Project Management

A strategic plan (typically long term and corporate-wide) can never be implemented as a single, monolithic task. A strategy of
expanding abroad, for example, would consist of a series of smaller tasks such as finding premises, recruiting, training, equipping the
factory, marketing, and establishing a distribution network. Each of these smaller tasks can be regarded as a project, with a start, end,
objectives, deadline, budget, and required deliverables. Realising a strategic plan therefore depends on carrying out a complex jigsaw
of projects, and if one piece goes missing the whole strategic plan will be in jeopardy. Therefore, successful project management is at
the heart of successful strategic planning.

A project is an activity that:

- is temporary having a start and end date
- is unique
- brings about change
- has unknown elements, which therefore create risk

A project is a temporary undertaking performed to produce a unique product, service, or result. Large or small, a project always has
the following three components:
Specific scope: Desired results or products; closely linked to quality as well.
Schedule: Established dates when project work starts and ends
esources allocated specifically to the project although often on a shared basis: Necessary number of people and funds and other
resources (money, facilities, supplies, servies).

Each component affects the other two! For example:

Expanding the type and characteristics of desired outcomes may require more time (a later end date) or more resources. Moving up
the end date may necessitate paring down the results or increasing project expenditures (for instance, by paying overtime to project
staff)

Project management can be a core strategic competence for some industries (like consulting and construction).

Projects are generally considered successful if they meet the triple constraint; scope, time cost.

WHY DO PROJECTS FAIL?

1. Poor project and program management discipline
2. Lack of executive-level support
3. Wrong team members
4. Poor communication
5. No measures for evaluating the success of the project
6. No risk management
7. Inability to manage change

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THE PROJECT LIFECYCLE

All projects will start from an initial idea, perhaps embedded in the strategic plan. A project will then progress to the initiation stage
when a project manager will be appointed. The project manager will choose a project team and they will carry out a feasibility study.
The feasibility study is necessary to establish the following:
- Commercial feasibility will the likely benefits exceed the cost?
- Technical feasibility do we think this project has a good chance of working? Operational feasibility will it help the organisation
reach its objectives?
- Social feasibility will our employees, customers and other stakeholders tolerate it?

A feasibility report should be produced and this will have to be studied by senior managers, because if the project goes ahead
substantial expenditure might be required.

Note that the feasibility report does not merely have to present ma
of options, each with particular benefits, costs and time frames. Where there is some doubt as to the potential benefits that will arise
from the project, it is particularly valuable to offer a range of choices which allow the organisation to first try out a modest project
and later allow the project to be extended. This approach is a useful way to reduce risk. If you are not sure about something, start in
a small way and extend later if worthwhile.

Successful organizations create projects that produce desired results in established time frames with assigned resources.

Every project, whether large or small, passes through the following four stages:
Starting the project: This stage involves generating, evaluating, and framing the business need for the project and the general
approach to performing it and agreeing to prepare a detailed project plan. Outputs from this stage may include approval to
proceed to the next stage, documentation of the need for the project and rough estimates of time and resources to perform it
(often included in a project charter), and an initial list of people who may be interested in, involved with, or affected by the project.

Organizing and preparing: This stage involves developing a plan that specifies the desired results; the work to do; the time, the
cost, and other resources required; and a plan for how to address key project risks. Outputs from this stage may include a project
plan documenting the intended project results and the time, resources, and supporting processes to help create them.

Carrying out the work: This stage involves establishing the project team and the project support systems, performing the planned
work, and monitoring and controlling performance to ensure adherence to the current plan. Outputs from this stage may include
project results, project progress reports, and other communications.

Closing the project: This stage involves assessing the project results, obtaining customer approvals, transitioning project team
members to new assignments, closing financial accounts, and conducting a postproject evaluation. Outputs from this stage may
include final, accepted and approved project results and recommendations and suggestions for applying lessons learned from this
project to similar efforts in the future.

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Project initiation

All projects begin with an idea. Perhaps the the management thinks of a new market
to explore; or maybe the management thinks of a way to refine the

Sometimes the initiating process is informal. For a small project, it may consist of just a discussion and a verbal agreement. In other
t team.

Decision makers consider the following two questions when deciding whether to move ahead with a project:
Should we do it? Are the benefits we expect to achieve worth the have to pay? Are there better ways to approach the
issue?
Can we do it? Is the project technically feasible? Are the required resources available?

Project selection: As organizations have limited resources, they should assess suitability, acceptability and feasibility of projects before
they choose one to proceed with.

Pre-initiating tasks:
- Project objectives and constraints are determined ( i.e. set scope, identify time and cost constraints)
- Select project manager ( who takes responsibility that desired results are achieved on time and within budget);
- Identify project sponsor ( who provides and is accountable for the resources invested in the project; will NOT be involved in the
management of the project normally; the project sponsor ( say the senior management) may appoint a project owner to review
project plans and progress at regular intervals)

Initiating tasks:

Preparation of a business case document ( why the project is needed, what it will achieve and how it will proceed)

Explains the need for work on the project to start.

Typical contents:
1. Description of current information/issues ( problems to be solved)
2. Cost benefit analysis(including intangible costs and benefits), any assumptions undertaken
3. Impact on organization other than cost ( changes in org structure for example)
4. Key risks and actions to mitigate them
5. Recommendations

Project costs and benefits ( part of the business case document)

Within the business case document, benefits should be mentioned before the costs!
A benefit-cost analysis is a comparative assessment of all the benefits anticipated from the project and all the costs to introduce the
project, perform it, and support the changes resulting from it.

Some anticipated benefits can be expressed in monetary equivalents (such as reduced operating costs or increased revenue). For
other benefits, numerical measures can approximate some, but not all, aspects. If the project is to improve staff morale, for example,
you may consider associated benefits to include reduced turnover, increased productivity, fewer absences, and fewer formal
grievances. Whenever p

Identifying the costs ( capital and operating )

Consider costs for all phases of the project.

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Such costs may be nonrecurring (such as labor, capital investment, and certain operations and services) or recurring (such as changes
in personnel, supplies, and materials or maintenance and repair). In addition, consider the following:
Potential costs of not doing the project
Potential costs if the project fails
Opportunity costs (in other words, the potential benefits if you had spent your funds successfully performing a different project)

Cost-benefit evaluation

One the costs and benefits have been quantified, an investment appraisal can be undertaken using techniques like
- Accounting rate of return
- Payback period
- Net present value
- Internal rate of return

Project initiation document/project charter

Give authorization for work to be done and resources to be used.

Complements the business case document

Can be used for internal communication to keep staff informed of what is happening

One of the main outputs of the initiation stage should be the project initiation document, or PID. The term is poor because it implies
e of pages
only. In fact, the PID is of key importance both initially and throughout the duration of the project

Typical contents: It should address the following questions:

- What should the project achieve? What are its deliverables? These should be specified in detail so that the project and its scope
are well defined from the outset.
- Why is the project is needed (including a cost benefit analysis)? How will the quality or acceptability of outputs be assessed?
- Who will lead the project?
- Who will be on the project team and what will be the role and responsibility of each team member? What are the risks? How
have they been assessed and prioritised, and how will they be managed?
- Who will carry out the work on the project? Which actions will be assigned to in-house staff and which to sub- contractors?
- By when should the project and its various stages be completed? What are the constraints on the project?
- What are the assumptions on which the project depends? How much budget has been allocated to the project?
- What other resources are needed by the project, and have been allocated to it?
- Who sponsors or owns the project? (generally the department or client who is paying) What are the reporting arrangements?

As this shows, the PID is the key reference document and it will be extensive and detailed, containing all the planning information
required about the project.

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WHAT DETERMINES RISK?

Project risk can be said to depend on three variables:

1. How well defined is the project? A well-defined project will set out in detail exactly what the project is to accomplish (the
deliverables), when each stage should be completed, and how each stage will be appraised (quality). These qualities can be
ortant to set a cost budget in advance. We will see later that there
can be tensions between cost, time, quality and scope, but if these have not been defined in the first place, the project will run
into difficulties quickly as each member of the project team is likely to be pursuing different goals. A poorly defined project will
be short on detail but long on grand ambition. For example, stating that the new IT system will improve inventory management
is almost useless. Is the firm moving to just-in time? Is it going to develop sophisticated demand forecasting algorithms? Is the
warehouse to be automated? Will labour and machine use be part of the system? In addition, if the project is not well defined,
even if most participants happen to have a similar vision initially, the project will be susceptible to drift. This means that as the
project progresses, ideas change and the project deliverables change. To some extent, project drift is inevitable because as the
project is worked on, more information is discovered and it would be foolish not to take note and alter the project where
necessary. However, altering projects part way through is usually expensive in terms of time and money if work has to be redone
e-to-
without proper evaluation of costs and benefits. By defining the project in detail at the start, the firm will have thought carefully
about deliverables and the need for subsequent amendments should be minimised.
2. The size of the project. It is pretty obvious that there will be more risk associated with large projects. More stakeholders will be
involved, possibly including customers and suppliers. There will be more coordination problems and the financial investment will
be greater. Project failure, will cause great disruption and many people will be affected. By contrast, small projects will be easier
to control and if they go wrong, damage is likely to be confined to a smaller number of stakeholders.
3. The technical sophistication of the project. A project which depends on well understood solutions is much less likely to go wrong
than a project which is attempting to use cutting edge, experimental technology.

So, if you are put in charge of a large, poorly defined, sophisticated project, you might like to look round for another job, as if the
project fails to deliver (and it probably will) you could be the number one scapegoat.

Of course, there can be a good business case for embarking on large sophisticated projects, as these can allow companies to
differentiate their products and services. If standard, hesitant, safe solutions are always used then more ordinary performance will
t radical solutions to gain competitive advantage. However, there can never be
any excuse for a project being ill defined at the start.

Risks must be managed and the following approach can be used:

- Define the risks. What could go wrong?
- Assess the risks. This will be a combination of estimating the financial effect if the risk event occurs, and the probability of the risk
occurring. Some risks would have large financial consequences but could be very unlikely to happen. Others might have trivial
financial consequences.
- Prioritise the risks. What are the really serious events that need to be addressed first?
- Deal with the risks. Generally, there are four approaches:

1. Tolerate the risk, either because the event is unlikely to happen and/or the consequences will be immaterial.
2. Treat the risk, or do something to ameliorate it. For example, if the consequences of missing a deadline are serious, have additional
resources available that can be used to speed up the process if necessary.
3. Transfer the risk. Insurance is a form of risk transfer, as is sub-contracting. So if you are worried about an IT project missing
important deliverables, consider sub contracting part of it and build in penalty clauses.
4. Terminate the risk. In other words, the event would be so serious that you do not want to risk it occurring at all. For example, if
there were a security breach during a project that requires sensitive data to be held, this could be devastating to a company, so
the company might decide not to hold that data, despite it possibly yielding good marketing information.

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Project planning

Include the following in the project-management plan:

An overview of the reasons for your project
A detailed description of intended results
A list of all constraints the project must address
A list of all assumptions related to the project
A list of all required work
A breakdown of the roles you and your team members will play
A detailed project schedule
Needs for personnel, funds, and non-personnel resources (such as equipment, facilities, and information)
A description of how you plan to manage any significant risks and uncer- tainties
Plans for project communications
Plans for ensuring project quality

PROJECT PLANNING AND MANAGEMENT TOOLS

Typically, projects consist of a number of separately identifiable steps which can be broken down, hierarchically, until manageable
work packages are produced which can be assigned to the appropriate people. This is the process of deriving the work breakdown
structure for the project. Each work package, or task, will have four components:
- task name and description
- costs, both marginal and any fixed element
- duration
- who is responsible and, in particular, whether the work will be carried out internally or externally.

So now the project manager knows who is doing what and how much each element should cost. Using a relatively simple cost
accounting system, material, labour, overheads and third party costs can be coded to the work packages, hence to the project, and
actual costs can be compared to budget for control purposes.

Still to be taken into account is the time that each work package will take, but whereas costs are cumulative, times need not be as
often several tasks can be undertaken simultaneously. A more sophisticated approach is needed which sets out the relationship of the
tasks or activities to one another, identifying those tasks which can be concurrent and those which can only be consecutive. For
example, if the project was to set up a new website for the company, the task of choosing the internet service provider to host the
website can be undertaken at the same time as designing the graphics and layout of the web pages. However, the layout and graphics
sks could be set
out in a network diagram, or critical path analysis

Network diagram / Critical path analysis

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 ntent and
layout have been decided. These are consecutive steps, one taking eight days and the next five days, so this small part of the project
cannot be accomplished in less than 13 days. It does not matter that it takes only nine days to choose the ISP: everything has to wait
for the content and design activities to be completed. These are critical activities, and if either were to take another day, completion
of the whole project would be delayed by a day.

Therefore, the project manager has to monitor critical activities very carefully. Choosing the ISP is a non- critical activity and it could
be delayed by up to four days before impacting on project completion.

Once project slippage is likely, the project manager has a number of choices, all of which should be discussed and perhaps negotiated
with the project sponsor:
- live with the slippage
- reduce project scope
- reduce project quality
- bring in more resources, such as hiring sub-contractors to help out (which will, of course, increase costs)
- move resources from non critical to critical activities if skills are interchangeable.

Even small projects can be broken down into many tasks, each with its own definition, personnel assigned, costs, start time, finish
time and defined relationships with other tasks. Controlling this manually can be very arduous and project management software can
be very useful in tracking each activity and, therefore, the progress of the project as a whole.

Work breakdown structure

The Work Breakdown Structure (WBS) is a grouping of the work involved in a project oriented towards the deliverables that defines
the total scope of the project. The WBS can be imagined as a roadmap of the project which breaks down the total work required for
the project into separate tasks and helps group them into a logical hierarchy (see example below)Different levels of detail assure the
project managers that all products and work tasks are identified in order to integrate the project with the current organisation and
to establish a basis for control. Furthermore, the WBS organizes and divides the work into logical parts based on how the work will
be performed. This is important as usually a lot of people are involved in a project and many different deliverables are set to reach
one main objective to fulfill the project.

In addition tothis, the WBS serves as a framework for tracking cost and work performance because every element which is defined
and described in it can be estimated with reference to its costs and time needed. Consequently, the WBS enables the project
managers to make a solid estimation of costs, time, and technical performance at all levels in the organisation through all phases of
the project life-cycle.

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Project execution and control
After the project-management plan has been developed et to work and start executing the plan.
This is often the phase when management gets more engaged and excited to see things being produced.

Preparing
Preparing to begin the project work involves the following tasks
Assigning people to all project roles: Confirm t perform the project work, and negotiate agreements with
them and their
Introducing team members to each other and to the project: Help people begin developing interpersonal relationships with each
other.

Help them appreciate the overall purpose of the project and how the different parts will interact and support each other.

Giving and explaining tasks to all team members: Describe to all team sible for producing
and how the team members will coordinate their efforts.
Defining how the team will perform its essential functions: Decide how the team will handle routine communications, make
different project decisions, and resolve conflicts. Develop any procedures that may be required to guide performance of these
functions.
Setting up necessary tracking systems: Decide which system(s) and account work effort, and
expenditures, and set them up.
Announcing the project to the organization: Let the project audiences know that your project exists, what it will produce, and
when it will begin and end.
Performing
Finally, project work begin! The performing subgroup of the executing processes includes the following tasks
Doing the tasks:
Assuring quality: Continually confirm that work and results conform to requirements and applicable standards and guidelines.
Managing the team: Assign tasks, review results, and resolve problems.
Developing the team: Provide needed training and mentoring to improve
Sharing information: Distribute information to appropriate project audiences.

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The monitoring and controlling processes

As the project progresses, it needs to be ensured that plans are being followed and desired results are being achieved. The monitoring
and controlling processes include the following tasks:
Comparing performance with plans: Collect information on outcomes, schedule achievements, and resource expenditures;
identify deviations from your plan; and develop corrective actions.
Fixing problems that arise: Change tasks, schedules, or resources to bring project performance back on track with the existing
plan, or negotiate agreed-upon changes to the plan itself.
Keeping everyone informed: Tell pro achievements, project problems, and necessary revisions to
the established plan.

Project slippage: when a project is running behind schedule.

Project completion

Finishing the assigned tasks is only a part of bringing the project to a close.
In addition, the following must be done:
Get approvals of the final results.
Close all project accounts
Help team move on to their next assignments.

Hold a post-project review with the project team to recognize project achievements and to discuss lessons can be applied to the next
project.

This happens at the end of the project and allows the project team to move on to other projects. It can often be the last stage of the
project, with the review culminating in the sign-off of the project and the formal dissolution of the project team. The focus of the po
st-project review is on the conduct of the project
itself, not the product it has delivered. The aim is to identify and understand what went well and what went badly in the project and
to feed lessons learned back into the project management standards with the aim of improving subsequent project management in t
he organisation.

Post implementation review: A post implementation review focuses on the product

delivered by the project. It usually takes place a specified time after the product has been delivered. This allows the actual users of t
he product an opportunity to use and experience the product or service and to feedback their observations into a formal review. The
post-implementation review will focus on the fitness for purpose. The review will not only discuss strategies for fixing or a
ddressing identified faults, but it will also make recommendations on how to avoid these faults in the future. In this instance these le
ssons learned are fed back into the product production process. Without a PIR, a business cannot demonstrate that its investment in
the project was worthwhile.

PIRs can sometimes be an on-going element of project management that may be used at project gateways to examine changes impl
emented to date.

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Project manager
You will see from the contents of the PID that there are a number of classes of stakeholder in projects, typically:
- The sponsor
- The project team
- Other employees, sub contractors and regulatory authorities, such as health and safety inspectors.

Funds from the sponsor flow through the project team and on to other departments and sub contractors. In return, project
deliverables should flow back towards the sponsor.

The project team will often be multi-disciplinary and it will be led by a project manager. The project manager is enormously influential
as to whether or not the project ends in success, and he or she must combine technical knowledge, leadership ability, and project
management skills.

Relationships between project manager and stakeholders

The tasks of the project manager can be summarised as:

- Ensuring that the PID is comprehensive. This can be a complex task because it will mean ensuring that deliverables, budget,
resources, project team, deadlines and so on have been determined. As was emphasised earlier, there is no point embarking on
a semi-defined project, so the project manager should be strong enough to resist management pressure to be seen to be doing
something. If the project is started before the PID is complete, things will be done but they will probably be the wrong things.
- Communication with the sponsors. Even when projects run smoothly, sponsors will expect updates on progress. Often, however,
even in well planned projects, problems will be encountered and it is then that communication with the sponsors is particularly
important. This will keep the sponsors informed but will also give the sponsors opportunities to make choices, for example to
spend more or to cut back on deliverables.
- Team leading. The project team is likely to consist of people from a number of departments with different skills and priorities.
The project manager should be capable of creating a cohesive, well-motivated team where participants work well together.
- Communication with sub-contractors and regulatory authorities.
- Technical appreciation of project issues. For example, someone running a construction project will need to understand relevant
technical issues when these are raised in meetings.
- Organisational ability, including the ability to delegate tasks.
- Technical competence in project management. For example, an understanding of critical path analysis (to monitor and control
progress through time), and cost reports to monitor and control expenditure.
- An ability to balance project cost, time, scope, and quality. All projects have targets relating to cost, time, scope, and quality;
these should be defined in the PID. However, certain priorities or pressures are likely to apply to each variable, depending on the
nature of the project. For example, a project involving safety- critical systems will rightly put great emphasis on quality because
the consequence of technical failure will be very serious. However, managers need to be aware of the impact of the following
compromises:

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 Increased emphasis on quality places the project in danger of taking longer and costing more.
Increased emphasis on meeting the cost budget may compromise quality, the project may take longer, or the scope could be
narrowed.
Increased emphasis on meeting time deadlines may also compromise quality, cost over-runs are more likely (perhaps because
overtime has to be paid), or scope could be narrowed.
If the emphasis is to ensure that the project scope is not reduced, then cost and time might increase, and quality might
decrease. Naturally, if scope is increased, whether through project drift or through more pre-meditated changes to the project,
costs, time and quality will all be severely jeopardised.

None of these compromises is bound to happen, but project managers should be aware that such tensions exist and that a balance
has to be maintained by management action, if necessary negotiating with the project sponsors to gain approval for changes.

Project sponsor
The project sponsor or project facilitator will normally be a senior member of the management team.
They are often chosen as the person with the most to gain from the success of the project and the most to lose from the failure of it.

Their job is to direct the project, and allow the project manager to manage the project.

The roles taken on by project sponsors in organisations include:

- gatekeeper choosing the right projects for the business means ensuring that only projects that support the business strategy a
re started and that they are of sufficiently high priority and have clear terms of reference
- sponsor and monitor steering the project by requesting regular meetings with the project leader and giving advice and guidan
ce
- supporter and coach provides practical support for the project leader, especially if they are taking on a project that is larger or
more significant than they have handled before
- decision-maker if decisions are required that are outside the scope of the project then the project sponsor will make the decis
ion on behalf of the organization
- champion or advocate involves informal communication with other senior managers to ensure that they continue to have an
objective view of the importance of their project in relation to other projects within the business
- problem solver when the team faces problems that it is unable to solve or does not have the skills or experience to solve
- Resource negotiator a success will depend on the availability of the right resources at the right time. In cross-fun
ctional projects the sponsor may provide assistance in negotiating resources around the company

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