PROJECT MANAGEMENT -

A Book on Project Management By Dr K K KHANNA

 Publisher: Bloomsbury India

Address: Bloomsbury Publishing India Pvt Ltd , DDA Complex, Pocket C-6&7  , Vasant Kunj, New Delhi -110070, India

PREFACE

Projects are critical to the success of any organization. These result in new or changed products and services, processes and organizations. Projects help in reducing the costs, improving the quality and customer satisfaction and result in many other benefits. As organizations have recognized the criticality of projects to their success, project management has become a focal point of improvement efforts. These days many organizations are embracing project management as a key strategy for remaining competitive in the current business environment. In the leading organizations, project management is aligned and integrated with the company’s business goals and objectives.

However, in the context of Indian organizations, the scenario is somewhat different. The success rate of implementing projects in India is not encouraging. Time and cost overruns are frequent and even the envisaged benefits are not achieved. I have conducted post completion review of several projects as an Independent Consultant. The observations made during the reviews are indicated below:

§ Business cases were sometimes formulated based on top management intuition and not on well worked financial appraisals.

§ Feasibility report providing multiple options was not prepared before seeking approval of business case to start implementing the project.

§ Feasibility report often considered only one option instead of exploring all possible options.

§ Business decisions being made based on perceived certainty; often not considering risks and uncertainty.

§ Risks were often not identified and analyzed and risk response strategies were not developed.

§ Assumptions made were often not validated.

§ Technical specifications were at times too elaborate and sometimes ambiguous. 

§ Procurement often got delayed due to delays in completion of design engineering. Equipment supplies are often delayed.

§ Though networks were prepared at the initial stage of the project, these were hardly updated and used for project monitoring. 

§ Volume of civil work in terms of cubic meter of excavation / concreting work and structural work in terms of tonnage of the structures often under estimated.

§ Project implementation strategy envisaged large number of work packages which often increased co-ordination beyond the capacity and capability of the project team.

§ Frequent mid-stream scope changes that led to delays and disputes with the contractors. Change control management (changes in scope baseline, time baseline and cost baseline) often not given importance.

§ Lack of clarity of the responsibility and liability of contractors within a contract with the consortium of several contractors that often led to delays

§ Inadequate and delayed deployment of resources have often resulted time overrun. The resources include both the physical and human resources

§ Frequent delays in payment of contractor’s invoices due to various processes resulting in contractor delaying the project

§ Non sequential supplies often interrupted progress of the project sometimes resulting in stoppage of project work.

§ There have been frequent mid stream changes in the leadership of the project team.

§ The project work had often been temporarily stopped due to inadequate cash flow causing both time and cost overrun

§ Performance guarantee tests, a part of project contracts, were either not conducted by the project owner due to reasons beyond their control or conducted after considerable delays for reasons mostly attributable to them. In projects where performance guarantee tests were conducted, shortfalls in agreed guarantee parameters were often observed thus not achieving the envisaged project benefits. Levying liquidated damages, often small amount as compared to actual production losses in the long term, is no solution. Project on completion should result in achieving all the benefits as envisaged in the business case.

 Indian organizations need to strengthen the project management for developing industrial and infra-structural base for India’s economic growth. In India, project management, once considered nice to have, is now being recognized as a necessity for ensuring the successful completion of the projects without time and cost overruns. Some organizations are just getting started with project management. Others have reached a reasonable level of maturity in project management. Training programs to improve project management practices are increasingly becoming the common parts of strategic plans to improve organizational effectiveness.

This text discusses the principles of project management including project management processes and functional areas-scope management, time management, cost management, procurement management, resource management, quality management, risk management, communication management, stakeholder management, commissioning management, integration management, post-completion project reviews and closing of the project. The text also includes how to prepare the business case of the project. The text is primarily on project management for industrial and infrastructure projects in India, but also includes an overview of agile project management for software development. This book is addressed not only to those students who wish to understand and improve upon their project management skills, but also to those functional managers and upper-level executives who must provide continuous support to all projects. This book shall be helpful to the management professionals, project managers, project engineers, consultants and students.

CONTENTS

 Chapter-1: What is project?

ATTRIBUTES OF A PROJECT

DIFFERENT TYPES OF PROJECTS

RELATIONSHIP- PROJECT, PROGRAM, PORTFOLIO& OPERATIONS MANAGEMENT

BUSINESS VALUE

BUSINESS CASE

Chapter-2 : What is project management?

PROJECT MANAGEMENT

PRPJECT MANAGEMENT PROCESSES

TEN FUNCTIONAL AREAS OF PROJECT MANAGEMENT

PROJECT PHASES

PROJECT LIFE CYCLE

PROJECT SPONSOR

PROJECT MANAGER

PROJECT TEAM

RESOURCE MANAGERS

THE CUSTOMER

PROJECT STAKEHOLDERS

THE 7-S OF PROJECT MANAGEMENT

PROJECT SUCCESS MEASURES

WHAT ARE THE PERCEIVED CAUSES OF PROJECT FAILURE?

ISSUES THAT NEED ATTENTION BEFORE STARTING A PROJECT

MANAGING THE COMPLEXITIES OF THE PROJECT

Chapter-3: Project Operating Environments

ENVIRONMENTAL FACTORS BEYOND THE CONTOL OF ORGANIZATION

ENVIRONMENTAL FACTORS INTERNAL TO THE ORGANIZATION

ORGANIZATIONAL POLICIES, PROCEDURES & PRACTICES

Chapter-4: Project Organization Structure

ORGANIZATION STRUCTURE

PROJECT MANAGEMENT OFFICE (PMO)

FUNCTIONAL ORGANIZATION

MATRIX ORGANIZATION                                                                                       

PROJECTIZED ORGANIZATION

INTEGRATED PROJECT MANAGEMENT ORGANIZATION

PROBLEM AREAS IN STAFFING THE PROJECT

Chapter-5: Who should be the project manager?

SELECTING THE PROJECT MANAGER

RESPONSIBILITIES OF THE PROJECT MANAGER

SKILLS THE PROJECT MANAGER MUST DEMONSTRATE

PRIMARY SKILLS FOR EFFECTIVE PROJECT MANAGER

Chapter-6: Selecting the right project

Chapter-7: Project Feasibility Study

Chapter-8: Project Detailed Study

PROJECT SCOPE

PROJECT SCHEDULE

PROJECT COST

PROJECT ORGANIZATION STRUCTURE

PROJECT CONTRACTING STRATEGY

PROJECT RISKS

PROJECT BUDGETING

PROJECT FINANCING

PROJECT BENEFITS

FINANCIAL EVALUATUATION

Payback Period Method

Net Present Value Method

Internal rate of return (IRR) Method

Comparing IRR, NPV and Payback

ECONOMIC ANALYSIS

SENSITIVITY ANALYSIS

RECOMMENDATIONS OF DETAILED STUDY

Chapter-9: Project Business Case

BUSINESS CASE

REVIEW OF BUSINESS CASE

PHASE GATE PROCESS

PROJECT CHARTER

Chapter- 10: Project Management Processes

PROJECT MANAGEMENT PROCESSES

PROJECT INFORMATION

PROJECT DOCUMENTS

Chapter- 11: Project Execution

PROJECT MANAGEMENT PLAN

DIRECTING AND MANAGING PROJECT WORK

MONITORING AND CONTROLLING THE PROJECT WORK

MANAGING THE COMMISSIONING OF PROJECT FACILITIES

Chapter-12: Scope Management

COLLECTING REQUIREMENTS

DEFINING SCOPE

CREATING WORK BREAKDOWN STRUCTURE (WBS)

SCOPE BASELINE

VALIDATING SCOPE

CONTROLLING SCOPE

Chapter-13: Schedule Management

DEFINING PROJECT ACTIVITIES

DETERMINING RELATIONSHIP & LOGICAL SEQUENCE AMONG PROJECT ACTIVITIES

ESTIMATING RESOURCES REQUIRED FOR PROJECT ACTIVITIES

ESTIMATINGDURATION OF PROJECT ACTIVITY

DEVELOPING PROJECT SCHEDULE

HOW TO CONTRUCT NETWORK

PERT &CPM NETWORKS

TECHNIQUES TO OPTIMIZE NETWORKS

RESOURCE OPTIMIZATION TECHNIQUES

SCHEDULE COMPRESSION

WHAT-IF ANALYSIS

SIMULATION

PRECEDENCE NETWORKS

COMPARISION OF NETWORK TECHNIQUES:

MONITORING & CONTROLLING PROJECT SCHEDULE

PROJECT MANAGEMENT SOFTWARE

Chapter-14: Cost Management

THREE METHODS OF ESTIMATING COSTS

COST ESTIMATES

COST BASELINE

MANAGEMENT RESERVES

COST MANAGEMENT PLAN

DETERMINING BUDGET

CONTROLLING THE COSTS

REVIEW OF BASELINES

Chapter-15: Procurement Management

CONTRACTOR

PROJECT CONTRACTS

TYPES OF CONTRACTS CONSIDERING CONTRACT PRICE

TYPES OF CONTRACTS CONSIDERING MODE OF PROJECT IMPLEMENTATION

HOW TO MANAGE UNCERTAINTIES OF PROJECT?

PROJECT CONTRACTING STRATEGY

SELECTION OF ACQUISTION METHOD

SELECTION CRITERIA FOR PRE-QUALIFICATION OF BIDDERS:

BID EVALUATION CRITERIA

BIDDING DOCUMENTS

PAYMENT TERMS

TYPICAL CONTRACTUAL CLAUSES IN PROJECT CONTRACT

PROCUREMENT PLAN

CONDUCTING THE PROCUREMENTS:

MANAGING THE PROCUREMENT CONTRACT:

CONTRACT CLOSURE

Chapter-16: Human Resource Management

STAFFING THE PROJECT ORGANIZATION

DEVELOPING THE PROJECT TEAM

MANAGING THE PROJECT TEAM

STAFFING THE PROJECT DELIVERABLE PRODUCTION UNIT

Chapter-17: Physical Resource Management

PHYSICAL RESOURCE MANAGEMENT PLAN

 IDENTIFYING RESOURCE REQUIREMENTS

ACQUIRING RESOURCES

CONTROLLING RESOURCES

Chapter-18: Quality Management

QUALITY RELATED CONCEPTS

QUALITY CONTROL TOOLS

PROJECT QUALITY MANAGEMENT

QUALITY MANAGEMENT PLAN

MANAGING THE QUALITY (QUALITY ASSURANCE)

CONTROLLING THE QUALITY

Chapter-19: Risk Management

WHAT IS RISK?

RISK ATTITUDE

 CATEGORIZATION OF RISKS

RISK BREAKDOWN STRUCTURE

CERTAINTY, RISK AND UNCERTAINTY

DECISION MAKING UNDER CERTAINTY

DECISION MAKING UNDER RISK

DECISION MAKING UNDER UNCERTAINTY

DECISION TREE

RISK MANAGEMENT

RISK MINDSET

RISK PLANNING

IDENTIFYING THE RISKS

RISK ANALYSIS

RISK EVALUATION

QUALITATIVE RISK ASSESSMMENT

QUANTITATIVE RISK ASSESSMENT

RISK RESPONSE PLANNING

IMPLEMENT RISK RESPONSES

RISK MONITORING & CONTROL

Chapter-20: Communication Management

COMMUNICATION MODEL

COMMUNICATIONS MANAGEMENT PLAN

MANAGING THE COMMUNICATION

MONITORING COMMUNICATIONS

Chapter- 21: Stakeholder Management

IDENTIFYING STAKEHOLDERS

STAKEHOLDER ENGAGEMENT PLAN

MANAGING ENGAGEMENT OF THE STAKEHOLDERS

MONITORING STAKEHOLDER ENGAGEMENT

Chapter- 22: Commissioning Management

TRIAL RUNS

PRELIMINARY ACCEPTANCE

COMMISSIONING MANAGEMENT

TAKING OVER

PERFORMANCE GUARANTEE TEST

Chapter-23: Coordinating and integrating activities across multiple functions

DEVELOP PROJECT MANAGEMENT PLAN

DIRECTING AND MANAGING PROJECT WORK

MONITORING AND CONTROLLING THE PROJECT WORK

INTEGRATED CHANGE REQUESTS CONTROL PROCESS

Chapter-24: Closing The Project

Chapter-25: Post Completion Review

POST COMPLETION REVIEWS

CONCLUSION

Chapter- 26:  An Overview of Agile Project Management

MANIFESTO FOR AGILE SOFTWARE DEVELOPMENT

PRINCIPLES BEHIND THE AGILE MANIFESTO

AGILE SOFTWARE DEVELOPMENT METHOD

AGILE PROJECT MANAGEMENT AND SCRUM

 SCRUM

COMPLEXITY IN SOFTWARE DEVELOPMENT

SCRUM FOUNDED ON EMPIRICISM

SCRUM – ITERATIVE & INCREMENTAL PROCESS

SCRUM VALUES

SCRUM TEAM

SCRUM FLOW

IDENTIFYING PRODUCT REQUIREMENTS FOR SOFTWARE DEVELOPMENT

SPRINT

SCRUM ARTIFACTS

AGILE PROJECT MANAGEMENT SOFTWARES