PM IMT 26 (1)Nature and Purpose of PM-1

7/31/2019 PM IMT 26 (1)Nature and Purpose of PM-1

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Project Management

I MT -26

Two Year Advanced Post Graduate Diploma in ManagementFor

The Executives and Managersof

Hindalco Industries Ltd.Renukoot

By

Prof. S. S. Sharma

Institute Of Management TechnologyGhaziabad


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Introduction - Concepts


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What is a Project ?

A project is a problem scheduled for solution. - J. M.Juran

A project is a temporary endeavour undertaken to create aunique product, service or result.

Attributes of projects

unique purpose

temporary

require resources, often from various areas

should have a primary sponsor and/or customer

involve uncertainty


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Attributes of projects

unique purpose

temporary require resources, often from various areas

should have a primary sponsor and/or customer

involve uncertainty


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Types of Projects ?

Manufacturing Projects

Greenfield Projects Management Projects

Scientific Development Projects

Systems Development Projects


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What is project management?


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Project management is the process of :

Planning,

Organizing,

Managing task and resources

To accomplish a defined objective, within constraints on:

Time,

Resources

Cost.


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A project consists of a temporary endeavor

undertaken to create a product or a service.

Project or capital expenditure is defined as a

commitment of current resources in order to

secure a stream of benefits in future years.


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When the term capital expenditure is used, after

the initial commitment of resources, the stream of

benefits is expected to arrive after over more than

one year.

Two factors are central in the term capital

expenditure:

Timing of benefits

Size and type of expenditure.


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Projects are given more importance by the

management for survival of the organisation

Increasing need felt to do projects right &

successful the first time

More limitations on resources and lesser

organisational support

Increasing pressure on project management to

achieve quick results


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Projects are tending to get more complex & large

to handle

Projects to be completed ahead of schedule,

always.

Need more flexibility in defining scope, planning &

execution to expand project benefits and impact


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Every project is constrained in different

ways by its

Scope/Performance goals

Time goals Cost goals

It is the project managers duty to balance

these four often competing goals


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Time

Money Scope


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Most projects have a specific finish date( time),budget (money), and Scope.

Trio of time, money and scope is called as the

Project Triangle.

If we adjust any one of these elements, the other twoare affected. While all three elements are important,typically one will have the most influence on our

project.


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Primary Objectives

Project work must be complete:

P - At the desired performance level C - Within cost or budget constraints

T - On time

S - While holding the scope of the project

constant, and While using resources efficiently and effectively.


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Project Objectives Scope:

Magnitude of the job as well as certain other boundaries

or constraints


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Project Cost a function of :

Performance

Time

Scope

C = f (P,T,S)

Scope increases as time passes

Control scope creep


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Where do resources fit in to the projecttriangle?

In terms of the Project Triangle, the resources are

considered a cost item. Adjusting resources for more or

less work or availability,costs will go up or down

correspondingly, based on resource rates.


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Quality

Money

Time

Scope


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What does quality have to do with the project triangle?Quality: Fourth element of the project triangle.

Any changes we make to any of the three sides of thetriangle is likely to affect quality. Quality is not a factor of

the triangle; it is a result of what we do with time, money,

and scope.


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Measures used to determine the successful implementation oroutcome of a project


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The quality standards we follow should help ourproject team satisfy w.r.t following:

Achieving all project goals

Prevent costly mistakes,

Provide the resources needed to complete the projectsuccessfully,

Meet project schedule objectives,

Improve productivity and meet customer requirements. Failure to set and meet quality standards can result in a

loss of customers, money, and trust.


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Project Management to be effective requires:

Powerful interpersonal skills - soft skills

Structures Management - hard skills


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Select the right projects. Limited Resources

Reconciling with company strategy

Considerations for Project selection

Deliver real benefits

Meet defined business needs

Derived from gaps identified in business plan


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Business led projects predictable results

through:

Building in quality

Being benefit focussed

Managing Risks and exposure

Exploiting the skill base of the organization


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Initiating the project:During the project planning phase of projects it isvery important to:

Define the project objectives,

Assumptions made,

Constraints of the project.


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Once project objectives have been established we need todefine the actual service that meets those objectives.


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A project comprises a defined scope

(deliverables), to be delivered in an agreed time

scale, at an agreed cost. These must be combined

in such a way to ensure that the project is alwaysviable and will deliver the expected benefits.

If any one of these falls outside the area of benefit

viability,the other should be changed to bring the

project back on target. If this cannot be done the project should be

terminated.


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Project format 50 % of work done in a projectformat.

Application:

Developing a new products, services

Writing software

Publishing a book

Developing a new marketing plan

Installing a new assembly line

Process.

Building a factory, house, bridge, road.


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Project format.

Please check whether following Applications fit in

Project Management category?

1. Processing insurance claims

2. Manufacturing auto components

3. Cooking in a restaurant

4. Driving a delivery truck over the same route every day.

5. Anything of purely repetitive nature.


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The changing land scape:

The New Face of project Management


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Cross function management.

Concurrent Project management

Systematic approach to the integrated,concurrent

design,development or construction of product and

services, including their related processes such as

manufacture,delivery and support.

Project Team to consider from the outset all elements of

the product life cycle from conception throughdisposal,including quality, cost, delivery schedule and

user requirements. Focus on customer requirement and

priorities.


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Project Life Cycle

System Components


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4-6 phases of Project Life Cycle

Concept

Definition

Design

Development / Construction

Application

Post Completion


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The Concept Phase

- need identification.

Marketing Input

Investigation of Technology,

Feasibility Studies

Survey of competition


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Definition Phase

Develop a Problem Statement

Specify Objectives

Establish PDT targets

Quality Assurance Procedures

Set up control systems

Establish project system organiztion.

The way a problem is defined determines the solutionpossibilities.

Breakthrough thinking


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Breakthrough thinking

Complaint of damaged products from distributor.

Statement - to reduce damage to Goods

Statement Revised- Sell all the warehouses

Case study: Micromatic Grinding Tech Ltd

Objective Statements:

Enhance Plant Capacity from 150 to 300 mcs/year.

Reduce Lead Time to Deliver CNC SPMs from 4 months

to 2.5 months


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Design Phase :

Architectural, Enginnering design

Design Reviews

Assesment Reports

Revise cost and performance targets


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Development / construction Phase

Work Execution/Implementation

First Units

Begin sales campaigns

Quality Control Procedures.


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Application Phase

Installation/Commissioning

- Install and field test

Begin de-staffing

Advertising begins

De-bug

- Product/service

- Plant/machinery/Process

Redesign-if required


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Post Completion Phase

Final de-staffing

Post-mortem analysis

Final reports

Close out.


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System Components

Organization

Human

Techniques & Methodologies

Planning

Information

Control Culture


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Positive Forces: -Top Management Support -

Enthusiastic Team -

Support of functional Group

Negative Forces: -Not invented here -

Public Concern - We

don't do it that way around here.


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Delivering benefits which support business

strategy through right projects.

Two Key Roles

Project sponsorbenefits focussed

Project ManagerAction & Delivery focussed


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Business led projects predictable results

through:

Building in quality

Being benefit focussed

Managing Risks and exposure

Exploiting the skill base of the organization


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Essential to increase the likelyhood ofsuccess.

Is benefit driven

Is user and customer foccussed.

Capitalises on the skills and resources of theorganization.

Builds quality in to the project deliverables.

Helps manage risk

Allows many activities to proceed in parallel,

greater velocity.

Is used by people across the whole

organization


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Product leadership:

Developing & Delivering innovative products and

services,

Operational Efficiency:

Deliver more efficiently at lower cost

Customer Intimacy:

Provide experience for customers.


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Product Development

Product Withdrawal

Information System

Bid or tender

Construction

Publishing

IT


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A project using rapid techniques has fixed timescale, cost

and minimum benefits.

Simple Project with variable SCOPE within known limits,

to suite above constraints. Rapid project tehnique Involves iterative requirements

definition, design and delivery using either a prototype

platform or the actual operational platform.


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Case Study:

Why Good Projects Fail AnywayIMT CDL PMIMT 26 PCP\PM 130311\PM Case Study - WhyGood Projects Fail Anyway.pdf
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Project Management

I MT -26

Nature & Purpose

of

Project Management


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A successful project- also known as capital

expenditure, important for the survival and growth

of business and for creating shareholder value.

There are many pitfalls in project management,

largely because of the managements unfamiliaritywith the project and due to the uncertainty and

risk associated with it.

A well-defined process and administration to

handle various stages of project management arerequired.


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A project consists of a temporary endeavor

undertaken to create a product or a service.

Project or capital expenditure is defined as a

commitment of current resources in order to

secure a stream of benefits in future years.

When the term capital expenditure is used, after

the initial commitment of resources, the stream of

benefits is expected to arrive after over more than

one year. Two factors are central in the term capital

expenditure:

Timing of benefits

Size and type of expenditure.


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Size of funds committed

Benefits over a long period

Risk element

High visibility Mistakes are expensive


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Commitment of funds and other resources is

significant in most projects.

In a competitive business scenario, new projects

are essential for acquiring a competitive edge

over competitors.

A successful project-as defined in terms of

meeting the expectations of time, cost, benefits

and quality standards-is very important for the

growth of a firm. One failed project may doom a company while

one successful project can change its fortune.

Swarnima Oil Industries Case


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A successful project creates shareholder value.

New projects signify growth of the firm; a growing

firm offers growth opportunities for individuals

working in it and is better positioned to attract

good human resources.

Project activities break routines of the firm, which

is important in maintaining agility.


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Coordination among several departments and

external agencies involved in the project can be

very difficult.

Contract management, as a part of project

management, can be difficult.

Diverted attention of managerial resources may

sometime be costly for current operations.


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An ongoing project is more likely to create a

liquidity stress with pressure on the working

capital for current operations.

Allocation of internal resources for a big project

may be done at the cost of small and routinecapital expenditure, which may damage the

current shape of the business.


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It is easier to get distracted during the project

implementation phase, rendering the project

unviable.

Organizational structure for projects and that for

routine business operations are essentiallydifferent. This duality often causes problems in

simultaneously managing operations and

projects.

In case of mutually exclusive projects, measuringsuccess of the accepted project is difficult,

because no one can predict the outcome of those

projects that were not taken up.


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In a efficient investment analysis, one should

identify all opportunities, group them on the basis

of their dependence on each other and then

develop alternative sets of projects before taking

a project decision.Opportunity

The investment proposal which originates from

various departments, is the opportunity.

Opportunity is usually incomplete due to theeconomic dependence of one opportunity on the

other. In addition, an alternative opportunity may

serve an equal or better purpose.


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Opportunity:

A firm should have a mechanism where (a)

opportunities are received, (b) alternatives are

searched, (c) economic dependence is studied

and then (d) projects are formed before detailed

cash flows are estimated. These four actions are

the essential ingredients of efficient investment

analysis.

Two opportunities are economically dependent, ifthe adoption of one of the opportunities affects the

profitability or the ability to adopt the other

opportunity.


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Give three examples of activities that are projects

and three examples of activities that are not

projects

How is project management different from general

management?

Why do you think so many information technology

projects are unsuccessful?

Documents

PM IMT 26 (1)Nature and Purpose of PM-1