PROJECT MANAGEMENT

 

This article is designed to introduce you to the basic concepts and definitions associated with project management. You will learn about the triple constraints of scope, time and cost; the nine functional knowledge areas associated with project management and the four major phases of a project. You will also learn about the skills and tools used to integrate all of the knowledge areas throughout a project’s lifecycle. You will also learn how to use the CPM and PERT techniques in solving project related problems.

What is Project Management?

Project Management has been called an accidental profession. In many organisations in the past, project managers typically stumbled or fell into project management responsibilities. The world has since changed and project management is now recognised globally as a formal discipline, with international standards and guidelines and a growing knowledge base of best practices. 

Project management is the application of skills and knowledge and the use of tools and techniques applied to activities in a project to complete the project as defined in the scope. Project management is not only the use of a scheduling tool such as Microsoft Project, Scheduler Plus, etc. 

Many organisations still do not understand that the ability to use a scheduling tool is not enough to successfully manage a project. The use of a tool is only one part of the equation. Project management requires a high level of skill in both the people and technical side of the discipline for successful projects to result. If we consider that the tasks in a project are completed by people, this then sheds an entirely different light to the concept of project management and should make it clear that for successful project management the right combination of skills can impact on success and project outcomes. 

The world is changing very rapidly with added complexities, increased expectations and constant change. Project Management is an effective process for organisations to address business needs to get products and services to market more quickly and preferably before the competition.

 International Standards and Guidelines

Project Management is a formal discipline with international standards and guidelines developed by the Project Management Institute (PMI). A significant body of knowledge has been accumulated specifically over the past 5 years relating to effective project management practices, tools, techniques and processes across industries. PMI is recognised as the international body providing guidance and direction for the discipline. PMI has developed the “Project Management Body of Knowledge” or “PMBOK” the essential knowledge areas and processes required to effectively manage projects. There are nine “body” of knowledge areas within the standards and guidelines.

•    Integration Management - Processes to ensure that the elements of the project are effectively coordinated. Integration management involves making decisions throughout the project in terms of objectives and alternative approaches to meet or exceed stakeholder expectations.

•    Scope Management - processes to ensure that all the work required to complete the project is defined. Defining what is or is not in scope.

•    Time Management - all processes required to ensure that the project completes on time (defined schedule).

Cost Management - all processes required to ensure the project is completed within the budget approved for the project.

•    Quality Management - processes to ensure that the project delivers the need for which it was undertaken. Includes all quality processes such as quality policy, objectives, and responsibility and implements these through quality planning, quality assurance, quality control and quality improvement.

• Risk Management - all processes involved in identifying, assessing/analysing, responding and controlling project risk.

•     Human Resource Management - all processes required to make the most effective use of people resources in a project, including sponsor, stakeholders, partners, team etc.

•     Communications Management - all processes to ensure timely and appropriate distribution of project information, includes providing links between key people in the project, generating, collecting, disseminating, storing and archival of project information.

•     Procurement Management - processes to acquire goods and services for the project outside of the organisation.

 Project Management Processes

Project Management processes define, organise and complete the work defined for the project. There are five project management process areas that apply to most projects and are defined in the PMBOK:

•    Initiating Processes - authorising the project or phase.

•    Planning Processes - defining the project objectives and selecting the most appropriate approach for the project to attain the objectives.

•    Executing Processes - managing the resources required to carry out the project as defined in the plan.

•     Controlling Processes - ensuring that project objectives are met as defined by monitoring, measuring progress against plan, identifying variance from plan and taking corrective action.

•     Closing Processes - formalising acceptance of a phase and or the project and closing all associated activities. Project management is integrative and to effectively manage a project, a project manager uses all of the body of knowledge areas and all of the processes throughout the life cycle of a project.

The following diagram is a sample of a standard four phase project life cycle.

 

Project vs. Product Life Cycles

Those of you involved in information technology fields have likely heard of the systems development life cycle (SDLC) - a framework for describing the phases involved in developing and maintaining IT systems. This is an example of a product life cycle. The project life cycle applies to all projects (regardless of product produced) whereas a product life cycle varies depending on the nature of the product. Many products (such as large IT systems) are actually developed through a series of several different projects. Large projects are seldom given full funding and approval from the beginning. Usually a

project has to successfully pass through each of the project phases before continuing to the next. The practice of ‘progressive resource commitment’ also means you only get the money for the next phase after the prior phase has been completed and there is an opportunity for management review to evaluate progress, probability of success and continued alignment with organisational strategy. These management points are often called phase exits, kill points or stage gates.

What is the Value of Project Management?

Project Management increases the probability of project success. Project Management is change facilitation, and used effectively with appropriate processes, tools, techniques and skills will:

•    Support the Business

•    Get the product or service to market effectively, efficiently and to quality standards

•    Provide common approach to project management

•    Improve service

Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project.

How Project Management Relates to Other Disciplines

Project management overlaps with general management knowledge and practice, as well as with the project's application areas, knowledge, and practice. Project managers focus on integrating all the pieces required for project completion. General managers or operational managers tend to focus on a particular discipline or functional area. In this respect, project management tends to be a cross-functional role, often involving people from various business areas and divisions. 

While project management requires some fundamental understanding of the knowledge area of the project itself, the project manager does not have to be an expert in that field. You don’t need to be a certified carpenter, plumber, and electrician in to manage the construction of your house, but you do need to have a least a fundamental understanding of each trade or discipline.

The Project Management Profession

The Project Management Institute (PMI) provides certification as a project management professional (PMP). The requirements include verification of from 4500 to 7500 hours of project management experience (depending on education level), adherence to a Code of Ethics, and obtaining a score of 70% or higher on a 200- question multiple choice certification exam. For further information see the PMI Internet website at https://www.PMI.org.

 Project Planning

We are going to take a quick look at the elements of project planning, starting with the project life cycle and then examine the importance of detailed planning to the overall success of the project. Without a clear definition of the project, it's impossible to discern what should be delivered as a result. If requirements are not clear, your project will be impossible to control, and it will become unmanageable. We will review the fundamentals of planning and then move on to the importance of developing a comprehensive work breakdown structure.

Today’s organisations are running at a fast pace. More so than ever, organisations are faced with increasing global competition and as such, want products and services delivered yesterday. Organisations are struggling with multiple projects, tight deadlines and fewer skilled resources available to manage these projects. Project managers are struggling with the concepts of best practices and the reality of life in a corporation.

Often, insufficient time is provided for planning the project appropriately and as a result projects consistently fail to produce the expected results, have cost or time overruns, or just plain fail. In such cases, the project manager can usually look back on his or her experiences and see what went wrong, vowing never to make the same mistake again. Sometimes, however, the cycle continues. Whether you manage a small, medium or large size project, effective planning of the project is the single most critical step to success. 

Too many project managers either neglect or spend too little time and effort planning. The tendency is to rush to implementation before a clear picture is developed. The project definition must be clear and understood by the stakeholders and the team. Often the directive from the project sponsor is “Just do it” or “We need this in place by next week”, “we don’t have the luxury to spend time planning, we need to do the project”, not allowing the time up front to conduct proper planning activities. Failure to plan, however, usually results in failure to survive. Without a clearly defined scope, the project has no sustainable basis for success.

Building a detailed project plan forces the team and the stakeholders to realistically assess the proposed project. What will the outcome be when the project is finished? What will you have? - product, service? What will the product/service look like? What are the must have, nice to have features of the product/service? What is the current situation? What is the desired outcome? What are the obstacles keeping you from closing the gap? Who are the primary and secondary stakeholders? What is the problem/change? What are the assumptions/constraints and objectives of the project? 

The planning stage of the project includes setting broad-based goals and designing strategies and action plans to reach these goals. E2 Project Management, Block Two Page 3 of 22 Project planning is a dynamic, "cyclical" process that continues throughout the project life cycle.

Planning must take place to deal with problems, change or risks as they occur in the project. Planning begins with the identified and agreed to requirements in mind. It is critical to the success of the project to understand your destination when you start. You will know where you are going and you will have developed plans to arrive at the goal and complete the project successfully. Project managers must learn how to develop a project strategy and plan regarding how to implement that plan. 

Your organisation, team and stakeholders depend on it. Project planning is a cycle that is repeated on an on-going basis. For the duration of the project, it is never a finished process. Why? Because resources change or move, factors in the organisation may change causing project objectives to change, unknown risks can occur, or technology may change, requiring project managers to continually monitor and manage this process throughout the life of the project.

The following diagram illustrates the “Project Life Cycle” and the cyclical nature of planning activities.

 

The cyclical nature of planning activities

 

PROGRAMME EVALUATION AND REVIEW TECHNIQUE AND CRITICAL PATH METHOD (PERT AND CPM)

Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are two techniques that are widely used in planning and scheduling the large projects. A project is a combination of various activities. For example, Construction of a house can be considered as a project. Similarly, conducting a public meeting may also be considered as a project. In the above examples, construction of a house includes various activities such as searching for a suitable site, arranging the finance, purchase of materials, digging the foundation, construction of superstructure etc. 

Conducting a meeting includes, printing of invitation cards, distribution of cards, arrangement of platform, chairs for audience etc. In planning and scheduling the activities of large sized projects, the two network techniques — PERT and CPM — are used conveniently to estimate and evaluate the project completion time and control there sources to see that the project is completed within the stipulated time and at minimum possible cost. 

Many managers, who use the PERT and CPM techniques, have claimed that these techniques drastically reduce the project completion time. But it is wrong to think that network analysis is a solution to all bad management problems. In the present chapter, let us discuss how PERT and CPM are used to schedule the projects. Initially, projects were represented by milestone chart and bar chart. But they had little use in controlling the project activities. 

Bar chart simply represents each activity by bars of length equal to the time taken on a common time scale as shown in figure 15. l. This chart does not show interrelationship between activities. It is very difficult to show the progress of work in these charts. An improvement in bar charts is milestone chart. In milestone chart, key events of activities are identified and each activity is connected to its preceding and succeeding activities to show the logical relationship between activities. Here each key event is represented by a node (a circle) and arrows instead of bars represent activities, as shown in figure the figures below. The extension of milestone chart is PERT and CPM network methods.

The Bar Chart

In PERT and CPM the milestones are represented as events. Event or node is either starting of an activity or ending of an activity. Activity is represented by means of an arrow, which is resource consuming. Activity consumes resources like time, money and materials. Event will not consume any resource, but it simply represents either starting or ending of an activity. Event can also be represented by rectangles or triangles. When all activities and events in a project are connected logically and sequentially, they form a network, which is the basic document in network-based management. The basic steps for writing a network are:

(a)     List out all the activities involved in a project. Say, for example, in building construction, the activities are:

(i)     Site selection,

(ii)     Arrangement of Finance,

(iii)     Preparation of building plan,

(iv)     Approval of plan by municipal authorities,

(v)      Purchase of materials,

(vi)      Digging of foundation,

(vii)      Filling up of foundation,

(viii)      Building superstructure,

(ix)      Fixing up of doorframes and window frames,

(x)        Roofing,

(xi)      Plastering,

(xii)      Flooring,

(xiii)      Electricity and water fittings,

(xiv)     Finishing.

(b)      Once the activities are listed, they are arranged in sequential manner and in logical order. For example, foundation digging should come before foundation filling and so on. Programme Evaluation and Review Technique and Critical Path Method (PERT and CPM)

(c)       After arranging the activities in a logical sequence, their time is estimated and written against each activity. For example: Foundation digging: 10 days, or 1 and half weeks.

(d)       Some of the activities do not have any logical relationship, in such cases; we can start those activities simultaneously. For example, foundation digging and purchase of materials do not have any logical relationship. Hence both of them can be started simultaneously. Suppose foundation digging takes 10 days and purchase of materials takes 7 days, both of them can be finished in 10 days. And the successive activity, say foundation filling, which has logical relationship with both of the above, can be started after 10 days. Otherwise, foundation digging and purchase of materials are done one after the other; filling of foundation should be started after 17 days.

(e)       Activities are added to the network, depending upon the logical relationship to complete the project network.

Some of the points to be remembered while drawing the network are

(a)   There must be only one beginning and one end for the network, as shown in figures bellow.

Writing the network

(b)   Event number should be written inside the circle or node (or triangle/square/rectangle etc). Activity name should be capital alphabetical letters and would be written above the arrow. The time required for the activity should be written below the arrow as in the figure below.

Numbering and naming the activities

(c)   While writing network, see that activities should not cross each other. And arcs or loops as in figures above should not join Activities.

Crossing of activities not allowed

(d)      While writing network, looping should be avoided. This is to say that the network arrows should move in one direction, i.e. starting from the beginning should move towards the end, as in figure 15.6.

Looping is not allowed

(e)     When two activities start at the same event and end at the same event, they should be shown by means of a dummy activity as in figure 15.7. Dummy activity is an activity, which simply shows the logical relationship and does not consume any resource. It should be represented by a dotted line as shown. In the figure, activities C and D start at the event 3 and end at event4. C and D are shown in full lines, whereas the dummy activity is shown in dotted line.

Use of Dummy activity

(f When the event is written at the tail end of an arrow, it is known as tail event. If event is written on the head side of the arrow it is known as head event. A tail event may have any number of arrows (activities) emerging from it. This is to say that an event may be a tail event to any number of activities. Similarly, a head event may be a head event for any number of activities. This is to say that many activities may conclude at one event. This is shown in the figure below:

Tail event and Head event

The academic differences between PERT network and CPM network are: (i ) PERT is event oriented and CPM is activity oriented. This is to say that while discussing about PERT network, we say that Activity 1-2, Activity 2-3 and so on. Or event 2 occurs after event 1 and event 5 occurs after event 3 and so on. While discussing CPM network, we say that Activity A follows activity B and activity C follows activity B and so on. Referring to the network shown in figure 9, we can discuss as under. PERT way: Event 1 is the predecessor to event 2 or event 2 is the successor to event 1. Events 3 and 4 are successors to event 2 or event 2 is the predecessor to events 3 and 4. CPM way: Activity 1-2 is the predecessor to Activities 2-3 and 2-4 or Activities 2-3 and 2-4 are the successors to activity 1-2.

(ii) PERT activities are probabilistic in nature. The time required to complete the PERT activity cannot be specified correctly. Because of uncertainties in carrying out the activity, the time cannot be specified correctly. Say, for example, if you ask a contractor how much time it takes to construct the house, he may answer you that it may take 5 to 6 months. This is because of his expectation of uncertainty in carrying out each one of the activities in the construction of the house. 

Another example is if somebody asks you how much time you require to reach railway station from your house, you may say that it may take 1 to 1^ hours. This is because you may think that you may not get a transport facility in time. Or on the way to station, you may come across certain work, which may cause delay in your journey from house to station. Hence PERT network is used when the activity times are probabilistic.

Logical relationship in PERT and CPM

Three Time Estimates

There are three time estimates in PERT, they are:

(a)     OPTIMISTIC TIME: Optimistic time is represented by t₀. Here the estimator thinks that everything goes on well and he will not come across any sort of uncertainties and estimates lowest time as far as possible. He is optimistic in his thinking.

(b)     PESSIMISTIC TIME: This is represented by t_P. Here estimator thinks that everything goes wrong and expects all sorts of uncertainties and estimates highest possible time. He is pessimistic in his thinking.

(c)     LIKELY TIME: This is represented by t_L. This time is in between optimistic and pessimistic times. Here the estimator expects he may come across some sort of uncertainties and many a time the things will go right. So while estimating the time for a PERT activity, the estimator will give the three time estimates. When these three estimates are plotted on a graph, the probability distribution that we get is closely associated with Beta Distribution curve. For a Beta distribution curve as shown in figure 6.10, the characteristics are:

Standard deviation = (tP - tO)/6 = ct, t_P- t_Ois known as range.

Variance = {(t_P- t_O)/6}2 = ct²

Expected Time or Average Time = tE= (tO + 4t_L+ t_P) / 6

These equations are very important in the calculation of PERT times. Hence the student has to remember these formulae. Now let us see how to deal with the PERT problems.

(d)     Numbering of events: Once the network is drawn the events are to be numbered. In PERT network, as the activities are given in terms of events, we may not experience difficulty. Best in case of CPM network, as the activities are specified by their name, is we have to number the events. For numbering of events, we use D.R. Fulkerson’s rule.

As per this rule: An initial event is an event, which has only outgoing arrows from it and no arrow enters it. Number that event as 1. Delete all arrows coming from event 1. This will create at least one more initial event. Number these initial events as 2, 3 etc. Delete all the outgoing arrows from the numbered element and which will create some more initial events. Number these events as discussed above. Continue this until you reach the last event, which has only incoming arrows and no outgoing arrows. 

While numbering, one should not use negative numbers and the initial event should not be assigned ‘zero’. When the project is considerably large, at the time of execution of the project, the project manager may come to know that some of the activities have been forgotten and they are to be shown in the current network. In such cases, if we use skip numbering, it will be helpful. Skip numbering means, skipping of some numbers and these numbers may be made use to represent the events forgotten. We can skip off numbers like 5, 10, 15 etc. or 10, 20 and 30 or 2, 12, 22 etc.

Another way of numbering the network is to start with 10 and the second event is 20 and so on. This is a better way of numbering the events. Let now see how to write network and find the project completion time by solving some typical problems.

Example 12.1.

A project consists of 9 activities and the three time estimates are given below. Find the project completion time (TE).

1.    Write the network for the given project and find the project completion time?

Activities

Activities		Days
I	j	T0	Tl	Tp
10	20	5	12	17
10	30	8	10	13
10	40	9	11	12
20	30	5	8	9
20	50	9	11	13
40	60	14	18	22
30	70	21	25	30
60	70	8	13	17
60	80	14	17	21
70	80	6	9	12

 

Solution

In PERT network, it is easy to write network diagram, because the successor and predecessor event relationships can easily be identified. While calculating the project completion time, we have to calculate t_e i.e. expected completion time for each activity from the given three-time estimates. In case we calculate project completion time by using to or //or t_p separately, we will have three completion times. Hence it is advisable to calculate t_e expected completion time for each activity and then the project completion time. Now let us work out expected project completion time.

Predecessor Event event	Successor	Time in days			Te = (tO + 4tL + tP)/6	Range tP - tO	S.D (V) (tP - tO) /6	Variance □ 2
10	20	5	12	17	9.66 (10)	12	2	4
10	30	8	10	13	10.17 (10)	5	0.83	0.69
10	40	9	11	12	10.83 (11)	3	0.5	0.25
20	30	5	8	9	7.67 ( 8 )	4	0.66	0.44
20	50	9	11	13	11.00 (11)	4	0.66	0.44
40	60	14	18	22	18.00 (18)	8	1.33	1.78
30	70	21	25	30	25.18 (25)	9	1.5	2.25
60	70	8	13	17	12.83 (13)	9	1.5	2.25
50	80	14	17	21	17.17 (17)	7	1.16	1.36
70	80	6	9	12	9.00 ( 9 )	6	1.0	1.0

 

For the purpose of convenience the t_E got by calculation may be rounded off to nearest whole number (the same should be clearly mentioned in the table). The round off time is shown in brackets. In this book, in the problems, the decimal, will be rounded off to nearest whole number. To write the network program, start from the beginning i.e. we have 10 - 20, 10 - 30 and 10 - 40. Therefore from the node 10, three arrows emerge. They are 10 - 20, 10 - 30 and 10 - 40. Next from the node 20, two arrows emerge and they are 20 - 30 and 20 - 50. Likewise the network is constructed. The following convention is used in writing network in this book.

 

 

Network for Problem

Let us start the event 10 at 0th time i.e. expected time TE = 0. Here TE represents the occurrence time of the event, whereas tE is the duration taken by the activities. TE belongs to event, and tE belongs to activity.

if" = 0

Te²⁰ = Te¹⁰ + tE^{10- 20} = 0 + 10 = 10 days

Te³⁰ = Te¹⁰ + tE1 ^{- 30} = 0 + 10 = 10 days

Te³° = Te²⁰ + tE²⁰" ³⁰ = 10 + 8 = 18 days

The event 30 will occur only after completion of activities 20-30 and 10-30. There are two routes to event 30. In the forward pass i.e. when we start calculation from 1st event and proceed through last event, we have to workout the times for all routes and select the highest one and the reverse is the case of the backward pass i.e. we start from the last event and work back to the first event to find out the occurrence time.

Te⁴⁰ = Te¹⁰ + tE^{10 - 40} = 0 + 11 = 11 days

Te⁵⁰ = Te²⁰ + tE^{20 - 50} = 10 + 11 = 21 days

Te⁶⁰ = Te⁴⁰+ tE⁴⁰ " ⁶⁰ = 11 + 18 = 29 days Te⁷⁰ = Te³⁰ + tE^{30 - 70} = 18 + 25 = 43 days T_e⁷° = t_e6o + t_E6o - 70 = 29 + 13 = 42 days Te⁸⁰ = Te⁷⁰ + tE^{70 - 80} = 43 + 9 = 52 days Te⁸⁰ = Te⁵⁰ + tE^{50 - 80} = 21 + 17 = 38 days

TE⁸⁰ = 52 days. Hence the project completion time is 52 days. The path that gives us 52 days is known as Critical path. Hence 10-20-30-70-80 is the critical path. Critical path is represented by a hatched line ( I I ). All other parts i.e. 10-40-60­70-80,     10-20-50-80 and 10-30-70-80 are known as non-critical paths. All

activities on critical path are critical activities.

CONCLUSION

Project management is the application of skills and knowledge and the use of tools and techniques applied to activities in a project to complete the project as defined in the scope. Project management is not only the use of a scheduling tool such as Microsoft Project and Scheduler Plus. Project management overlaps with general management knowledge and practice, as well as with the project's application areas, knowledge, and practice. Project managers focus on integrating all the pieces required for project completion. General managers or operational managers tend to focus on a particular discipline or functional area.

Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are two techniques that are widely used in planning and scheduling the large projects. PERT is event oriented and CPM is activity oriented. PERT activities are probabilistic in nature in the sense that the time required to complete the PERT activity cannot be specified correctly. Because of uncertainties in carrying out the activity, the time cannot be specified correctly

UNIT SUMMARY

This article treats the concept of project management. We defined Project management as the application of skills and knowledge and the use of tools and techniques applied to activities in a project to complete the project as defined in the scope. Project Management is a formal discipline with international standards and guidelines developed by the Project Management Institute (PMI). 

Project Management processes define, organise and complete the work defined for the project. There are five project management process areas that apply to most projects. They are: Initiating Processes, Planning Processes, Executing Processes, Controlling Processes, and Closing Processes. 

Programme Evaluation and Review Technique (PERT) and Critical Path Method (CPM) are two techniques that are widely used in planning and scheduling the large projects. A project is a combination of various activities. 

The basic steps for writing a network are: Listing out all the activities involved in a project, once the activities are listed, they are arranged in sequential manner and in logical order, after arranging the activities in a logical sequence, their time is estimated and written against each activity, in a situation where some of the activities do not have any logical relationship can start those activities simultaneously, add activities to the network, and when two activities start at the same event and end at the same event, they should be shown by means of a dummy activity. 

The academic differences between PERT network and CPM network include the fact that PERT is event oriented and CPM is activity oriented, and that PERT activities are probabilistic in nature.

ASSIGNMENT QUESTIONS

1.      Define project management.

2.      Discuss the interrelationship between project management and other disciplines.

3.      Identify and explain the five project management process areas that apply to most projects.

4.      Identify and discuss two techniques that are widely used in planning and scheduling the large projects.

5.      Differentiate between PERT and CPM.

REFERENCES

Murthy, Rama P. (2007) Operations Research 2^nded. New Delhi: New Age International Publishers.

Denardo, Eric V. (2002), The Schience of Decision making: A Problem-Based Approach Using Excel. New York: John Wiley.

Gupta, P.K and Hira, D.S., (2012), Operations Research, New - Delhi: S. Chand & Company.

Lucey, T. (1988), Quantitative Techniques: An Instructional Manual, London: DP Publications.