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Functional Work
Functional work is routine, ongoing work. Each day, secretaries, financial analysts, and car
salespeople perform functional work that is routine, even if their activities vary somewhat from
day to day. A manager assigned to the specific function provides training and supervision, and
manages them according to standards of productivity in terms of typing speed or sales quotas.
The following are distinguishing characteristics of functional work:
• Functional work is ongoing, routine work.
• Managers manage the specific function and provide technical direction.
• People and other resources are assigned to the functional department.
• Functional departments are responsible for the approved objectives of the function, such
as technical competency, standards of performance and quality, and efficient use of
resources.
Functional work is typically structured as a hierarchical organization with traditional formal lines
of authority, as shown in Diagram 1.
Diagram 1
Functional Organizational Structure
Vice President
Director
Writer Designer
Writer
Project Work
Diagram 2
Functional and Project Responsibilities
Diagram 2 illustrates how functional and project responsibility fit together, using the functional
departments in a publishing company, with project managers assigned to accomplish specific
publication projects. Solid vertical lines show the functional responsibilities of the writing,
editing, design, printing, and distribution departments. Broken horizontal lines show the project
responsibilities of specific project managers assigned to given publications (projects). Because
not all projects require the services of every functional department, circles indicate where
people are assigned to a project. Project #2 uses outsourced resources. Project #3 is a video
that uses an external video duplication company rather than the internal printing facility.
A project manager manages horizontally via projects rather than vertically via functional
experts. Diagram 2 shows that Dennis is responsible for Project #1. To get the job done, he
must enlist the help of editors and designers from one functional manager, and printers and
distributors from another functional manager. In some organizations, functional managers are
called resource managers because they are responsible for assigning resources to the project.
In the real world, there are at times overlaps between project and functional managers. If
functional resources (other than a project management staff) are assigned to a project
manager, then the manager has functional responsibility and is acting as both project manager
and functional manager. If projects are assigned to a functional manager, then the functional
manager also has project responsibility and is acting in both roles. Diagram 3 compares
functional and project work.
Diagram 3
Comparison of Project and Functional Work
All procurement requires some level of planning. The intensity and the effort required in
planning depend on the complexity of the scope of work in the procurement package.
For a manufacturing company deciding to starts a project, the ‘make or buy’ decision forms the
first step in the procurement planning. This decision is based on a cost comparison between
‘make’ and ‘buy’, and the timely availability of the manufacturing equipment or shop personnel
for meeting deliveries without adversely affecting their other job orders. Several companies in
India exist, wherein; the company or a division of the company already manufactures a product,
and the company is also executing projects for its clients which require the same product as
part of another project scope. For example, Larsen & Turbo manufactures switchgear, pressure
vessels, heat exchangers etc. These products are also required in several electrical projects or
petrochemical projects that they execute for clients. Another example, Kamani Engineering
manufactures transmission towers, and also executes large power transmission projects for
Power Grid Corporation of India, where the bulk of the transmission towers are their in-house
supply. The Table 2 shows the comparison of costs for in-house development and outsourcing.
Table 2: Comparison of Costs for In-house Development and Outsourcing
The additional investment of Rs 30000 for In-house option will break even if the software usage
is for more than 20 months i.e. (Rs. 3500/month –
Rs. 2500/month) x 20 months.
Therefore if you plan to use the software for less than 20 months then go for outsourcing but if
plan to use the software for more than 20 months then go for In-house development. The
market scenario for the product or service to be procured gives rise to any of the following three
conditions:
· Sole Source: In this case there is only one qualified seller in the market. For example,
Dow Chemicals under their patent was the only manufacturer Reverse Osmosis (RO)
membranes which were utilized for desalinating saline water and all water treatment
package vendors had to buy RO membranes only from them or their licensee in a
country.
· Single Source: This is a case when your organization prefers to work with an identified
seller, even though other sellers may offer a lower price. Sometimes companies show a
preference for a supplier with a view to create a long term relationship for a niche
product which the company may require to procure often.
· Oligopoly: This is a condition where the providers of the product or service are so few in
number that the actions and pricing of one seller affect the actions and pricing of the
other sellers. Examples of airline fares, oil prices, and hardware prices can fall in this
category.
The Table 3 summarizes the actual procurement processes involved in each of the process
groups.
The function performed by each process is explained below.
Plan Purchases and Acquisition
Plan Purchases and Acquisitions is the process for deciding what to buy or acquire and when and
how to buy that. It is a process of identifying the risks involved in each make or buy decision. It
also reviews the type of contract with regard to mitigating the risk by determining what risks
can be transferred to seller.
The outputs of this process are:
Plan Contracting
This process includes preparation of a procurement document for each contract planned. This
document is issued to prospective sellers who are invited to bid. The invitation is termed
Invitation To Bid (ITB), Request For Quotation (RFQ), tender notice, Request For Proposal (RFP),
invitation for negotiation or contractor initial response.
ITB and RFQ (both imply the same type of invitation) are focused on getting the seller’s price,
and not his ideas. For example if RFP asks for a price that means in addition, it necessarily asks
for the sellers’ and ideas on how the project work should be done, which implies that there is a
bit of consultancy service demanded from the sellers in their response.
Evaluation criteria: The first category of evaluation relates to prequalification of a firm for
receiving the ITB. Here, a prior assessment of the capability of a firm to perform the intended
scope of work is made. For large value contracts, the ITB is preceded by an invitation to submit
a prequalification offer, in which the seller is asked to submit his experience list for similar works
carried out by enumerating the following:
· List of projects completed with contract value, completion period, and scope of work.
· Audited financial statements like balance sheet, Profit and Loss (P & L) account for the
last 3 to 5 years.
· Contract completion certificates from his clients.
· Firm’s organizational structure
· List of key personnel of the firm
· List of construction equipment/production machinery owned.
· Any other technical/financial/organizational data considered relevant by the owner.
This data submitted by all prospective bidders is analyzed to arrive at a list of pre-qualified
bidders, eligible to receive the ITB/RFP.
The second category of evaluation criteria relates to evaluating the bids received in response to
the ITB/RFP. These may involve price loading criteria for technical and commercial deviations
stipulated by the bidders in their bids, as well as specific criteria for price loading on utilities
consumption (electricity, water etc.) where system performance is evaluated based on system
life-cycle costs.
Request Seller Responses
While the prospective sellers are expected to submit their bids in response to the ITB/RFP as
issued to them, it is a common practice in large value contracts to host a bidders’ conference,
where all bidders are present and are permitted to ask questions concerning the SOW. This
Q.3 Describe the role of project managers in Human resource management and communication
management.
Ans: Role of Project Manager in HR and Communications Management
A project manager is responsible for managing various tasks, activities and processes to ensure
that the project is delivered in the defined time. He is responsible for defining the goals and
objectives of the project and ensures that the resources that are required for the smooth
working of the project are available. He also monitors and controls the project process to keep
track of the status of the work. This ensures that the progress, schedule, procedures and the
cost of the project are well monitored. Apart from monitoring and controlling the implementation
and execution of the project, a project manager also plays a vital role in Human Resources and
communications management such as:
· Assists in effective communications among the team members,
· Consistency in methodology,
· Consistency in process, documentation, procedure,
· Meet deadlines and commitments
· Facilitate formal metrics and reporting to upper management/project sponsors.
· Entrusted with the authority and accountability necessary to get the job done.
· Able to cope with conflicting scope, quality, schedule, risk, and other requirements.
· Single point of integration to meet customer’s needs.
· Held accountable for project failure.
· Maintain control over the project by measuring performance and correcting as necessary.
Q.4 If the optimistic estimate of an activity is 12 days & pessimistic estimate is 18 days. What is
the variance of this activity?
Ans:
If three standard deviations are chosen for the optimistic and pessimistic times, then there will
be six standard deviations between them. In this case the variance of each activity completion
time is given by
tp = 18 days
to = 12 days
Variance = [(tp - to) / 6]2
Ishikawa (1990).
Ishikawa diagram, in fishbone shape, showing factors of Equipment, Process, People,
Materials, Environment and Management, all affecting the overall problem. Smaller
arrows connect the sub-causes to major causes.
Ishikawa diagram
Common uses of the Ishikawa diagram are product design and quality defect prevention,
to identify potential factors causing an overall effect. Each cause or reason for
b. A Pareto chart, named after Vilfredo Pareto, is a type of chart that contains both bars
and a line graph, where individual values are represented in descending order by bars,
and the cumulative total is represented by the line.
The left vertical axis is the frequency of occurrence, but it can alternatively represent
cost or another important unit of measure. The right vertical axis is the cumulative
percentage of the total number of occurrences, total cost, or total of the particular unit of
measure. Because the reasons are in decreasing order, the cumulative function is a
concave function. To take the example above, in order to lower the amount of late
arriving by 80%, it is sufficient to solve the first three issues.
The purpose of the Pareto chart is to highlight the most important among a (typically
large) set of factors. In quality control, it often represents the most common sources of
defects, the highest occurring type of defect, or the most frequent reasons for customer
complaints, and so on.
Pareto chart
Q.6 List the benefits of WBS? Need for risk management in an organization-comment.
Ans:
Work Breakdown Structure
Work breakdown structure (WBS) is a fundamental component of project management process
that helps in defining and organizing the total scope of a project using hierarchical tree
structure. According to Project Management Body of Knowledge (PMBoK), ‘WBS is a deliverable-
oriented hierarchical decomposition of the work to be executed by the project team to
accomplish the project objectives and create the required deliverables’. The hierarchy structure
approach of WBS helps the project team to know the requirements of total project more
accurately and specifically. WBS can also be used to assign responsibilities and allocate
resources to the project. It helps the team to monitor and control the project.
There are five major forms of cost breakdown structures. They are:
· Grouped on the basis of the components that the product is made of and thus following
the bill of materials.
· Divided on the basis of organizational departments.
· Divided based on the product functionalities which are very beneficial for a product
development purposes.
· Divided based on the various activities and operations of the project.
· Divided based on any desired way and then the result is arranged using the Pareto chart
rule. This indicates the most important and the least important cost elements from the
desired point of view.
The cost elements of a CBS are usually associated with the three basic elements. They are:
· Resources
· Activities
· Product
Q.3 If optimistic time for an activity is 5 days, estimated time to complete the activity 85 and
most likely time 10 days. What is the variance of the activity?
Ans: to = 5 days te = 85 days tm = 10 days tp = ?
Estimated time of the project (te) = (to + 4*tm + tp)
85 = (5 + 4*10 + tp)
85 = (45 + tp)
tp = 85-45
tp = 40
Variance = [(tp - to) / 6]2 = [(40 – 5) / 6]2 = 35/6 * 2
Variance = 11.667
c: Time and Material (T&M) contracts: Here the contract contains the feature of both cost
reimbursable and fixed price contracts. Unit rate contracts are an example, where the unit rates
for specific items of work are fixed, but the contractor is paid for the actual quantities executed,
since quantities are not known at the time of signing the contract with the contractor.
Q.5 Describe the factors to be considered when feasibility of a project is examined. Also explain
the various qualities that a good project management process encompasses.
Ans: Feasibility Study on Project
Feasibility study on project defines the probabilities associated with it. Various measures are
taken to identify whether a project is feasible or not. Initially, an analysis is performed to
determine if the project meets all the requirements to proceed to next stage. However, when a
feasibility of the project is to be examined, the following factors have to be taken into
consideration:
· Cost: The project management team makes a cost analysis to ensure that the estimated
costs of the project fall within the range set by the organization. However, there are
certain factors that have to be considered while determining the costs of the projects. It
includes the implications of the capital expenditure, the project costs, determining the
effects of finances on the organization, determining the expenses required in the current
year as well as the subsequent years.
· Timing: The project manager makes a timing analysis to ensure that the project meets
its delivery date with the expected quality outcome. The timing phase of the project
ensures that any legal or requirements from the government are complied on date. It
also ensures that the finances are used by the company in the restricted period of time.
Timing policies are also important for the operational concerns such as requirement of
equipments or systems to meet the defined deadlines and specific procedures.
· Performance: The project manager fixes the job responsibilities to the members of the
team based on the skill set they possess. It is vital to monitor the performance both
technically and personally. It is necessary that the performance of the members
participating in the project meet the standards as specified by the client as well as the
organization internally.
d. Phased Approach: A project life cycle includes initiation, planning, execution, control and
close. The phased approach is responsible in fitting the requirements according to the need
of the organizations of various sizes. There are various benefits of using phased approach in
project development. This approach assists in laying down a firm and structured foundation
for the project.