UNIT-III

PROJECT EXECUTION
INITIATING THE PROJECT
STEPS FOR PROJECT INITIATING

Develop a Business Case

Undertake a feasibility analysis

Establish Project Charter

 Appoint the Project Team

Set up Project Office

Perform a Phase Review

 Controlling and Reporting Project objectives
1. Establishing Baselines:
• Scope Baseline: Defines the project's deliverables and boundaries.
• Schedule Baseline: A timeline for project tasks and milestones.
• Cost Baseline: An approved budget for the project.
2. Monitoring and Measuring Performance:
• Key Performance Indicators (KPIs): Metrics used to measure progress towards
objectives.
• Performance Reviews: Regular assessments of project progress.
• Variance Analysis: Comparing actual performance with planned performance to
identify deviations.
3. Change Control:
• Change Request Process: Formal process for requesting, assessing, and
approving changes to the project scope, schedule, or cost.
• Impact Analysis: Evaluating the potential effects of changes on project objectives.
4. Risk Management:
• Risk Identification: Recognizing potential issues that could impact the
project.
• Risk Assessment: Analyzing the likelihood and impact of identified risks.
• Risk Mitigation: Developing strategies to minimize or manage risks.
5. Quality Control:
• Quality Assurance: Ensuring project processes meet defined standards.
• Quality Control Measures: Inspecting project deliverables to ensure they
meet quality standards.
Reporting Project Objectives
1. Regular Status Reports:
• Frequency: Weekly, bi-weekly, or monthly.
• Content: Current status, progress, issues, risks, and next steps.
• Format: Standardized templates for consistency.
2. Executive Summaries:
• Purpose: Provide high-level updates to stakeholders and sponsors.
• Content: Key achievements, major issues, and decisions required.
3. Dashboards:
• Visual Representation: Use graphs, charts, and indicators for a quick overview
of project status.
• Tools: Project management software like MS Project, Trello, or Jira.
4. Meetings and Reviews:
• Regular Meetings: Stand-ups, project team meetings, and stakeholder meetings.
• Milestone Reviews: Assessing progress at major project milestones.
5. Documentation:
• Meeting Minutes: Recording decisions and action items from meetings.
• Project Logs: Issues log, risk log, and change log for tracking ongoing items.
6. Communication Plans:
• Stakeholder Analysis: Identifying who needs what information and how
frequently.
• Communication Channels: Emails, intranet, project management tools, and
meetings.
By effectively controlling and reporting on project objectives, project managers
can ensure alignment with project goals, timely identification, and resolution of
issues, and clear communication with stakeholders. This helps in maintaining
project direction and achieving successful outcomes.
Challenges Within Project Controls

 Lack of commitment and support from senior management

 Perception as just another cost function
 Confrontational dynamic
 Manual and outdated processes
 CONDUCTING PROJECT EVALUATION
STEP 1: Clarify what is to be evaluated
STEP 2: Engage stakeholders
STEP 3: Assess resources and availability
STEP 4: Determine your evaluation questions
STEP 5: Determine appropriate methods of
measurement and procedures
STEP 6: Develop evaluation plan
STEP 7: Collect data
STEP 8: Process data and analyze results
STEP 9: Interpret and disseminate results
STEP 10: Apply evaluation findings
 Cost Management
 Cost management has been defined to encompass data
collection, cost accounting, and cost control and it involves
taking financial-report information and applying it to projects
at finite levels of accountability in order to maintain a clear
sense of money management for the project.
Some of the more common sources of project costs include:
1. Labor
2. Materials
3. Subcontractors
4. Travel
5. Equipment and facilities
 Types of project costs:
 Direct costs are those clearly assigned to the aspect of the project that generated
the cost.
Total direct labor costs = (Direct labor rate) (Total labor hours)
 Indirect costs, on the other hand, generally are linked to two features: overhead, and
selling and general administration. Overhead costs are perhaps the most common
form of indirect costs and can be one of the more complex forms in estimating
 Recurring Vs Non- Recurring Cost.
Costs can also be examined in terms of the frequency with which they occur; they
can be recurring or nonrecurring. Nonrecurring costs might be those associated with
charges applied once at the beginning or end of the project, such as preliminary
marketing analysis, personnel training, or outplacement services.
Recurring costs are those that typically continue to operate over the project’s life
cycle. Most labor, material, logistics, and sales costs are considered recurring because
some budgetary charge is applied against them throughout significant portions of the
project development cycle. In budget management and cost estimation, it is necessary
to highlight recurring versus nonrecurring charges
 Fixed Vs Variable Cost:
An alternative designation for applying project costs is to identify
fixed and variable costs in the project budget. fixed costs, as their title
suggests, do not vary with respect to their usage. Variable costs are those
that accelerate or increase through usage; that is, the cost is in direct
proportion to the usage level.
 Normal Vs Expedited Cost:
Normal costs refer to those incurred in the routine process of working
to complete the project according to the original, planned schedule agreed
to by all project stakeholders at the beginning of the project. Certainly, this
planned schedule may be very aggressive, involving extensive overtime
charges in order to meet the accelerated schedule; nevertheless, these
costs are based on the baseline project plan.
Expedited costs are unplanned costs incurred when steps are taken
to speed up the project’s completion
Creating A Project Budget
 The process of developing a project budget is an interesting mix of
estimation, analysis, intuition, and repetitive work. The central goal of a
budget is the need to support rather than conflict with the project’s and
the organization’s goals.
 The project budget is a plan that identifies the allocated resources, the
project’s goals, and the schedule that allows an organization to achieve
those goals.
 Effective budgeting always seeks to integrate corporate-level goals with
department-specific objectives; short-term requirements with long-term
plans; and broader, strategic missions with concise, needs-based issues.
 Useful budgets evolve through intensive communication with all
concerned parties and are compiled from multiple data sources. Perhaps
most importantly, the project budget and project schedule must be
created in tandem; the budget effectively determines whether or not
project milestones can be achieved
 Approaches
 Top-Down Budgeting: It requires the direct input from the organization’s top
management; in essence, this approach seeks to first ascertain the opinions
and experiences of top management regarding estimated project costs.
 Bottom- Up Budgeting. It takes a completely different approach than that
pursued by top-down methods. The bottom-up budgeting approach begins
inductively from the work breakdown structure to apply direct and indirect
costs to project activities
 Activity Based Costing: Most project budgets use some form of activity-
based costing. Activity-based costing (ABc) is a budgeting method that assigns
costs first to activities and then to the projects based on each project’s use of
resources. Remember that project activities are any discrete task that the
project team undertakes to make or deliver the project. Activity-based costing,
therefore, is based on the notion that projects consume activities and activities
consume resources.