities
Identify key companies required to position for industry adoption
Specifically, some of the activities required are:
Point of contact for members wishing to join and participate in
the project.
Set-up and management of team meetings

3
Matrix management
Definition: Matrix management is commonly used in
organizations to share resources across functions. In
a matrix management system an individual has a
primary report-to boss and also works for one or more
managers, typically on projects.
Matrix management is ideal for sharing talents and
skills across departmental boundaries. One of the
most common scenarios for matrix management is
when a group of individuals from all different functions
organize under a project manager to create
something new and unique. The ability to draw upon
diverse skill sets from multiple disciplines strengthens
the overall project team.

4
Succeeding as an Employee in a Matrix Management
Situation: Working in a matrix environment can be both
rewarding and frustrating..
Clarify who has the primary responsibility to evaluate you.
Clarify how the input of your various matrix managers (often
project managers) will be taken and reflected in your
performance evaluation.
Maintain a regular discussion with your report-to manager to
keep him/her explained of your progress and priorities.
Identify conflicting priorities and broker discussions between the
various managers to clarify any confusion.
Take the initiative to propose or encourage your report-to
manager to invest in your professional development through
training, education and coaching. Gain the support of your matrix
managers for these efforts.

5
Structure selection: The role of the Project
Management Office (PMO) continues to gain
reputation; many organizations of all industrial
sectors are positioning them as key partners in the
achievement of strategic objectives.
It has been demonstrated that PMOs can solve
many of the problems organizations face when
managing portfolios, programs and projects, such
as misalignment between projects and strategy
management, failure to anticipate corrective
actions over troubled projects, use of nonstandard
project management practices, among others.

6
7
When implementing a PMO, the first thing that must be done is
select a structure type tailored to the specific needs of the
organization, which is not an easy task, as there is no “one size
fit all formula”. Organizations can be very different from one
another in their needs, size, structure and project management
maturity, and selecting the right structure type is a key success
factor.
In this article we will focus on defining 4 steps to choose the right
set of roles for the PMO.
The Challenge of Selecting the Right Type of PMO Structure
Following the project management framework established by the
Project Management Institute (PMI), the types of PMO Structures
can be classified in:
Supporting: Provides methodologies, procedures, templates,
best practices, training and other resources.

8
Controlling: Establish procedures to ensure
adherence to methodologies, through monitoring
metrics and performance reporting to Management.
Directive: Leads the recruiting of project
management staff, assignment of resources to
projects (including project managers themselves),
project selection in alignment with the organization
strategy, cancelation of failed projects, resource
management across projects, among others.

9
Mixed organizational structures and coordination
: An organizational structure is a pattern of
interactions that link a company's employees, tasks
and technologies. The mixed model approach to
organizational structure is also referred to as a matrix
organizational structure. This method combines two
or more departments within the company to leverage
the benefits of both or all of them. Global corporations
often use a mixed model approach to organizational
structure, combining product divisions with
geographical divisions.

10
Elements
A mixed model, or matrix organizational structure, has multiple
lines of authority with some employees reporting to at least two
managers.
There are functional managers who direct departments such as
engineering and marketing, and there are project managers who
oversee employees who work on specific projects.
The project managers may also report to the functional
managers.
An example of an organization using the mixed model approach
is Citigroup. Citigroup has country leaders and product leaders
who work together on projects that overlap…

11
Managing the team :-Whether you're creating a new team or
integrating workers into an existing team, you need to be aware
of team dynamics. Managing relationships between team
members can be difficult enough within a shared office space,
but it's even more challenging when workers are all over the
country – or the world……..Managing a Geographically
Dispersed Team is to Achieving the Goals Together, While Apart
- A long time ago – before the days of videoconferencing,
intranets, and email – teams generally needed to be in the same
physical location in order to work effectively.
Running effective meetings :It's essential for members to unite
around a common purpose. Everyone must agree to the team's
goals. Creating a team contract is an excellent way to achieve
this. A team charter is a "roadmap" for your team. It ensures that
all workers are focused on the right thing from the start. You can
use a team charter to state your team's mission, clearly define
everyone's roles and responsibilities, identify key resources, and
decide how the team operates.

12
Team contracts often use the SMART framework (Specific,
Measurable, Attainable, Relevant, Time-bound) to set goals and
objectives.
Working with geographically :Now, many of us work regularly
with coworkers based in different buildings, cities, countries, and
even continents. Team members may be in different time zones,
speak different languages, and be part of different cultures. One
team may include any variety of circumstances. Some members
may work in groups of two, three, or more in the same office,
while others may work individually in separate offices or at home.
Regardless of how people are organized, managing a team
that's spread out in many locations can present huge challenges,
even for the most experienced bosses.
They should be self-motivated
They need good communication skills
They should be open and honest
They must be results-driven

13
Remote people and groups :
With remote workers, you don't have the advantage of watching
body language for signs of trouble between team members. The
same is true for managing the morale of individuals. How can
you tell if remote workers are unhappy if you can't see them?
Watch closely for warning signs such as these:
Reduced output.
Short and unexpected emails.
Unwillingness to engage in telephone calls or video conference
calls.
Shortage of new ideas.

14
 Managing personalities in teams & Project Management :
A project manager (PM) has a challenging enough task to
coordinate deadlines, resources, and workflows. Yet with many
different personalities and expertise coming together on a project.
The PM also has a responsibility to build up a team. The
development of internal team relationships is key to a project’s
success
7 Personality Types That Make a Well-Rounded Team:
The leader :This person is responsible for mediating conflicts,
facilitating communications between team members, and
keeping everyone on course. The leader will schedule and guide
the course of meetings. . A good leader knows how to delegate
and let go of the reins.
The team player : Team players are identified by their
enthusiasm to work together for a common good. They’re usually
eager to help, willing to compromise and diplomatic. They might
not the biggest initiators in the world, but you can rely on team
players to follow-through on tasks and to willingly settle conflicts

15
The researcher : The researcher types—who show up in sales,
IT, support, marketing, content, etc.—are always asking
questions and then finding their own answers. If you need more
information to complete your project, it’s important to have a
strong researcher who can get it for you
The expert : Most projects, especially in technology, need a
subject matter expert. This is the person that possesses intimate
knowledge in a field that your project encompasses. So, if you’re
on the marketing team within a group that is working on new
mobile software, you need a developer to go to who will explain
the necessary technical details and offerings
The planner : Planners are naturally self-motivated. They’re also
driven to organize processes and give order to the world around
them (good news for others working in their orbit). You don’t
have to worry about planners being people-pleasers; they’re
more dedicated to making decisions for the good of the project
over winning a popularity contest.

16
The creative :
Creative types have a tendency to get caught up in their world of
imagination, problem solving, and conceptualizing. They might
not always be the clearest communicators, diplomats or
deadline-makers. Every team benefits from a creative thinker in
the group—someone who can deliver fresh ideas and solutions
that let the team’s work stand out from the crowd.
The communicator :
Communicators are often thought of as the salespeople,
marketers, writers and leaders. Those are communication jobs.
Communicators are also good at encouragement just about
anyone to jump on board and give the team the help it needs.
Your communicator might be the person with the longest list of
contacts, and knows someone for just about anything you need.

17
 Teamwork:
Teamwork in the workplace is an important
factor for project success. As a result, developing an
effective project team is one of the primary
responsibilities of a project manager.
Teamwork is important because it creates human
synergy. It increases the results of each member of
your team such that the overall result is greater than the
individual contributions made by each member

18
Effective teamwork: Effective teamwork creates its own set of
characteristics that makes it possible to see the cohesion in a group.
When an efficient team gets to work, the structure that has been put into
place helps the group obtain productive results. In order to create a
productive team, you first need to be able to identify the characteristics
of effective teamwork.
Unified Commitment to a Goal
A team is created to complete the goals it is given. An effective team is
committed to completing its goal by using the team's resources. It does
not mean that as individuals the people that make up the team share the
same point of view or are all in agreement on what is best for the group.
It means that when the team is presented with a goal, they can come
together and work as a single unit to complete the task.
Participation
In order for a team to act as a team everyone must be participating in
the creation of a solution. A team does not have extra members. Each
member of a team is essential to the team's success, and when the
group is given a task, each member knows what their job is and sets out
to put in their fair share of the effort.

19
Open Communication- A team is able to communicate effectively and
there is a feeling of open communication between all members of the
group. Issues within a team are handled by face-to-face communication.
Team members do not talk behind each other's back as there is a
respect developed among team members that necessitates direct and
open communication on all issues.
Decision-Making - A team has a hierarchy and a built-in decision-
making system that helps it to react quickly and effectively to all
situations. The members of the group are respected for their various
areas of expertise, and the leader of the group has developed the ability
to obtain the group members' opinions to formulate the group's
response. This applies to decisions made within the group ranging from
resolving internal conflict to a potential change in group leadership.
Efficient Use of Ideas
Brainstorming is one way that groups come up with the solution to a
problem. An effective team is able to gather information from each
member and formulate that information into a response. The team
becomes adept at dismissing ideas that will not work, and including
effective ideas into what would become the team's solution to an issue.

20
The pure project management :
A project-based organizational structure places most
of the decision-making at the working level. Work is
organized around teams that receive specific and
time-limited objectives. If you need to introduce a new
product, it becomes a project for a team. If sales are
below target, a team receives the job of increasing
sales to projected levels. The projects making up the
company organization exactly reflect what is
happening in the company's markets. The projects
change as the business requirements change. You
have reduced control but a high customer and market
focus. This type of organizational structure performs
better than other types in a rapidly changing business
environment.

21
 Control systems : According to the omniscient Project
Management Body of Knowledge (PMBOK), project controls are
defined as the following:
 “Project controls are the data gathering, management and
analytical processes used to predict, understand and
constructively influence the time and cost outcomes of a project
or program; through the communication of information in formats
that assist effective management and decision making.”
 Project controls are all-encompassing for project definition,
planning, execution, and completion; assisting in the entire
lifecycle of your project. As we said before, the use of controls
will vary according to individual project demands, but project
controls address, organize, and of course control the following
aspects of your project management system:
 Developing your project strategy; defining methods that will
enhance the future PM software use and project outcomes
 Development, updates, and maintenance scheduling for the PM
software

1
 Managing risks; assessing and analyzing project risks,
and cataloging past risks and how to avoid future
risks
 Earned schedule and earned value management,
including both work and organizational breakdown
structures
 Controlling project documentation
 Diagnosing project scheduling and costs with legal
assessment procedures
 Oversight and quality assessment of supplied
materials
 Comprehensive integration of the elements of
control and other areas of project management

2
 The scope of what project controls provide for your
PM software, let us go over why these controls are
important. The opposite of control is disorder,
disorganization, confusion, which are plain obscenity
to successful project management.
 Successful project execution first begins with planning
the process of execution. So how do project controls
fit in? To craft a well thought-out plan for executing
your projects can only happen if you have a sufficient
set of controls in place for your project
scheduling methods. A project control system that will
work for your company goals is essential to take full
advantage of your PM software, and guarantee
smooth sailing (float).

3
 Project Management Information Systems (PMIS)
 The PMIS is a tool that can help the project team to plan,
schedule, monitor and report on a project.
 A PMIS is typically a computer-driven system (though it can be
paper-based) to aid a project manager in the development of the
project. A PMIS is a tool for, not a replacement of, the project
manager.
 A PMIS can calculate schedules, costs, expectations, and
likely results.
 The PMIS cannot, however, replace the expert judgment of the
project manager and the project team. The goal of a PMIS is to
automate, organize, and provide control of the project
management processes.
 A typical PMIS software system has:
  WBS creation tools
  Calendaring features
  Scheduling abilities
  Work authorization tools
4
 Earned Value Management (EVM) controls
  Quality control charts, PERT charts, Gantt charts, and other
charting features
  Calculations for the critical path, Earned Value Management
(EVM), target dates based on the project schedule, and more
  Resource tracking and leveling

  Reporting functionality

The PMIS is used by the project management team to

support generation of a project charter, facilitate feedback as the
document is refined, control changes to the project charter, and
release the approved document. A project
management information system (PMIS) is the coherent
organization of the information required for an organization to
execute projects successfully. A PMIS is typically one or more
software applications and a methodical process for collecting and
using project information. These electronic systems "help [to] plan,
execute, and close project management goals."[1] PMIS systems
differ in scope, design and features depending upon an
organization's operational requirements.
5
 Control of major constraints are –
 Quality, cost and time; Visual control; Last planner; Technical
performance monitoring
 Quality, cost and time; Quality –This refers to the quality or
standard required to maintain in a product of a project. This help
to attract the customers , increase the demands & success of the
project.
 Time – This refers to the actual time required to produce a
deliverable. Which in this case, would be the end result of the
project. Naturally, the amount of time required to produce the
deliverable will be directly related to the amount of requirements
that are part of the end result (scope) along with the amount of
resources allocated to the project (cost).
 Cost – This is the estimation of the amount of money that will be
required to complete the project. Cost itself encompasses
various things, such as: resources, labor rates for contractors,
risk estimates, bills of materials, et cetera. All aspects of the
project that have a monetary component are made part of the
overall cost structure.
6
 Visual control ; Visual control is a business
management technique employed in many places where
information is communicated by using visual signals instead of
texts or other written instructions. The design is deliberate in
allowing quick recognition of the information being
communicated, in order to increase efficiency and clarity.
These signals can be of many forms, from different colored
clothing for different teams, to focusing measures upon the
size of the problem and not the size of the activity.
 A visual display group relates information and data to
employees in the area. For example, charts showing the
monthly revenues of the company or a graphic
representing a certain type of quality issue that group
members should be aware of. The visual control system
makes product flow, operations standards, schedules and
problems instantly identifiable to even the casual observer

7
 Last planner : Last Planner is a system of Production Control.
Production control is necessary on projects to support working
toward planned accomplishments, doing what can be done to
move along a planned path, and when that becomes
impossible, determine alternative paths that accomplish desired
goals. We work with the leadership of the project team to
(re)establish the milestone plan and develop a pull schedule.
We then engage the larger group of planner-doers in their first
experience with the LPS. At the end of the sessions the
expanded team will have a 6-week make-read plan and weekly
work plan that they can operate to and learn from. Later we
investigate that new practice with the team to make sense of
why it is working or not.
 There are two significant benefits of this approach:
 Project teams are getting results early in their experience with
the LPS.
 Training is focused on just what the team needs. This approach
is not suitable for all teams. The teams that are ambitious,
challenged, and open to change do the best.
8
 Technical performance monitoring : Managing a project
effectively means thinking before acting, identifying and
dealing with potential problems before they occur, and
constantly monitoring to determine whether your actions are
achieving their desired results.
 Progress Monitoring: Tracks the operational work of the
project. It answers questions like “Have activities been
completed as planned . It tells the project manager where the
project performance is in terms of money, time, risk, quality,
and other areas of project progress.
 Project Evaluation : Tends to focus on tracking progress at
the higher levels of the logical framework – i.e. project
outcomes. Evaluations tend to explore questions like, “Is the
project successful at achieving its outcomes
 Project Control :Involves establishing the systems and
decision-making process to manage variances between the
project plans (in terms of scope, cost, schedule, etc.) and the
realities of project implementation.

9
 Change control : Change control is an important part of the
project management process. With the pace of change today, it
is almost certain that projects will face the demand for change
during their life. While change may help ensure the project's
alignment with business needs, it is important to consider and
approve each change carefully.
 The change control process in project management ensures
that each change proposed during a project is satisfactorily
defined, reviewed and approved before implementation. The
change control process helps avoid unnecessary changes that
might disturb services and also ensures the efficient use of
resources.
 Change control contains five stages:
 Proposing a Change
 Summary of Impact
 Decision
 Implementing a Change
 Closing a Change
10
 There are two documents used during the
process:
 Change Log: used to provide a record of all changes
requested and decisions made
 Change Request Form: used to document details of
the change, including the business case.
 Proposing a Change
 This process gives the ability for anyone in the project
team (including the customer) to suggest a change to
the project. The proposal must include a description
of the change and expected benefits or other reason
for the change. The change is presented using the
Change Request Form and added to the Change Log
for the project.

11
 Summary of Impact
 This process is carried out by the project manager, who will
consider the overall effect on the project, covering the
following items:
 Quantifiable cost savings and benefits
 Legal, regulatory or other unquantifiable reason for change
 Estimated cost of the change
 Impact on timescales
 Extra resources needed
 Impact on other projects and business activities
 New risks and issues
 After this assessment, the project manager recommends
whether to carry out the change.

12
 Decision: This process involves a review of the change request
by an approved authority who will consider all the information
provided by the project manager and person making the request.
The decision will usually be:
 Accept
 Accept with comments and special conditions
 Reject
 Defer (change is not approved, but is left for consideration later)
 4. Implementing a Change
 If the change is approved it is planned, scheduled and executed
at a time agreed with the stakeholders.
 As part of the planning, a regression test plan is needed in case
the change needs to be backed out.
 After implementation, it is usual to carry out a post-
implementation review.
 Closing a Change : Once implemented, the requester checks
and agrees on the change, and it is closed in the Change Log by
the project manager.
13
 Control of the work of development projects:
 This template can be used to define roles and responsibilities – Below is
a few typical examples of the different types of roles involved in
delivering a project and their respective responsibilities
 Project Manager : The person responsible for developing, in
conjunction with the Project Sponsor, a definition of the project. The
Project Manager then ensures that the project is delivered on time, to
budget and to the required quality standard (within agreed
specifications). He/she ensures the project is effectively resourced and
manages relationships with a wide range of groups (including all project
contributors). The Project Manager is also responsible for managing the
work of consultants, allocating and utilizing resources in an efficient
manner and maintaining a co-operative, motivated and successful team.
 Responsibilities
 Managing and leading the project team.
 Recruiting project staff and consultants.
 Managing co-ordination of the partners and working groups engaged in
project work. & Detailed project planning and control including:
 Developing and maintaining a detailed project plan.
 Managing project deliverables in line with the project plan.
 Working closely with users to ensure the project meets business needs. 14
 Project Sponsor The person who commissions others to deliver the
project and champions the cause throughout the project. They will
normally be a senior member of staff with a relevant area of
responsibility that will be affected by the outcome of the project. They
are involved from the start of the project, including defining the project in
conjunction with the Project Manager. Once the project has been
launched they should ensure that it is actively reviewed. The Project
Sponsor is usually the one who has to negotiate a path through the
complicated diplomatic areas of the project although the Project
Manager will most likely be involved in such areas from time to time too!
 Responsibilities
 Acts as champion of the project.
 Is accountable for the delivery of planned benefits associated with the
project.
 Ensures resolution of issues escalated by the Project Manager or the
Project Board.
 Sponsors the communications programme; communicates the
programme’s goals to the organization as a whole.

15
 Project Board This group, normally containing management grade
personnel, is responsible for overseeing the progress of the project and
reacting to any strategic problems. The group is optional, as the
Sponsor-Manager relationship may be seen as the best means of
control, but is usually required in large projects that cross-functional
boundaries.
 Responsibilities
 Championing the project and raising awareness at senior level.
 Approving strategies, implementation plan, project scope and
milestones.
 Resolving strategic and policy issues.
 Driving and managing change through the organization
 Prioritizing project goals with other ongoing projects.
 Communicating with other key organizational representatives.

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 Project Team Members The staff who actively work on the
project, at some stage, during the lifetime of the project. Some
may have a specific role – for example, the Team might include
a Project Administrator (see below).
 Responsibilities
 Team member roles will vary depending on the type of project.
Typically they might be to:
 Provide functional expertise in an administrative process
 Work with users to ensure the project meets business needs
 Documentation and analysis of current and future
processes/systems
 Identification and mapping of information needs
 Defining requirements for reporting and interfacing
 User training

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 Systems Developer To work with the Project Manager on
defining and executing development requirements.
 Responsibilities
 Working with the Project Manager on definition of development
requirements and priorities.
 Data Migration.
 Interfaces with other systems.
 Reporting configuration and deployment.
 Set up and maintenance of security rights and access
permissions.
 Contributing to technical strategy, policy and procedure.
 Development and operation of technical testing programmes.
 Production of technical documentation to agreed quality
standards.
 Reporting on progress/issues to management and users

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 Concept of supply chain management :
 Supply chain management (SCM), the management of the
flow of goods and services, involves the movement and
storage of raw materials, of work-in-process inventory, and of
finished goods from point of origin to point of consumption.
Interconnected or interlinked networks, channels and
node businesses combine in the provision
of products and services required by end customers in
a supply chain. Supply-chain management has been
defined as the "design, planning, execution, control, and
monitoring of supply chain activities with the objective of
creating net value, building a competitive infrastructure,
leveraging worldwide logistics, synchronizing supply with
demand and measuring performance globally.
SCM practice draws heavily from the areas
of industrial engineering, systems engineering, operations
management, logistics, procurement, information technology,
and marketing struggles for an integrated approach.

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 Purchasing ;
 Contracts;
 From buying to relationship management
 Purchasing :
 Purchasing is the function of buying Goods & Services from
External Source to an Organization. Purchase department buys
Raw Materials, Spare parts, services etc. as Required by the
company or Organization. Purchase management is One of the
most Crucial Area of the Entire Organization. Thus, Needs
Intensive management. Purchase is the Main Activity in Area of
Material management. Purchasing management is a
department in an organization responsible for purchasing
activities. Purchase is Most Important Function in any
Organization. Purchase is the first element which affects the
product cost. Purchase management decides profitability of the
Company. Purchasing management also covers the areas
of outsourcing and insourcing. Purchasing management is
the management of purchasing process, and related aspects in
an organization.
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 Purchasing Management Process consists
usually of four stages:
 Purchasing Planning
 Purchasing Tracking
 Purchasing Reporting
 Negotiate
 Contracts :

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 From buying to relationship management
 Supplier relationship management (SRM) is the discipline of
strategically planning for, and managing, all interactions with
third party organizations that supply goods and/or services to an
organization in order to maximize the value of those interactions.
In practice, SRM entails creating closer, more collaborative
relationships with key suppliers in order to uncover and realize
new value and reduce risk of failure.
 The starting point for defining SRM is a recognition that these
various interactions with suppliers are not discrete and
independent – instead they are accurately and usefully thought
of as comprising a relationship, one which can and should be
managed in a coordinated fashion across functional and
business unit touch-points, and throughout the relationship
lifecycle.

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 Modern techniques in supply chain management
 Supply chain techniques are usually quite customized to the
companies themselves given the fact that all companies have
unique locations to cater to when it comes to their inbound and
outbound supply chains. For eg: a supply chain of a mining
complex in the remote edges of Australia would be very different
to the supply chain of Dominoes' pizza in an urban setting. It's
not just the location that matters but also the type of products,
the customers, competitive advantage and a whole raft of
variables that shape a supply chain.
 Adaptive: Supply chain managers all over the world always
strive for their supply chains to be adaptive to changing market
dynamics (changes in supply & demand). The innovations within
this theme usually are around the pre-emptive adaptability of
supply lines so that minimum inventory ensures maximum
security of supply. This maybe through integrated IT systems
implemented across the complete supply chain or collaborative
production planning.

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 Collaboration: Adaptive supply chain is a function of
collaboration within the supply chain and this interdependency
increases as we become more and more global. In today's
world economy supply chains are a collaboration of multiple
corporations, countries and organisations. Usually these
supply chains have one or more dominant nodes with the rest
being orchestrated and co-ordinated by the dominant
organisation.Collaboration is a great tool that helps to
increase the transparency within the supply chain as well as
to share the risk between the supply chain partners.
 Integrating. Breaking down silos and integrating functions
helps companies develop creative solutions. In companies
that excel at supply chain innovation, "supply chain managers
and C-level executives usually have a good relationship,"

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 The rise of Right shoring:
 Right shoring is a combination of Total Cost of
Ownership analysis and a Strategic Planning
approach to manufacturing location. Supplier
selection is no longer driven by geographic bias,
based on pre-conceived notions of lower cost
countries. Corporate supply chain executives have
historically been on a quest to chase the latest low
labor cost country. The cheapest labor does not
automatically equal the true lowest cost source.

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 Project completion and handover :
 The goal of project management is to obtain stakeholder
acceptance of the project result. This means that the
stakeholder agrees that the quality specifications of the project
parameters have been met. In order to make this go smoothly,
the stakeholder and project manager must have a well-
documented criteria of performance in place from the beginning
of the project. This information should be documented in
the project management plan which should include all changes
requested through the life of the project.
 Objective, measurable criteria are always best, subjective
criteria are risky and open to interpretation. There should be no
room for doubt or ambiguity, although this is often difficult to
achieve.

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 The project may not be complete when delivered to the
stakeholder. Some final project areas that may need to be
considered are:
 Documentation requirements
 Complete drawings
 Final report
 Provision of people trained on operating product of facility
 Customer training
 Project audit
 Update risk and work registers
 Settle all invoices
 Equipment and hire returns
 Warranties and guarantees settled
 Update financial systems
 Document lessons learned

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 Structuring improvement activities :
 The need to deploy a continuous improvement (CI)
program is greater than ever. In the global financial
failure, companies must find ways to produce goods
and services cheaper, faster and better, while
continuously appreciating customers.
 The 2 pillars that make up the project of continuous
improvement are:
 Learning before doing –
 role of external knowledge;
 Learning by doing –
 role of audit and review;
 Conducting reviews;
 Justifying it all – evaluating cost of quality

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 Learning before doing – Role of external knowledge:
 Proper knowledge is a basic requirement for effective project
management. According to Sankarasubramanian (2009), all
projects have one thing in common—knowledge. The Japanese
project management standard recognizes knowledge and
experience as the main sources of project value (Project
Management Association of Japan [PMAJ], 2005a, p. 86).
Projects may be seen as knowledge management processes
(Sauer & Reich, 2009). Project knowledge management,
especially in complex projects, is one of the main success
factors in project management; lack of project knowledge
management is one of the main reasons for project failure
(Desouza & Evaristo, 2004). Knowledge about project
management, explicit as well as tacit, plays a decisive role in
understanding this discipline (Morris, 2004).

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 Learning by doing – role of audit and review :
 A project audit provides an opportunity to uncover the issues,
concerns and challenges encountered in the execution of a
project. It affords the project manager, project sponsor and
project team an interim view of what has gone well and what
needs to be improved with the project to successfully complete it.
If done at the close of a project, a project audit can be used to
develop success criteria for future projects by providing a
forensic review. This review will provide an opportunity to learn
what elements of the project were successfully managed and
which ones presented some challenges. This will help the
organization identify what it needs to do so that mistakes are not
repeated on future projects.
 A project audit consists of three phases:
 Phase 1: Success Criteria and Questionnaire Development
Phase 2: In-depth Research
Phase 3: Report Development

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 Conducting reviews
 The monthly project review meeting is a powerful method of
delivering project status to executive management and other
stakeholders, refreshing with them the major bullets of the
project vision, reaffirming their commitment to the vision (or
identifying any emerging issues with the vision), and cross-
pollinating with other projects and with supporting functional
groups.
 The key complaint about such large monthly meetings is that
even when they are efficiently run and cover a large number
of projects in a short period of time they are still expensive.
The meetings tie up critical management resources for half a
day to a day in the meeting itself, and meeting preparation
time is a further hit on project managers

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 Justifying it all – evaluating cost of quality
 Cost of quality is a methodology that allows an
organization to determine the extent to which its
resources are used for activities that prevent poor
quality, that appraise the quality of the organization’s
products or services, and that result from internal
and external failures. Having such information allows
an organization to determine the potential savings to
be gained by implementing process improvements.
 Quality-related activities that incur costs may be
divided into:
 prevention costs,
 appraisal costs, and
 internal and external failure costs