PROJECT

MANAGEMENT
LECTURE 1 : OVERVIEW
Prof. Dato’ Dr. Sayed Mushtaq Hussain

1
I. What is a Project ?
 Project is a ‘Task Scheduled for Completion’.
 An output to meet a specific objective /goal.
It is temporary and unique-it has a start time
and a completion time.

2
 II. Project Management
 PM is the basic principles of planning, scheduling
and controlling.
 PM is a discipline that was invented in the
trenches mostly by Project Managers. Helps to
handle similar problems and challenges.
 In 1950’s and 1960’s, PM emerged as a discipline.
Projects everywhere. Public sector, military,
MNCs.

3
Project Management…
 PM turned to other disciplines like-operations
research, systems engineering, statistics and
computers.
 From 1960-1985, PM had no allies. 1985-
2000, PM borrows concepts and techniques
from other disciplines-TQM (1985), Schedule
Compression (1990), Decentralized Decision
Making (1991-92), Change Management
(1995), Multinational Teams(2000), Risk
Management.
4
III. How to Identify
Projects?
 Needs studies or opportunity studies
 Policy-guided by a strategy (project is a
means to an end)
 Resource Studies / Area Studies
 Market Studies
 Technology studies and applications

5
IV. Why Project Planning and
Management?

 To improve both the productivity and quality

of project.
 Eliminate waste.
 Manage the common problem of cost
overruns and delays. PM triangle.
 Ensure effective coordination and control.
 Create a suitable environment for success-
teamwork, information, communication,
incentives and leadership.
6
 V. Project Planning and Management
Cycle

 The PP&M cycle has four phases.

 Planning, appraisal and design (3 tasks)
 Selection, approval and activation (2 tasks)
 Operation, control and handover (3 tasks)
 Evaluation and refinement (2 tasks)

7
VI. Lessons from PM Reviews
 Policy occupies a central position-adequate
communication and feedback channels.
 Turnkey projects – maintenance problems.
 Indifference to costs, mismanagement and lack
of supervision.
 Conflicts in control development projects –
dams, etc.
 Teamwork
 Poor data base
 Inadequate studies
8
VII. Project Management Issues /
Importance

 Project operates in three constraints - cost, time and

level of performance. All imply trade-offs. PM has
tackle them.
 Completion is main focus of PM-failure is not an
option
 Power gap- PM needs a certain level of
power/authority to get the job done.
 Customer Satisfaction/Stakeholders Interest-projects
are done for customers/stakeholders. Their
satisfaction is important. Technical knowledge is not
enough. Customers sometimes do not know what they
want. 9
PROJECT
MANAGEMENT
LECTURE 2: PROJECT PLANNING,
APPRAISAL AND SELECTION
Prof. Dato’ Dr. Sayed Mushtaq Hussain

10
I. Project Cycle-has four
phases
 Phase 1- includes :
a) Project identification and formulation
b) Feasibility analysis and appraisal and
c) Design of the project , starting point in the
Project Identification Brief (PIB), followed
by the pre-feasibility/feasibility study …..
The technical, economic and commercial
aspects. Appraisal is the evaluation of the
ability of the project to succeed
11
Project Cycle-has four
phases…
 Phase 2- includes:
Selection, Approval and Activation. Project selection
is based on financial analysis and other
considerations. Approval is from company
management or funding authorities in the case of
public sector projects. Activation is coordination and
allocation of resources to make the project
operational. Project team responsibility and authority
need to be established at this stage. Personnel, legal,
financial, organizational, procurement and
administration matters are sorted out. 12
Project Cycle-has four
phases…
 Phase 3-
Refers to operations, control and handover involving
implementation, supervision, completion and handover.
Implementation involves allocation of tasks (WBS),
schedules and time frame for feedback, communication and
other MI systems. CPM/PERT and other type of network
analysis is useful. Project completion requires preparation
for phasing out and handover. This involves scaling down,
dismantling of the project organization, finalization of
contracts, termination of loan facilities and transfer of
project resources and admin arrangement for post-
completion phase of the project
13
Project Cycle-has four
phases…
 Phase 4-
Evaluation and Refinement. Evaluation is a
post-completion evaluation of the project in
attaining its internal goals. It should be a
continuous process to gain experience and
lessons and improve planning and
implementation. Follow-up is PM’s role; while
refinement of policy and planning helps the
project management in the future.
14
Project Cycle-has four
phases…
 IPPMC provides a useful framework for all
concerned to play their respectively role.
 In old days, project planning received much of
the attention (particularly in the public
sector). Now PM takes place in the broader
framework of IPPMC.
 Case studies (over 1000) from the Harvard
Business School are available to enrich on
experience in PM.
15
 II. Pre-feasibilty and Feasibility
Studies

 Project identification is the first step. Project

Identification provides the first hand details.
 If PIB is promising detailed feasibility studies are
made to check the likely feasibility of the project .
 A feasibility study must cover six important aspects
of the Project –technical viability,
economic/financial analysis, administrative and
organizational, environmental, social and political,
and financial (funding needs and sources)
 Feasibility studies should provide a fairly firm
estimate of costs and revenues. 16
Pre-feasibilty and Feasibility Studies…

 Feasibility studies should be carried out by a

team of experts and specialist and not by
amateurs.
 Feasibility studies should provide options
while discussing various aspects of the
Project, especially in matters of size, location,
technology, markets, etc.
 Project risks should be clearly identified with
details on the measures to manage the risks
involved. 17
III. Project Appraisal
 Project appraisal uses many techniques. Financial
analysis includes computation of ‘Payback Period’, Net
Present Value (NPV), Internal Rate of Return (IRR), and
Average Profitability of the Project. (See Exercise 1
and Item 6 of the Course Material for details).
 Financial analysis can be done by using the Windows
Excel 2007.
 For Public Sector Projects, IRR, Benefit-cost Ratio and
Cost-effectiveness criteria are used.
 Public projects use both financial and economic
analysis. Economic analysis is based on social costs
and social benefits.
18
IV. Project Selection
 Project selection can be made on the basics
of financial analysis (private sector) and
economic analysis (public sector).
 In case of multiple goals and many projects,
project selection relies on project ranking (by
assigning scores) and relative weight for the
various goals.

19
V. Final Design
 Review the proposed Project Design in the
light of the Feasibility Study and the Project
Appraisal and make modifications, if
necessary.
 Finalize the Project Design.
 Prepare specifications and cost estimates.
 Prepare listings of project tasks/activities.
 Prepare contract documents with a viable
system of monitoring and evaluation.
20
PROJECT
MANAGEMENT
LECTURE 3 : PROJECT IMPLEMENTATION

Prof. Dato’ Dr. Sayed Mushtaq Hussain

21
Project Implementation
 Planning indicates ‘what’ activities are to be
accomplished.
 Scheduling indicates ‘when’ activities are to be
accomplished.
 Techniques used are the WBS-Work Breakdown
Structure, Bar Chart (Gantt Chart), Network Diagram,
CPM/PERT.
 Work Breakdown Structure (WBS) is the listing of
activities/tasks to be undertaken to implement the
Project. WBS is the first step in project implementation.
WBS should have level of detail which can be easily
managed. Many tiers of the WBS can be established.
22
Project Implementation…
 Bar charts are OK . But they do not show the sequence
or priorities or the possibility to undertaking more than
one job concurrently. This is achieved by constructing
network diagram and CPM analysis.
 Network diagram, using arrows to display sequence and
interrelations are more meaningful.
 CPM analysis identifies critical path (activities which
cannot be delayed without delaying the Project).
Float/slack in estimated by using the ‘forward pass’ and
the ‘backward pass’. A critical activity has no float (when
late finish and early finish times are the same)

23
Project Implementation…
 Dummy activities have no time or resources consumed.
They are used to complete the sequential logic.
 PERT uses probabilistic time estimates.
 Network planning requires resource leveling and
resource allocation.
 To match target time with CPM time, transfer
resources from slack paths to more critical path, add
more resources, cut activity time (technology),
outsource, or eliminate some of the time consuming
components.
 Milestones- are important events on the CPM. These
are used for better management.
24
 Project Implementation…
 Network Scheduling Techniques include Gantt Chart,
Milestone Chart, Network Diagram with CPM/PERT
analysis, PDM (Procedure Diagram Method), GERT
Graphical Evaluation and Review Techniques).
 Gantt Chart, Milestone Chart do not show
interdependencies between activities and events.
 PERT is used for large and complex projects.
Te = a+4m+b/6 standard deviation of the critical
path is the sum total of standard deviation of all
activities in the critical path. Variance is

25
Project Implementation…

where
z = number of standard deviations of a
normal distribution
D = target completion time
μ = sum of the Te on critical path
σ μ = variance of the critical path
 z statistic indicates the probability of
completing the project on time
26
PROJECT
MANAGEMENT
LECTURE 4: PROJECT MONITORING,
AND CONTROL
Prof. Dato’ Dr. Sayed Mushtaq Hussain

27
I. Control Systems
 The primary responsibility of the PM is to ensure
that things are done as they are supposed to be
done. Find good, fast and chief ways of achieving
the objective. To achieve this, project control in
essential.
 Control in achieved by comparing when one is
with where we are supposed to be; and then
taking corrective action.
 The central idea of control is information (not
authority). Information system/feedback is
important.
28
Control Systems…

PROCESS
INPUTS OUTPUTS

FEEDBACK

29
Control Systems…
 Authoritarian management does not work; manager has
to create a situation where work is controlled not the
worker. PM in control if every member of his team is in
control of his own work.
 PM should have macro control; not micro-control. PM
should achieve empowerment-with minimum
supervision. Team should have self-control.
 How to empower people?-clear definition of work with
the purpose stated; personal plan how to do the required
work; skills and resources to be adequate to do the work;
feedback on progress directly from person who does
work; a clear definition of authority to take corrective
action.
30
Control Systems…
 A well trained, informed and empowered
employee can do a lot.
 Climate of fear, distrust or antagonism is not
good. It kills initiative and innovation. Climate
that fosters openness, honestly and
innovation. Good working relationship is
good.

31
Control Systems…
 Three components of a Project Control System-
First order (example: thermostat)
no flexibility
Second order (example: autopilot)
follow rules/guidelines/program
response
Third order (example: monitoring and team
decision)
human judgment and analysis-
learning process, flexibility,
human element
32
Control Systems…
 Monitor output and compare with the plan
targets, discrepancy, take corrective action. It
requires team work, brain storming, finding
solutions, ethical goal-directed behaviour.

33
Control Systems…

INPUT PROCESS OUTPUT

ADJUST

PLAN COMPARE MONITOR

34
Control Systems…
 Go/no go controls-pre-designated control
system(Budgets, Schedules-which are all
documented)
 Comparing performance against plan is very
difficult, if work cannot be quantified. Measuring
progress in knowledge work is difficult.
 Progress reports-earned value reports; written
reports; keep paperwork to the minimum. Set
formats. Project Status Report, Milestone
Report, Bar Charts. Information System.
35
Control Systems…
 Changes to the plan-significant changes be
signed by the stakeholders. Changes in the
scope of the project and timing are
troublesome as contractual obligations are
involved (client’s approval is necessary)
 Measuring progress- monitor the major
project variables. Performance, scope and
time. Three measures are normally used:

36
Control Systems…
a) BCWS, ACWP;
b) Variance analysis involving time and
expenditure.
c) Critical Performance Index (CPI)-Ratio of
BCWP-ACWP (Actual progress/scheduled
progress) / (Budgeted cost/Actual cost).
Ratio of 1 is O.K. Less than 1, is not
satisfactory as it implies cost over-runs.
More than 1, is good as it shows some cost
saving.
37
PROJECT
MANAGEMENT
LECTURE 5 : IMPLEMENTATION
RELATED MATTERS
Prof. Dato’ Dr. Sayed Mushtaq Hussain

38
 I. Project Organization
 PM position very much depends on whether the
organization is project-driven or not.
 Projects should be located where they can function
effectively. PM should have the right to interface
with high management and chain of command used
for approving projects. To tackle day to day
problems, central organization is to give depth,
flexibility and perspective.
 Three types of organizations-functional, pure
project and matrix organizations.
39
 Project Organization…
 Functional organizations involve time for decision making
and communication. It may be suitable when in –depth
technology inputs are required. Pure organizations are
suitable for developing new product lines and for speedy
implementation. Matrix organization more suitable for
integrating technology inputs without the need to engage all
specialists on full time basis.
 Functional organization-advantage of experts/specialist can
have the normal path of advancement. Disadvantage is that
client is not the focus, no individuals has full responsibility,
coordination is slow, tendency to sub-optimize the project,
motivation weak, no holistic approach.
40
Project Organization…
 Pure organization-self-contained more efficient,
motivation and committed, high unity of command.
Disadvantages are: access to departments difficult,
distorting relationship, worry about ‘life after project
ends’.
 Matrix organization-combination of the two. PM is part
of the organization and is given resources from the
functional departments. Many combinations possible:
a) Time-sharing
b) System approach with sub-systems
c) Mixed organization with ‘clusters’ by products.

41
Project Organization…
 Disadvantage is the PM functioning become
more complex. A lot of balancing acts are
involved.
 A new trend is towards ‘project oriented’
organization. Traditional/normal business is
done under functional organization while
changes passed to ‘projects’. Later, outputs
are integrated into the organization. (IT
Companies)

42
II. Project Manager
 PM is not a functional manager; he is recruited at an
early stage and prepares a preliminary budget and
schedules, create a team and mobilizes resources for
implementation.
 Two conditions for success:
a) Degree of support by top management, and
b) General orientation of the project team (making them
problem oriented rather than discipline oriented).
 PM overseas many functional areas. Collegial relations
are needed in the team. Collegiality without
competence leads to failure (even when the project
team smiles a lot while falling)
43
Project Manager…
 PM responsibilities are wide ranging- to
organization; to project and to the Team.
 Special demands on the PM includes:
a) Acquiring adequate resources;
b) Acquiring and motivating personnel;
c) Dealing with obstacles;
d) Making project goal trade-offs;
e) Failure/fear of failure;
f) Breadth of communication;
g) Negotiations
44
Project Manager…
 Essential traits of the PM- technical knowledge,
flexible, fair, open minded, delegates,
trust/trustworthy, good listener, supportive, team
builder, visible leader.
 Essential skills- learning, communication and
interpersonal skills, ability to handle stress, problem-
solving skills, and time management.
 Management style-effective management requires
participative and consultative style, in which the PM
provides guidance and coaching to the project team.
Leadership requires that the PM provide direction, not
directions.
45
Project Manager…
 A capable PM understands what-motivates
team members and creates a supportive
environment.

46
III. Project Teams
 People who work closely together to achieve
shared/common goals Constitute Teams.
Through interaction they strive to enhance
their creativity, innovation, problem-solving,
decision making, morale and job
performance.
 Team is not a group of people.
 Teams are better recognized with projects.
 Teams are like an orchestra.

47
Project Teams…
 Purpose of project teams is:
a) Volume of work to be distributed;
b) Range of skills needed;
c) Brainstorming and discussion;
d) Enhance motivation;
e) Support some team members; and
f) Take more risk in decision making.
 Risk sharing ;enhance self- esteem; gain support;
provide psychological home for individuals; synergy
generates more output, provide wide range of
technical support.
48
Project Teams…
 Size- many factors determine-complexity of work;
technical expertise needed. Chance of conflict
increases with size; too large creates commitment
problem; balance of personalities. A size of 5-10
ideal.
Teams win if- these are well managed, encouraged
to contribute, innovative ideas are generated,
spread of mental abilities chairman should not
dominate. He should pull things together and
integrate the team. Creativity and flexibility helps.

49
Project Teams…
Team may fail- if unable to take advantage of
opportunities, poor in problem solving, unable to change
with times, could not work together, negative selection
of PM (low salary/quality)
 Management style- participative/ consultative.
 Five stages of development- forming, storming,
norming, performing, adjourning.
 Culture which fosters cooperation and trust.
 Creating a high performance team- project meetings,
establish team identity, create a shared vision, build a
reward system, manage decision making, manage
conflict, rejuvenate the project team.
50
IV. Communication
 Communications links people, ideas and
information.
 90% of the time of PM is spent on
communication.
 Information cost money; lack of information
cost more.
 Well managed communication is single most
important factor determining quality,
efficiency, productivity and satisfaction.
51
Communication…
 Important points in communication are the:
a) Lines of communication (should include all key people);
b) Medium (many forms, written and verbal)- use the
more effective one;
c) Important agreements and instructing must be
confirmed in writing;
d) Keep a balance between the value of information and
cost of information (frequency, format, content);
e) Project Information System- should be properly laid
down;
f) Handover meeting to set the scene;

52
Communication…
g) Project progress meetings- Agenda,
minutes, actions, progress, document,
control, claims, quality, minutes;
h) Project Status Reports.
 Communication should have clarity and
relevance.
 Cultural aspects be respected.

53
V. Leadership
 Leadership styles- vary from autocratic to
democratic.
 Action- countered leadership- individual
needs should be considered first.
 Team must work together.
 Task needs (through effective planning and
control systems) be met.

54
Leadership …

TASK
NEEDS

TEAM’S INDIVIDUAL
NEED NEEDS

55
Leadership …
 The PM should follow the
consultative/participative style.
 Leadership role should be visible and
substantial.

56
VI. Motivation
 Performance = ability x commitment
 Maslow’s Hierarchy of needs.
 Herzberg’s Motivation and Hygiene Factors
(negative and positive factors).

57
V. Project Management Activities (1/7)
1. Planning - goal setting, defining the project,
team organization
2. Scheduling - relate people, money, and
supplies to specific activities and activities to
each other
3. Controlling - monitor resources, costs, quality,
and budgets; revise plans and shift
resources to meet time and cost demands

(Heizer and Render, 2014)

V. Project Management Activities (2/7)
► Planning
► Objectives ► Scheduling
► Resources ► Project
activities
► Work
break- ► Start & end
down structure times
► ► Network
Organization

► Controlling
► Monitor, compare, revise,
action
(Heizer and Render, 2014)
 V. Project Management Activities (3/7)

Project Planning,
Scheduling,
and Controlling

2014 Pearson Education Inc.

 V. Project Management Activities (4/7)
Project Planning,
Scheduling,
and Controlling

2014 Pearson Education Inc.

 V. Project Management Activities (5/7)
Project Planning,
Scheduling,
and Controlling

2014 Pearson Education Inc.

 V. Project Management Activities (6/7)
Project Planning,
Scheduling,
and Controlling

2014 Pearson Education Inc.

 V. Project Management Activities (7/7)
ing,
Project Plann
Time/cost estimates g,
Schedulin
Budgets
and Controlli
Engineering diagrams
ngMaterial
Cash fl ow charts
availability details

Budgets
Delayed activities report
Slack activities report

CPM/PERT
Gantt charts
Milestone charts
Figure
Cash 3.1
fl ow
schedules
2014 Pearson Education Inc.
VII. Conflict Resolution
 Arbitration
 Co-ordination
 Negotiations
 Separation/withdrawal/neglect
 Smoothing rules & regulation
 Confirmation
 Forcing
 Problem solving

65