Basics of Project Management Short Notes Part 3

Organizational Structures

An organization is divided into a spec ialised functional departments, undertaking corresponding specialised task of each project. Each department is/are supervised by a functional

manager who has expertise in the same field, A department may have more than one projects at a time. Any project is not identified by one special person or department.

In this kind of system functional manager has all the authority i.e. budget allocation, resource allocation, decision making etc.

Generally position of project manager does not exist, whereas if there is a project manager their role will be limited and requires approvals from functional managers.

Sometimes Project manager may have title of Project Co-Coordinator

Advantages

• Individual experts can be utilized by many different projects
• The functional division containing the normal path of advancement for individuals whose expertise is in the functional area. Employee feels secure & therefore they perform job responsibility.
• Budgeting and cost control is easier. Flexibility in use of manpower.
• There is no duplication of work as roles and responsibility of each employee is fixed.
• Clear cut hierarchy i.e. each employee reports to his functional manager, which results in better communication and co-operation.
• Better accountability of work.

Disadvantages

• No one person is responsible for the total project.
• Project-oriented focus for achieving project goals is absent.
• Decisions are influence by stronger functional departments.
• Work of functional division usually takes precedence over the project work.
• Lack of coordinated effort tend to make response to client needs slow.
• Employees might feel bored due to the monotonous, repeated type of work and may become lazy.
• Cost of high skilled employee is higher. Communication is not good among the departments, which causes poor inter-department co-ordination. This reduces flexibility and innovation.
• Project manager has little or no authority.

Matrix Organization

The matrix organization structure takes the characteristics of both types of organization structures. Here the knowledge, skill, or talent of an employee is shared between the functional department and project management team. In matrix organization structure there are two chains of command, one along functional lines and the other along project lines.

Project manager will have authority over the administrative part of the project, such as what to do, follow-up on the schedule, evaluate the performance, etc.

1. Weak Matrix Organization Structure

 In weak matrix organizations, the project manager will have limited power and authority. He will have a part time role and no administrative staff will report to him. His role will be more like a coordinator or an expediter. Here, the functional manager controls the project budget. A weak matrix organization structure resembles the characteristics of a functional organization structure.

1. Balanced Matrix Organization Structure

In balanced matrix organizations, power and authority are shared between the functional managers and the project managers. Although, the project manager has a full time role, he will have a part time or otherwise limited project management administrative staff under him.

In this type of structure, both managers control the project budget.

1. Strong matrix Organizational Structure

In strong matrix organizations, most of the power and authority is held by project manager. The project manager has a full time role, has a full time project management administrative staff under him, and he controls the project budget. The functional manager will have a very limited role within the strong matrix Organization.

The strong matrix structure has a lot of the characteristics of a projectized organization.

Phase To Phase Relationship

Sequential Relationship

In sequential relationship next phase can start if and only if previous phase is complete. Traditionally construction projects generally use sequential relationship.

Step by step nature of this approach reduces uncertainty but also eliminates options for shortening the schedule. In overlapping phase relationship next phase can begin before the completion of previous phase. This technique allows schedule compression called fast tracking. This technique can lead to increase in risk and may result in rework if a subsequent phase progress before accurate information is available from previous phase.

Predictive Life Cycle

This life cycle is also known as “plan driven” lifecycle or “Water fall” life cycle. In a predictive life cycle, the three major constraints of the project i.e. scope, time and cost, are defined in complete details early in the project life cycle as practically. Then project is split up into phases which can be either sequential or overlapping. Requirements are defined early and not expected to change.

Work in each phase is different from subsequent or from previous phases, hence each phase acts as a sub project.

Iterative and Incremental Life Cycle

This life cycle is also known as “Incremental” lifecycle. In Iterative life cycle, the project is split up into phases (or iteration’s) which can be either. Sequential or overlapping, same as predictive

lifecycle. In Iterative life cycle, scope is not defined ahead of time at a detailed level, but only for the first iteration or phase of the project. Once a phase is completed, the detailed scope for next phase is worked out, and so on. This life cycle is used for projects where change in the scope is need to be managed.

Adaptive Life Cycle

This life cycle is also known as “Change-Driven” life cycle or “Agile” life cycle. Adaptive life cycle is also iterative and incremental. In Adaptive life cycle also, project is split up intophases (or iteration’s) which can be either sequential or overlapping, same as predictive lifecycle.

This life cycle is used for projects where rapid changes are expected and it is not possible to define scope in the start.

Conflict Resolution Techniques

1. Withdraw/Avoid
2. Smooth/Accommodate
3. Compromise/reconcile
4. Force/Direct
5. Collaborate/Problem solve

PROCESS GROUP AND KNOWLEDGE AREAS

What is “process groups”?

Project management process groups are a logical categorization of 47 Project management processes which are organized in the way that the projects are being performed. Hence 47 project management processes are grouped into five categories,

1. Initiating Process Group,
2. Planning Process Group,
3. Executing Process Group,
4. Monitoring and Controlling Process Group, and finally
5. Closing Process Group.

What is “knowledge areas”?

Knowledge areas are designed to group processes which have common knowledge characteristics. Hence Knowledge Areas are formed by grouping 47 processes of project management into 10 specialized and focused areas. Each Knowledge Area is made up of a set of processes, each with inputs, tools and techniques, and outputs. This means that knowledge areas are divided to keep the same type of skill set (or knowledge) in one group. Knowledge areas describe specific skills and experience needed by the Project manager to achieve project goals.

Knowledge Areas

(1) Project Integration Management

Project integration management ensures that the project is properly planned, executed, and controlled, including the exercise of formal project change control.

(2) Project Scope Management

Changes to project scope are often the factors that kill a project.

(3) Project Time Management

This knowledge area involve processes related with time constraints of the project.

(4) Project Cost Management

This knowledge area involve processes related with cost constrains of the project. Project cost management involves estimating the cost of resources, including people, equipment, materials, and such things as travel and other support details.

(5) Project Quality Management

This knowledge area involve processes which assure that project meets its quality obligations. Project quality management includes both quality

assurance (planning to meet quality requirements) and quality control (steps taken to monitor results to see if they conform to requirements).

(6) Project Human Resource Management

This knowledge area involve processes related with obtaining and managing the project team.

(7) Project Communications Management

This knowledge area involve processes related with planning and managing communication mechanisms required for the project.

(8) Project Risk Management

This knowledge area involve processes related with project-related risk management. Project risk management is the systematic process of identifying, quantifying, analyzing, and responding to project risk

Socio-Economic Feasibility

Socio-Economic Feasibility studies are conducted to determine the degree to which the design or location of project is economically or socially justified. Every business has the primary purpose of obtaining profit from their goal. But they cannot go away with the fact that they operate in a social environment.

Social Cost and Benefit Analysis (SCBA)

SCBA can be defined as the systematic evaluation of a concern’s social performance as distinguished from its economic performance.

Social Costs

Social cost is the cost related to the working of the firm but is not explicitly borne by the firm instead it is the cost to the society due to production of a commodity.

Types of social costs

• Environmental damage
• Ecological imbalance
• Human services used
• Material used
• Usage of public utility
• Unemployment caused
• Depletion of energy and global warming
• Usage of foreign exchange
• Subsidies
• Social Benefits
• Improve environment
• Products and services provided
• Employment creation
• Taxes
• Indirect employment
• Earning foreign exchange
• Hospital and educational facility
• Development of backward area

Environmental/Ecological Feasibility

Environmental feasibility study is a comparative process that looks at all potential solution, then evaluates them against specific criteria considering both human and environmental health factors, to ultimately find the best choice.

Environment Impact Assessment

EIA is management tool or process used for evaluating the likely impacts of a proposed project or development taking into account socio-economic, cultural and human-health impacts both beneficial and adverse.

Main aspects of EIA

• Appraisal of prevailing environmental conditions.
• Appraisal of production methods – both existing and proposed
• Methodologies related to environmental impact assessment
• Possible impact of projects on the environment both existing and proposed.
• Development of the techniques of conservation of the environment by modifying and improving the existing production technology.
• DPR has details of all feasibility studies i.e. Technical, financial, Market etc. Detailed Project Report (DPR) is an essential building block for the projects as it serves the purpose of investment decision making and approval. As DPR contains complete details of the project, same is being submitted to banks and financial institutions for getting financial assistance.
• DPR also acts as a base document for project planning and implementation.

Project Charter

Project charter is 1st document of the project Project charter is a document issued by the project sponsor/initiator that formally authorize the existence of a project and allocates the project manager with authority to apply organizational resources to the project activities.

Role of Project Charter

• Documents reasons for undertaking the project.
• Outlines the objectives (i.e. project goals) and the constraints faced by the project.
• Identifies the main stakeholders of the project
• Defines level of authority, roles and responsibilities of a project manager.

RISK MANAGEMENT

Risks is an uncertain event or condition such that if it occurs, it will have a positive or negative effect on at least one of the project objective. A risk may occur due to one or more causes. It can be classified as below:

• Positive Risk: A positive risk is a condition such that if it occurs, will have a positive impact on any of the project objective.
• Negative Risk: A negative risk is a condition such that if it occurs it will have a negative impact on the project objectives.

Every risk is made up of two components as mentioned below.

• Likelihood (Probability): Extent to which the risk event are likely to occur.
• Impact (Consequence): Effect that a risk will have on the project if it occurs.

(a) Risk tolerance: It gives the idea about an organization’s or individual sensitivity towards the various risks. High tolerance means people are willing to take high risk whereas low tolerance means people are not willing to take high risk unless the benefits of taking risk out weights the fear of risk.

(b) Risk threshold: It is the amount of the Risk, that on organization or individual are willing to accept. It is usually a definite figure.

Sources of Risk

1. Operational Risk
2. Market Risk
3. Economic Risk
4. Financial Risk
5. Technological Risk
6. Commercial Risk
7. Quality risk
8. Legal or regulatory risk
9. International risk

Risk Identification Tools & Techniques

1. Brainstorming
2. Delphi Technique
3. Interviewing
4. SWOT Analysis

Quantitative Risk Analysis

Quantitative risk analysis is a way of numerically estimating the probability that a project will meet its cost and time objective. It is based on a simultaneous evaluation of the impact of all identified and quantified risk. An outcome of quantitative risk analysis is a probability distribution of the projects cost and completion date based on the identified risk in the project.

Project Audit

 Audit is generally defined as an unbiased examination and evaluation of the process documents or statements of an organization. It can be done internally by (employee of organization) or externally by an outside firm.

Objectives of Audits are as listed below.

(i) Building up an information base to help proper estimation of project cost & time.

(ii) Educating all those concerned with the project about the realities of project management.

(iii) Establishing correct time-cost relationship.

(iv) Creation of appropriate standards for work based on suitable work techniques.

(v) Sharing of project audit information among all concerned – In order to build up better understanding of the project and its problem areas. So that mistakes can be avoided in the future.

Different Types of AUDIT

1. Financial Audit

Financial Audit is done for the following costs to verify that the actual is as per the estimates /projections made at the time of planning or appraisal:

(i) Project Cost under various heads.

(ii) Operating Costs.

(iii) Profitability

(iv) Cash Flow

(v) Sources & Application of Funds.

1. Technical Audit

This audit throws light on the other objectives of the project, that is, quality and scope. During this audit actual quality & quantity of production, scope of the project and operating costs attained by product and services are compared with the planned parameters.

1. Schedule Audit

Time is another important objective of any project. A delayed project may lead to a huge loss in the form of opportunity cost or unsatisfied customer. Schedule audit aims at comparison of actual time of completion of a project as compared to projected time.

1. Social Audit

This type of audit is generally applicable to either public sector undertakings or government projects, which are generally performed with the objectives of social benefits.

Types for Project Closing And Termination

Project closing or termination is one of the most serious decisions a project management team and its control board have to take.

(a) Gray and Larson (2008) identify five circumstances for project closure:

1. Normal closure - The common condition of project closure is when the project is completed and planned are achieved.

1. Premature Closure - Many projects are stopped before completion due to various reasons such as cost inuring is more than planned, project being obsolete due to new technology or product etc.

1. Perpetual projects -  As some project are suffered by consistent scope creep, add on, changes, numerous delays, setbacks and problems.

1. Failed project - In rare circumstances, projects simply fail, for a variety of reasons.

1. Poorly defined project scope
2. Inadequate risk management
3. Project managers who lack experience and training
4. No use of formal methods and strategies
5. Lack of effective communication at all levels
6. Changed Priority

Organization’s strategies often changes during the course of time according to market environment changes.

(b) According to medredith and mentel, project termination or closing can be by following four ways:

1. Termination by addition If a project is a major success, it may be terminated by institutionalizing it as a formal part of the parent organization, project staff and resources are transferred to new project.

1. Termination by integration It is the most common method for terminating of successful projects. Output of project is integrated with the operations of the client. Project staff and resources are distributed among existing parent organization.
2. Termination by Starvation Termination by starvation involves greatly reducing the budget of a project. It is used when i t is politically dangerous to cancel a project
3. Termination by Extinction

Termination by extinction occurs when a project stops. In other words when a project stops whether the project is successful or unsuccessful; it is terms or termination by extinction. Project are terminated by extinction by various reasons such as

1. When a project has successfully completed the scope and delivered to client
2. When due to technological advancement, project becomes obsolete.
3. When it has no longer support from the senior management.

Next - Basics of Material Science & Engineering Part 1

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