Notes Module -5 M & E 18EE51 PDF

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Project Management: Meaning of Project, Project Objectives & Characteristics, Project Identification- Meaning & Importance; Project Life Cycle, Project Scheduling, Capital Budgeting, Generating an Investment Project Proposal, Project Report-Need and Significance of Report, Contents, Formulation, Project Analysis-Market, Technical, Financial, Economic, Ecological, Project Evaluation and Selection, Project Financing, Project Implementation Phase, Human & Administrative aspects of Project Management, Prerequisites for Successful Project Implementation. New Control Techniques- PERT and CPM, Steps involved in developing the network, Uses and Limitations of PERT and CPM MEANING OF PROJECT A piece of planned work or an activity that is finished over a period of time and intended to achieve a particular purpose. Planned set of interrelated tasks to be executed over a fixed period and within certain cost and other limitations. A project is a temporary endeavour designed to produce a unique product, service or result with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverable) undertaken to meet unique goals and objectives, typically to bring about beneficial change or added value. MEANING OF PROJECT MANAGEMENT is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements. Project management is the discipline of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time. The primary challenge of project management is to achieve all of the project goals within the given constraints. This information is usually described in project documentation, created at the beginning of the development process. The primary constraints are scope, time, quality and budget. The secondary — and more ambitious — challenge is to optimize the allocation of necessary inputs and apply them to meet pre-defined objectives. PROJECT MANAGEMENT STAGES / PROCESS Initiating Planning

EEE M&E 18EE51 Module 5

Executing Monitoring and controlling Closing

PROJECT MANAGEMENT COMPONENTS

PROJECT OBJECTIVE

• Financial - Financial objectives are normally relatively easy to put together and you will find your sponsor is keen to make sure that if your project is going to make the company any money that this is record adequately in the project objectives. Your project may deliver a clear financial return (for example, launching a new product to the consumer market) or make a financial saving (such as closing an underperforming office).

• Quality - There may be some quality objectives for your project, such as delivering to certain internal or external quality standards. Quality objectives also manifest themselves in the form of process improvement projects that aim to reduce defects or increase customer satisfaction somehow. You may find that quality objectives are included in your quality plan, so you can take them from there and include them in the main body of your project documentation (or vice versa, as you will probably write the quality plan after your charter).

EEE M&E 18EE51 Module 5

• Technical - Companies already have technology in use so a technical objective could be to upgrade existing technology, install new technology or even to make use of existing technology during the deployment of your project. Technology comes in different forms so this could include mobile devices or telephones as well as hardware, software and networking capabilities.

• Performance - Performance objectives tend to be related to how the project will be run, so could include things like delivering to a certain budget figure or by a certain date, or not exceeding a certain number of resources. You could also have performance objectives related to achieving project scope, such as the number of requirements that will be completed or achieving customer sign off.

• Compliance - Regulatory requirements form compliance objectives. For example, there could be the obligation to meet legal guidance on your project or to comply with local regulations. A construction project could also have the objective to meet or exceed health and safety targets.

• Business - Of course! This is the main area where you are likely to find project objectives and it relates to what it is that you are doing – the key drivers for the project. Business objectives would be things like launching that new product, closing that office or anything else that is the main reason for delivering the project.

• produce something new or altered, tangible or intangible. • To have a finite timespan: a definite start and end. • likely to be complex in terms of work or groups involved CHARACTERISTICS OF PROJECT

• To define the reason why project is necessary • To capture the requirements, specifying quality of the deliverables, estimating resources and timescales.

• Preparing the business case to justify the investment • Securing corporate agreement and funding • Developing and implementing management plan for the project • Leading and motivating the project delivery team

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• Managing the risk, issues and changes of the project • Monitoring progress against plan • Managing the project budget • Marinating communication with shareholders and stake holders • Closing the project in a controlled fashion when appropriate. PROJECT IDENTIFICATION This guide aims to give a brief overview of the project management cycle and some handy tips to consider when you are planning and implementing a project. Identification, design and budgeting/funding are the steps that make up your planning process. The planning process should make up a significant part of the whole cycle in order to ensure a successful project. Project identification results from issues emerging from the external environment. You might pick up on these issues in the environment by reading reports on trends in the geographical area where you work and speaking to stakeholders (including users) about the local issues arising. KEY STPES TO IDENTIFY. Scanning the external environment Undertaking preliminary research Making decisions Checklist IMPORTANCE OF PROJECT IDENTIFICATION

• Strategic alignment - Project management is important because it ensures what is being delivered, is right, and will deliver real value against the business opportunity.Every client has strategic goals and the projects that we do for them advance those goals. Project management is important because it ensures there’s rigour in architecting projects properly so that they fit well within the broader context of our client’s strategic frameworks Good project management ensures that the goals of projects closely align with the strategic goals of the business. In identifying a solid business case, and being

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methodical about calculating ROI, project management is important because it can help to ensure the right thing is delivered, that’s going to deliver real value.

• Leadership - Project management is important because it brings leadership and direction to projects. Without project management, a team can be like a ship without a rudder; moving but without direction, control or purpose. Leadership allows and enables a team to do their best work. Project management provides leadership and vision, motivation, removing roadblocks, coaching and inspiring the team to do their best work. Project managers serve the team but also ensure clear lines of accountability. With a project manager in place there’s no confusion about who’s in charge and in control of whatever’s going on in a project. Project managers enforce process and keep everyone on the team in line too because ultimately they carry responsibility for whether the project fails or succeeds.

• Clear Focus & Objectives - Project management is important because it ensures there’s a proper plan for executing on strategic goals.Where project management is left to the team to work out by themselves, you’ll find teams work without proper briefs, projects lack focus, can have vague or nebulous objectives, and leave the team not quite sure what they’re supposed to be doing, or why.As project managers, we position ourselves to prevent such a situation and drive the timely accomplishment of tasks, by breaking up a project into tasks for our teams. Oftentimes, the foresight to take such an approach is what differentiates good project management from bad. Breaking up into smaller chunks of work enables teams to remain focused on clear objectives, gear their efforts towards achieving the ultimate goal through the completion of smaller steps and to quickly identify risks, since risk management is important in project management.

• Realistic Project Planning - Project management is important because it ensures proper expectations are set around what can be delivered, by when, and for how much1.Without proper project management, budget estimates and project delivery timelines can be set that are over-ambitious or lacking in analogous estimating insight from similar projects. Ultimately this means without good project management, projects get delivered late, and over budget. Effective project managers should be able to negotiate reasonable and achievable deadlines and milestones across stakeholders, teams, and management. Too often, the urgency placed on delivery compromises the necessary steps, and ultimately, the quality of the project’s outcome. We all know that most tasks will take longer than initially anticipated; a good project manager is able to analyse and balance the available resources, with the required timeline, and develop a realistic schedule. Project management really matters when scheduling because it brings objectivity to the planning.

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• Quality Control - Projects management is important because it ensures the quality of whatever is being delivered, consistently hits the mark. Projects are also usually under enormous pressure to be completed Without a dedicated project manager, who has the support and buy-in of executive management, tasks are underestimated, schedules tightened and processes rushed. The result is bad quality output. Dedicated project management ensures that not only does a project have the time and resources to deliver, but also that the output is quality tested at every stage. Good project management demands gated phases where teams can assess the output for quality, applicability, and ROI. Project management is of key importance to Quality Assurance because it allows for a staggered and phased process, creating time for teams to examine and test their outputs at every step along the way.

• Risk Management - Project management is important because it ensures risks are properly managed and mitigated against to avoid becoming issues. Risk management is critical to project success. The temptation is just to sweep them under the carpet, never talk about them to the client and hope for the best. But having a robust process around the identification, management and mitigation of risk is what helps prevent risks from becoming issues. Good project management practice requires project managers to carefully analyse all potential risks to the project, quantify them, develop a mitigation plan against them, and a contingency plan should any of them materialise. Naturally, risks should be prioritised according to the likelihood of them occurring, and appropriate responses are allocated per risk. Good project management matters in this regard, because projects never go to plan, and how we deal with change and adapt our plans is a key to delivering projects successfully.

• Orderly Process - Project management is important because it ensures the right people do the right things, at the right time – it ensures proper project process is followed throughout the project lifecycle. Surprisingly, many large and well-known companies have reactive planning processes. But reactivity – as opposed to proactivity – can often cause projects to go into survival mode. This is a when teams fracture, tasks duplicate, and planning becomes reactive creating inefficiency and frustration in the team. Proper planning and process can make a massive difference as the team knows who’s doing what, when, and how. Proper process helps to clarify roles, streamline processes and inputs, anticipate risks, and creates the checks and balances to ensure the project is continually aligned with the overall strategy. Project management matters here because without an orderly, easily understood process, companies risk project failure, attrition of employee trust and resource wastage.

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• Continuous Oversight - Project management is important because it ensures a project’s progress is tracked and reported properly.Status reporting might sound boring and unnecessary – and if everything’s going to plan, it can just feel like documentation for documentation’s sake. But continuous project oversight, ensuring that a project is tracking properly against the original plan, is critical to ensuring that a project stays on track.When proper oversight and project reporting is in place it makes it easy to see when a project is beginning to deviate from its intended course. The earlier you’re able to spot project deviation, the easier it is to course correct.Good project managers will regularly generate easily digestible progress or status reports that enable stakeholders to track the project. Typically these status reports will provide insights into the work that was completed and planned, the hours utilised and how they track against those planned, how the project is tracking against milestones, risks, assumptions, issues and dependencies and any outputs of the project as it proceeds.

• Subject Matter Expertise - Project management is important because someone needs to be able to understand if everyone’s doing what they should. With a few years experience under their belt, project managers will know a little about a lot of aspects of delivering the projects they manage. They’ll know everything about the work that their teams execute; the platforms and systems they use, and the possibilities and limitations, and the kinds of issues that typically occur.Having this kind of subject matter expertise means they can have intelligent and informed conversations with clients, team, stakeholders, and suppliers. They’re well equipped to be the hub of communication on a project, ensuring that as the project flows between different teams and phases of work, nothing gets forgotten about or overlooked.Without subject matter expertise through project management, you can find a project becomes unbalanced – the creatives ignore the limitations of technology or the developers forget the creative vision of the project. Project management keeps the team focussed on the overarching vision and brings everyone together forcing the right compromises to make the project a success.

• Managing and Learning from Success and Failure - Project management is important because it learns from the successes and failures of the past. Project management can break bad habits and when you’re delivering projects, it’s important to not make the same mistakes twice. Project managers use retrospectives or post project reviews to consider what went well, what didn’t go so well and what should be done differently for the next project. This produces a valuable set of documentation that becomes a record of “dos and don’ts” going forward, enabling the organisation to learn from failures and success. Without this learning, teams will often keep making the same mistakes, time and time again. These retrospectives are great documents to use at a project kickoff meeting to remind the team about failures such as underestimating projects, and successes such as EEE M&E 18EE51 Module 5

the benefits of a solid process or the importance of keeping time sheet reporting up to date.

• Stake holder agreement

PROJECT LIFE CYCLE we can define Project Cycle Management as a tool that describes the management activities and decision making procedures used during the life-cycle of a project. The systematic process of initiating, planning, implementing, managing and evaluating projects or programmes is known as ‘Project Cycle Management’, PCM ; it is also defined as an approach in project management used to guide management activities and decisionmaking procedures during the life-cycle of a project, from the first idea until the last ex-post (afterwards) evaluation. The project cycle follows the life of a project, from the initial idea through its completion. It provides a structure to ensure that stakeholders are consulted, and defines the key decision, information requirements and responsibilities at each phase so that informed decision can be made at each phase in the life of the project. THE PHASES OF PROJECT CYCLE ARE AS FOLLOWS

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Project initiation: During this phase a business problem or opportunity is identified and a business case providing various solution options is defined. Next, a feasibility study is conducted to investigate whether each option addresses the business problem and a final recommended solution is then put forward. Project planning: This phase involves outlining the activities, tasks, dependencies and timeframes; resource plan; financial plan; quality plan; acceptance plan; and procurement plan. Project execution: This phase involves implementing the plans created during the project planning phase. Project closure: Project closure involves releasing the final deliverables to the customer, handing over project documentation to the business, terminating supplier contracts, releasing project resources and communicating the closure of the project to all stakeholders. PROJECT SCHEDULING In project management, a schedule is a listing of a project's milestones, activities, and deliverables, usually with intended start and finish dates. Those items are often estimated by other information included in the project schedule of resource allocation, budget, task duration, and linkages of dependencies and scheduled events. A schedule is commonly used in the project planning and project portfolio management parts of project management. Project scheduling is a mechanism to communicate what tasks need to get done and which organisational resources will be allocated to complete those tasks in what timeframe. A project schedule is a document collecting all the work needed to deliver the project on time. The project schedule is the tool that communicates what work needs to be performed, which resources of the organisation will perform the work and the timeframes in which that work needs to be performed. The project schedule should reflect all of the work associated with delivering the project on time. Without a full and complete schedule, the project manager will be unable to communicate the complete effort, in terms of cost and resources, necessary to deliver the project. Online project management software allows project managers to track project schedules, resources, budgets and project related assets in real time. The project schedule can be viewed and updated by team members associated with the project, keeping everyone well informed on the overall project status.

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CAPITAL BUDGETING Capital Budgeting is the process of making investment decision in fixed assets or capital expenditure. Capital Budgeting is also known as investment, decision making, planning of capital acquisition, planning and analysis of capital expenditure etc. Capital budgeting is the planning process used to determine whether an organisation's long term investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalisation structure. It ...