Comprehensive Overview of Project Management Principles

1. Chapter Five Project Management Project management, 2011/12

2. Introduction Project management, 2011/12 • Many organizations today have a new or renewed interest in project management • The U.S. spends $2.3 trillion on projects every year, or one-quarter of its gross domestic product • The world as a whole spends nearly $10 trillion of its 40.7% gross product on projects of all kinds • This is the landmark of project management

3. Introduction-Definition • “A Project is a non-routine, non-repetitive complex economic activity that requires investments or commitments of scarce resources to provide facilities, goods, services, etc. whose benefits would exceed the committed investments or resources.” Project management, 2011/12

4. Introduction Elements of a project Non-routine/ non-repetitive One time operational activity Requires investment (allocation of scarce resources) It has a sense of uniqueness Requires a unique organization (as opposed to functional/institutional organization) Project management, 2011/12

5. Introduction-Cont’d • A project is a set of activities that are related to one another; and all the activities must be completed in order to complete the project. • Material resources and manpower resources are the two basic things required for the completion of a project. • Thus a project management is a specialized management technique to plan and control the available resources under a strong single point of responsibility for the successful completion of the project. Project management, 2011/12

6. Types of Projects Duration Long duration e.g HE power Short duration e.g annual crop yield Goal goods production; Service production; E.g. transport Knowledge generating; E.g. research station Information generating; E.g. mineral exploration or other surveys Project management, 2011/12

7. Types of Projects-cont’d • Catering to • regional market • national market • international market Resource differentiated capital intensive Labor intensive Energy intensive, etc. Functional agricultural Industrial Transportation Project management, 2011/12

8. Macro-level Sources • National, regional, sectorial plan • e.g. reduce disparity of regional dev’t. •  the need is the source of project idea • Decision by macro-planners to reduce regional dev’t imbalances. • Constrains in the dev’t effort • e.g. lack of infrastructure, health centers, roads, ports, power, financial institutions. • Self-sufficiency objective in critical resources • e.g. in supply of food, finding of oil/petroleum. • 4) Events such as drought, flood Natural calamities/disasters. Sources of Project Ideas Project management, 2011/12

9. Micro-level Sources of Project Ideas Identification of unsatisfied demand Can be of macro-level magnitude e.g. Cement Existence of unused/underutilized natural or human resources. Response to gov’t incentives e.g. Charge in mortgage interest rate triggers construction of houses  demand for construction materials. 4) Local group initiative for economic independence. e.g. Source of drinking water, feeder road, power supply. Project management, 2011/12

10. There are different types of projects Project management, 2011/12

11. Construction project Project management, 2011/12

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16. Manufacturing project Project management, 2011/12

17. Agricultural project Project management, 2011/12

18. Discuss a new project on progress in Ethiopia? Project management, 2011/12

19. A project is generally deemed successful if it meets predetermined targets set by the client, performs the job it was intended to do, or solves identified problem within predetermined time, cost, and quality constraints. To meet these targets the project manager uses project management systems to effectively plan and control the project. Introduction-Cont’d Project management, 2011/12

20. Project management • Managing projects is a matter of keeping scope, schedule, and resources in balance. • Generally project management means planning, organizing, and tracking a project’s tasks to accomplish the project objectives. • Scope is the range of tasks required to accomplish project goals. • A schedule indicates the time and sequence of each task, as well as the total project duration. • Resources are the people and/or equipment that perform or facilitate project tasks. Project management, 2011/12

21. Project management-History • The history of project management is often associated with the construction of Egyptian Pyramids and Great Wall of China. • They were certainly large and complex structures, built to high standards, which have stood the test of time and must have required an enormous workforce, but with no documented evidence the management technique used can only be based on assumption. Project management, 2011/12

22. Project management-History • Modern day project management is associated with Henry Gantt's development of the bar chart (early 1900’s) and the techniques developed during the military and aerospace projects of the 1950’s and 1960’s in America and Britain. • Although Henry Gantt may be acknowledged as the father of planning and control techniques, it is widely accepted that the 1950's are the genesis of modern day project management. Project management, 2011/12

23. Journey through project management history • 1900-1949 • Emergency of management science • People begin to study work and people at work • Henry Gantt introduce his famous planning chart • Early development of critical path network • Before 1900 • Wonderful projects • People cheap, even expendable • Urgency not driven by the rat-race • Management organization structure seen in the church and the military • No management scientists • No project management profession Project management, 2011/12

24. Journey through project management history • 1970-1979 • Creation of professional associations • More project management software • 1950-1969 • US defense projects exploit critical path network analysis • Mainframe computers can run project management software in batch mode • Project management becomes a recognized profession • More concerned for people at work Project management, 2011/12

25. Journey through project management history • 1990-2000+ • PCs and Notebooks can run all application • More interest in project risk • Project management is a respected profession, with flourishing association • World wide communication by satellite and the Internet • 1980-1989 • Desktop computers can run powerful project management software • Managers less dependent on IT expert • Wider acceptance of project management as profession Project management, 2011/12

26. Project management History • Rapidly changing technology, fierce competitive markets and a powerful environmental lobby have all encouraged companies to change their management systems - in this sink or swim, adopt or die market, the role of project management and management-by-projects was found to offer a real solution Project management, 2011/12

27. Project Management-Why Need Project Management? • Complex project needs coordination of: • Multiple people • Multiple resources (labs, equipment, etc.) • Multiple tasks – some must precede others • Multiple decision points – approvals • Phased expenditure of funds • Matching of people/resources to tasks Project management, 2011/12

28. Project Management-Project Stakeholders • The project sponsor • The project manager • The project team • Support staff • Customers • Users • Suppliers • And yes - opponents to the project! • Stakeholders are the people involved in or affected by project activities • Stakeholders include: Project management, 2011/12

29. Project Management Framework Project management, 2011/12

30. Skill Requirements for Effective Project Management • Conflict Resolution • Creativity and Flexibility • Ability to Adjust to Change • Good Planning • Negotiation Project management, 2011/12

31. Ten Most Important Skills and Competencies for Project Managers 6. Verbal communication 7. Strong at building teams 8. Conflict resolution, conflict management 9. Critical thinking, problem solving 10. Understands, balances priorities 1. People skills 2. Leadership 3. Listening 4. Integrity, ethical behavior, consistent 5. Strong at building trust Project management, 2011/12

32. The Triple Constraint of Project Management –Goals • Successful project management means meeting all three goals (scope, time, and cost) – and satisfying the project’s sponsor! • However, quality is the quadruple constraint Project management, 2011/12

33. Project Management-Project Cycle • It is convenient to think or project the work as taking place in several distinct stages. This chain of stages is commonly referred to as the "project cycle". • The term denotes that the stages are closely linked to one another and follow a logical progression, with the later stages helping to provide the basis for renewal of the cycle throughout subsequent project work. Project management, 2011/12

34. The World Bank model Project life cycle Project management, 2011/12

35. Identification • The first phase of the cycle is concerned with identifying project ideas that appear to represent a high priority use of the country’s resources to achieve an important development objective. • Such project ideas should assure that technical and institutional solutions at costs matching with the expected benefits-will be found and suitable policies adopted. Project management, 2011/12

36. Preparation • Once a project idea has passed the identification “test“ it must be advanced to the point at which a firm decision can be made whether to or not to proceed with it. • This requires a progressive refinement of the design of the project in all its dimensions technical, economical, financial, social, institutional and so on. Project management, 2011/12

37. Appraisal • Before approving a loan external agencies normally require a formal process of appraisal to assess the overall soundness of the project and its readiness for implementation for an internally generated and financed investment. • An explicit appraisal is necessary or at least a desirable, part of the decision making process before funds are committed. Project management, 2011/12

38. Implementation • The implementation stage covers the actual development or Construction of the project, up on the point at which it becomes fully operational. • It includes monitoring of all aspects of the work or activity as it proceeds and supervision by “over sight” agencies within the country or by external lenders. Project management, 2011/12

39. Evaluation • The post evaluation of a completed projects to determine whether the objectives have been achieved as planned or not; and to draw lessons from experience with the project that can be applied to similar project in the future. Project management, 2011/12

40. Fundamentals • Every project has one specific purpose; it starts at one specific moment and ends up when its objectives are fulfilled Project management, 2011/12

41. Check Points • Define what is meant by a project and explain its difference from other economic activities.(2.5 pts) • List the sources of project ideas.(2.5pts) Project management, 2011/12

42. Project Management-Objectives of project • A project should be completed with in minimum of elapsed time. • It should use available manpower and other resources as sparingly as possible, with out delay. • It should be completed, with minimum capital investment, with out delay. • To achieve the above objectives, Project management involves the following three phases. Project management, 2011/12

43. Project Planning • In this phase, plan is made and strategies are set taking into consideration the company's policies, procedures and rules. Project management, 2011/12

44. Steps in the planning process • Define: the objective of a project in definite words • Establish: goals and intermediate stages to attain the final target • Develop: forecasting methods and means of achieving goals, i.e, activities • Evaluate: organization's resources-financial, managerial and operational- to carry out activities and to determine what is feasible and what is not. Project management, 2011/12

45. Determine: alternatives - individual course of action that will allow to accomplish goals. • Test: for consistency with company's policy. • Choose: an alternative which is not only consistent with its goals and concepts, but also one that can be accomplished with the evaluated resources. • Decide: on a plan. Project management, 2011/12

46. Project Scheduling • Scheduling is the allocation of resources. The resources in conceptual sense are time and energy; but in practical sense they encompass time, space, equipment and effort applied to material. Project management, 2011/12

47. The steps in scheduling • Calculate: detailed control information. • Assign: timing to events and activities. • Give: consideration to the resources. The manager is generally concerned with those resources whose availability is limited and thereby imposes a constraint on the project. • Allocate: the resources. Project management, 2011/12

48. Project Controlling • Project control is the formal mechanism established to check deviations from the basic plan, to determine the precise effect of these deviations on the plan, and to re-plan and reschedule to compensate for the deviation. Controlling is accomplished in the following well recognized steps: Project management, 2011/12

49. The steps in controlling • Establish: standards or targets. These targets are generally expressed in terms of time. • Measure: performance against the standards set down in the first step. • Identify: the deviation from the standards. • Suggest and Select: correcting measures. This will involve problem identifying, decision making, organizing the leadership and improving leadership skill of the decision maker. Project management, 2011/12

50. Project Success Factors • The success of a project depends on factors and prevailing circumstances both within and outside of the organization. • Usually project financers (project sponsors, lenders or host governments) look at the consideration, that are particularly important for success. • The following are some of the success factors that are given higher priority Project management, 2011/12