Project mgt

Theory of project mgt by PERT/CPM Techniques

1.

What is project

1.

Project is any task which has got definite beginning

and predictable end
It is temporary endeavor undertaken to create unique
PRODUCT or SERVICE
Project also defined as a unique set of co-ordinate
&interrelated activities undertaken by an organization
to meet defined objectives that has an agreed start &
finish time & is constrained by cost and resources &
has specified performance requirements

2.
3.

Characteristics of Project
1.
2.
3.
4.
5.
6.

Project has definite start & finish.

It consists of many activities which are interrelated to
one another.
They have to be carried out in certain logical or
technical sequence i.e. some activities are
completed.
Project consists of well defined collection of jobs
activities or task which when complete make the end
of project.
Each activity is viewed as a job requiring time and
resources.
The activities can be started & terminated
independently of each other even though the
resources employed on the various activities are not
independent i.e. the activities to be completed within
a given resource i.e. constraint

7.

The jobs are ordered i.e. They must be performed in

technical order or sequence the road leveling cant
he done unless road bed is ready

Today the definition of project has expanded to include

recurring situations one time crisis and dealing with
difficult issues
Application I project & project MGT
Project Management:
1)It is planning, organizing, directing and controlling of
company resources for a relatively SHOK, TERM,
OBJECTIVES and has been established to accomplish
specific objectives
2)Project mgt is the application of knowledge skill, tools
& techniques to project activities in order to meet or
exceed stake holders need & expectations from
project
It is applied to various business situations that have to
deal with complexity who are normally state holders what
is role of a project manager vis--vis state holders
expectations
1) Project stake holders are
1. Individuals or organizations who are actively involved
in the project
2.

Or whose interests may be positely or negatively

affected as a result of project execution or is
successful completion

3.

Key stake holders are

1. Project manager who manager project
2. Customers to who project is institutes
3. Performing organisation who has under taken project
4. Project sponsors (who has sponsor initiated)
5. Owners/ funders
6. Supplied/contractors
7. Team members of a project
8. Their families
9. Government agencies & media out lets
10.
Individuals temporary or permanent lobbing
organizations
11.
Society at large

Managing stake holders Expectations is difficult because

various stake holders have different object with each
other & with project objectives Exam ----- Narmada
dam/place for Tata motors in Calcutta project manager
has to understand these expectations and achieve
judicious balance in the interest of successful project
implementation
Project manager has to
1. Create an environment for every state holder to
contribute his skill & knowledge in development of a
project plan
2. Analyses needs of various stake holders to ensure
that they will he met in the best possible manner

Absorption of a technology in C.G.H which remove

man power down sizing
3. Analyze stake holders risk tolerance to develop a risk
management strategy
Risk of a project: [risk mgt steps]
Risk: It is a possibility of unfavorable or undesirable
effect of a future event is on the project resulting in
reduction in project benefits or a loss
In order to manage the project risk
The following steps are necessary
1. Risk identification
2. Risk analysis
3. Response strategy
4. Risk monitoring and control

Application of project mgt

All business situations that have deal with complexity
1. Legal offices
2. Hospitals
3. Other services
4. Traditional manufacturing firms
5. Construction companies
6. Engineered business
7. Financial Institutions
These organization have become enthusiastic about the
ways in which project mgt is improving their delivery of
services or creation of new products some typical
examples are
1. Contraction of a bldg dam or highway
2. Maintenance of oil refinery
3. Over hauling of an AEPOPLANE
4. Selection procurement Installation & commission of a
new Technology
5. Designing of a proto type of a product
6. Setting up of a new factory /Expansion of excising
factory
7. Modernization of Equips / factories
8. Annual budgeting / auditing exercises
9. Introduction of a new system [ISO 9000]
10.
Organizational Restructuring
11.
Development of a new product
12.
Campaign for new product launch
13.
Organizing AGM(Annual General body meeting
sale conference)
14.
Marriage ceremony(time bound program)

Criteria for Success of a project

Project is said to be successful if
1. Project objectives are achieved with in its scheduled
time
2. within budgeted cost
3. Meeting desired performance/technology level while
utilizing assigned resources effectively & efficiently
The measurement and comparison of actual deviations or
variances from the schedule Budget & set performance.
Parameters for the project indicate the degree of success.

Scope of project mgt

Due to complexities of present business situations have
added pressure on the brains of decision maker in large
complex project involving nos of inter-related activities
require large resources like men makes materials It is not
possible for the mgt to make & execute an optimum
schedule just by intuition or by thumb rule based on
organizational capabilities and experience.
Hence mgt has to look after the technique or methods for
planning scheduling & controlling the project.
Theory of project mgt by using PERT or CPM Techniques.

Project management work can be divided into following

phrase.
1. Planning
2. Scheduling
3. Allocation of resources
4. Controlling
To meet the objectives of systematic planning project mgt
user PERT or CPM technique applying network strategy.
1) Planning: This phase consists of
1. Setting the objectives of project & assumptions to be
made
2. Developments of W.B.S work break down structure
1. Depending upon the objectives of mgt
2. The extent of control desired
3. The availability of computational aids
The project
activities.

is

broken

down

into

clearly

definable

3.
Estimating the activity durations their resource
requirement & lost
4.
Establishing the interdependence relationship
between the activities
Like- concurrent, proceeding, succeeding

2)Scheduling: This consists of laying of the activities

according to technical or logical sequence i.e
Deciding the time table of performance of activities
1)Start & finish time for each activity
2)Critical path on which the activities require special
attention [Find in CPM
3)Slacks / float for Non critical path
3) Controlling: This phase is carried out only after
above two phases are carried out thus it is follow
up planning & scheduling
1. Making periodical progress reports
2. Reviewing the progress
3. Analyzing the status & of the project
4) And mgt decisions regarding updating, crashing &
resource allocations
Every time the progress of the project is reviewed &
correcting action is takes if required
The project managers always try to control activities
on critical path

Allocation of resources
To achieve desired results effectively & efficiently &
economically the use of resource is done optimally

A project signifies huge complex task which for convince

of ingt is broken down into smaller elements referred as
activities such that each of such smaller elements can be
defined in terms of finite requirement of resources &time
ESSENCE OF PROJECT MANAGEMENT
I
F
A
I
M
E

Identification
Formulation
Appraisal
Implementation
Monitoring
Evaluation

PROJECT MANAGEMENT
How does projecting differs for the mgt of other types
manufacturing activities or on GOING mgt

1)Goal/objects

Project
has to achieve

1)Long
term,
usually
more
2)Time
horizon
than a year
2)More strategic
for play
thinking
involved
3)Process
Has
to
be
developed
designed
new

Manufacturing
may or may not
achived
Short
term
medium
term
usually with in
one year
Fully or minor day
to day issues
Stabilised over a
period of time
due to experience

end
time
considerable
&
minimum
uncertainty
&
uncertainty
many
unknown
factor
Repetitive work &
Every time new &
4)Kind of work
not
much
challengeable
challenge
New
multidisciplinary team
Plant & personnel
to be created
already
exist
5)Resources
usually from the
personnel
is
available
possible
personnel or form
other depts.
Projects
are Minimal or no
initiated to bring change
is
6)Change mgt
about change / expected in set
opportuties
routine
Substantially
Comparatively
7)Capital out lays
large
smaller
Narrow
scope
8)Out look of a Wide scope gets
limited
manager
over all improve
improvement
9)Qualities
& To be successful Manufacturing of
traits
project manager less qualities
special qualities
are required
1)Willingness to
mall sacrifices
2)Leadership
3)Decisiveness

fluid situation
Uncertainly
4)Confidence in
project
5)Strong ego
10) Type
of
organization

Matrix/pure

functional

Why
Project manager is equated to an Entrepreneur
Qualities for becoming a successful project manager are
the same as that of an entrepreneur who has to deal with
new & unknown factors under time pressure.
A project manager should have following traits (page42)
1)Willingness to make sacrifices
A project is invariably riddled with numerous
difficulties & unanticipated problems the project
manager has to sacrifice his time energy & resources
to future project in an in hospitable environment
project managers job is a lot of demanding &
requires total commitment
2)Leadership & team building abilities
1. He has to select the people interested in working
for the project & integrate them into a team he has
to motivate their team to be successfully cope with

the challenges & frustration inherent in a new

venture keep team spirit high
2. Communication between team members & should
he open & free
3. He has to solve conflicts with in intergroup &
intergroup &keep at low level
4. He should give commitments
commitments from other

and

obtain

3)Decisiveness: i.e. serving to settle the question

The project has to accomplish many things in the
atmosphere of uncertainty Numerous decisions have
to be taken in quick succession on the basis of
limited information He does not have history to fall
back on a well organized data base to rely upon the
fluid situation calls for ability to decide quickly & also
to revise decisions to adopt to the changing
environment.
4)Confidence in project: having unbound faith in the
project instills confidence in suppliers, contractors,
creditors, customers, employees, team members &
others.
5)Strong Ego: Project managers need a strong ego to
cope with the ups & downs of the project to endure
periods of adversity and maintain perspective when

events cost shadow over the enterprise the project

manager need a strong identify & self image.
6)Organizational skill:
1)Preparing organization suitable chart for project to
be successful
2)Define span of control ,channels of flow of
information designing reporting relationships skills
in communication & conflict resolution however
conflict some time may be healthy if it increases
competitive spirit of doing thinks
3)Project manager should have good working
relationship with top mgt it is terms with mgt
depend on his credibility the importance of his
project in the eyes of mgt his availability when the
mgt need someone to do something important.
7)Technical skill: He should be expert in
1. Technology
2. Administration and or
3. Marketing
He should have sound conceptual understanding of
all three & business environment to enable him to
take part & co-ordination the search for integrated
solution to the problems.
The understanding will also help him in foreseeing &
consequences of decisions take without holistic
approach the knowledge in all three fields is
necessary as project manager has to interact with
professionals in all three fields.

8) Planning abilities
1. milking schedule & budgets
2. Communication skill & information processing
skills to determine resources.
3. Administrative support required
4. Anticipating problems before they arise &taking
presenting measures
5. Negotiating with other department on when
major milestones activities will be commitments.
6. To control costs & expenditures
9)Administrative abilities

Project organization
1)Why
organization
structure
is
required
for
implementation of project
2)It shows the nos of people working at each level of
hierarchy & their interrelationship when to start.
The organizational structure can be planned once the
following information is available
i. Identification of staff who work on project
ii. Identification of departments which are involved
iii. The existing organization structure
An imp point to note that there are no good no bad
organization structures
It is only a question of whether a particular structure
chosen is appropriate to the people of firm or not
Any structure will work if people are willing to make it
work therefore choosing the structure that matches with
behavioral pattern of the employees is the key way
Type of organizational structures
1)Traditional organizational structures
2)Position of project leaders in a
organization
3)Line & staff organizational structure
4)Product organizational structure
5)Matrix organizational structure
6)Complex matrix organizational structure
7)Pure project organizational structure

traditional

TRADITIONAL STRUCTURE
Chief Executive

Engineer

Operations

Administration

Finance

Markets

Position
of
organization

Project

Leaders

in

Traditional

Divisional Manager

Dept. Manager

Dept. Manager

Dept. Inn

LINE STAFF ORGANIZATIONAL STRUCTURE

Divisional Manager

Project Manager

Dept. Manager

Dept. Manager

Dept. Manager

PRODUCT ORGANIZATIONAL STRUCTURE

General
Manager

Project
Manager

Project
Manager

MATRIX ORGANIZATION
General Manager

Engg.

Finance

Marketing

Operation

Project M.N.A

Project M.N.B
CEO

Project M.N.C
DirectorEngg.

Director Finance

Director MarketingDirector Operation

Project M.N.A

MORE COMPLEX MATRIX STRUCTURE

Project M.N.B

Project M.N.C

PURE PROJECT ORAGANIZATION

Existing Organization

Engg.

Procurement

Personnel

Finance

Project Manager

Project Engg.

Project Procurement

Project Personnel

Project Finance

Explain Organizational structure of a pure project type

organization with an organizational chart Enumerate its
advantages & disadvantages for what type of projects
such organization is more suitable
Pure project organization is fully dedicated organization
for project implementation and is separated from the
parent system with its.
1. Own technical staff
2. Own administration
3. Give parent from periodic reports &overview
Advantages:
Personnel demonstrate loyalty to
project
Better employee morale higher motivation
Rapid reaction time, fast communication
All members are responsible to project manager
Specific technologies for several successive
projects
Committed workers
Individuals excel in projects area of technical
expertise
Disadvantages: Duplication of efforts facilities &
personnel
Stock pile equipment & Technical assistance
Project takes on a life of its own
No perpetuation of technology
Lack of opportunity for technical interchange
between projects

The pure project type organization

expansion / Diversification Projects of
that are in a completely diverse field.

is

suitable for
a company

A Pure Project Organization a spate division developed

within the company with independent authority &
responsibility for project such organization is suitable for
companies embarking on major diversification expansion
projects generally at sites away from parent organization.
1)Power Tran project at Bhopal &both are away from
Bombay.
Industrial Tran project at Gwalior
Why is the traditional Functional organization is not
considered suitable for implementation of projects in
general
name the other organizational structure
developed stating the types of projects these are found to
be more effective.
The traditional functional organization is shown in fig 1
1)Were we find hierarchical structure with employees at
each level reporting to next level with the exception of
those at the top and bottom
2)Work flows from top to bottom
3)Authority & responsibility increase with upward
movement in the hierarchy
4)The nos. of each laves is higher than the level above it
5)The divisionalization is solely based on functions
When the nos. of products were less the complex city was
less this structure worked has to maintain different
multiple product lines the integration of all activities
presented problems

Thus traditional functional organization is not suitable for

implementation of project because
1)No single individual is directly responsible for project no
formal authority
2)If does not provide project oriented emphasis
necessary to accomplish project task
3)Needs excessive lead time for the approval of decision
due to complex co-ordination
4)Decisions normally favors strongest functional group
5)There is no customer focus
6)Slow response to customer needs
7)Difficult to pin point responsibility as no individual is
given responsibility of success of the project & nno one
can made accourilable
8)Individual motivation & innovation are on low scale
9)Customer focus is not there because all the depts. Are
concerned anly with those objectives related to their
functions
10) As the project is not main activity of the dept it is
difficult to motivate people to work hard for project
11) The holistic approach to the project is not given
12) The people may have a tendency to ignore & neglect
the activities which are not directly with the functional
domin of the dept
The following two types of structures are suitable for
project implementation
1) pure project organization
2) A matrix project organization
1. A matrix organization
A matrix organization combines the attributes

I function & pure project organizations

refraining the basic functional structure.
2. If achieves the
organization.

advantages

of

both

while

types

of

3. It identifies independent authority & responsibility for

a project with project manager.
4. There are two lines of reporting one to functional
heads & other to project managers.
5. The project manager gets their authority from the
top i.e. from (general manager) as shown in fig to
whom they generally report.
6. The project manager is given the overall
responsibility for the implementation of project
The project manager decides the tasks to be
performed & the depts.
Which will handle each task the responsibility of line
managers to provide an appropriate technology &
the right people to do the work.
7
Assigning task to each person is done by project
manager
8
The line managers are also expected to develop
for the requirements of the organization
9
They are also required to keep track of the
latest development in technology & update
technological base
10
The project Manager has complete authority
responsibility & accountability for the success of
the project

In the traditional structure, people are informed of their

task by functional managers the project manager never
had any direct role in their work is responsibility was
limited to co-ordinating different department.
Jobs used to be sent to different line manager & they
were done at diff time in different depts. As decided by
line managers.
In the matrix organization all people involved in project
report directly to project management and take order
from him on continuous basis. The project manager
therefore co-ordinate easily and integrate the jobs
effectively.
Matrix form of organization is best suited to project
driven organization. i.e. organizations engaged in project
implementation for the client as their main business like
construction software firms advantages.