2nd term project management system

S.R.P** NICMAR 2ND TERM-PROJECT MANAGEMENT SYSTEMS Page 79

PROJECT MANAGEMENT SYSTEM

Introduction

Project management is concerned with the overall planning and co-ordination of a project from conception to completion aimed at meeting the stated requirements and ensuring completion on time, within cost and to required quality standards.

Project management is normally reserved for focused, non-repetitive, time-limited

activities with some degree of risk and that are beyond the usual scope of operational activities for which the organization is responsible.

7.2 Steps in Project Management

The various steps in a project management are:

1. Project Definition and Scope

2. Technical Design

3. Financing

4. Contracting

5. Implementation

6. Performance Monitoring

7.2.1 Project Definition and Scope

What is a Project?

―A project is a one-shot, time-limited, goal-directed, major undertaking, requiring the

commitment of varied skills and resources‖.

A project is a temporary endeavor undertaken to create a unique product or service. A project

is temporary in that there is a defined start (the decision to proceed) and a defined end (the

achievement of the goals and objectives). Ongoing business or maintenance operations are

not projects. Energy conservation projects and process improvement efforts that result in

better business processes or more efficient operations can be defined as projects. Projects

usually include constraints and risks regarding cost, schedule or performance outcome.


Four Basic Elements of Project Management

A successful Project Manager must simultaneously manage the four basic elements of a

project: resources, time, cost, and scope. Each element must be managed effectively. All

these elements are interrelated and must be managed together if the project, and the project

manager, is to be a success.

1.Managing Resources

A successful Project Manager must effectively manage the resources assigned to the project.

This includes the labor hours of the project team. It also includes managing labor subcontracts

and vendors. Managing the people resources means having the right people, with the right

skills and the proper tools, in the right quantity at the right time.

However, managing project resources frequently involves more than people management.

The project manager must also manage the equipment (cranes, trucks and other heavy

equipment) used for the project and the material (pipe, insulation, computers, manuals)

assigned to the project.

2.Managing Time and Schedule

Time management is a critical skill for any successful project manager. The most common

cause of bloated project budgets is lack of schedule management. Fortunately there is a lot of

software on the market today to help you manage your project schedule or timeline.

Any project can be broken down into a number of tasks that have to be performed. To prepare

the project schedule, the project manager has to figure out what the tasks are, how long they

will take, what resources they require, and in what order they should be done.

3.Managing Costs

Often a Project Manager is evaluated on his or her ability to complete a project within budget.

The costs include estimated cost, actual cost and variability. Contingency cost takes into

account influence of weather, suppliers and design allowances.

4.How the 80/20 Rule can help a project manager?

The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent) are

trivial. Successful Project Managers know that 20 percent of the work (the first 10 percent and

the last 10 percent) consumes 80 percent of your time and resources.

Project Management Life Cycle

The process flow of Project management processes is shown in Figure 7.1. The various

elements of project management life cycle are

1) Need identification

2) Initiation

3) Planning

4) Executing

5) Controlling

6) Closing out


a) Need Identification

The first step in the project development cycle is to identify components of the project.

Projects may be identified both internally and externally: Internal identification takes place

when the energy manager identifies a package of energy saving opportunities during the day-

to-day energy management activities, or from facility audits. External identification of energy

savings can occur through systematic energy audits undertaken by a reputable energy auditor

or energy service company.In screening projects, the following criteria should be used to rank-

order project opportunities.

Cost-effectiveness of energy savings of complete package of measures (Internal rate of

return, net present value, cash flow, average payback) Sustainability of the savings over the

life of the equipment. Ease of quantifying, monitoring, and verifying electricity and fuel savings.

Availability of technology, and ease of adaptability of the technology to Indian

conditions. Other environmental and social cost benefits (such as reduction in local pollutants,

b) Initiation

Initiating is the basic processes that should be performed to get the project started. This

starting point is critical because those who will deliver the project, those who will use the

project, and those who will have a stake in the project need to reach an agreement on its

initiation. Involving all stakeholders in the project phases generally improves the probability of

satisfying customer requirements by shared ownership of the project by the stakeholders. The

success of the project team depends upon starting with complete and accurate information,

management support, and the authorization necessary to manage the project.

c) Planning

The planning phase is considered the most important phase in project management. Project

planning defines project activities that will be performed; the products that will be produced,

and describes how these activities will be accomplished and managed. Project planning

defines each major task, estimates the time, resources and cost required, and provides a

framework for management review and control. Planning involves identifying and documenting

scope, tasks, schedules, cost, risk, quality, and staffing needs.

The result of the project planning, the project plan, will be an approved, comprehensive

document that allows a project team to begin and complete the work necessary to achieve the

project goals and objectives. The project plan will address how the project team will manage

the project elements. It will provide a high level of confidence in the organization‘s ability to

meet the scope, timing, cost, and quality requirements by addressing all aspects of the project.


d) Executing

Once a project moves into the execution phase, the project team and all necessary resources

to carry out the project should be in place and ready to perform project activities. The project

plan is completed and base lined by this time as well. The project team and the project

manager‘s focus now shifts from planning the project efforts to participating, observing, and

analyzing the work being done.

The execution phase is when the work activities of the project plan are executed, resulting in

the completion of the project deliverables and achievement of the project objective(s). This

phase brings together all of the project management disciplines, resulting in a product or

service that will meet the project deliverable requirements and the customers need. During this

phase, elements completed in the planning phase are implemented, time is expended, and

money is spent. In short, it means coordinating and managing the project resources while

executing the project plan, performing the planned project activities, and ensuring they are

completed efficiently.

e) Controlling

Project Control function that involves comparing actual performance with planned performance

and taking corrective action to get the desired outcome when there are significant differences.

By monitoring and measuring progress regularly, identifying variances from plan, and taking

corrective action if required, project control ensures that project objectives are met.

f) Closing out

Project closeout is performed after all defined project objectives have been met and the

customer has formally accepted the project‘s deliverables and end product or, in some

instances, when a project has been cancelled or terminated early. Although, project closeout is

a routine process, it is an important one. By properly completing the project closeout,

organizations can benefit from lessons learned and information compiled. The project closeout

phase is comprised of contract closeout and administrative closure.

7.2.2 Technical Design

For a project to be taken up for investment, its proponent must present a sound technical

feasibility study that identifies the following components:

The proposed new technologies, process modifications, equipment replacements and

other measures included in the project.

Product/technology/material supply chain (e.g., locally available, imported, reliability of

supply)

Commercial viability of the complete package of measures (internal rate of return, net

present value, cash flow, average payback).

Any special technical complexities (installation, maintenance, repair), associated skills

required.


Preliminary designs, including schematics, for all major equipment needed, along with

design requirements, manufacturer‘s name and contact details, and capital cost

estimate.

Organizational and management plan for implementation, including timetable, personnel

requirements, staff training, project engineering, and other logistical issues.

7.2.3 Financing

When considering a new project, it should be remembered that other departments in the

organization would be competing for capital for their projects. However, it is also important to

realize that energy efficiency is a major consideration in all types of projects, whether they are:

Projects designed to improve energy efficiency

Projects where energy efficiency is not the main objective, but still plays a vital role.

The funding for project is often outside the control of the project manager. However, it is

important that you understand the principles behind the provision of scarce funds.

Project funds can be obtained from either internal or external sources.

Internal sources include:

Direct cash provision from company reserves

From revenue budget (if payback is less than one year)

New share capital

Funding can become an issue when energy efficiency projects have previously been given a

lower priority than other projects. It is worth remembering that while the prioritization of

projects may not be under our control, the quality of the project submission is.

External sources of funds include:

Bank loans

Leasing arrangement

Payment by savings i.e. A deal arranged with equipment supplier

Energy services contract

Private finance initiative

The availability of external funds depends on the nature of your organization. The finance

charges on the money you borrow will have a bearing on the validity of your project.

Before applying for money, discuss all the options for funding the project with your finance

managers.

It is reiterated that energy savings often add substantially to the viability of other non-energy

projects.


7.2.4 Contracting

Since a substantial portion of a project is typically executed through contracts, the proper

management of contracts is critical to the successful implementation of the project. In this

context, the following should be done.

The competence and capability of all the contractors must be ensured. One weak link

can affect the timely performance of the contract.

Proper discipline must be enforced among contractors and suppliers by insisting that

they should develop realistic and detailed resource and time plans that are matching

with the project plan.

Penalties may be imposed for failure to meet contractual obligations. Likewise,

incentives may be offered for good performance.

Help should be extended to contractors and suppliers when they have genuine

problems.

Project authorities must retain independence to off-load contracts (partially or wholly)

to other parties where delays are anticipated.

If the project is to implemented by an outside contractor, several types of contract may be

used to undertake the installation and commissioning:

Traditional Contract: All project specifications are provided to a contractor who

purchases and installs equipment at cost plus a mark-up or fixed price.

Extended Technical Guarantee/Service: The contractor offers extended guarantees on

the performance of selected equipment and / or service/maintenance agreements.

Extended Financing Terms: The contractor provides the option of an extended lease

or other financing vehicle in which the payment schedule can be based on the

expected savings.

Guaranteed Saving Performance Contract: All or part of savings is guaranteed by

the contractor, and all or part of the costs of equipment and/or services is paid down

out of savings as they are achieved.

Shared Savings Performance Contract: The contractor provides the financing and

is paid an agreed fraction of actual savings as they are achieved. This payment is used

to pay down the debt costs of equipment and/or services.

7.2.5 Implementation

The main problems faced by project manager during implementation are poor monitoring of

progress, not handling risks and poor cost management.

a) Poor monitoring of progress: Project managers some times tend to spend most of their

time in planning activity and surprisingly very less time in following up whether the

implementation is following the plan. A proactive report generated by project planner

software can really help the project manager to know whether the tasks are progressing as

per the plan.


b) Not handling risks: Risks have an uncanny habit of appearing at the least expected time.

In spite of the best efforts of a project manager they are bound to happen. Risks need

immediate and focused attention. Delay in dealing with risks cause the problem to

aggravate and has negative consequences for the project.

c) Poor cost management: A project manager's success is measured by the amount of cost

optimization done for a project. Managers frequently do all the cost optimization during

the planning stages but fail to follow through during the rest of the stages of the project.

The cost graphs in the Project planner software can help a manager to get a update on

project cost overflow. The cost variance (The difference between approved cost and the

projected cost should be always in the minds of the project managers).

7.2.6 Performance Monitoring

Once the project is completed, performance review should be done periodically to compare

actual performance with projected performance. Feedback on project is useful in several

ways:

a) It helps us to know how realistic were the assumptions underlying the project

b) It provides a documented log of experience that is highly valuable in decision making in

future projects

c) It suggests corrective action to be taken in the light of actual performance

d) It helps in uncovering judgmental biases

e) It includes a desired caution among project sponsors.

Performance Indicators (PIs) are an effective way of communicating a project‘s benefits,

usually as part of a performance measuring and reporting process. Performance Indicators are

available for a wide range of industries and allow a measure of energy performance to be

assigned to a process against which others can be judged.

Depending on the nature of the project, savings are determined using engineering

calculations, or through metering and monitoring, utility meter billing analysis, or computer

simulations.

"The best preparation for tomorrow is to do today's work superbly well." -Shreedhar

S.R.P** NICMAR 2ND TERM-PROJECT MANAGEMENT SYSTEMS 6

NETWORK MODEL

8.0 AIMS AND OBJECTIVES

In this lesson we are going to discuss the various Network Model Like Critical Path Method and Project Evaluations Review Technique. The CPM in a diagrammatical technique whereas PERT in a unique controlling device.

8.1 INTRODUCTION Any project involves planning, scheduling and controlling a number of interrelated activities with use of limited resources, namely, men, machines, materials, money and time. The projects may be extremely large and complex such as construction of a power plant, a highway, a shopping complex, ships and aircraft, introduction of new products and research and development projects. It is required that managers must have a dynamic planning and scheduling system to produce the best possible results and also to react immediately to the changing conditions and make necessary changes in the plan and schedule. A convenient analytical and visual technique of PERT and CPM prove extremely valuable in assisting the managers in managing the projects. Both the techniques use similar terminology and have the same purpose. PERT stands Quantitative Techniques for Project Evaluation and Review Technique developed during 1950‘s. The technique for Management was developed and used in conjunction with the planning and designing of the Polaris missile project. CPM stands for Critical Path Method which was developed by DuPont Company and applied first to the construction projects in the chemical industry. Though both PERT and CPM techniques have similarity in terms of concepts, the basic difference is, PERT is used for analysis of project scheduling problems. CPM has single time estimate and PERT has three time estimates for activities and uses probability theory to find the chance of reaching the scheduled time.

Project management generally consists of three phases.

Planning: Planning involves setting the objectives of the project. Identifying various activities to be performed and determining the requirement of resources such as men, materials, machines, etc. The cost and time for all the activities are estimated, and a network diagram is developed showing sequential interrelationships (predecessor and successor) between various activities during the planning stage.

Scheduling: Based on the time estimates, the start and finish times for each activity are worked out by applying forward and backward pass techniques, critical path is identified, along with the slack and float for the non-critical paths. Controlling: Controlling refers to analyzing and evaluating the actual progress against the plan. Reallocation of resources, crashing and review of projects with periodical reports are carried out.

PHASES OF PROJECT NETWORK ‘Planning Analyzing and Scheduling

Resource Allocation Controlling


Planning Defining the objectives Developing WBS Determining the Quantity of individual work elements

Analysis and Scheduling Determining the precedence relationship Determining the extend of inter dependency Scheduling the flow path of activities

Resource Allocation Identifying the types of resources Quantity of resources Duration of Activity

Controlling Evaluating Progress Degree of fulfillment of the objectives Analyzing the status of the project Remedial measures/re-plan

8.2 PERT/CPM NETWORK COMPONENTS

PERT / CPM networks contain two major components i. Activities, and ii. Events Activity : An activity represents an action and consumption of resources (time, money, energy) required to complete a portion of a project. Activity is represented by an arrow, (Figure 8.1).


8.3 ERRORS TO BE AVOIDED IN CONSTRUCTING A NETWORK a. Two activities starting from a tail event must not have a same end event. To ensure

this, it is absolutely necessary to introduce a dummy activity, as shown in .


8.4 RULES IN CONSTRUCTING A NETWORK

1. No single activity can be represented more than once in a network. The length of an arrow has no significance.

2. The event numbered 1 is the start event and an event with highest number is the end event. Before an activity can be undertaken, all activities preceding it must be completed. That is, the activities must follow a logical sequence (or – inter- relationship) between activities.

3. In assigning numbers to events, there should not be any duplication of event numbers in a network.

4. Dummy activities must be used only if it is necessary to reduce the complexity of a network.

5. A network should have only one start event and one end event. 244

Some conventions of network diagram are shown in Figure 8.10 (a), (b), (c), (d) below: Network Model

8.5 PROCEDURE FOR NUMBERING THE EVENTS USING FULKERSON'S RULE Step1 : Number the start or initial event as 1. Step2 : From event 1, strike off all outgoing activities. This would have made one or

more events as initial events (event which do not have incoming activities). Number that event as 2.

Step3 : Repeat step 2 for event 2, event 3 and till the end event. The end event must have the highest number.


Example 1: Draw a network for a house construction project. The sequence of activities with their predecessors are given in Table 8.1, below.

Solution: Figure 8.11: Network diagram representing house construction project. The network diagram in Figure 8.11 shows the procedure relationship between the activities. Activity A (preparation of house plan), has a start event 1 as well as an ending event 2. Activity B (Construction of house) begins at event 2 and ends at event 3. The activity B cannot start until activity A has been completed. Activities C and D cannot begin until activity B has been completed, but they can be performed simultaneously. Similarly, activities E and F can start only after completion of activities C and D respectively. Both activities E and F finish at the end of event 6. Example 2: Consider the project given in Table 8.2 and construct a network diagram.

Solution: The activities C and D have a common predecessor A. The network representation shown in Figure 8.12 (a), (b) violates the rule that no two activities can begin and end at the same events. It appears as if activity B is a predecessor of activity C, which is not the case. To construct the network in a logical order, it is necessary to


introduce a dummy activity as shown in Figure 8.12.

Example 3: Construct a network for a project whose activities and their predecessor relationship are given in Table 8.3.

Table 8.3: Activity Sequence for a Project

8.6 CRITICAL PATH ANALYSIS The critical path for any network is the longest path through the entire network. Since all activities must be completed to complete the entire project, the length of the critical path is also the shortest time allowable for completion of the project. Thus if the project is to be completed in that shortest time, all activities on the critical path must be started as soon as possible. These activities are called critical activities . If the project has to be completed ahead of the schedule, then the time required for at least one of the critical activity must be reduced. Further, any delay in completing the critical activities will increase the project duration.


The activity, which does not lie on the critical path, is called non-critical activity. These non-critical activities may have some slack time. The slack is the amount of time by which the start of an activity may be delayed without affecting the overall completion time of the project. But a critical activity has no slack. To reduce the overall project time, it would require more resources (at extra cost) to reduce the time taken by the critical activities to complete. Scheduling of Activities: Earliest Time and Latest Time

Before the critical path in a network is determined, it is necessary to find the earliest and latest time of each event to know the earliest expected time (T ) at which the activities

E originating from the event can be started and to know the latest allowable time (T ) at

L which activities terminating at the event can be completed. Forward Pass Computations (to calculate Earliest, Time T )

E Procedure Step 1 : Begin from the start event and move towards the end event. Step 2 : Put T = 0 for the start event.E Step 3: Go to the next event (i.e node 2) if there is an incoming activity for event 2,

add calculate T of previous event (i.e event 1) and activity time. Step 4 : Repeat the same procedure from step 3 till the end event. 248

Backward Pass Computations (to calculate Latest Time T )

L Procedure Step 1 : Begin from end event and move towards the start event. Assume that the

direction of arrows is reversed. Step 2 : Latest Time T for the last event is the earliest time. T of the last event.

L E Step 3 : Go to the next event, if there is an incoming activity, subtract the value of TL of previous event from the activity duration time. The arrived value is TL for that event. If there are more than one incoming activities, take the minimum

TE value.

Step 4 : Repeat the same procedure from step 2 till the start event. 8.7 DETERMINATION OF FLOAT AND SLACK TIMES As discussed earlier, the non – critical activities have some slack or float. The float of an activity is the amount of time available by which it is possible to delay its completion time without extending the overall project completion time.


Example 5: The following Table 8.7 gives the activities in construction project and time Duration


8.9 PROJECT EVALUATION REVIEW TECHNIQUE, PERT

In the critical path method, the time estimates are assumed to be known with certainty. In certain projects like research and development, new product introductions, it is difficult to estimate the time of various activities. Hence PERT is used in such projects with a probabilistic method using three time estimates for an activity, rather than a single estimate,


Example 8: An R & D project has a list of tasks to be performed whose time estimates are given in the Table 8.11, as follows. Time expected for each activity is calculated using the formula (5):


8.11 COST ANALYSIS

The two important components of any activity are the cost and time. Cost is directly proportional to time and vice versa. For example, in constructing a shopping complex, the expected time of completion can be calculated using be time estimates of various activities. But if the construction has to the finished earlier, it requires additional cost to Network Model complete the project. We need to arrive at a time / cost trade-off between total cost of project and total time required to complete it.

Normal time : Normal time is the time required to complete the activity at normal conditions and cost. Crash time : Crash time is the shortest possible activity time; crashing more than the normal time will increase the direct cost. Cost Slope Cost slope is the increase in cost per unit of time saved by crashing. A linear cost curve is shown in Figure 8.27.

Example 8: An activity takes 4 days to complete at a normal cost of Rs. 500.00. If it is possible to complete the activity in 2 days with an additional cost of Rs. 700.00, what is the incremental cost of the activity? Solution:


Project Crashing Procedure for crashing

Example 9: The following Table 8.13 gives the activities of a construction project and other data.

If the indirect cost is Rs. 20 per day, crash the activities to find the minimum duration of the project and the project cost associated. Solution: From the data provided in the table, draw the network diagram (Figure 8.28) and find the critical path.


From the diagram, we observe that the critical path is 1-2-5 with project duration of 14 days The cost slope for all activities and their rank is calculated as shown in Table 8.14


8.14 KEYWORDS

Critical path : Is a network and a continuous chain of activities that connect the initial event to the terminal event. Activity : An activity represents an action and consumption of sources. PERT : Project Evaluation Review Technique — is a unique a important controlling device. The PERT take into consideration the three types of time optimistic time, pessimistic time and likely time. CPM : Critical Plan Method is a diagrammatical technique for planning and scheduling of projects. Float : Is used in the context of network analysis. Float may be +ive or –ive. Arrow : Direction shows the general progression in time. Slack : Normally associated with events. It indicates the amount of latitude. Network : Is a series of related activities which result in once produces (or services). It is a pictorial presentation of the various events and activities covering a project. Event : An event represent the start or completion of activity.


Earned value Management

Earned Value concept

Why Use Earned Value?

Have you ever asked yourself any of these questions? My actual costs are less than my budget.Is my

project doing well,or is it behind schedule? My project‘s actual costs are now higher than budgeted,and

the project is only halfway complete. What‘s it likely to cost at completion? My project manager or

engineer keeps telling me not to worry about the cost overruns.

The rest of the work will cost less than budgeted.Is this probable? Do I have the necessary staff for this

new contract? Will labour rate and currency exchange rate fluctuations affect my project‘s costs? How

will funding cuts affect my cash flow? Is price or usage causing my cost variance?

TEN Benefits of EMVS

It is a single management control system that provides reliable data.

It integrates work, schedule,and cost into a work breakdown structure.

The associated database of completed projects is useful for comparative analysis.

The cumulative cost performance index (CPI) provides an early warning signal.

The schedule performance index provides an early warning signal.

The CPI is a predictor of the final cost of the project.

EVMS uses an index-based method to forecast the final cost of the project.

The ―to-complete‖ performance index allows evaluation of the forecasted final cost.

The periodic (e.g.weekly or monthly) CPI is a benchmark.

The ―management by exception‖ principle can reduce information overload.

Activity: Effort that occurs over a time period and generally consumes resources.Another term for Activity is Task.

Actual Cost:A cost sustained in fact,on the basis of costs incurred,as distinguished from forecasted or estimated costs.

Actual Cost of Work Performed (ACWP): The sum of the costs actually incurred in accomplishing the work performed.

Baseline:The original plan for a project, work package, or an activity plus or minus any approved changes against which progress on the project is measured.

Budget:A time-phased plan of operations for a given period. Budget at Complete (BAC):The estimated total cost of the project when it is complete. Budgeted Cost of Work Performed (BCWP): The sum of the budgets for completed work

and the completed portions of open work.It is ameasure used in cost control that allows you to quantify the overall progress of theprogramme in monetary terms.BCWP is calculated by multiplying the physical percentcomplete by the planned cost.Another term for BCWP is Earned Value.

Budgeted Cost of Work Scheduled (BCWS):The sum of the budgets for all planned work scheduled to be accomplished within a given timeperiod.

Cost Overrun: The amount by which a contractor exceeds or expects to exceed the estimated costs and/orthe final limitations (the ceiling) of a contract.


Cost Performance Index (CPI):The cost efficiency factor representing the relationship between the actual costs expended andthe value of the physical work performed. The CPI is calculated as BCWP/ACWP.

Cost Variance (CV):The numerical difference between the earned value (BCWP) and the actual cost (ACWP).The CV is calculated as BCWP - ACWP.

Direct Costs: Those costs (labour,material,and other direct costs) that can be consistently related to work performed on a particular project. Direct costs are best contrasted with indirect costs that cannot be identified to a specific project.

Earned Value (EV):The sum of the budgets for completed work and the completed portions of open work.It is a measure used in cost control that allows you to quantify the overall progress of the programme in monetary terms.EV is calculated by multiplying the physical percent complete by the planned cost.

Earned Value Management System (EVMS):The EVMS guidelines incorporate best business practices for programme management systems that have proven to provide strong benefits for programme or enterprise planning and control. The processes include integration of programme scope, schedule and cost objectives, establishment of a baseline plan for accomplishment of programme objectives, and use of earned value techniques for performance measurement during the execution of a programme.

Estimate at Complete (EAC):A value expressed in either dollars and/or hours to represent the projected final costs of workwhen completed.EAC is calculated by adding the actual cost of work performed to theestimate to complete.The EAC is calculated as ETC + ACWP.

Estimate to Complete (ETC):The value expressed in either dollars or hours, developed to represent the cost of the workrequired to complete a task.ETC is calculated by subtracting the budgeted cost of workperformed from the budget at complete. The ETC is calculated as BAC - BCWP.

Full Time Equivalents (FTE) :Also known as equivalent staffing units,FTEs are typically expressed as persons per month.

Level of Effort (LOE):Work that does not result in a final product (e.g.liaison,co-ordination,follow-up,or other support activities) and which cannot be effectively associated with a definable end product process result.Level of effort is measured only in terms of resources actually consumed withina given time period.

Organizational Breakdown Structure (OBS):A functionally oriented structure indicating organisational relationships and used as the framework for the assignment of work responsibilities. The organisational structure is progressively detailed downward to the lowest levels of management.

Original Budget:The initial budget established at or near the time a contract was signed or a project authorized, based on the negotiated contract cost or management‘s authorization.

Performance Measurement Baseline (PMB):The time-phased budget plan against which project performance is measured.It is formed bythe budgets assigned to scheduled cost accounts and the applicable indirect budgets.For future effort,not planned to the cost account level,the PMB also includes budgets assigned to higher-level CWBS elements. The PMB does not include any management or contingency reserves, which are isolated above the PMB.

Performance Measurement Techniques (PMT):Performance measurement techniques (PMTs) are the methods used to estimate earned value. Different methods are appropriate to different work packages,either due to the nature of the work or to the planned duration of the


work package .Another term for Performance Measurement Techniques is Earned Value Methods.

Programme Manager: An individual who has been assigned responsibility for accomplishing a specific unit of work. The project manager is typically responsible for the planning, implementing, controlling, and reporting of status on a project.

Schedule Performance Index (SPI):The planned schedule efficiency factor representing the relationship between the value of the initial planned schedule and the value of the physical work performed, in other words earned value.The SPI is calculated as BCWP/BCWS.

Schedule Variance (SV):An indicator of how much a programme is ahead or behind schedule. The SV is calculated as BCWP - BCWS.

To Complete Performance Index (TCPI):The projected performance which must be achieved on all remaining work in order to meet some financial goal set by management.

Variance at Complete (VAC):The algebraic difference between Budget at Complete and Estimate at Complete.

What-if Analysis:The process of evaluating alternative strategies.

Work Breakdown Structure (WBS):The WBS is a product-oriented breakdown structure of hardware,software,services,and programme-unique tasks that organizes and defines the product to be produced, as well as identifying the scope of work to be accomplished to achieve the specified product.A WBS element may be an identifiable product, a set of data, or a service.

Schedule Variance

BCWS : of the work I scheduled to have done,how much did I budget for it to cost?

BCWP : of the work I actually performed, how much did I budget for it to cost?

BCWP : of the work I actually performed,how much did I budget for it to cost?


ACWP: of the work I actually performed,how much did it actually cost?

FIVE BASIC PERFORMANCE DATA

QUESTIONS & ANSWERS

Performance Measurement

Technique


Precedence Network analysis

Precedence diagrams have a number of advantages over arrow diagrams in that

1) No dummies are necessary; 2) They may be easier to understand by people familiar with flow sheets; 3) Activities are identified by one number instead of two so that a new activity can be inserted between

two existing activities without changing the identifying node numbers of the existing activities; 4) Overlapping activities can be shown very easily without the need for the extra dummies.


Line of Balance Line of Balance is a method of showing the repetitive work that may exist in a project programme as a single

line on a graph rather than a series of individual activities on a bar chart. A Line of Balance Chart can be used for

any project where there are a number of separate but common activities to undertake or an activity with a long

duration. They are not well suited to individual activities that have a short duration that are undertaken in

isolation to similar activities in a project. .


Project Management Tools –

Bar Charts/ Gantt Charts

PERT - Programme Evaluation & Review

Techniques

CPA -Critical Path Analysis

CPP&S -Critical Path Planning & scheduling

DCPM -Decision Critical Path Method

GRASP -General Resource Allocation & Scheduling

Programming

GERT -Graphical Evaluation & Review

Techniques

LCES -Least Cost Estimating & Scheduling

PEP -Programme Evaluation Procedure

PNA -Precedence Network Analysis

LPC - Linear Programme Chart

LOB -Line of Balance Techniques

PLAN DEVELOPMENT PROCESS a) TIME PLANNING PROCESS

1. PRE PLAN STUDIES.

2. PROJECT WORK BREAKDOWN.

3. MODELLING AND ANALYSING NETWORKS.

4. ANALYSE PROJECT DURATION AND

ACTIVITIES.

5. SCHEDULING.

B)RESOURCE PLANNING PROCESSFORECASTING

INPUT AND OUTPUTS.

a) PLANNING CONSTRUCTION MANPOWER.

b) PLANNING CONSTRUCTION MATERIALS

c) PLANNING CONSTRUCTION EQUIPMENT.

d) PLANNING CONSTRUCTION STANDARD

COSTS.

e) PLANNING CONSTRUCTION BUDGET.

c)PROJECT CONTROL PROCESSPROJECT CONTROL METHODOLOGY.

1. RESOURCES PRODUCTIVITY CONTROL.

2. PROJECT COST CONTROL.

3. PROJECT TIME CONTROL.

a) Updating Time Progress.

b) Reviewing Time Progress.

c) Time Crashing Methodology.

d) What – If- Analysis.

PMIS STRUCTURE ( PROJECT MNGT INFORMATION SYSTEM) THE FOLLOWING SUB-SYSTEMS INTERACT WITH EACH OTHER THROUGH INFORMATION CHANNELS.

a) WORK TIME PROGRESS CONTROL.

b) RESOURCES PRODUCTIVITY CONTROL.

c) MOBILISATION OR LOGISTIC CONTROL

d) DIRECT COST CONTROL.

e) INDIRECT COST CONTROL.

f) EARNED VALUE CONTROL

g) FINANCIAL CONTROL.


IMPORTANCE OF PLANNING

1) project plan clearly defines project scope of work

2) It breaks down project objectives into clear ,identifiable,quantifible,attainable,and verifiable goals

which are assigned to individual &responsibility centers for accomplishment

3) Project plan aids the management in performing its functions effectively & efficiently.

4) Project plan forms the basis of project operations &directions &shows how the project is to be run.

5) Project plan identifies critical activities, thus enabling the managing of project by exceptions.

6) Project plan provides the basis for coordinating the efforts of

clients,consultants,architects,designers, specialists,suppliers,contractors and the quantity

surveyors &project staff.

7) Project plan provides the yard stick for measuring progress and evaluating resources performance.

Planning includes

1.Time planning 2.Resource planning 3.Planning control system

1.Time planning

1.Project work breakdown

2.Drwing project networks

3.Project work sheduling

2.Resource planning

1.Planning construction manpower

2.Plannnijng construction materials

3.Selecting construction equipment

4.Planning construction costs

5.Planning construction budgets

3.Planning control system

1.Resource productivity control

2.Project cost control

3.Project time control


Conclusions:-

Proper planning can optimize productivity with the resource available

Project can be completed with in time

Costs can be controlled within the planned, by proper monitoring accordingly to the planned.


PROJECT WORK SHCEDULING

Object of Scheduling

To know precisely the start and finish dates wrt. Base time

To know them on the calendar dates for proper appreciation

To see the availability of floats for resource leveling

To know the effect of delays on other activities and give a clear picture.

To forecast resources

To fore cast man power

To fore cast budget

To compare progress

To monitor the project

Progress

Cost

To mark Mile stones

To update progress

To generate reports

To control the physical working at site

‘Scheduling helps in

Resource fore casting

Man power planning

Material planning

Material procurement schedule

Planning and selection of equipment

Line and balance schedule

Cost control, working out cost, cost progress, cost monitoring, budget forecasting, cost

scheduling

Recording progress

Monitoring ,reports generation.

Monitoring and Control of projects Monitoring involves

Watching the progress Comparing it with the planned progress Identifying the delayed activities , analyzing their effect on other activities and the project Taking suitable remedial actions and applying corrections Apprising all concerned of the position


Project Breakdown Structures

Product Breakdown Structure ( PBS )

Cascade of deliverables in which overall objective of the project is broken into subprojects,

components. It is the project‘s bill of material.

Organization Breakdown Structure ( OBS )

Cascade of resource type, skill types or activities. At high levels, similar to project phases :

design, development, procurement, production, assembly, testing. At lower levels, specific

resource types : mechanical engineers, programmers, etc.

Work breakdown structure ( WBS )

At any level of breakdown, the 2- dimensional matrix of products / projects and activities

required to deliver each product / project. The cascade of task matrices is the WBS of a

project.

Work Breakdown Structure

Subdivide the total effort into discrete and logical sub elements

Check proposed WBS and planned efforts for completeness, compatibility and

continuity.

Determine that WBS which satisfies both functional and project requirements.

Check if WBS provides for local sub division of all project work.

Establish assignment of responsibilities for all identified effort to specific organizations

and organizational elements.

Check proposed WBS against the reporting requirements of the organization involved.

Limit WBS development to subdivision of work to the work package level.


No effort should be made to extend the WBS to the same number of levels for all project

tasks.

While too many work packages are undesirable, the project mgt. should not be

constrained from subdividing work in areas that are complex, high risk, or otherwise

critical to project success.

A work package is assigned to a single individual or contractor. The period of work is

usually short - 3 months or less.

Sample : The process of project control described earlier requires the establishment of a firm base line defined

in terms of scope, quality, time and cost on a compatible basis, and in units that can be more readily

handled. One of the more important and powerful techniques for managing a large complex project,

therefore, is the Work Breakdown Structure (WBS), which greatly facilitates control.

WBS can be based on any criteria as under

• Responsibility

• Design teams

• Type of work

• Phases

• Engineering departments

• Contract packages and so on

To be effective a WBS must: Establish an information structure for describing the project's scope in entirety Serve as an effective means of communication to integrate the objectives and activities of all the

internal and external organizations involved in the project Represent the planning of the project, step by step Separate sequential and parallel activities assigned to different groups who will schedule,


ENTERPRISE PROJECT MANAGEMENT METHODOLOGIES

Enterprise project management methodologies can enhance the project planning process as well as

providing some degree of standardization and consistency. Companies have come to the realization

that enterprise project management methodologies work best if the methodology is based upon

templates rather than rigid policies and procedures. The International Institute for Learning has

created a Unified Project Management Methodology with templates categorized according to the

PMBOK Guide Areas of Knowledge :

Communication

Project Charter Project Procedures Document Project Change Requests Log Project Status Report PM Quality Assurance Report Procurement Management Summary Project Issues Log Project Management Plan Project Performance Report

Cost

Project Schedule Risk Response Plan and Register Work Breakdown Structure (WBS) Work Package Cost Estimates Document Project Budget Project Budget Checklist

Human Resources

Project Charter Work Breakdown Structure (WBS) Communications Management Plan Project Organization Chart Project Team Directory Responsibility Assignment Matrix (RAM) Project Management Plan Project Procedures Document Kickoff Meeting Checklist Project Team Performance Assessment Project Manager Performance Assessment

Integration

Project Procedures Overview Project Proposal Communications Management Plan Procurement Plan Project Budget Project Procedures Document Project Schedule Responsibility Assignment Matrix (RAM) Risk Response Plan and Register Scope Statement Work Breakdown Structure (WBS) Project Management Plan Project Change Requests Log Project Issues Log Project Management Plan Changes Log Project Performance Report Lessons Learned Document Project Performance Feedback Product Acceptance Document Project Charter Closing Process Assessment Checklist Project Archives Report


Procurement

Project Charter Scope Statement Work Breakdown Structure (WBS) Procurement Plan Procurement Planning Checklist Procurement Statement of Work (SOW) Request for Proposal Document Outline Project Change Requests Log Contract Formation Checklist Procurement Management Summary

Quality

Project Charter Project Procedures Overview Work Quality Plan Project Management Plan Work Breakdown Structure (WBS) PM Quality Assurance Report Lessons Learned Document Project Performance Feedback

Project Team Performance Assessment PM Process Improvement Document

Risk

Procurement Plan Project Charter Project Procedures Document Work Breakdown Structure (WBS) Risk Response Plan and Register

Scope

Project Scope Statement Work Breakdown Structure (WBS) Work Package Project Charter

Time

Activity Duration Estimating Worksheet Cost Estimates Document Risk Response Plan and Register Medium Work Breakdown Structure (WBS) Work Package Project Schedule Project Schedule Review Checklist.

Project Manager Responsibilities

Project plan implementation

Achievement of objectives

Project integration

Communications

Stakeholder relations

Change management system

Priority establishment and maintenance

Staff acquisition, retention, and motivation

Selection and use of PM tools and techniques

Compliance with regulations, state and federal laws, and organization policies and procedures

Resolving team conflicts

Negotiating win/win solutions

Deliver the project on time and within budget

"You're either in or you're out. There's no such thing as life in-between." - Pat Riley


The main roles are Project manager : 1. Figure head role( legal N social head) : The project manager, is the legal and social head

of the project, is the single focal point of making decisions, ceremonial functions and

symbolic duties.

2. Leader ship role (Performance motivator N experienced person): As a leader, the project

manager directs the inter functional efforts through a complex web of relationships created

in the project organization by building a performance-motivated organization a team of

skilled and experienced people who collectively face the challenges posed by the people.

3. Liaisoning role (Dealing with the out side agencies): The project manager maintains

contacts outside the organization, deals with those activities which may involve

correspondence and contact with the concerned government officials contract vendors

professionals, and top persons of the construction industry.

4. Monitoring role (Monitoring the relevant information coming form out side agencies): The

project manager focuses a planned approach for performing tasks, land implements of

time, cost and quality planning and monitoring system for the project that highlights the

commitment of the project team to provide assured results.

5. Disseminators role (Transfer information to higher N lower ends): The project manager

transmits the relevant information received from external sources and internal systems to

the concerned people in the work place. This information may be written or verbal, formal

or informal.

6. Spokesmen's role: The project manager acts as the sole representative through whom all

communications with the client or other external parties are conducted outside the project

site.

7. Entrepreneur's role (Identifies opportunities to promote to improvements): The project

manager seeks and identifies opportunities to promote improvements and needed

changes.


8. Disturbance handling role( The PM resolves conflicts ): The project manager maintains

organizational harmony by resolving conflicts and diagnosing organizational behaviour an

time. He applies corrective action when the organization faces important unexpected

disturbances.

9. Resource allocator role : The project manager takes responsibility for allocating/ altering

the project resources and .makes any changes which are necessary to ensure the

availability of adequate resources on time. This role also calls for developing and

monitoring budgets and predicting future resource needs.

10. Negotiator’s role.: The project manager negotiates important conflicting issues and

business related matters, both inside and outside of the project environment. He represents

the organization on major negotiations.

Why Projects Fail?

Failure to align project with organizational objectives

Poor scope

Unrealistic expectations

Lack of executive sponsorship

Lack of project management

Inability to move beyond individual and personality conflicts

Politics.

Project Success Factors Project Mission: Initial clarity of goals and general direction.

Top Mgt Support: Willingness to provide necessary resources and authority / power for

project success.

Project Schedule/Plans: Detailed specification of steps for project implementation.

Client consultation: Communication and consultation with and active listening to all

affected parties.

Human resources: Recruitment, selection and training of necessary personnel for the

project team.

Technical tasks: Ability of required technology and expertise to accomplish specific

technical action steps.

Client acceptance: The act of ‗selling‘ the final project to the intended users.

Monitoring and feedback: Timely provision of comprehensive control information at

each stage of implementation process.

Communication: Provision of an appropriate network and necessary data to all key

actors in the project implementation.

Trouble shooting: Ability to handle crisis and deviations from the plan.


Core Project Management Tools Project Charter

Work Breakdown Structure (WBS)

Project Schedule

Project Budget

Project Charter What must be done?

What are the required resources?

What are the constraints?

What are the short and long term implications?

Why do it?

When must it be done?

Where must it be done?

Who does what?

Who is behind the project?

Who is funding the project?

Who is performing the work of the project?

Managing the Project

Triple Constraint

Five Stages

Project Manager Role

Decision Making Structure

Communication Plan

Meeting Management

Team Development

Navigating Organizational Politics

THE PROJECT CHARTER

The original concept behind the project charter was to document the project managerís authority and

responsibility, especially for projects implemented away from the home office. Today, the project

charter is more of an internal legal document identifying to the line managers and their personnel the

project manager ís authority and responsibility and the management- and/or customer-approved

scope of the project.

Theoretically, the sponsor prepares the charter and affixes his/her signature, but in reality, the project

manager may prepare it for the sponsor ís signature. At a minimum, the charter should include:

Identification of the project manager and his/her authority to apply resources to the project


The business purpose that the project was undertaken to address, including all assumptions and constraints

Summary of the conditions defining the project Description of the project Objectives and constraints on the project Project scope (inclusions and exclusions)

Key stakeholders and their roles Decision making Assumptions Risks Business process changes Project manager Project team Budget

Construction Participants The agencies supporting the construction industry include but are not limited to the following:

Construction business promoters like government bodies, public and private enterprises for real estate

and industrial development, and other similar agencies.

1. Construction management consultant firms.

2. Architect-engineering associates.

3. Construction manpower recruitment and training agencies.

4. Construction materials developing, manufacturing, stocking, transportation and trading firms.

5. Construction plant and machinery manufacturing, distributing, and repair and maintenance

organizations.

6. Banking and finance institutions.

7. Risk insurance and legal services companies.

8. Construction quality assurance, and research and development establishment.

9. Contractors and contracting firms.

Project Mission The project manager aims to achieve its mission by:

Managing

• Time & progress

• Cost & cash flow

• Quality & performance

• Organization behavior

With Organization resources

By

• Planning resources

• Scheduling resources

• Organizing resources

• Directing resources

• Monitoring resources

• Controlling resources

Within

• Quality constraints

• Time constraints

• Cost constraints

• Environment constraints


Project Environment

Most construction projects have one or more of the following characteristics associated with them:

Details of work are not precisely defined.

Scope of work gets modified during execution.

Nature of work varies from job to job.

Site of works are located in remote areas.

Places of works are spread out.

Resource requirements and organization of works differ with each task.

Investments involved are large and the decisions entail risks.

Performance is sensitive to the unexplored site geology, uncertain weather and unforeseen

natural calamities. Engineering failures such as ill-defined scope of work, inadequate field

investigations, faulty designs, absence of quality consciousness and lack of construction

experience can delay completion and increase costs.

Rapidly changing technology, fast moving economic conditions and susceptible environments

and new dimensions to the complex nature of construction projects.

These difficulties, uncertainties and risks pose never-ending questions concerning the resources like:

at what scale are the resources required?

where are they going to come from?

when should they be inducted at site?

where should they be housed?

how to optimize their utilization? And

when to demobilize them?

Start Up Techniques For Projects

Objectives of Project Start Up:

To create a shared vision for project, by identifying the project‘s context, its purpose and

objectives.

To focus the attention of the project team on project‘s purpose and the method of achieving.

To gain acceptance of plans by defining the scope of work, the project organization, and the

constraint of quality, cost and time.

To get the project team functioning, by agreeing to a mode of operation and the channels of

communication.

Construction Project Planner & their CompetenciesPart I:

Part I : Business Environment

These are the competencies that a project manager needs to understand in order to operate in

the environment effectively. These competencies should be considered in tandem with the

management and technical competencies.

Business Literacy —Ability to understand the line of business or company, to take the

business vision and translate it into the project vision.

Corporate Procedures & Tools —Ability to understand established policies and procedures

and corporate tools; how to apply them to the project.


Institutional or Corporate Culture — Ability to recognize and understand the corporate culture

and its impact on the project.

Organizational Structure — Ability to understand and work within the corporate organization

and team structure.

Part II: Management Competencies

These are the "soft skills" or people-oriented competencies that would be required of any

manager, but are especially important for project managers dealing with a project team

(superiors, staff and consultants) and external stakeholders (clients, other third parties, media

outlets, regulators).

Communications — Ability to produce clear status reports (clear writing and verbal skills),

communicate tactfully and candidly, simplify jargon, make clients aware of all issues, be an

excellent listener.

External Issue Management — Ability to identify, analyze and prioritize issues external to the

project and develop mitigation plans.

Financial Acumen — Ability to understand how decisions affect the bottom line knowledge

about general financial and accounting principles and practices that impact operations;

knowledge about the links between operations and the company‘s financial performance is

essential to create value for all stakeholders of the organization.

Learning & Knowledge Management — Ability to keep abreast of technological change, to

learn from and reflect on the past, to ensure effective training & development of team members,

to find most expedient way to develop new skills and knowledge required to undertake new

projects.

Negotiation — Ability to undertake continual adjustments with stakeholders in a persuasive

manner, to keep the project on course by use of positive win/win negotiations.

Organization — Ability to find a place for everything so that needed tools, resources and data

are easily accessible, ability to create and maintain a clear team structure.

Problem Solving and Decision Making — Ability to analyze and define a problem, evaluate

alternatives, find a solution, understand how and when to make a choice.

Relationship Management — Ability to consult and provide advice; to facilitate discussion and

resolve conflict; to develop relationships with key project stakeholders; to recognize and deal

with other cultures; to establish trust, credibility and respect; and to be willing to give more than

to receive.

Strategic Thinking — Ability to analyze the future impact of decisions by taking a big-picture

approach, to strategically position the project within the business to relate to short and long-term

objectives.


Team Building — Ability to assemble the team with the right mix of skills, then "create" the

team, understand and know how to share information, coach members, delegate responsibility,

promote support and interaction.

Time Management — Ability to manage competing priorities effectively, to be resourceful and

to use time as resource to make up or extend.

Part III: Technical Competencies

These have been traditionally considered the main competencies required by the project the

results of which the project manager will be accountable. For every project, a project execution plan

is required, and the following competencies will be needed to bring the project to fruition.

Budget Planning — Understand and know how to perform cost/benefit analyses; use sound

rationale; ensure that all factors are included; maintain focus on budget; consult with client and

mgmt if estimated final costs are close to or above budget.

Client ( or Customer ) Focus — Understand who is the client and what are the client‘s needs;

ability to provide realistic expectations; to reach agreement with client from outset of project.

Contract / Procurement Management — Understand and know how to use purchasing project

tools, how to create contracts with clear and agreed to terms and conditions, and how to

administer contracts.

Environmental, Health & Safety Management — Understand and know how to comply with

all regulations; implement a positive attitude toward health and safety in design and execution of

the project; ensure safe deliverables.

Hand-over Management — Understand and know how to coordinate, implement, test and

deliver a project in order to produce an effective working system (or a successful product).

Information Management — Ability to manage project documentation (technical and

management) and data (or information) requirements.

Issues /Change /Assumptions Management — Ability to control and implement a process of

change when needed; document and track issues; monitor assumptions and make decisions in

a timely manner; understand and use problem solving techniques.

Risk Management —Understand how to assess, document and manage internal and external

project risks; develop contingencies and mitigation plans.

Project Controls and Process Management — Understand and know how to use standard

project management tools & techniques to schedule, plan, track and correct project

performance; know how to make effective use of technical and management methodologies.

Quality Management — Understand how to obtain and ensure quality results (or products) for

total client satisfaction, ability to take corrective actions and perform verification of project

standards, effectively.

Resource Management — Ability to identify and make optimal use of resources.


Scheduling Management — Ability to organize the work in a logical way so that it is executed

effectively; manage the schedule.

Scope Definition — Ability to establish a clear scope, define the extent of the project; what's in,

what's out, set up and understand approval procedures.

Behavioral Characteristics of Construction Planning Professionals &Attitude

– an open positive ―can do‖ attitude which encourages communication and motivation, and fosters

co-operation.

Common sense – the ability to spot sensible, effective, straight forward, least risky, least

complex solutions i.e. ..% right on time is better than ...% far too late!

Open mindedness – an approach where one is always open to new ideas, practices and

methods and in particular gives equal weight to the various disciplines involved on the project.

Adaptability – a propensity to be flexible where necessary and avoid rigid patterns of thinking

or behaviour, to adapt to the requirements of the project, the needs of the sponsors, its

environment and people working on it – to ensure a successful outcome.

Inventiveness – an ability to discover innovative strategies and solutions from within oneself or

by encouragement with other members of the project team, and to identify ways of working with

disparate resources to achieve project objectives.

Prudent risk taker – a willingness and ability to identify and understand risks but not to take a

risky approach in an unwise or reckless fashion.

Fairness – a fair and open attitude which respects all human values.

Commitment – an over-riding commitment to the project‘s success, user satisfaction and team

working. A strong orientation towards goal achievement.

Success depends on your …

Knowledge

Behaviors

Attitude

Organizational environment

Project environment

Fit

Self-knowledge and ability to adjust - shreedhar

"The trouble with most of us is that we would rather be ruined by praise than saved by criticism." - Norman Vincent Peale

2nd term project management system

Documents