SCHOOL OF MANAGEMENT STUDIES

UNIT–I: INTRODUCTION SBAB7036

PROJECT DEFINITION

Project in general refers to a new endeavor with specific objective and varies so widely that it
is very difficult to precisely define it. Some of the commonly quoted definitions are as
follows. Project is a temporary endeavor undertaken to create a unique product or service or
result. (AMERICAN National Standard ANSI/PMI99-001-2004)

Project is a unique process, consist of a set of coordinated and controlled activities with start
and finish dates, undertaken to achieve an objective confirming to specific requirements,
including the constraints of time cost and resource. (ISO10006)

Examples of project include developing a watershed, creating irrigation facility, developing

new variety of a crop, developing agro- processing center, construction of farm building,
sting of a concentrated feed plant etc. it may be noted that each of these projects differ in
composition, type, scope, size and time.

PROJECT CHARACTERISTICS

• Despite the above diversities, projects share the following common characteristics.
• Unique in nature.
• Have definite objectives (goals) to achieve.
• Requires set of resources.
• Have a specific time frame for completion with a definite start and finish.
• Involves risk and uncertainty.
• Requires cross-functional teams and interdisciplinary approach.

PROJECT PERFORMANCE DIMENSIONS

Three major dimensions that define the project performance are scope, time, and resource.
These parameters are interrelated and interactive. The relationship is generally represented as
an equilateral triangle. The relationship is shown in figure 1.
 Time Cost

Scope

Figure 1. Project Performance Dimensions

It is evident that any change in any one of the dimensions would affect the other. For
example, if the scope is enlarged, the project would require more time for completion and the
cost would also go up. If time is reduced the scope and cost would also be required to be
reduced. Similarly, any change in cost would be reflected in scope and time. Successful
completion of the project would require accomplishment of specified goals within scheduled
time and budget. In recent years a fourth dimension, stakeholder satisfaction, is added to the
project. However, the other school of management argues that this dimension is an inherent
part of the scope of the project that defines the specifications to which the project is required
to be implemented. Thus, the performance of a project is measured by the degree to which
these three parameters (scope, time and cost) are achieved.
Mathematically
Performance = f (Scope, Cost, Time)

PROJECT MANAGEMENT

Project management is the art of directing and coordinating human and material resources
throughout the project by using modern management techniques. The main purpose of project
management is to achieve the predetermined objectives of scope, cost, time, quality and the
satisfaction of the participant.
Project management includes developing and implementing a plan for the project while
considering the available resources such as manpower, material and cost in the organization.
Project management involves the following activities:
• Planning and analyzing the objectives of the project
• Measuring and controlling the risk-involved in the project
• Estimating the organizational resources required in the project
 • Assigning tasks to the employees related to the project
• Directing and motivating employees to improve their performance
• Organizing project activities
• Formulating the project
• Forecasting trends in the project
• Completing the project on time
• Keeping up the quality of the project

OBJECTIVES OF PROJECT MANAGEMENT

• Achieving Project Goals within Constraints: The primary objective is to complete the
project according to the predefined scope, time, and cost constraints. This involves
meticulous planning and resource allocation to ensure project objectives are met
without overstepping these boundaries and building a strong project management
foundation.
• Optimizing Resource Allocation: Effective utilization of resources, including
personnel, technology, and budget, is a critical objective. Project management aims to
use these resources efficiently to maximize value and minimize waste.
• Enhancing Team Collaboration and Communication: Ensuring clear communication
and fostering collaboration among team members is a vital goal. This leads to better
problem-solving, idea-sharing, and overall project efficiency.
• Managing Risks and Changes: Identifying potential risks and preparing contingency
plans are fundamental objectives of project management. Project management
also involves adapting to changes and steering the project towards its goals amidst
evolving circumstances.
• Ensuring Customer Satisfaction: Delivering quality outcomes that meet or exceed
customer expectations is crucial. This involves understanding the client's needs and
aligning the project deliverables accordingly.
• Facilitating Continuous Improvement: Project management is not just about the
immediate goals. It also focuses on learning from current projects to improve
processes and outcomes in future endeavors.
PROJECT LIFE CYCLE

The project life cycle shows how a project can be subdivided into several phases presented
sequentially along a project timeline.
Every project has certain phases of development. A clear understanding of these phases
allows managers and executives to control the project more efficiently.
All the phases of a project from start to end are known as life cycle phases. The project life
cycle i.e. the number of phases may differ from project to project.

Phase-1: Feasibility Stage or Conception Stage

The feasibility phase assesses the business case to confirm it is feasible to manufacture and
implement.
If there are several possible business case solutions, the feasibility study will rank the
business cases in order of how well they are addressing the client’s requirements.
This is the phase when a problem is identified and potential solutions are suggested i.e. ideas
are conceived.
After the feasibility study, once the objectives have been clearly defined then the appraisal of
the solutions is conducted in terms of risk, financial commitment, and benefits.
In case project ideas are found feasible from all considerations, it is then given a go-ahead
signal.
Phase-1 of the project can be summarized as under:
(a) Identification of the need
(b) Establishment of the primary feasibility of project idea
(c) Identification of alternatives
(d) Evaluation/appraisal of the alternatives
(e) Investment decision

Phase-2: Design Stage (Planning & Scheduling Stage)/Definition Phase

The project definition phase uses the guidelines from the feasibility study to design the
product, outline the build method and develop detailed schedules and plans (baseline plan)
for all the knowledge area topics required to make the project.
Once the investment decision is taken, the design or the planning stage of the project starts.
In this phase, original ideas are amplified to prepare a ‘blueprint’ for the next stage. It means
technical parameters are frozen and basic designing is completed and specifications for
equipment are finalized, costs are estimated in detail, a schedule for the project is planned
and steps are taken for raising funds and resources at the end of the design phase blueprint is
ready for execution. The output of the design phase is called Detailed Project Report (DPR).
Usually, DPR is further examined by the concerned organization. From the first phase to the
second phase of the project life cycle, the intensity of activities continuously increases.

Phase-3: Execution or Production Phase

The project execution phase uses the design and project plan from the definition phase,
together with the execution strategy, to construct the project.
In the third phase project moves for execution or production where the emphasis is given to
give physical shape to the ideas presented in DPR.
In this phase procurement of resources (material/machinery) starts.
The intensity of activities further builds up and reaches to peak in the 3rd phase, however
when execution approaches completion the intensity of activities starts falling again. This is
the most important phase. The demand for the project manager is at its peak in this phase.
There is a great need for continuous monitoring and control of all activities in this phase.

Phase-4: Termination or Commissioning or Handover Phase

The project commissioning and handover phase inspects and confirms the project has been
made to the approved design and then hands over the project to the client for operation.
It is the last phase of the project cycle. During this phase, the constructed facilities are tested
one by one and final teething problems are solved. If the trial is successful then the
commissioning is complete.
After commissioning, the project is handed over. This stage might include training of
operating personnel. In this phase intensity of activities reduces to minimal at the end.

Life Cycle Graph between Intensity of Activities and Time:

Phase-I → Feasibility/ Appraisal/ Conception
Phase-II → Design/ Planning and scheduling / Development/ Definition
Phase-III → Implementation / Execution/ Production
Phase-IV→Commissioning/Termination/Transfer

g/

The important elements of a project life cycle are:

• Operations /activities: Which should be performed in sequence
• Resources: Manpower, Material, Money Machinery, etc.
• Constraints and external conditions.

Level of Effort (Intensity of Activities)

The project lifecycle is often presented with its associated level of effort. The level of effort
could be any parameter that flows through the project that can be measured, but it is most
commonly expressed as man-hours or expenses/costs. The level of effort is a useful indicator
for the project manager to quantify the amount of work to be performed and the amount of
work completed within each phase. These parameters can be presented as a line graph of ‘rate
of expenditure’ (or rate of effort) and/or a line graph of ‘cumulative expenditure’.
The accumulated effort is the sum of the effort to date. This shows a typical’ curve’ profile
similar to that used in the earned value calculation. This is a useful feature for the project
manager to note as similar projects tend to have similar levels of effort profiles.

PROJECT ENVIRONMENT

The project environment consists of a set of factors and conditions that can influence a
project’s execution and outcomes. It encompasses elements such as organizational culture,
stakeholder expectations, regulatory requirements, technological infrastructure, and economic
considerations. Understanding the project environment is important for effective planning
and decision-making, as it helps project managers anticipate challenges, identify
opportunities, and adapt strategies to ensure successful project delivery. It involves analyzing
both internal and external factors that may impact the project throughout its lifecycle.
Project managers need to continuously assess and respond to changes in the environment to
mitigate risks, capitalize on emerging opportunities, and ensure that the project aligns with
organizational goals.

TYPES OF PROJECT ENVIRONMENTS

1. Social and Cultural Environment

The social and cultural environment encompasses the norms, behaviors, belief systems, and
values prevalent in the societies where a development project is undertaken. Understanding
cultural diversity is important, especially in global projects, as it influences communication,
collaboration, and stakeholder dynamics. It plays a pivotal role in shaping team interactions,
data processing, and decision-making processes.

2. Physical Environment
The physical environment involves the project location’s geographical and climatic
conditions, including weather, terrain, and existing infrastructure. Consideration of these
factors is essential, particularly in engineering, logistics, construction, and resource
utilization. Extreme weather conditions, such as high or low temperatures, can pose
challenges to successful project planning and execution.

3. Political Environment
The political environment includes factors beyond the project, such as government policies,
regulations, security, and potential political changes. Adapting to governmental policies and
navigating political stability is important for project success, especially in highly regulated
industries. Political variations may disrupt workflow, necessitate rule compliance, or divert
resources.

4. Economic Environment
The economic environment encompasses variables like inflation rates, exchange rates,
interest rates, and overall economic stability or volatility. Economic factors can impact
project budgets, funding availability, and resource prices. Economic downturns may lead to
project contraction or reduced financial resources, affecting investors and funding.
5. Technological Environment
The technological environment focuses on the impact of technology on the project,
considering factors like innovativeness, technology development rate, and supply. Evolving
technology can be an asset or a threat, and projects should anticipate potential phase-out or
ongoing maintenance. This environment plays an important role in shaping the project’s
technological strategies.

6. Market Conditions
Market conditions represent the state of the market where the project operates, including
demand, competition, and industry trends. Understanding market dynamics is critical for
projects with commercial strategies, influencing product development, pricing strategies, and
overall project direction.

7. The Structure and Culture of the Organization

The organizational environment, an internal factor, includes the structure, communication
tools, and the culture of the project-initiating company. Organizational structure may change
management processes, and the company’s culture facilitates teamwork, creativity, and
problem-solving. It significantly influences the project’s internal dynamics and overall
success.

PROJECT ENVIRONMENT ANALYSIS

Project environment analysis is a strategic process that translates gathered information about
a project’s surroundings into actionable strategies for enhanced outcomes. It involves
assessing factors that may impact the project and selecting the most influential ones for
focused consideration.

1. SWOT Analysis
Strengths and Weaknesses: Internal factors affecting the project, highlighting its distinctive
features and limitations.
Opportunities and Threats: External factors, exploring positive prospects and potential risks
such as technological advancements or market competition.
2. PEST Analysis
Focuses on essential external factors: Politics, Economy, Society, and Technology. Provides
insights for market positioning and relationship-building with external elements.

3. Porter’s Value Chain

Analyzes internal activities and processes, categorizing them into primary (directly related to
the product/service) and support activities (those aiding primary functions). Enhances overall
efficiency.

4. Porter’s Five Forces

Evaluate the competitive environment through Threat of New Entry, Buyer’s Bargaining
Power, Supplier’s Bargaining Power, Threat of Substitution and Competitive Rivalry guides
decision-making on entering or avoiding specific markets based on these forces.

5. Stakeholder Analysis
Identifies and classifies internal and external stakeholders, including shareholders, managers,
clients, and suppliers. Analyzes stakeholders’ interests and influence, prioritizing those with
the greatest impact on the project. Seeks support from priority stakeholders for more effective
project realization.

ADVANTAGES OF PROJECT ENVIRONMENT

1. Clear Communication Channels

The project communication is streamlined through the clear and efficient communication
channels in the project environment design. It means that the transfer of data between team
members, stakeholders, and project managers is smoothed out. Effective communication
minimizes the risk of misunderstanding as well as it aids the project team in the achievement
of a common understanding of the goal and requirements of the project.

2. Enhanced Collaboration
A fertile project environment generates a team that can work collaboratively. Teamwork and
communication are leveraged when team members work in an environment that creatively
brings out ideas, knowledge, and resources. This prosperity cooperation results in creative
answers to problems and good problem-solving. Write a response that informs which skills
you feel are the most vital and why.

3. Optimized Resource Allocation

A properly structured project environment will support the most productive use of human and
non-human resources. In the project management context, project managers are expected to
scan the availability, skills, potential, and limits of the team members and then assign tasks
accordingly to make the use of resources such as time, budget, and manpower optimal to
meet the project objectives.

4. Risk Management
The consideration of the environment as a project is, therefore, important in recognizing,
assessing, and mitigating risks. One of the effective shortcomings solutions is creating one
where risks are envisaged, analyzed, and settled quickly and efficiently. It will make the
problem cause a reduced impact on the schedule and budget of the project.

5. Increased Accountability
A successful project environment makes sure that the team members’ accountability includes
everyone. Free of ambiguity, each distinct contribution of a team member to the project is
understood through tasks, roles, and responsibilities. This combined vision breaks down the
barriers and makes everyone accountable for achieving the objectives of their tasks.

PROJECT MANAGER

A project manager is an individual in charge of the planning and execution of a project. This
individual is the team member who defines project goals, aligns internal and external teams,
builds project timelines and dependencies, and tracks key performance indicators for
effective project management.

A few effective project management skills that a project manager may acquire include:
• Budget forecasting
• Budget management
• Business strategy development
 • Defining the scope of work
• Document sharing
• Gantt chart and timeline development
• Progress measurement
• Progress reporting
• Quality control
• Staffing
• Strategic oversight
• Vendor management

ROLES OF PROJECT MANAGER

1. Team and Timeline Management

The role of a project manager is uniquely positioned with visibility into the multiple functions
or task-forces of a team. For example, in launching a mobile application, the project manager
may work with:
Web developers
Content developers
Graphic designers
Marketing teams
Social media community managers
And many others…

However, each of these functions may not speak to one another or have full line-of-sight into
the project deliverable. As a project manager, it’s your role to manage relationships with each
of these teams, report progress to the project owner, and share information across functions.
Often the dynamics of a project may create a level of uncertainty in approval processes or
next steps. It’s during these times that the project manager may have to “manage up” to level-
set expectations with a project owner or guide functional teams through deliverables to
ensure timelines are met.
2. Team Organization
An essential role of a project manager is to organize teams to deliver on an outcome. This
means understanding the various team functions, structuring them in a way that’s efficient,
and communicating program progress and expectations in a timely manner. None of this can
be done without being organized.
Project manager role to work seamlessly across teams to structure timelines, outline
deliverables, and hold vendor or client teams accountable. New software helps make this
easier, but it’s imperative that the project manager bring organization to a diverse group to
streamline project activities.

3. Technology Integration
In recent years, more and more organizations are leaning on technology and artificial
intelligence to streamline, structure, and track project-based outcomes.
In this digital age, it’s important as a project manager to leverage existing technology to
enhance workstream transparency, share information, synthesize data, and alert internal and
external stakeholders to programmatic updates. When it comes to technology, we know that
file sharing, time tracking, email integration, and budget management are among the top most
used and requested features in project management software. In the project manager role, you
must understand these digital platforms, own management of these systems, and synthesize
data inputs to make decisions for your team.

4. Leadership
The role of a project manager also includes being a leader. This role is at the center of
programmatic development, making leadership and relationship building skills a must to
encourage team collaboration and trust to get a job done. Teamwork, conflict resolution, and
adaptability are important roles for project managers.

5. Performance Tracking and Measurement

No project is considered a success without the proper measurement tools to showcase
strategic alignment and return on investment. Project managers are often the individuals
working across teams to support the identification of key performance indicators and own the
reports shared with business executives to justify program progress.
RESPONSIBILITIES OF PROJECT MANAGER

A project manager is responsible for a variety of tasks and activities. The following list
includes the key responsibilities every project manager takes on.

1. Planning
A project manager is responsible for formulating a project plan to meet the project’s
objectives while adhering to an approved budget and timeline. This blueprint will guide the
project from ideation to fruition. It will include the project’s scope, the resources necessary,
the anticipated time and financial requirements, the communication strategy, a plan for
execution and documentation, and a proposal for follow-up and maintenance. If the project
has not yet gained approval, this plan will serve as a critical part of the pitch to key decision-
makers.

2. Leading
An essential part of any project manager’s role is to assemble and lead the project team. This
requires excellent communication, people, and leadership skills, as well as a keen eye for
others’ strengths and weaknesses. Once the team has been created, the project manager
assigns tasks, sets deadlines, provides necessary resources, and meets regularly with the
members. An ability to speak openly and frequently with all stakeholders is critical.

3. Execution
The project manager participates in and supervises the successful execution of each stage of
the project. Again, this requires frequent, open communication with the project team
members and stakeholders.

4. Time management
Staying on schedule is crucial to completing any project, and time management is one of the
key responsibilities of a project manager. Project managers are responsible for resolving
derailments and communicating effectively with team members and other stakeholders to
ensure the project gets back on track. Project managers should be experts at risk management
and contingency planning to continue moving forward even when roadblocks occur.
5. Budget
Project managers devise a budget for a project and stick to it as closely as possible. If certain
parts of the project end up costing more (or, in a perfect world, less) than anticipated, project
managers moderate the spend and reallocate funds when necessary.

6. Documentation
A project manager must develop effective ways to measure and analyze the project’s
progress. Common strategies for documenting a project include data collection and verbal
and written status reports. It’s also a project manager’s job to ensure that all relevant actions
are approved and that these documents are archived for future reference.

7. Maintenance
The work doesn’t end once a project has been completed. There needs to be a plan for
ongoing maintenance and troubleshooting. The project manager devises methods for properly
supporting the final deliverable going forward, even if they are not directly overseeing its
day-to-day operations.

SELECTION OF PROJECT MANAGER

When choosing a Project Manager, some criteria to consider include:

• Experience in managing projects

• Mastery of the project management process and tools
• Ability to dedicate the time necessary for project success
• Attention to detail
• Obsession with achieving objectives on-time and on-budget
• Ability to communicate, orally and in writing
• Skills and experience managing and influencing people including those who are not
direct reports
• Ability to juggle multiple responsibilities
 SCHOOL OF MANAGEMENT STUDIES

UNIT– 2 – PROJECT MANAGEMENT – SBAB7036

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 PROJECT APPRAISAL

The Planning Process – Work Break Down Structure – Cost Estimation and Budgeting –
Process, Summaries, Schedules and Forecasts. Managing Risks – Concepts, Identification,
Assessment and Response Planning.

Project Appraisal

Project appraisal is a consistent process of reviewing a given project and evaluating its
content to approve or reject that project by analyzing the problem or need to be addressed
by the project, generating solution options (alternatives) for solving the problem, selecting
the most feasible option, conducting a feasibility analysis of that option, creating the
solution statement, and identifying all people and organizations involved with or affected
by the project and its expected results.

Project planning

Project planning or project management planning is the foundation and most important
stage of the project management life-cycle. The planning process forms the basis of the
next project phases i.e. execution, monitoring & controlling closure, and also stipulates
how the project team will pursue the goals outlined in the business case and project
charter. Project planning in project management is also important from a cost-saving
perspective as any project can easily run into unknowns, environmental challenges, and
scope creep that haunt the completion and delivery of any/all types of projects.

Types of Project Planning

Project planning can be of various types depending on the objective, scope, and purview
of the activity in consideration. The 3 broad categories of planning include:

 Vertical Planning - involves creating a detailed hourly plan to roll up to the day
and is also known as daily planning as it is done on that particular day;

 Horizontal Planning - involves creating a plan for the day as a whole instead of
focusing on every hour and can be done weekly or monthly as well;

 Joint Planning - as the name suggests, involves both horizontal and vertical
planning i.e. planning the tasks for the day as well as the week to have a bird's eye
view and also a detailed plan at the same time. Joint planning requires careful
consideration of the task duration and order of items, to sequence activities and
complete them.
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Project planning process

The project planning process is very vital because it helps to create and document project
plans, requirements, deliverables, and the schedule. Thus, a full understanding of the
activities involved in this process will help to lay the perfect foundation for project
execution. At the end of the project planning process, all the necessary plans concerning
the schedule, resources, and staff needed to complete a project are completed.

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The project planning process consists of the following activities.

1. Determine Detailed Requirements and Finalize Project Scope

This activity aims to establish in details all the requirements of the project and also to
finalize laying out the scope of the project. The project manager determines what resources
are required in each and every step of the project. They also lay out the scope of the project
to ensure a smooth flow of events in the project implementation.

In the end of this activity, a Project Scope Statement document is developed. This is the
document that details the scope of the project and acts as a guide to ensure that all factors
have been considered and are fully covered.

2. Create Activity List and Prepare WBS

The purpose of this activity is to come up with a list of all activities of the project with their
timelines, and to also prepare a work break-down structure (WBS) for the project.

The project manager establishes a timeline for all activities involved in the project. The
project is also broken into smaller tasks and sub-tasks with well-defined timelines for
optimal execution. The output of this activity is two documents: an Activity List and a
WBS.

3. Develop Project Schedule

Here, the schedule of the project is developed. This includes establishing what should be
done, when it should be done and what resources to be used to optimally carry out the task.
The project manager lists all the activities alongside the milestones and their deliverables,
all with the intended start date and finish date.

This ensures that a clear timeframe is followed to implement and complete the project. A
Gantt Chart and a Project Schedule are the output documents of this activity. A Gantt chart
is a type of a timeline chart that lists all activities against their timelines thus showing their
estimated start and end dates while a project schedule is a list of all activities, milestones
and their deliverables with their estimated timelines.

4. Assess What to Purchase and Prepare Procurement Document

This activity involves evaluating the things that should be bought to facilitate the successful
implementation of the project. Doing this helps the project manager to identify all the items
that should be purchased and prepare the necessary procurement documents. Besides, the
activity helps to come up with cost estimates for the required items. The project manager
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therefore comes up with a procurement document that details all the items to be procured
including their budget estimates and possible suppliers. To perform this activity effectively,
the project manager references the Project Proposal document.

5. Determine Project Team, Roles and Responsibilities

The purpose of this activity is to identify the team that will be involved in performing
project tasks and activities. The project manager identifies individuals that can perform
various activities. The abilities and qualifications of team members are critical in the
process of assigning project roles.

Here, the project manager seeks to identify every project task or activity and match it to the
most suited individual. The project manager assigns key roles that require special skills to
persons that have the required skills. Each role is therefore assigned with respect to the
required skills.

The Project Organization Chart is the output document for this activity. This chart provides
an outline the project, the personnel to perform various tasks and their roles and
responsibilities.

6. Prepare Project Management Plan, Communication Management Plan, Risk

Management Plan and Quality Management Plan

The objective of this activity is to design plans and strategies that will facilitate project
management, communication management, risk management, and quality
management processes throughout the project lifecycle.

The project management plan is created to keep the project on schedule and within budget.
It ensures that the project goals and objectives are satisfactorily met and the resources
allocated are optimally utilized.

The communication management plan establishes a protocol to be followed for

communication throughout the entire project. This ensures that a proper communication
channel is established to prevent a communication breakdown.

The risk management plan assesses all possible risk in every step of the project. This helps
the project manager to plan on ways to avoid or mitigate any risk that comes up. This
therefore ensures that the project manager and his entire team are well prepared for any
underlying risk.

The quality management plan helps to lay down certain quality standards to be followed
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throughout the project. This ensures that the quality of the project is not compromised at
any level.

Thus, Project, Communication, Risk & Quality Management plans are the output
documents of this activity. After preparing these plans, the project manager forwards them
to the Head of PMO for review. Then, the Head of PMO hands them over to the project
sponsor for approval. The approval of these documents permits the project manager to
conduct the kick-off meeting.

7. Conduct Kick-off Meeting

The aim of the Conduct Kick-off Meeting is to bring together all the key stakeholders of
the project such as the project manager, the project sponsors and project team, in order to
debrief them about the project and commence the project execution.

The project manager conducts the kick-off meeting in order to bring on set all the involved
personnel and inform them about their roles and responsibilities in the project. The Meeting
Minutes are the output of the kick-off meeting. The minutes record the matters that have
been discussed and the conclusions that have been made.

Work Breakdown Structure

A Work Breakdown Structure (WBS) in project management is a hierarchical

decomposition of a project into smaller, more manageable components. It systematically
breaks down the project's scope into deliverables and tasks, providing a visual
representation of the work to be accomplished.

The WBS serves as a foundation for project planning, scheduling, and resource allocation,
offering a clear roadmap for project teams to understand, organize, and execute their work
effectively.

The purpose of creating a WBS Tool is to organize and define the total scope of the project
in a structured way. Each level of the hierarchy represents an increasingly detailed
description of the project work, from the overall project down to individual tasks.

Characteristics of a work breakdown structure

 Hierarchical: Organized in a hierarchical structure that starts with the project as a

whole and breaks down into increasingly detailed levels and work packages.

 Deliverable-Oriented: Focuses on defining the deliverables or outcomes of the

project rather than the activities or tasks themselves.
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  Decomposition: Involves breaking down the project scope into smaller, more
manageable components.

 Numbering System: Uses a numbering system to denote the hierarchical

relationship between elements, aiding in understanding and referencing.

Types of WBS

The Work Breakdown Structure (WBS) typically includes five main types:

 Phase-Based WBS: Phase-Based WBS Organizes work by project phases, such as

initiation, planning, execution, monitoring, and closure. A Phase-Based Work
Breakdown Structure (WBS) divides a project into distinct phases or stages. Each
phase represents a significant stage in the project's lifecycle, and within each phase,
tasks and deliverables are further broken down. This helps in organizing and
managing the project more effectively.

 Deliverable-Based WBS: Deliverable-based WBS Breaks down the project into

tangible deliverables, focusing on the final outputs or results.

 Organizational-Based WBS: Organizational-based WBS Structures the work

according to the responsible organizational units or departments.

 Product-Based WBS: Product-based WBS decomposes the project into its

physical or functional components, emphasizing the end products.

 Activity-Based WBS: Activity-based WBS divides the project into specific

activities or tasks required for completion.

These types can be used individually or in combination, depending on the project's nature
and requirements.

Importance/ Benefits Of Work Breakdown Structure

The Work Breakdown Structure (WBS) holds significant importance in project

management for several reasons:

 Clarity and Scope Definition: Clearly defines the scope of the project and ensures
all necessary work is identified and included.

 Efficient Planning and Scheduling: Facilitates effective project planning by

breaking down complex tasks into smaller, actionable components.

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  Resource Allocation: Helps in estimating resources, time, and costs required for
each work package, enabling efficient resource allocation.

 Monitoring and Control: Provides a framework for monitoring project progress

against the planned scope and schedule, allowing for timely adjustments and
interventions.

 Communication: Improves communication among project stakeholders by

providing a common framework and terminology for discussing project scope and
deliverables.

 Risk Management: Supports risk identification and management by breaking

down project risks into specific components that can be assessed and mitigated.

 Integration with Project Management Processes: Integrates seamlessly with

other project management processes such as scheduling, budgeting, risk
management, and quality management.

Example of a Work Breakdown Structure:

In this example, "Project Alpha" is the top-level deliverable, broken down into phases
(Planning, Execution, Monitoring and Control, Closing), and further decomposed into
specific tasks and activities.
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Cost estimation and budgeting

Cost estimation is a quantitative assessment of the amount likely to be spent to complete a

project task (work package or activity). Project cost estimating involves developing an
approximation of the money required for all the tasks in the project.

The project budget is the sum total of the cost required to complete all the tasks in a project
and contingency reserves for the known risks. The project budget is developed at the start
of a project and later refined as more information becomes available about the project work
and a detailed WBS is prepared.

Cost estimation and budgeting are fundamental processes in project management that
involve predicting the financial resources required for a project and then allocating those
resources appropriately. It allows businesses to make informed decisions about whether or
not to proceed with a given project. If the estimated cost of a project exceeds the available
budget, the business may decide to scale back the scope of the project or even cancel it
entirely. If the estimated cost of a project is lower than the available budget, the business
may choose to invest additional resources in order to increase the likelihood of success. In
either case, having accurate cost estimates is essential for making sound decisions about
projects.

9
Cost Estimation Process

1. Define Scope and Requirements: Clearly outline the project scope, including all
deliverables and requirements. This helps in identifying all tasks and resources
needed.
2. Break Down the Project (WBS): Create a Work Breakdown Structure (WBS) that
divides the project into smaller, manageable components. Each component is then
estimated separately.
3. Identify Resources: Determine the resources required for each task, including
labor, materials, equipment, and other expenses.
4. Gather Cost Data: Collect cost data from various sources, such as historical data
from similar projects, vendor quotes, and industry benchmarks.
5. Choose Estimation Methods:
o Analogous Estimation: Analogous estimation is a top-down approach that
uses historical data from similar past projects to estimate the cost of a new
one.
o Bottom-Up Estimation: Bottom-up estimating is where you estimate the
cost for individual tasks or components of a project and then sum them up to
get to the total project cost.
o Parametric Estimation: The parametric technique uses a mathematical
formula or algorithm to calculate cost based on historical data and project
parameters. It uses a statistical relationship between different variables (e.g.,
square footage in construction) to estimate the cost of a complete project or
part of the project.
o Three-Point Estimation: Three-point estimating is done by taking the
average of three different estimates. The following estimates are used to
calculate the expected cost.
 Optimistic (O): A cost estimate considering the best-case scenario.
 Pessimistic (P): A cost estimate considering the worst-case scenario.
 Most likely (M): A cost estimate considering the realistic scenario.

The expected cost (E) can be found by using the formula: E = (O+P+M)/3

10
 6. Estimate Direct and Indirect Costs: Direct costs are linked to specific tasks (e.g.,
labor, materials), while indirect costs are overheads not directly attributable to a
single task (e.g., utilities, administrative expenses).
7. Review and Validate Estimates: Conduct a thorough review of the estimates with
stakeholders and experts to ensure accuracy and completeness.
8. Document the Estimate: Clearly document all assumptions, methodologies, and
data sources used in the estimation process.

Budgeting Process

1. Allocate Costs to WBS: Assign estimated costs to the corresponding elements in

the WBS.
2. Develop Budget Baseline: Sum up all the costs to develop the total project budget.
This becomes the budget baseline against which actual performance will be
measured.
3. Determine Contingency Reserves: Allocate a portion of the budget for unexpected
costs or risks. This ensures that the project can handle unforeseen issues without
derailing financially.
4. Get Approval: Present the budget to stakeholders and get formal approval before
proceeding with the project.
5. Monitor and Control: Continuously monitor actual costs against the budget
baseline. Use variance analysis to identify deviations and take corrective actions as
necessary.

Summaries and Schedules

Summaries

1. Cost Summary Report: A high-level overview of the total project costs, including
breakdowns by phase, task, or category.
2. Variance Report: Highlights differences between estimated and actual costs,
providing insights into where deviations occurred and why.

11
Schedules

1. Cost Schedule Plan: Aligns cost estimates with the project schedule, detailing
when each cost will be incurred. This helps in cash flow planning.
2. Milestone Budgeting: Allocates budget to specific project milestones, ensuring that
funds are available for critical phases of the project.

Forecasting

1. Earned Value Management (EVM): Combines scope, schedule, and cost data to
provide accurate forecasts of project performance and completion. Key metrics
include:
o Planned Value (PV): Budgeted cost for work planned.
o Earned Value (EV): Budgeted cost for work actually completed.
o Actual Cost (AC): Actual cost incurred for work completed.
o Cost Performance Index (CPI): EV/AC, indicating cost efficiency.
o Schedule Performance Index (SPI): EV/PV, indicating schedule
efficiency.
2. Trend Analysis: Examines historical cost data to identify patterns and predict
future costs.
3. To-Complete Performance Index (TCPI): Calculates the cost performance
needed to complete the project within budget.
4. Cash Flow Forecasting: Projects the timing of cash inflows and outflows to ensure
sufficient funds are available when needed.
5. Scenario Analysis: Evaluates different scenarios to understand the potential impact
of changes in project scope, schedule, or resources on the budget.

Project risk management

Project risk management is a systematic process of identifying, analyzing, assessing,

prioritizing, and mitigating risks that could potentially affect the success of a project. It
involves proactive planning and decision-making to minimize negative impacts and
maximize opportunities. Here are some key concepts of project risk management:

12
Risk Identification

Identifying risks is the most important part of the risk management process and has the
biggest impact on the process. It is the first step in the process. If a risk is not identified, it
cannot be assessed or evaluated. A more disciplined process involves using checklists of
potential risks and evaluating the possibility that those events might happen on the project.
Some companies and industries develop risk checklists based on experience from past
projects. These checklists can be helpful to the project manager and project team in
identifying both specific risks on the checklist and expanding the thinking of the team. The
past experience of the project team, project experience within the company, and experts in
the industry can be valuable resources for identifying potential risks on a project.

Identifying the sources of risk by category is another method for exploring potential risks
on a project. Some examples of categories for potential risks include the following:

 Technical

 Cost

 Schedule

 Client

 Contractual

 Weather

 Financial

 Political

 Environmental

 People

Risk Assessment

After the potential risks have been identified, the project team then assesses each risk based
on the probability that a risk event will occur and the potential loss associated with it. Not
all risks are equal. Some risk events are more likely to happen than others, and the cost of a
risk can vary greatly. Evaluating the risk for the probability of occurrence and the severity
or the potential loss to the project is the next step in the risk management process.

13
Having criteria to determine high-impact risks can help narrow the focus on a few critical
risks that require mitigation. For example, suppose high-impact risks are those that could
increase the project costs by 5% of the conceptual budget or 2% of the detailed budget.
Only a few potential risk events meet these criteria. These are the critical few potential risk
events that the project management team should focus on when developing a project risk
mitigation or management plan. Risk evaluation is about developing an understanding of
which potential risks have the greatest possibility of occurring and can have the greatest
negative impact on the project (Figure 6-2). These become the critical few.

Figure 6-2: Risk and Impact

There is a positive correlation—both increase or decrease together—between project risk

and project complexity. A project with new and emerging technology will have a high
complexity rating and a correspondingly high risk. The project management team will
assign the appropriate resources to the technology managers to ensure the accomplishment
of project goals. The more complex the technology, the more resources the technology
manager typically needs to meet project goals, and each of those resources could face
unexpected problems.

Risk evaluation often occurs in a workshop setting. Building on the identification of the
risks, each risk event is analyzed to determine the likelihood of occurrence and the
potential cost if it did occur. The likelihood and impact are both rated as high, medium, or

14
 low. A risk mitigation plan addresses the items that have high ratings on both factors—
likelihood and impact.

Example: Risk Analysis of Equipment Delivery

A project team analyzed the risk of some important equipment not arriving at the project on
time. The team identified three pieces of equipment that were critical to the project and
would significantly increase costs if they were late in arriving. One of the vendors, who
was selected to deliver an important piece of equipment, had a history of being late on
other projects. The vendor was good and often took on more work than it could deliver on
time. This risk event (the identified equipment arriving late) was rated as high likelihood
with a high impact. The other two pieces of equipment were potentially a high impact on
the project but with a low probability of occurring.

Risk Response Plan

After the risk has been identified and evaluated, the project team develops a risk response
plan, which is a plan to reduce the impact of an unexpected event. The project team
mitigates risks in various ways:

 Risk avoidance (avoid or eliminate the risk)

 Risk acceptance (accept the risk, and move forward, deal with the consequences, if any)

 Risk mitigation (reduce the probability of the risk, reduce the consequences)

 Risk transfer/share (let someone else deal with it, move the risk somewhere else
ie. supplier)

Each of these techniques can be an effective tool in reducing individual risks and the risk
profile of the project. The risk response plan captures the risk of each identified risk event
and the actions the project management team will take to reduce or eliminate the risk.

Risk Avoidance usually involves developing an alternative strategy that has a higher
probability of success but usually at a higher cost associated with accomplishing a project
task. A common risk avoidance technique is to use proven and existing technologies rather
than adopt new techniques, even though the new techniques may show promise of better
performance or lower costs. A project team may choose a vendor with a proven track
record over a new vendor that is providing significant price incentives to avoid the risk of
working with a new vendor. The project team that requires drug testing for team members

15
is practicing risk avoidance by avoiding damage done by someone under the influence of
drugs.

Risk Acceptance involves partnering with others to share responsibility for the risky
activities. Or hiring someone else to take on that part of the project. Many organizations
that work on international projects will reduce political, legal, labour, and other risk types
associated with international projects by developing a joint venture with a company located
in that country. Partnering with another company to share the risk associated with a portion
of the project is advantageous when the other company has the expertise and experience the
project team does not have. Or, they may contract out a portion of the project to a company
with greater skills and experience to ensure success.

Risk Mitigation (reduction) is an investment of funds to reduce the risk on a project. On

international projects, companies will often purchase the guarantee of a currency rate to
reduce the risk associated with fluctuations in the currency exchange rate. A project
manager may hire an expert to review the technical plans or the cost estimate on a project
to increase confidence in that plan and reduce the project risk. Assigning highly skilled
project personnel to manage the high-risk activities is another risk-reduction method.
Experts managing a high-risk activity can often predict problems and find solutions that
prevent the activities from having a negative impact on the project. Some companies
reduce risk by forbidding key executives or technology experts to ride on the same
airplane.

Risk Transfer (or sometimes shared) is a risk reduction method that shifts the risk from
the project to another party. The purchase of insurance on certain items is a risk-transfer
method. The risk is transferred from the project to the insurance company. A construction
project in the Caribbean may purchase hurricane insurance that would cover the cost of a
hurricane damaging the construction site. The purchase of insurance is usually in areas
outside the control of the project team. Weather, political unrest, and labour strikes are
examples of events that can significantly impact the project and that are outside the control
of the project team.

16
Importance of Project Risk Management:

 Early Identification of Potential Issues: By systematically identifying risks early

in the project lifecycle, teams can proactively address them before they escalate into
larger problems.

 Improved Decision Making: Risk management provides project managers and

stakeholders with valuable insights into potential threats and opportunities, enabling
informed decision-making and resource allocation.

 Enhanced Project Planning: Incorporating risk management into project planning

ensures that contingencies are considered, and realistic expectations are set
regarding project outcomes.

 Mitigation of Negative Impacts: Through risk assessment and response planning,

projects can reduce the likelihood and impact of negative events, minimizing
disruptions and cost overruns.

 Exploitation of Opportunities: Effective risk management not only focuses on

mitigating threats but also on identifying and maximizing positive risks
(opportunities) that could benefit the project.

17
 SCHOOL OF BUSINESS ADMINISTRATION

UNIT – III –PROJECT SCHEDULING AND ALLOCATION – SBAB7036

PERT & CPM Networks – Project Duration and Floats – Crashing – Resource Loading and
Leveling. Simulation for Resource Allocation. Goldratt’s Critical Chain

Introduction
Scheduling in project management is the listing of activities, deliverables, and milestones within
a project. A schedule usually includes a planned start and finish date, duration,
and resources assigned to each activity in such manner that the whole work should be done in
an orderly and systematic way. Effective project scheduling leads to success of project,
reduced cost, and increased customer satisfaction.
The most common form of project schedule is a Gantt chart. Apart from using a Gantt chart,
there are a number of other project management scheduling techniques that your team can
choose from, depending on your project needs. Two other popular project management
scheduling techniques include the program evaluation and review technique (PERT) and the
critical path method (CPM).

PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT)

PERT involves using a visual mapping tool known as a PERT chart to plan the overall project
schedule. A project’s PERT chart contains a number of boxes, which each represent a project
activity or task. Within each box, there are seven sections, each referring to a different piece of
information about the task, such as its duration, its slack, and how early or late the task can start
or finish. A PERT chart is similar to a Gantt chart but contains more detail, meaning that PERT
is more suited to initial timeline planning, while Gantt charts are better used to track time during
the course of the project.

CRITICAL PATH METHOD (CPM)

CPM is an approach commonly used in construction project management that bases the project
schedule on the project’s critical path, i.e., the number of tasks involved in the project and the
order in which those tasks must be completed. The critical path is the group of tasks essential to
the project’s success, put in sequential order. There can be other tasks involved in a project too,
but if they are not on the critical path, they’re known as float tasks.
 Difference between PERT and CPM

Aspect PERT CPM

PERT stands for Project Evaluation CPM stands for Critical Path
Abbreviation
and Review Technique. Method

PERT is a technique of project CPM is a technique of project

management which is used to management which is used to
Definition
manage uncertain (i.e., time is not manage only certain (i.e., time is
known) activities of any project. known) activities of any project.

It is activity oriented technique

It is event oriented technique which
which means that network is
Orientation means that network is constructed
constructed on the basis of
on the basis of event.
activities.

Model Type It is a probability model. It is a deterministic model.

It majorly focuses on time as

It majorly focuses on Time-cost
meeting time target or estimation of
Focus trade off as minimizing cost is
percent completion is more
more important.
important.

It is appropriate for high precision It is appropriate for reasonable

Precision
time estimation. time estimation.

Nature of Job It has Non-repetitive nature of job. It has repetitive nature of job.

There is no chance of crashing as There may be crashing because of

Crashing
there is no certainty of time. certain time bound.

It uses dummy activities for

Dummy
It doesn’t use any dummy activities. representing sequence of
Activities
activities.

It is suitable for construction

Sustainability It is suitable for projects which
required research and development. projects.
Applications of PERT/CPM
PERT/CPM is a highly versatile and widely used tool in project management, offering
numerous applications across various industries. Some of the key areas where this technique
proves beneficial are:
1. Defense Industry: PERT/CPM plays a crucial role in managing large-scale projects
related to the development and production of complex weapon systems. It aids in the
meticulous planning, scheduling, and coordination of activities, ensuring efficient project
execution.
2. Construction Projects: The construction industry extensively relies on PERT/CPM for
project management. It effectively handles building and construction projects of different
sizes and complexities. By optimizing resource allocation, scheduling activities, and
monitoring progress, PERT/CPM contributes to timely project completion.
3. Shipbuilding: PERT/CPM finds valuable applications in the shipbuilding sector. It assists
in planning and controlling activities involved in constructing ships, including hull
fabrication, equipment installation, outfitting, and testing. This ensures streamlined
operations and on-time delivery.
4. Airport Infrastructure: From the construction of new airport facilities to expansion
projects, PERT/CPM is instrumental in managing diverse activities such as terminal
construction, runway development, installation of navigation systems, and baggage
handling systems. It enables efficient coordination and timely completion.
5. Plant Construction: PERT/CPM is highly beneficial in managing the construction of new
plants, such as manufacturing facilities, power plants, or refineries. It aids in organizing
and sequencing activities, coordinating various contractors and suppliers, and ensuring the
project progresses according to schedule.
6. Product Launches: When it comes to launching new products, PERT/CPM offers
invaluable support. It helps organizations plan and coordinate critical activities involved in
product development, manufacturing, marketing, and distribution. By managing timelines
and dependencies, PERT/CPM ensures successful product launches.
7. Computer System Installations: PERT/CPM can be effectively utilized in managing
complex computer system installations. Whether it is setting up network infrastructure,
deploying hardware components, configuring software, or conducting testing, PERT/CPM
facilitates smooth project execution and timely completion.
Basic Steps in PERT / CPM
Project scheduling by PERT / CPM consists of four main steps
1. Planning
The planning phase is started by splitting the total project in to small projects. These smaller
projects in turn are divided into activities and are analyzed by the department or section.
 The relationship of each activity with respect to other activities are defined and established
and the corresponding responsibilities and the authority are also stated.
 Thus the possibility of overlooking any task necessary for the completion of the project is
reduced substantially.
2. Scheduling
 The ultimate objective of the scheduling phase is to prepare a time chart showing the start
and finish times for each activity as well as its relationship to other activities of the project.
 Moreover the schedule must pinpoint the critical path activities which require special
attention if the project is to be completed in time.
 For non-critical activities, the schedule must show the amount of slack or float times which
can be used advantageously when such activities are delayed or when limited resources are to
be utilized effectively.
3. Allocation of resources
 Allocation of resources is performed to achieve the desired objective. A resource is a
physical variable such as labour, finance, equipment and space which will impose a
limitation on time for the project.
 When resources are limited and conflicting, demands are made for the same type of
resources a systematic method for allocation of resources become essential.
 Resource allocation usually incurs a compromise and the choice of this compromise
depends on the judgment of managers.
4. Controlling
The final phase in project management is controlling. Critical path methods facilitate the
application of the principle of management by expectation to identify areas that are critical to
the completion of the project.
 By having progress reports from time to time and updating the network continuously, a
better financial as well as technical control over the project is exercised.
  Arrow diagrams and time charts are used for making periodic progress reports. If required,
a new course of action is determined for the remaining portion of the project.
The Framework for PERT and CPM
Essentially, there are six steps which are common to both the techniques. The procedure is listed
below:
I. Define the Project and all of its significant activities or tasks. The Project (made up of
several tasks) should have only a single start activity and a single finish activity.
II. Develop the relationships among the activities. Decide which activities must precede
and which must follow others.
III. Draw the "Network" connecting all the activities. Each Activity should have unique
event numbers. Dummy arrows are used where required to avoid giving the same numbering
to two activities.
IV. Assign time and/or cost estimates to each activity
V. Compute the longest time path through the network. This is called the critical path.
VI. Use the Network to help plan, schedule, and monitor and control the project.

Rules for Drawing Network Diagram

Rule 1 Each activity is represented by one and only one arrow in the network

Rule 2 No two activities can be identified by the same end events.

Rule 3 In order to ensure the correct precedence relationship in the arrow diagram, following
questions must be checked whenever any activity is added to the network
 What activity must be completed immediately before this activity can start?
 What activities must follow this activity?
 What activities must occur simultaneously with this activity?
In case of large network, it is essential that certain good habits be practiced to draw an easy to
follow network
 Try to avoid arrows which cross each other
 Use straight arrows
 Do not attempt to represent duration of activity by its arrow length
 Use arrows from left to right. Avoid mixing two directions, vertical and standing arrows may
be used if necessary.
 Use dummies freely in rough draft but final network should not have any redundant dummies.
 The network has only one entry point called start event and one point of emergence called the
end event.

Common Errors in Drawing Networks

The three types of errors are most commonly observed in drawing network diagrams
1. Dangling - To disconnect an activity before the completion of all activities in a network
diagram is known as dangling. As shown in the figure activities (5 – 10) and (6 – 7) are
not the last activities in the network. So the diagram is wrong and indicates the error of
dangling.

2. Looping or Cycling - Looping error is also known as cycling error in a network

diagram. Drawing an endless loop in a network is known as error of looping as shown in
the following figure.

3. Redundancy - Unnecessarily inserting the dummy activity in network logic is known as

the error of redundancy as shown in the following diagram
Advantages of PERT/CPM
The following are the advantages of PERT/CPM:
1. Thorough Analysis: PERT/CPM encourages managers to conduct a comprehensive
analysis of all factors that can impact project completion. Proactively identifying potential
obstacles, uncertainties, and inefficiencies, allows for effective planning and eliminates
surprises along the way.
2. Predictive Capability: PERT/CPM serves as a valuable predictive tool for assessing the
impact of schedule changes. By analyzing the network diagram, project managers can
identify potential trouble spots in advance, enabling them to take preventive measures and
mitigate risks effectively.
3. Focus on Critical Activities: PERT/CPM directs attention to critical activities where it is
most beneficial to allocate resources or expedite progress. This approach allows for
efficient resource management and effective prioritization of key tasks, ensuring that
project objectives are met.
4. Continuous Review and Adaptation: PERT/CPM emphasizes the importance of ongoing
review and updates based on feedback from all project levels. This promotes a culture of
vigilance and adaptability, enabling timely adjustments to address emerging challenges
and ensure project success.
5. Enhanced Collaboration and Communication: PERT/CPM fosters collaboration among
different departments involved in the project. By visually representing task relationships
and responsibilities, it facilitates improved communication, coordination, and cooperation
among team members, leading to better project outcomes.
6. Clarity of Individual Roles: PERT/CPM provides individuals with a clear understanding
of their roles and responsibilities within the project. Each team member can easily identify
their specific tasks and how their contributions align with the project’s objectives,
promoting a sense of ownership and accountability.

Limitations of PERT/CPM
The following are the limitations of PERT/CPM:
1. Estimation Challenges: One of the limitations of PERT/CPM is the inherent difficulty in
accurately estimating the time and cost involved in various project activities. Estimation
errors can introduce unpredictability and make the PERT chart less reliable as a control
tool for effective project management.
2. Time-Centric Focus: PERT/CPM is primarily suited for projects where time plays a
critical role. It shines in managing and controlling time-sensitive projects, but its
applicability may be constrained when other factors, such as cost or quality hold greater
significance in project outcomes.
3. Limited Applicability to Simple Projects: PERT/CPM may have limited utility in
handling straightforward, routine, and repetitive projects. Its strength lies in tackling
complex and unique projects that require intricate analysis and involve multiple
interdependent activities. In cases of continuous processes or projects with a streamlined
and predictable flow, PERT/CPM may not provide substantial advantages.

Exercise:
Determine the critical path, the critical activities and the project completion time. The
following details are available regarding a project

Solution
First let us construct the network diagram for the given project. We mark the time
estimates along the arrows representing the activities. We obtain the following diagram:
 Consider the paths, beginning with the start node and stopping with the end node. There
are two such paths for the given project. They are as follows:

Compare the times for the two paths. Maximum of {22,19} = 22. We see that path I has
the maximum time of 22 weeks. Therefore, path I is the critical path. The critical activities
are A, B, D and F. The project completion time is 22 weeks.

PROJECT DURATION AND FLOATS

Project duration refers to the length of time it takes to complete a project from start to finish. It
is the total amount of time required to complete all project activities, tasks, and milestones.

Key aspects of project duration:

1. Start date: The date when the project begins.
2. End date: The date when the project is completed.
3. Duration: The total time between the start and end dates.
4. Critical path: The longest sequence of dependent tasks that determines the minimum project
duration.
5. Float: The amount of time a task can be delayed without impacting the project duration.
6. Dependencies: Relationships between tasks that affect the project duration.
7. Resources: Availability of resources (e.g., team members, materials) can impact project
duration.
8. Task duration: The time required to complete individual tasks.

Factors that can influence project duration:

1. Scope changes
2. Resource availability
3. Task dependencies
4. Risk and uncertainty
5. Team productivity
6. External factors (e.g., weather, regulatory changes)

Float/Slack
The term “Float” implies “Fluid”, which in turn implies “Flexibility“. In Project Scheduling,
Float refers to the amount of scheduling flexibility. Float is also popularly called “Slack“
In project management, float is used to denote the extra time that a project task, a branch of
project tasks, or the entire project can be extended by.
If a task has float, you can spend more time on it than is allotted, without disrupting the rest of
the project schedule.
For example, if a task is scheduled to take 5 days to complete and it also has 5 days of float,
then you can spend 9 or even 10 days total doing that task without affecting the project schedule
in any negative way.
Conversely, if a task has 0 float, any delays on it will inevitably result in delays to all
subsequent tasks, pushing the project past its deadline, unless you perform some course
correcting.
Types of float in project management
Float is one of the very basic concepts essential for building network diagrams and in turn a
project schedule. Further, there are different types of floats such as Free float, Total float,
Project float, Interfering Float, Independent Float. As a Project Manager, you should have a
clear understanding of these concepts in order to create efficient project schedules. So, lets see.
Total Float
PMBOK defines Total Float as “The amount of time that a schedule activity can be delayed or
extended from its early start date without delaying the project finish date or violating a schedule
constraint.”
So, Total Float is about flexibility at the project level. It is about the flexibility that an activity
has in its execution without delaying the Project finish date.
Total Float Formula
Total float is calculated by subtracting the Early Start date of an activity from its Late Start date
(Late Start date – Early Start date), or Early Finish date from its Late Finish date (Late Finish
date – Early Finish date).
Total Float or Float = LS – ES or LF – EF

Free Float
PMBOK Defines Free Float as “The amount of time that a schedule activity can be delayed
without delaying the early start date of any successor or violating a schedule constraint”
So, Free Float is about flexibility at the activity level. It is about the flexibility that an activity
has in its execution without delaying its successor activity.
Free Float Formula
Free float is calculated by subtracting the Early Finish date of current activity from the Early
Start date of its successor activity (ES of successor Activity – EF of current Activity).
Free Float = ES (of successor) – EF (of current)
Total Float vs Free float
While Total Float is how much an activity can be delayed without affecting the project Finish
date, Free Float is about how much an activity can be delayed without affecting its successor
activity.
Project Float
This type of Float is not mentioned in the PMBOK, but is present in some reference books.
It is the amount of time a Project can be delayed without delaying the externally imposed
project finish date by the customer, or the project finish date previously committed to by the
Project Manager.
Free & Total Floats are about the time an activity can be delayed, while Project float is the
amount of time a Project can be delayed.

Interfering Float (INTF)

Interfering Float is the amount of time a schedule activity can be delayed or extended from its
early start date without delaying the project finish date. However, it should be understood that
delaying an activity into interfering float will delay the start of one or more following non-
critical activities. If an activity is delayed for the amount of the Free and Interfering Float, then
its successor activities are critical.
Interfering Float Formula
Interfering Float = Total Float – Free Float

Independent Float (INDF)

Interfering Float is the maximum amount of time an activity can be delayed without delaying
the early start of the succeeding activities and without being affected by the allowable delay of
any predecessor activity.

Independent Float Formula

Independent Float (INDF) = Earliest Successors’ Early Start – Earliest Predecessors’ Late
Finish – Activity’s duration
when the INDF is a negative value, we set the value to zero.

CRASHING
Crashing, in the context of project management, is a technique used to fast-track a project by
allocating more resources to critical tasks. It is a viable method to reduce the project’s overall
duration by decreasing the time spent on critical activities. This is achieved by increasing
expenditures on resources such as manpower, equipment, or materials. In some cases, it may
also involve reallocating these resources from non-critical activities.
Crashing comes into effect when a project faces unexpected delays or when it is required to be
completed in a shorter time frame. For example, if a client advances the delivery date, or
an unforeseen event pushes the project behind schedule, crashing can be used to get back on
track. However, it is important to note that this technique should only be employed when the
cost of not delivering on time is higher than the cost of crashing.

Contrary to popular belief, crashing is not just about throwing more resources at the project.
While it does involve intensifying resource utilization, crashing is different from other project
management techniques such as fast-tracking. The latter is more about rearranging the schedule
to work on multiple activities concurrently, rather than the concentrated effort on specific
activities seen in crashing. Understanding these distinctions makes crashing crucial for project
managers.

Techniques for Crashing a Project

Crashing a project requires substantial planning and a certain technique. The first step in this
technique often involves a comprehensive examination and understanding of the project
schedule. You must review every project task, understanding their interdependencies and the
time they will take. Moreover, it is essential to compare the planned schedule with the desired
one. With the analysis completed, we can then identify the specific tasks that need to be
shortened to speed up the project completion. This process may involve adding more resources,
optimizing task performance, or outsourcing particular tasks.

Before implementing the crashing technique, several crucial factors need to be taken into
account. Firstly, you need to confirm that the tasks you plan to crash will indeed result in a
shorter project duration. Not all jobs are suitable for crashing, and some may even increase
project time if not correctly managed. Secondly, you must calculate the cost implications of
crashing. Crashing typically inflates project costs, and you need to guarantee that these
increased costs can be offset by the time saved. Lastly, consider the possibility of risks and
uncertainties that could emerge. Crashing tends to heighten project risk, so a comprehensive
risk assessment must be undertaken.

Let’s explore specific instances of successful project crashing in project management. A famous
example is the construction of the Empire State Building. Even with the Great Depression on
the horizon, the builders completed the construction ahead of schedule by using the crashing
technique – adding more workers and resources, and working multiple shifts, without
compromising quality or safety. In another example, a software company that was behind
schedule hired an extra team of developers and instituted 24-hour coding shifts to crash the
project and meet the deadline. Both cases underscore how effective project crashing can be
when performed correctly, offering solid solutions for delivering projects on time without
sacrificing quality or safety.

The Benefits of Crashing in Project Management

The first substantial benefit of utilizing crashing in project management focuses on significantly
reducing project duration. Crashing essentially accelerates a project by allocating more
resources to a task or sequence of tasks, thus speeding up the time required to complete those
tasks. For example, if a project was originally scheduled to take eight months to complete, using
the crashing technique might allow for it to be completed in six months or less.

Moreover, crashing offers unique advantages for risk mitigation. From a strategic perspective,
reducing the project’s duration through crashing decreases the probability of encountering
potential risks or uncertainties. This reduced timeframe often helps in minimizing the risk
associated with factors such as market instability, unexpected competition, or resource
availability that might negatively affect the project’s outcome. Therefore, the skillful application
of crashing can result in a safer, more stable project environment.

Lastly, the potential cost benefits of crashing should not be overlooked. While it may seem
counterintuitive given that crashing often involves the use of additional resources, there is,
however, a parallel reduction in indirect project costs. For example, the costs associated with
prolonged project supervision, rentals, or administrative costs can be lessened by delivering the
project early. Thus, while crashing may require an upfront investment, often in the form of
increased manpower or equipment, the overall project costs may be equivalent, or possibly even
lower, than if crashing was not implemented.

In summary, the benefits gained from efficiently crashing a project, in terms of reduced
duration, risk mitigation, and potential cost savings, provide a compelling argument for
consideration of this technique in project management. However, like any powerful tool, its use
should be done judiciously, keeping in mind the overall project context and the potential risks
and limitations that could be associated.

The Risks and Limitations of Crashing

As powerful a tool as ‘crashing’ may be in project management, it’s important to recognize the
inherent risks and limitations that come with it. Irrespective of context, making a decision to
crash a project calls for a careful risk-benefit analysis. For instance, crashing can lead to a
significant increase in project costs, as resources are allocated at an increased rate to fast-track
tasks. There are also chances of quality being compromised, as the emphasis on speed may take
away focus from crucial details.

Crashing also has its limitations and presents challenges when it comes to implementation. Not
all tasks in a project can be crashed. Only those tasks that are on the critical path and capable of
being accelerated can be crashed. Also, being faster might not always be better. Extra
manpower or resources may not necessarily shorten your project timeline due to the principle of
diminishing returns. Plus, in some cases, crashing may lead to over-exhaustion of resources and
result in team burnout.

However, considering these risks and limitations, strategies exist that can mitigate potential
pitfalls. Developing a comprehensive plan before deciding to crash a project is crucial. This
includes effectively communicating with your team about the changes, ensuring there are no
ambiguities. Secondly, while the focus is on speeding up, quality should not be ignored. Regular
monitoring and controlling should be enforced to keep the project on the right track.
Implementing these strategies could potentially minimize the risks and surpass the potential
downsides of crashing in project management.

In conclusion, understanding both the risks and rewards is essential to mastering the technique
of ‘crashing’ and creating a successful project management strategy. It’s all about striking a
balance between accelerating project timelines and managing the increased risk and cost,
ensuring projects are delivered on time, within budget, and to the desired quality.
RESOURCE LOADING AND LEVELING
In project management, resource loading and resource leveling are two key techniques used to
manage the allocation and utilization of resources (such as people, equipment, or materials)
across project tasks. These techniques help ensure that resources are used efficiently and that
project schedules are realistic and achievable.

Resource loading - Resource loading is the process of filling team members' available hours
with project tasks. It involves assigning resources to project tasks based on their availability and
the project's needs. It essentially provides a snapshot of how much work a resource is assigned
over a specific period. The primary goal is to ensure that resources are allocated in a way that
meets project requirements without overloading any individual resource.
In resource loading, an employee will typically be assigned a percentage of a project, and can
then be assigned additional project percentages until that employee reaches 100% of their
hourly work week capacity. Once an employee reaches 100%, they are effectively booked and
should not be scheduled for more work. By looking at a resource loading chart, a manager can
view the total hours their employees can work for a given time period and adjust each team
member’s assignments accordingly.
How to calculate resource load in project management,
1. Find the assigned hours for a team member during a specific period.
2. Find the available hours for the same team member during the same period.
3. Calculate the ratio by dividing assigned hours by available hours.
Step 1: Find assigned hours
Before you find the assigned hours for a team member, you must:
 Make a list of project tasks using the Work Breakdown Structure.
 Estimate effort hours for each of the project tasks.
 Assign each project task to a team member.
With these two steps done, you can easily find the assigned hours for a team member on a day,
week, or month.
But sometimes, things become a little more complex.
As a project manager, you often share critical resources across multiple projects. For example, a
graphic designer may work on multiple projects during the week. In such situations, consider
resource assignments across all projects.
Toggl Plan’s Team Timeline shows you color-coded resource loading across multiple projects.
Step 2: Find available hours
To find the number of hours a resource is available for a project, you need the following:
 Initial capacity: The number of work hours in a specific period. For example, in a 5-
day work week at 8 hours per day, the initial capacity is 40 hours. If a team member is
shared equally across two projects, the capacity is 20 hours.
 Time off hours: These account for public holidays and vacations.
 Culture hours: Besides project hours, team members often attend internal meetings,
training, and other activities.
 Available capacity: The hours left after removing time off and culture hours from the
initial capacity.
 Utilization rate: It’s unreasonable to expect people to work 100% of their available
capacity. Unaccounted activities, from coffee breaks to work-related chats, eat into
capacity hours. A good benchmark to aim for is 80% of the available capacity.
To get available hours, simply subtract the time off and culture hours from the initial capacity
and then find the target utilization. Here’s an example:

Metric Calculation Example value

Initial Capacity (IC) 5 days x 8 hours 40 hours

Time off (TO) actual 8 hours

Culture Hours (CH) actual 2 hours

Available Capacity (AC) IC – TO – CH 30 hours

Available Hours 80% of AC 24 hours

Resource loading example – calculate available hours

To keep things simple, you can also disregard time off and culture hours, as they happen once in
a while. In such a case, your Available Hours will be calculated as 80% of your Initial Capacity.
Step 3: Calculate resource loading ratio
Finally, you can calculate resource loading ratio using the formula:
resource load = assigned hours / available hours
And, here’s what the result means:

Loading ratio Diagnosis Implication

< 1.0 The resource is under-utilized Can possibly take on more work

1.0 The resource is optimally utilized No buffer room for emergencies

> 1.0 The resource is over-utilized Can result in stress and, eventually, burnout

Now you know how to calculate the resource loading ratio for one team member. But how do
you do it for the entire team?
That’s where a resource loading chart can help.
What is a resource loading chart?
A resource loading chart is a graphical representation of the resource load across all critical
resources.
It helps project managers understand if their project team is over, under, or optimally loaded. It
also helps understand if the team can take up more work, such as last-minute change requests.
Free resource loading chart template

Free
resource loading matrix/chart template
Resource Leveling
Resource leveling refers to the process of evenly distributing resources across different tasks to
maximize efficiency and minimize conflicts. It is a technique in project management that
resolves various conflicts, such as schedule conflicts or over or under-allocation of resources, to
ensure that the available resources can be utilized to their fullest extent and the project gets
completed at the earliest.

In simple terms, resource leveling aims to balance the workloads of individuals or teams
involved in a project. It ensures that no one is overburdened with excessive work while others
are left with insufficient tasks.

Resource leveling takes into account factors such as resource availability, project priorities, and
dependencies among tasks. By strategically assigning resources, project managers can optimize
productivity, meet deadlines, and minimize bottlenecks.

Key concepts of resource leveling include:

1. Project timeline management: Involves strategically delaying project segments for
consistent resource allocation throughout.
2. Priority setting and Critical Path Analysis: Identifies and prioritizes urgent
tasks, optimizing resource allocation along the critical path for efficient milestone
achievement.
3. Optimal resource allocation throughout the project lifecycle: Strategically distributes
resources to meet project demands at each stage, enhancing efficiency and minimizing
bottlenecks.
4. Dynamic resource juggling: Acknowledges project dynamics, allowing for flexible
resource reallocation to adapt to shifting priorities or unexpected events.

Resource leveling techniques

Resource leveling is essentially about smoothing out the ups and downs in resource allocation to
ensure resources are utilized efficiently. There are several strategies you can use to achieve
effective resource leveling. Some of these techniques include critical path analysis, fast
tracking, crashing, critical chain method, and task dependency analysis. Here are 5 such
effective strategies for resource leveling:
1. Prioritizing tasks based on critical path analysis
Developing a critical path analysis is a powerful technique to implement resource leveling
effectively. A critical path refers to the series of tasks that directly impact the project's deadline.
These activities should be prioritized over other tasks that may be less time-sensitive. By
focusing on tasks on the critical path, resources can be allocated in a way that optimizes the
schedule and helps to avoid delays.
2. Fast tracking
Fast tracking is another handy technique for resource leveling. It involves performing certain
tasks in parallel that would otherwise be done sequentially. So, instead of waiting for the
completion of a particular task to start with the next task, both tasks can be worked on
simultaneously. Fast tracking can help optimize resource usage and imporve project delivery.
3. Crashing
Crashing refers to a method where additional resources are allocated to tasks to accelerate
project completion. This may involve extra manpower, equipment, or even longer work hours.
While this approach can also speed up the completion of the project and accelerate timelines, it's
important to strike a balance as it can lead to higher project costs or even resource burnout.
4. Critical Chain Method (CCM)
The Critical Chain Method (CCM) is a project management technique that puts a primary focus
on the project’s resources. It requires building a project model that includes all the planned
activities, linking them with their dependencies, and ensuring they align with the resource
availabilities. This method is especially useful when your resources are limited or when they are
assigned to multiple tasks simultaneously.
5. Task dependency analysis
Task dependency analysis is a great way to ensure effective resource leveling. This technique
involves identifying and understanding the relationships and dependencies among different
tasks. Planning and sequencing dependent tasks can ensure smoother workflows and better
resource allocation. For instance, a task that is dependent on another one should be scheduled
after the task it depends on has been completed.
Effective resource leveling is the art of finding balance in your project – between workload and
resource capacity, and between priority and feasibility. It requires careful planning, flexibility,
and continuous monitoring to make adjustments as necessary.

SIMULATION FOR RESOURCE ALLOCATION

Cost modeling simulation is a powerful tool that allows organizations to analyze and optimize
their resource allocation strategies. By simulating different scenarios and evaluating the costs
and benefits associated with each option, businesses can make more informed decisions about
how to allocate their resources effectively.

Cost modeling simulation is a technique that involves creating mathematical models to

represent the costs and benefits of different resource allocation strategies. These models are then

simulated to generate various scenarios and evaluate the potential outcomes. By using cost

modeling simulation, organizations can gain insights into the financial implications of

different resource allocation decisions, enabling them to make more informed and effective

choices.

One popular method of cost modeling simulation is Monte Carlo simulation. This technique

involves running thousands of simulations, each with different inputs and assumptions, to

generate a range of possible outcomes. By averaging the results of these simulations, businesses

can obtain a more accurate estimate of the expected costs and benefits of each resource

allocation option.

Benefits of Cost Modelling Simulation in Resource Allocation

Implementing cost modeling simulation in resource allocation offers numerous benefits to

organizations. Let's explore some of the key advantages:

1. Optimized decision-making: Cost modeling simulation provides organizations with a

systematic approach to decision-making. By quantifying the costs and benefits of different

resource allocation options, businesses can identify the most cost-effective strategies that

generate the highest return on investment.

2. Risk mitigation: Resource allocation decisions are often associated with inherent risks. Cost

modeling simulation allows organizations to assess the potential risks associated with different

scenarios and make informed decisions accordingly. By understanding the potential risks and

their financial impact, organizations can take proactive measures to mitigate them.

3. Improved resource utilization: Cost modeling simulation helps organizations optimize their

resource utilization. By simulating different resource allocation scenarios, businesses can

identify bottlenecks, inefficiencies, and underutilized resources. This insight enables

organizations to reallocate resources more effectively, reducing waste and

maximizing productivity.

4. Enhanced forecasting: Cost modeling simulation provides organizations with a powerful

forecasting tool. By simulating different scenarios and evaluating their costs and benefits,

businesses can gain insights into future resource allocation needs and challenges. This enables

organizations to plan ahead and make informed decisions based on accurate forecasts.

5. Competitive advantage: Implementing cost modeling simulation in resource allocation can

give organizations a competitive edge. By making data-driven decisions and optimizing

resource allocation, businesses can increase efficiency, reduce costs, and deliver

superior products and services to customers. This can help organizations outperform their

competitors and achieve sustainable growth.

Steps to Implement Cost Modelling Simulation

Implementing cost modeling simulation in resource allocation requires careful planning and

execution. Here are the key steps involved in the process:

1. Define the problem: Clearly define the resource allocation problem you want to solve.

Identify the goals, constraints, and desired outcomes of the allocation process. This will provide

a foundation for modeling and simulation.

2. Gather data: Collect relevant data about the resources, costs, and benefits associated with

different allocation options. Ensure the data is accurate, comprehensive, and up-to-date. This

data will be used to create the cost models and simulate various scenarios.

3. develop cost models: Use the gathered data to develop mathematical models that represent

the costs and benefits of different allocation strategies. Consider factors such as labor costs,

material costs, equipment costs, and potential revenue or cost savings associated with each

option.

4. Validate and calibrate models: validate the accuracy and reliability of the cost models by

comparing their outputs with real-world data. Calibrate the models by adjusting the input

parameters to match historical data or expert opinions. This ensures the models accurately

represent the resource allocation problem.

5. Run simulations: Use the validated and calibrated cost models to run simulations. Generate a

range of scenarios by varying the input parameters and assumptions. Run a sufficient number of

simulations to obtain statistically significant results.

6. Analyze results: Analyze the results of the simulations to identify trends, patterns, and

insights. Compare the costs, benefits, and risks associated with each resource allocation option.

Identify the optimal strategies that provide the desired outcomes while minimizing costs and

risks.

7. Make informed decisions: Based on the analysis, make informed decisions about resource

allocation. Consider the trade-offs between costs, benefits, and risks. Select the allocation

strategies that align with the organization's goals and objectives.

8. Monitor and refine: Continuously monitor the performance of the allocated resources and

refine the cost models as new data becomes available. incorporate feedback from

stakeholders and adjust the models based on real-world observations. This iterative process

ensures continuous improvement in resource allocation.

By following these steps, organizations can implement cost modeling simulation effectively and

unlock its potential in resource allocation.

Challenges and Limitations of Cost Modelling Simulation in Resource Allocation

While cost modeling simulation offers numerous benefits, it is important to consider the

challenges and limitations associated with its implementation. Let's explore some of these:

1. Data availability and accuracy: Cost modeling simulation relies heavily on accurate and

comprehensive data. Gathering relevant data can be challenging, especially when dealing with

complex and dynamic resource allocation problems. Inaccurate or incomplete data can lead to

unreliable simulation results and suboptimal decisions.

2. Model complexity and interpretation: Developing accurate cost models can be a complex

task. The models must capture the various factors that influence resource allocation, such as

costs, benefits, constraints, and uncertainties. Interpreting the simulation results and making

informed decisions based on the complex outputs can also be challenging.

3. Assumptions and uncertainties: Cost modeling simulation involves making assumptions

and dealing with uncertainties. The accuracy of the simulation results heavily relies on the

accuracy of these assumptions. Uncertainties, such as market dynamics, changing customer

preferences, or unforeseen events, can impact the reliability of the simulation outcomes.

4. Resource constraints: Resource allocation problems often involve constraints, such as

budget limitations or resource availability. Modeling these constraints accurately and

incorporating them into the simulation can be challenging. Failure to consider constraints

adequately can result in unrealistic or infeasible resource allocation strategies.

5. Organizational resistance and culture: Implementing cost modeling simulation may face

resistance from stakeholders who are skeptical or reluctant to adopt new approaches.

Overcoming resistance and fostering a culture of data-driven decision-making can be a

challenge for organizations.

Despite these challenges, organizations can overcome them by investing in data collection and

analysis capabilities, building internal expertise, and fostering a culture of openness to

new approaches and continuous improvement.

GOLDRATT’S CRITICAL CHAIN

The Critical Chain Project Management (CCPM) paradigm represents a project

management approach developed by ecologist Eliyahu M. Goldratt in the 1990s, and it is
based on the Theory of Constraints (TOC). This goal involves rationalizing inputs and
reducing the expected adverse effects of uncertainties and variabilities.
The Critical Chain method has been widely adopted in various industries, particularly where
project timelines are critical, such as construction, software development, and manufacturing. It
offers a structured approach to project management, helping teams to focus on key tasks and
manage uncertainties effectively.
The Key Components of a Critical Chain
 Critical Tasks: The constraints of these tasks can constrain the vital path, which is the
path with the greatest likelihood of enduring the project’s total duration. Jobs like this
allow no comfort zone and have no float or slack which implies any slight delay will
negatively affect the project progress.
 Resource Dependencies: A critical chain is tailored to resource dependencies, and
therefore, task durations differ due to two reasons: their inherent duration and the
availability of required resources for completion. From the point of the resources, that are
available on a critical chain, are what will determine the entire project timeframe.
 Resource Buffers: Critical tasks may be covered by resource buffers, which in turn may
be included in the critical chain to avoid schedule slacks due to resource scarcity or lack of
resource visibility. These buffers, among others, have assigned sensitive jobs to have an
allowance to stay within the resource fluctuations without affecting the project’s
chronology.
 Project Buffer: The buffer is located after the critical chain schedules the critical path
task, to overcome potential delays in their completion. It stands for part of the total project
duration after it is applied to the entire project to allow consideration of uncertainties and
variations in time which specific events may take on the critical chain.
 Buffer Management: Careful planning of the buffers is one of the key features of the
CCPM methodology. Project managers, throughout the process, monitor how buffers are
consumed and used in the project. Thus, avoid the use of excessive buffers which protect
against delays to avoid unnecessary padding of task durations.
 Dynamic Resource Allocation: Plan replication of resources across the critical tasks
within the critical path to guarantee their due-time delivery. Efforts are undertaken to
mitigate the impacts of resource limitation by ensuring that resources aren’t overused and
that there’s proper resource utilization.
Steps for using the Critical Chain Project Management Process

1. Identify the Critical Chain

The first step in the Critical Chain Project Management (CCPM) is to identify the Critical
Chain, that runs alongside sequentially dependent tasks, considering the availability of
resources as constraints. The considerations start with a deep investigation of the Schedule
network diagram which illustrates different duties and their inter-dependencies. Resource
limitations are identified next and the effect on task completion is taken into account to make
sure that the timing reflected scheduling processes realistically. The Critical Chain is derived
by these constraints under which the tasks along it having no slack or float are the main ones
that transition any delay in them directly into the project timeline.
2. Schedule and Buffer Management
The Critical Chain has been identified, and we will build a project schedule around it, doing
our best to allocate resources to critical tasks (which occur first) to avoid them running late.
By buffers, uncertainties and variability are factored in to enable proper task flow, with
feeding buffers being placed before non-critical jobs. Moreover, while the critical chain is to
be finished at the end of the plan, a project buffer is built to cover delays in the critical path to
serve as a margin for unexpected interruptions.
3. Resource Allocation and Management
Resource allocation and management being other portions of CCPM, space-holders include
decision-making on the allocation of resources to important job activities in the Critical
Chain, aiming to keep the project momentum. The usage of resources is monitored strictly
with the questions regarding the constraints of resources solved immediately to reduce
contention and increase efficiency in resource usage. Resource buffers are used effectively to
protect key tasks from delays caused by inadequacies or uncertainties of resource availability,
whereas resource levelling is played to balance the usage of resources across the project.
4. Buffer Monitoring and Control
Additionally, buffer monitoring and control provide accurate and detailed project reporting
and timely identification of issues that can affect project development. Ongoing assessment of
buffer use permits the manager to realize the risks and uncertainties ahead of the situation.
This standing makes a manager’s budget buffers judiciously to prevent time delays. To react
to the overconsumption of buffers, and to the changing project processes – project plans as
well as resource allocations are adjusted integrally so that it is possible to make agile
responses to the flux of the project, and thus it is possible to maintain the project momentum
towards successful completion.
Types of Buffers
Here are the following types of Buffers:
1. Project Buffer
 The project buffer, which is an element of time that is built into the project schedule at the
last phase, is a sort of addition to the critical path that serves as protection against delays
of the critical path activities. The resource is what we term the additional time, the extra
time that the project team is getting to do all its tasks without being much affected by
unpredictable events.
 The Project Buffer is the equivalent of a safety net. So, when the project gets
unanticipated delays, it will be able to absorb the delays without affecting the project’s
end date as planned.
 Delivery buffers Projects often stretch over a long time several processes are being carried
out. While being managed through the whole project’s period in a way to allow to track
the consumption and making sure the development process does not come to a stop.
2. Feeding Buffer
 The Feeding Buffer is a feeder of latent tasks to the critical path and is located upstream
before non-critical tasks. These buffers protect against delays resulting from the non-
critical tasks and ensures that a critical path is kept unrestricted.
 With the feeding buffers located appropriately, it helps project managers keep an even
conversion of the work to the critical tasks without a break. In case of non-critical tasks
taking up more time, the feeding buffers do that if this cannot happen, the delays starting
the non-critical task would never affect the critical path.
 Feeding Buffers are one of the major factors residing by project managers to maintain the
pace of workflow along the critical path and ultimately the project stays on schedule.
3. Resource Buffer
 Resource Buffer is the buffer allocated before critical tasks to let them have an uptime
duration, on which they may not be affected by resource deficiency or resource
fluctuations.
 Buffer resource groups are designed to provide tasks with assurances that they get enough
flexibility to deal with deviations in resource accessibility without preparing to alter
planned survival times. This gap acts as an emergency fund, covering what seems to be
resource-related delays, and reducing the risks of serious trouble in such projects.
 Buffers are very relevant in resource-constrained settings when the other competitors or
operational demands tend to curb the availability of resources for key activities.
 SCHOOL OF BUSINESS ADMINISTRATION

UNIT – IV –ORGANISATION STRUCTURE AND MANAGEMENT – SBAB7036

THE PROJECT ORGANIZATION STRUCTURE

A project organization is a structure that facilitates the coordination and implementation of

project activities. Its main reason is to create an environment that fosters interactions among the
team members with a minimum amount of disruptions, overlaps and conflict. One of the
important decisions of project management is the form of organizational structure that will be
used for the project.

Each project has its unique characteristics and the design of an organizational structure should
consider the organizational environment, the project characteristics in which it will operate, and
the level of authority the project manager is given. A project structure can take on various forms
with each form having its own advantages and disadvantages.

One of the main objectives of the structure is to reduce uncertainty and confusion that typically
occurs at the project initiation phase. The structure defines the relationships among members of
the project management and the relationships with the external environment. The structure
defines the authority by means of a graphical illustration called an organization chart.

A properly designed project organization chart is essential to project success. An organization

chart shows where each person is placed in the project structure. An organization chart is drawn
in pyramid form where individuals located closer to the top of the pyramid have more authority
and responsibility than members located toward the bottom. It is the relative locations of the
individuals on the organization chart that specifies the working relationships, and the lines
connecting the boxes designate formal supervision and lines of communication between the
individuals.
 Project Organization Chart

Creating the project structure is only a part of organizing the project; it is the actual
implementation and application that takes the most effort. The project organization chart
establishes the formal relationships among project manager, the project team members, the
development organization, the project, beneficiaries and other project stakeholders. This
organization must facilitate an effective interaction and integration among all the major project
participants and achieve open and effective communication among them.

The project manager must create a project structure that will meet the various project needs at
different phases of the project. The structure cannot be designed too rigid or too lose, since the
project organization's purpose is to facilitate the interaction of people to achieve the project
ultimate goals within the specified constraints of scope, schedule, budget and quality. The
objective in designing a project structure is to provide a formal environment that the project
manager can use to influence team members to do their best in completing their assignment and
duties. The structure needs to be designed to help develop collaboration among individual team
members; all in a cost effective way with a minimum of duplication of effort and overlaps.
The organization chart has a limited functionality; it only shows the hierarchical relationship
among the team members but does not shows how the project organization will work, it is for
that reason that the design should consider factors that will facilitate the operation of the
structure; these include communications, information flows, coordination and collaboration
among its members.

FACTORS IN DESIGNING A PROJECT STRUCTURE

There are two design factors that significantly influence the process of developing a project
management structure. These are the level of specialization, and the need for coordination. The
project manager should consider these factors at the moment of designing the project
organization in order to maximize the effectiveness of the structure.

Specialization affects the project structure by the degree of specialty in technical areas or
development focus; projects can be highly specialized and focus on a specific area of
development, or have different broad specializations in many areas of development. For large
projects that have multiple specializations or technical areas, each area may have a different
need; from differences in goals, approaches and methodologies, all of which influence the way
the project will implement its activities. A project that has two components, a reconstruction and
education, will need to manage different approaches based on the specialization of each one. In
the education component, the needs is for a structure more open and informal, where the time
horizon is longer, with more emphasis on sharing and generation of new ideas in order to achieve
innovation and creativity. In a reconstruction component, there are specific goals, a need for a
rigid, hierarchical structure, and there is a defined time horizon with little sharing of ideas. While
specialization allows each project component to maximize their productivity to attain their
departmental goals, the dissimilarities may lead to conflict among the members or leads of each
component. In general, the greater the differences, the more problems project managers have in
getting them to work together.

Coordination is required to bring unity to the various elements that make up a project. The
project work is organized around a work breakdown structure (WBS) that divides the overall
project goals into specific activities or tasks for each project area or component; the
project manager must design an organizational structure that ensure that the various components
are integrated so that their efforts contribute to the overall project goal. Integration is the degree
of collaboration and mutual understanding required among the various project components to
achieve project goals. Most projects are characterized by the division of labor and task
interdependencies, creating the need for integration to meet project objectives. This need is
greatest when there are many project components that have different specializations. The goal of
the project management structure is the achievement of harmony of individual efforts toward the
accomplishment of the group goals. The project manager's principal responsibility is to develop
integrating strategies to ensure that a particular component or activity is organized in a way that
all of the components, parts, subsystems, and organizational units fit together as a functioning,
integrated whole according to the project master plan.

TYPES OF PROJECT ORGANIZATIONS STRUCTURES

Of the several factors to consider when deciding on the design of project organizational
structures, especially within an existing organization, the factor that has a significant is the extent
of authority and responsibility top management is prepared to delegate to the project manager.
An important function of the organizations’ top management is to design an organization that
fully supports project management. This is done by redesigning the organization to emphasize
the nature of the projects and adapting how roles and responsibilities are assigned.

The organization needs to define the project manager’s job, degree of authority and autonomy,
and relationship to both the organization, other projects and to other units in the organization.
Upper management also should specify communication channels, methods of conflict resolution
between the project and the rest of the organization. Development organizations are usually
organized around programmatic focus areas such as health or education. These areas are usually
called program units and are centered on a specific development field. In this environment a
project has three organization structures available for design and all are defined by the level of
organizational authority given to the project manager:
• Programmatic based, in which project managers have authority only within the program
focus or area
• Matrix based, in which the project manager shares responsibility with other program
unit managers
• Project based, in which project managers have total authority.

Programmatic Based

The programmatic focus refers to a traditional structure in which program sector managers have
formal authority over most resources. It is only suitable for projects within one program sector.
However, it is not suitable for projects that require a diverse mix of people with different
expertise from various program sectors. In a programmatic based organization, a project team is
staffed with people from the same area. All the resources needed for the project team come from
the same unit. For instance, if the project is related to the health area, the project resources come
from the health unit.

Director

Program Manager Program Manager Program Manager

Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff

Staff Staff

The most obvious advantage of programmatic based projects is that there are clear lines of
authority, in large projects the project managers tend to also be the program unit manager. There
is not need to negotiate with other program units for resources, since all of the staff needed for
the project will come from the same program area. Another advantage of this type of
organization is that the team members are usually familiar with each other, since they all work in
the same area.

The team members also tend to bring applicable knowledge of the project.

A major disadvantage of the programmatic based organization is that the program area may not
have all of the specialists needed to work on a project. A nutrition project with a water
component, for instance, may have difficulty acquiring specialty resources such as civil
engineers, since the only people available will work in their own program unit. Another
disadvantage is that project team members may have other responsibilities in the program unit
since they may not be needed full- time on a project. They may be assigned to other projects, but
it is more typical that they would have support responsibilities that could impact their ability to
meet project deadlines.

Matrix Based

Matrix based project organizations allow program units to focus on their specific technical
competencies and allow projects to be staffed with specialists from throughout the organization.
For instance, nutrition specialists may report to one program unit, but would be allocated out to
work on various projects. A health specialist might report to the health unit, but be temporarily
assigned to a project in another project that needs health expertise. It is common for people to
report to one person in the programmatic unit, while working for one or two project managers
from other projects in different programmatic units.
The main advantage of the matrix based organization is the efficient allocation of all resources,
especially scarce specialty skills that cannot be fully utilized by only one project. For instance,
monitoring and evaluation specialists may not be utilized full-time on a project, but can be fully
leveraged by working on multiple projects.

Director

Program Manager Program Manager

Program Manager

Staff Staff
Project Manager Staff
Staff Staff

Project Manager Staff Staff Staff

Project Manager Staff Staff

The matrix based organization is also the most flexible when dealing with changing
programmatic needs and priorities. Additional advantages to matrix management are: it allows
team members to share information more readily across the unit boundaries, allows for

specialization that can increase depth of knowledge and allow professional development and
career progression to be managed. It is easier for a program unit manager to loan an employee to
another manager without making the change permanent. It is therefore easier to accomplish work
objectives in an environment when task loads are shifting rapidly between programmatic units.

The main disadvantage is that the reporting relationships are complex. Some people might report
to programmatic unit managers for whom little work is done, while actually working for one or
more project managers. It becomes more important for staff members to develop strong time
management skills to ensure that they fulfill the work expectations of multiple managers. This
organization also requires communication and cooperation between multiple programmatic unit
managers and project managers since that all be competing for time from the same resources.

Matrix management can put some difficulty on project managers because they must work closely
with other managers and workers in order to complete the project. The programmatic managers
may have different goals, objectives, and priorities than the project managers, and these would
have to be addressed in order to get the job done. An approach to help solve this situation is a
variation of the Matrix organization which includes a coordinating role that either supervises or
provides support to the project managers. In some organizations this is know as the Project
Management Office (PMO), dedicated to provide expertise, best practices, training,
methodologies and guidance to project managers.

Director

Program Manager Program Manager

Program Manager

Staff Staff
Project Manager Staff
Staff Staff

Project Manager Staff Staff Staff

Project Manager Staff Staff

The PMO unit also defines and maintains the standards of project management processes within
the organization. The PMO strives to standardize and introduce economies of scale in the
implementation of projects. The PMO is the source of documentation, guidance and metrics on
the practice of project management and implementation. The PMO can also help in the
prioritization of human resources assigned to projects.
Project Based

In this type of organization project managers have a high level of authority to manage and
control the project resources. The project manager in this structure has total authority over the
project and can acquire resources needed to accomplish project objectives from within or outside
the parent organization, subject only to the scope, quality, and budget constraints identified in the
project.

In the project based structure, personnel are specifically assigned to the project and report
directly to the project manager. The project manager is responsible for the performance appraisal
and career progression of all project team members while on the project. This leads to increased
project loyalty. Complete line authority over project efforts affords the project manager strong
project controls and centralized lines of communication. This leads to rapid reaction time
and improved responsiveness. Moreover, project personnel are retained on an exclusive rather
than shared or part-time basis. Project teams develop a strong sense of project identification and
ownership, with deep loyalty efforts to the project and a good understanding of the nature of
project’s activities, mission, or goals.
Pure project based organizations are more common among large and complicated projects. These
large projects can absorb the cost of maintaining an organization whose structure has some
duplication of effort and the less than cost-efficient use of resources. In fact, one major
disadvantage of the project based organization is the costly and inefficient use of personnel.
Project team members are generally dedicated to one project at a time, even though they may
rarely be needed on a full-time basis over the life cycle of the project. Project managers may tend
to retain their key personnel long after the work is completed, preventing their contribution to
other projects and their professional development.

In this type of organization, limited opportunities exist for knowledge sharing between projects,
and that is a frequent complaint among team members concerning the lack of career continuity
and opportunities for professional growth. In some cases, project personnel may experience a
great deal of uncertainty, as organization’s or donor’s priorities shift or the close of the project
seems imminent.

One disadvantage is duplication of resources, since scarce resources must be duplicated on

different projects. There can also be concerns about how to reallocate people and resources when
projects are completed. In a programmatic focus organization, the people still have jobs within
the program unit. In a project-based organization it is not always clear where everyone is
reassigned when the project is completed. Another disadvantage is that resources may not be
needed as a full time for the entire length of the project, increasing the need to manage short term
contracts with consultants and other subject matter experts.

A variety of this pure project approach is temporarily project-based organizations. This

organization consists of a project team pulled together temporarily from their program unit and
led by a project manager that does not report to a programmatic unit. The project manager has
the full authority and supervision of the project team.

Another design is based on a mixed structure that includes a matrix, programmatic focus and
project based; this mix reflects the need for more flexibility in a development organization to
accommodate different requirements. For example a health program may have a couple of
projects short term and long term all reporting to the program manager. An education project
may be organized on a matrix using resources part-time from other units, and a large water
project organized as a fully project-based were all staff report to the project manager. It is not
unusual to find this type of mixed designs on development organizations.

MANAGEMENT STYLES

Organization culture is a strong influence on the type of management styles that can be used on
projects. The local culture, customs and social dynamics also influence the management style;
along with the nature of the project, the nature of the team and the personality and skills of the
project managers. There are four distinct organizational management styles that have a strong
influence on how project are managed:

• Autocratic
• Paternalistic
• Democratic
• Laissez-faire

Autocratic or authoritarian, the manager makes all the decisions, keeping the information and
decision making among the senior management. Objectives and tasks are set and the workforce
is expected to do exactly as required. The communication involved with this method is mainly
downward, from the leader to the subordinate; this method can lead to a decrease in motivation
from the employee's point of view. The main advantage of this style is that the direction of the
organization will remain constant, and the decisions will all be similar, this in turn can project an
image of a confident, well managed organization. On the other hand, team members may become
highly dependent upon the project manager’s and supervision may be needed.

Paternalistic form is where the manager makes decisions in the best interests of the employees
rather than the organization. The manager explains most decisions to the team members and
ensures that their social and leisure needs are always met. This can help balance out the lack of
staff motivation caused by an autocratic management style. Feedback is again generally
downward; however feedback to the management will occur in order for the employees to be
kept happy. This style can be highly advantageous, and can engender loyalty from the
employees, leading to a lower staff turnover, thanks to the emphasis on social needs. It shares
similar disadvantages to an authoritarian style; employees becoming highly dependent on the
leader, and if the wrong decisions are made, then employees may become dissatisfied with the
leader.

Democratic style is one where the manager allows the employees to take part in decision-
making, where everything is agreed by the majority. This style can be particularly useful when
complex decisions need to be made that require a range of specialist skills. From the overall
organization’s point of view, job satisfaction and quality of work will improve. However, the
decision-making process is severely slowed down, and the need of a consensus may avoid taking
the best decision for the project.

Laissez-faire style, the manager's role is marginal and the employees manage their own areas
within the project; the manager evades the duties of management and uncoordinated delegation
occurs. The communication in this style is horizontal, meaning that it is equal in both directions,
however very little communication occurs in comparison with other styles. The style brings out
the best in highly professional and creative groups of employees, however in many cases it is not
deliberate and is simply a result of poor management. This leads to a lack of staff focus and
sense of direction, which in turn leads to much dissatisfaction, and a poor organization image.

PROJECT GOVERNANCE

Project governance can be defined as an organization’s overall process for sharing decision
rights about projects and monitoring the performance of project interventions. All development
organizations have some form of project governance. Those with effective governance have
actively designed a set of project governance mechanisms (committees, budgeting processes,
approvals, etc.) that encourage behavior consistent with the organization's mission, strategy,
values, norms, and culture.

The objective of project governance is to establish clear levels or authority and decision making
including the planning, influencing and conducting of the policy and affairs of the project. It
involves the people, policies and processes that provide the framework within which project
managers make decisions and take actions to optimize outcomes related to their areas of
responsibility. This is achieved by defining and identifying the roles, responsibilities and
accountability of all people involved in a project, including their interaction and level of
coordination with internal and external dependencies.

The organization’s management team is responsible for setting up and supporting the governance
structure before the project initiates its activities to ensure that all key decisions are made at the
right time. The management team defines the project governance in a document that outlays the
roles and responsibilities for decision making in the project team and stakeholders; this may
include the creation of a project committee and its high level operating rules. A good project
governance document helps projects by defining the procedures to follow escalation of issues,
defines the decision making structure, roles and responsibilities of each key stakeholder about
the different processes in the project from communications to budget change authorizations.

Some development organizations may choose the have a standing project governance committee
that oversees all projects and defines the decision making structure for each project. In this case
the committee may include decisions about project proposal approvals and supervision of the
organizations’ project portfolio in general, including the selection or appointment of project
managers.
PROJECT TEAM

A project team is a group of individuals brought together to work on a specific project or

initiative. The team will include roles needed for project planning, development, and
implementation. The team members collaborate to achieve a set of predetermined goals as stated
in the project scope. This could be the launch of a product or service, or delivering a new design
or feature for a client. Each member of the team has a unique set of skills and responsibilities
that contribute to the success of the project—ultimately, completing the project on schedule and
on budget. Establishing a project team helps you ensure important projects have a dedicated
group made up of various skills and experiences so the work can be completed as efficiently as
possible. Team roles can be assigned to full-time or part-time employees, contractors, subject
matter experts, or other external stakeholders.

Roles and responsibilities

Roles and responsibilities are related concepts. This article will cover the roles of a project team
(what specific positions and functions make up a project team), as well as
the responsibilities (the duties and tasks tied to each specific role).

Every project has different requirements, so team structure can vary. But the five major roles in a
project team are project sponsor, project manager, business analyst, resource manager, and
project team member.

1. Project sponsor: The person driving the vision

The sponsor is the in-house champion of a project, overseeing operations from a high level. This
person works directly with the project manager, clearing any obstacles that threaten to stall the
project and signing off on all major components.

A member of senior management typically fills this role. A project sponsor’s responsibilities
include the following:
 Creating the project vision

 Earning buy-in from executive leadership

 Making critical decisions

 Approving the project budget

2. Project manager (or leader): The person managing day-to-day operations

Project managers or leaders are responsible for day-to-day operations and ensuring the project is
completed on time, on budget, and achieves its objectives.

On a small project, the manager might oversee each team member. On a larger-scale project,
they are more likely to oversee team leaders, who each manage their own group.

The project manager is responsible for the following:

 Creating the project plan and schedule

 Recruiting project staff

 Managing the budget

 Managing the project schedule

 Delegating project tasks to team members

 Managing all project deliverables

 Communicating with upper management and other stakeholders

3. Resource manager: In charge of resource allocation and utilization

The resource manager is critical when putting together your project team. Now, if your project
isn’t big enough to require a resource manager, you’ll simply have to act as one. So what does
that mean exactly?
 Identify the right people for a project

 Match project team roles and skills with project needs

 Allocate and schedule the right resource within the project timeline and budget

 Stay on top of resource availability and utilization

 Monitor and optimize the use of resources throughout the course of the project to make sure it
can be completed successfully

4. Business analyst: Makes sure you have the data you need

The business analyst is responsible for gathering and analyzing data related to the project. They
help identify the project’s requirements and determine the best approach to achieve the project’s
objectives. They work with stakeholders to ensure that the project’s deliverables meet the
organization’s needs.

The business analyst ensures the project team has the technology and tools to do their jobs
effectively. They might also recommend new tools for streamlining workflows and improving
quality, such as resource scheduling software.

A business analyst:

 Helps to define the project and its goals

 Gathers technical requirements from team members

 Documents and analyzes project requirements

 Helps project team solve equipment management problems

 Tests solutions to ensure their effectiveness

5. Project team member (or project delivery team): Individual contributors assigned to
different project tasks

Project delivery team responsibilities vary between projects and roles (which may include
anything from developers and engineers, to designers and copywriters).

At a high level, all project team members are assigned the tasks required to complete the project,
and are responsible for:

 Contributing to the project goals and objectives

 Completing individual tasks within the expected time frame

 Collaborating with other team members

 Communicating with the project manager about roadblocks

Other roles in a project team

Some larger projects require additional project management roles and responsibilities to support
the core project team. These may include:

 An executive sponsor is a senior owner of the project (with more authority than the project
sponsor) and the ultimate decision-maker

 A project owner is usually the person who proposed the project. They assist the project
manager in ensuring successful implementation

 A project lead is someone who carries out a lot of the tasks of the project manager but
doesn’t have as much experience or official qualifications

 A team leader is responsible for training team members and monitoring progress toward
project objectives

 A functional manager’s responsibility can vary, but the primary function is to ensure the
project team has the resources it needs, and address problems that slow down the project
 A program manager coordinates all projects related to a specific program and provides
guidance to the project manager

 A subject matter expert (SME) has advanced knowledge of a specific area, practice, or
process. They provide guidance and strategy to the project team

 A project coordinator or project management office (PMO) offers administrative support

to the project team and establishes standards to ensure the team’s processes align with broader
organizational goals

 Project stakeholders are people (internal or external to the project) who have an interest in
and influence over the project. Their responsibilities and interests vary between (and even
within) projects

 A steering committee includes senior-level stakeholders (such as the project sponsor) and
company managers, and provides strategic support to help define business needs and achieve
project outcomes

Project team roles and responsibilities example

Roles in a team project can get confusing (fast). So to demonstrate how project team roles work
together, let’s use the example of an in-house marketing team undertaking a website redesign.

Project sponsor: This is the person who “owns” the project. In this case, the Chief Marketing
Officer (CMO) might decide the website needed an overhaul as part of a big rebranding
initiative. For this project, the responsibilities of the project sponsor could look something like
the following:

 Ensures the redesign aligns with strategic business goals

 Assigns with the project manager

 Provides resources and support for the redesign

 Serves as an escalation point when problems arise

Project manager: This person oversees the execution of the project and manages the team. In
this case, let’s say it’s the creative director. The project manager:

 Communicates with the sponsor and project team

 Sets milestones and deadlines

 Ensures the redesign stays on schedule and on budget

 Monitors the progress of the project

Resource manager: As the name implies, this person ensures the team has everything it needs to
complete the redesign. In this case, let’s say it’s the chief information officer.

 Identifies the best project team roles based on the project scope

 Plans and allocates people and resources (meeting rooms, equipment, etc.)

 Monitors utilization throughout the project and tracks billable hours

Project team members: These are the folks responsible for executing the redesign. They report
to the project manager. The following roles need to be assigned:

 Front-end and back-end engineers

 QA engineer

 UX/UI designer

 Visual designer

 SEO expert

 Copywriter

CONFLICT MANAGEMENT IN PROJECT TEAMS

Conflict is the disagreement or difference of opinions between or among individuals that can be
potentially harmful to any organization. In the workplace setting, it often involves personal
agendas, insights, or goals versus the agendas, insights, or goals of the group or team. Conflict
management seeks to resolve the disagreement or conflict with positive outcomes that satisfy all
individuals involved or is beneficial to the group. However, the perception of conflict is often
negative.

Conflict can, in fact, be positive if it is managed properly. Conflict can promote team-building
skills, critical thinking, new ideas, and alternative resolutions. Conflict management is a crucial
competency that leaders must possess, for the success of the team, group, unit, or employees they
lead

It’s often difficult. What we do about disagreements or clashes can make or break our mood,
wherever the conflict might be taking place. Resolving conflict in projects is an essential part of
our roles as project professionals, and conflict in projects, is inevitable. It’s best to have some
idea of what conflicts are, how to spot them and what you can do to better your conflict
management and conflict resolution skills.

Conflict in project teams usually happens when:

 There are disagreements over tasks
 Team members and stakeholders have different values or opinions
 Miscommunication and misunderstandings arise
 There’s uncertainty or different priorities in actions

Importance of conflict management in project management

Sometimes it becomes tiresome working with lots of different people; it feels like
we’re dealing with them, rather than being able to manage or engage them. So when we think
about conflict as an opportunity, it becomes a more positive experience for all involved. We need
to explore conflicts to enable creativity and innovation. But, different people approach, and are
affected by, conflict in different ways. We need to remember and understand that some of us like
to tackle the problem head on, and go into fight mode, whereas others become passive and prefer
to avoid confrontation by going into flight mode.
If conflict isn’t hostile or negative, it can drive discussion, but when conflict isn’t handled
properly, or there’s too much, it becomes harmful. Notice conflict before it becomes an issue,
here are some common things to look out for:
 Defensiveness instead of listening to others
 Not wanting to collaborate
 Direct challenges to decisions
 Unexpected changes in the style of communication

How to handle conflict in project management?

Let’s take a look at conflict management approaches in project management using the diagram
below, adapted from the Thomas Kilmann Conflict Mode Instrument:
There are various conflict resolution techniques that help us deal with disputes and they depend
on our desire to meet our own needs vs the needs of others.
Compete: This tends to be uncooperative with one person showing more assertiveness; where ‘I
win’ and ‘you lose’.
Collaborate: This is ideal; a win-win outcome. It’s when all groups and individuals are
cooperating for a solution.
Compromise: This is a ‘give and take’ scenario where everyone feels they’ve achieved some of
their wants, but it might not result in the best outcome.
Avoid: This is when no one is cooperating or being assertive about making a decision; no one
wins because nothing is being solved.
Accommodate: This is where we focus on others needs, which is great for the others, but may
make the individual feel unheard.

Conflict management techniques in project management:

1. Keep in mind that conflict happens. Almost all projects will involve conflict of some
kind, so be mindful and plan for it. Give yourself, and your team members, time to
manage disagreements.
2. Don’t avoid or ignore conflicts. Unaddressed conflict can become a bigger problem and
divert the team’s attention. This can impact project delivery, so be proactive in noticing
and sorting out issues.
3. Actively listen to different views. Coming to a resolution, whatever that may be, is
impossible unless you’re practising active listening and understand the different
perspectives of the people involved.
4. Facilitate and encourage discussion. Emotional intelligence is a key part of conflict
resolution. Everyone needs a chance to share their views and as leaders, we need to
enable those discussion with empathy.
5. Keep conversations neutral. Managing conflicts isn’t about picking sides or seeing who’s
right and who’s wrong, so avoid any judgments. Keep all discussions neutral and inspire
the team to do so as well.
 6. Think about the resolution. Having a clear goal in mind before entering a discussion with
conflicting parties is a good way to keep your focus. Problem solving is an essential skill
you need as a project manager, and this extends to stakeholder engagement. It can be
easy to get stuck in the details so think about the resolution that will bring success to the
project.

Managing conflict as a project manager requires key skills. And conflict isn’t always negative,
but if it’s not handled appropriately, it can cause serious issues on a project and lower morale.
Positive conflicts lead to new ideas and thinking which can benefit the team as well as the
project, so it’s vital we hone our conflict management skills, and keep projects on track.
SCHOOL OF MANAGEMENT STUDIES

SBAB7036 – PROJECT MANAGEMENT

UNIT V- PROJECT CONTROL AND EVALUATION

 UNIT 5 PROJECT CONTROL AND EVALUATION

Project Control - Process, Monitoring, Internal and External control, Performance analysis,
Performance Index Monitoring. Project Evaluation, Reporting and Termination. Project success
and failure - Lessons.

PROJECT CONTROL

Project control is a vital aspect of project management that involves tracking and managing
project performance to ensure that objectives are achieved within the agreed-upon constraints of
time, cost, and scope. Effective project control ensures that any deviations from the plan are
identified early and corrected promptly.

Key Objectives of Project Control:

1. Ensure adherence to project plans and objectives

2. Identify and address deviations or variances
3. Manage risks and uncertainties
4. Optimize resource utilization
5. Facilitate stakeholder communication

PROJECT CONTROL PROCESS

The project control process is a continuous cycle that involves planning, monitoring, and
adjusting project performance. It is divided into several stages:

Planning

 Establish Baselines: Define the project scope, schedule, and budget. Baselines serve as
the reference points for measuring performance.
 Develop Control Plans: Outline methods for monitoring performance, including metrics
and performance indicators.
 Set Performance Targets: Define acceptable thresholds for cost, time, and quality.

Monitoring

 Track Progress: Continuously measure performance against the baselines. This includes
tracking project milestones, resource usage, and financial expenditures.
 Collect Data: Use various tools and techniques to gather data on project performance,
such as status reports, progress charts, and financial statements.
 Analyze Performance: Compare actual performance with the planned performance to
identify any deviations.
Controlling

 Identify Variances: Determine the cause and extent of any deviations from the plan.
 Implement Corrective Actions: Adjust plans and processes to address deviations. This
could involve reallocating resources, adjusting schedules, or revising budgets.
 Update Documentation: Revise project documentation to reflect changes and ensure all
stakeholders are informed.

MONITORING PROJECT PERFORMANCE

Monitoring is an ongoing activity that ensures the project stays on track.

Key aspects include:

Performance Measurement

 Key Performance Indicators (KPIs): Metrics used to evaluate success. Common KPIs
include cost performance index (CPI), schedule performance index (SPI), and variance
analysis.
 Earned Value Management (EVM): A technique that integrates scope, schedule, and cost
to assess project performance and progress.

Tools and Techniques

 Gantt Charts: Visual representation of the project schedule, showing tasks, durations, and
dependencies.
 Progress Reports: Regular updates on project status, highlighting completed tasks,
pending tasks, and any issues encountered.
 Project Dashboards: Interactive tools that provide a real-time overview of project
performance metrics.

Risk Management

 Risk Monitoring: Continuously assess and address potential risks that could impact
project performance.
 Risk Mitigation Strategies: Develop and implement plans to reduce or eliminate
identified risks.
INTERNAL CONTROL

Internal controls are processes and procedures within the project management system designed to
ensure the integrity and accuracy of project performance data. They help prevent errors, fraud,
and inefficiencies.

Types of Internal Controls

 Preventive Controls: Measures designed to prevent issues before they occur, such as
approval requirements and segregation of duties.
 Detective Controls: Mechanisms to identify issues that have already occurred, such as
audits and performance reviews.
 Corrective Controls: Procedures for addressing issues once they are detected, including
corrective actions and process improvements.

Implementing Internal Controls

 Define Control Objectives: Establish goals for what the internal controls should achieve.
 Develop Policies and Procedures: Document the processes and responsibilities associated
with internal controls.
 Monitor and Review: Regularly assess the effectiveness of internal controls and make
necessary adjustments.

EXTERNAL CONTROL

External controls involve oversight and regulatory requirements imposed by entities outside the
project organization. They ensure that the project complies with legal, regulatory, and
contractual obligations.

Regulatory Compliance

 Legal Requirements: Adherence to laws and regulations applicable to the project, such as
labor laws, environmental regulations, and safety standards.
 Industry Standards: Compliance with industry-specific standards and best practices, such
as ISO standards or project management frameworks.

Stakeholder Oversight

 Client Requirements: Ensuring that the project meets the expectations and requirements
of the client or project sponsor.
 Audit and Review: External audits and reviews conducted by independent parties to
assess project performance and compliance.
Contractual Obligations

 Contract Management: Adherence to terms and conditions outlined in project contracts,

including deliverables, timelines, and performance standards.
 Change Management: Managing changes to the project scope or requirements in
accordance with contractual terms.

PERFORMANCE ANALYSIS

Performance analysis is a systematic process of evaluating and interpreting performance data to

assess the effectiveness and efficiency of a system, process, or individual. In various contexts,
such as business, sports, or education, performance analysis helps identify strengths, weaknesses,
and opportunities for improvement.

Objectives of Performance Analysis:

1. Evaluate effectiveness: Determine if goals and objectives are being met.

2. Identify areas for improvement: Highlight weaknesses and opportunities.
3. Enhance decision-making: Provide insights for better strategic planning and resource
allocation.
4. Benchmark performance: Compare against standards or competitors.

Performance Analysis Process

The performance analysis process involves several key stages:

1.Define Objectives and Metrics

 Establish Goals: Clearly define what you want to achieve. This could be improving sales,
increasing productivity, or enhancing skills.
 Select Metrics: Choose relevant performance indicators that align with objectives.
Examples include sales growth rate, productivity ratios, and test scores.

2.Data Collection

 Gather Data: Collect performance data from various sources, such as financial reports,
performance reviews, or operational data.
 Ensure Accuracy: Verify data accuracy and completeness to ensure reliable analysis.

3.Data Analysis

 Analyze Trends: Examine performance trends over time to identify patterns or changes.
  Compare Against Benchmarks: Measure performance against industry standards,
historical data, or competitor performance.
Identify Issues: Determine areas where performance deviates from expectations or goals.

4. Interpretation and Evaluation

 Interpret Results: Analyze the data to understand underlying causes of performance

outcomes.
 Evaluate Impact: Assess how performance affects overall goals and objectives.
 Draw Conclusions: Make informed judgments based on the analysis.

5.Reporting and Action

 Prepare Reports: Document findings and present them in a clear, concise format.
 Develop Action Plans: Create strategies to address identified issues or capitalize on
strengths.
 Monitor Progress: Implement action plans and track their effectiveness over time.

KEY PERFORMANCE INDICATORS (KPIS)

KPIs are specific, measurable metrics used to evaluate performance against strategic goals.

Financial KPIs

 Revenue Growth: Measures the increase in sales over a period.

 Profit Margin: Assesses the percentage of revenue that exceeds costs.
 Return on Investment (ROI): Evaluates the return generated from investments.

Operational KPIs

 Productivity Rate: Measures output per unit of input.

 Cycle Time: The time taken to complete a process or task.
 Quality Rate: Percentage of products or services meeting quality standards.

Human Resources KPIs

 Employee Turnover Rate: Measures the rate at which employees leave the organization.
 Employee Satisfaction: Assesses employee contentment and engagement levels.
 Training Effectiveness: Evaluates the impact of training programs on performance.
PERFORMANCE ANALYSIS TECHNIQUES

Several techniques are used to analyze performance data effectively:

1. Statistical Analysis

 Descriptive Statistics: Summarize data using measures like mean, median, and standard
deviation.
 Inferential Statistics: Use sample data to make inferences about a larger population.

2. Comparative Analysis

 Benchmarking: Compare performance against industry standards or best practices.

 Gap Analysis: Identify discrepancies between current performance and desired
performance.

3. SWOT Analysis

 Strengths: Identify internal capabilities that give a competitive advantage.

 Weaknesses: Recognize internal limitations that hinder performance.
 Opportunities: Discover external factors that can be leveraged for improvement.
 Threats: Identify external challenges that may impact performance.

4. Root Cause Analysis

 Identify Causes: Determine the underlying reasons for performance issues.

 Develop Solutions: Create targeted strategies to address root causes.

Example : Business Performance Analysis

Objective: Increase sales revenue by 20%.

Data Collection: Sales reports, customer feedback, market analysis.
Analysis: Identify sales trends, customer preferences, and market opportunities.
Outcome: Develop targeted marketing strategies and product improvements.

PERFORMANCE INDEX MONITORING

Performance Index Monitoring is a critical component of project management and organizational

performance analysis. It involves tracking and evaluating specific indices that measure the
effectiveness and efficiency of various processes, projects, or activities. Performance indices
provide quantifiable metrics that help in assessing progress, identifying issues, and making data-
driven decisions.
Objectives of Performance Index Monitoring:

 Track Progress: Measure how well objectives are being met.

 Identify Deviations: Detect and address performance deviations from the plan.
 Facilitate Decision-Making: Provide insights for strategic adjustments and improvements.
 Ensure Accountability: Hold teams or individuals accountable for their performance.

Performance Index Monitoring Process

The process of monitoring performance indices involves several stages:

1.Define Objectives and Indices

 Set Clear Goals: Determine what performance aspects need to be measured based on
organizational or project objectives.
 Select Relevant Indices: Choose performance indices that align with the defined goals.

2.Data Collection

 Gather Data: Collect accurate and timely data required for calculating the performance
indices.
 Ensure Data Quality: Verify data accuracy and consistency to ensure reliable results.

3. Calculation and Analysis

 Compute Indices: Use the appropriate formulas to calculate performance indices.

 Analyze Results: Interpret the indices to understand performance levels, trends, and
deviations.

4.Reporting

 Prepare Reports: Document the performance indices and their implications in a clear and
concise manner.
 Communicate Findings: Share the results with relevant stakeholders, including
management and team members.

5.Action and Adjustment

 Identify Issues: Highlight areas where performance is below expectations.

 Develop Action Plans: Create strategies to address identified issues and improve
performance.
 Monitor Changes: Track the effectiveness of implemented actions and adjust as
necessary.
Tools and Techniques

 Several tools and techniques can aid in the monitoring of performance indices:
 Project Management Software: Tools like Microsoft Project or Primavera for tracking
project performance indices.
 Business Intelligence (BI) Tools: Platforms like Tableau or Power BI for visualizing and
analyzing performance data.
 Dashboards: Interactive displays that provide real-time insights into performance indices.
 Charts and Graphs: Visual representations to simplify the interpretation of performance
data.
 Trend Analysis: Examine performance indices over time to identify trends and patterns.
 Benchmarking: Compare performance indices against industry standards or best
practices.

PROJECT EVALUATION, REPORTING, AND TERMINATION

Project evaluation, reporting, and termination are crucial phases in project management that
ensure a project’s objectives are met, performance is communicated, and the project is concluded
effectively. These phases help assess the success of a project, provide transparency, and formally
close the project.

Project Evaluation

Project evaluation involves assessing the performance and outcomes of a project to determine its
success and identify areas for improvement.

2.1 Evaluation Process

Define Evaluation Criteria

 Success Metrics: Establish criteria based on project objectives, such as cost, time, quality,
and scope.
 KPIs: Use Key Performance Indicators relevant to the project's goals.

Collect Data

 Performance Data: Gather data on project performance, including cost reports, schedule
adherence, and quality metrics.
 Stakeholder Feedback: Obtain feedback from stakeholders to gauge satisfaction and
identify issues.

Analyze Performance
  Compare Results: Assess actual performance against planned objectives.
 Identify Variances: Determine deviations in cost, schedule, and quality.

Assess Outcomes

 Achievement of Goals: Evaluate whether the project met its defined goals and objectives.
 Impact: Measure the impact of the project on the organization or stakeholders.

Document Findings

 Evaluation Report: Prepare a detailed report summarizing the evaluation process,

findings, and recommendations.

Types of Evaluation

1. Formative Evaluation
 Purpose: Assess progress during the project.
 Focus: Process improvements and mid-course corrections.

2. Summative Evaluation
 Purpose: Evaluate overall project success upon completion.
 Focus: Achievement of objectives, effectiveness, and impact.

PROJECT REPORTING

Project reporting involves documenting and communicating the status, performance, and
outcomes of a project to stakeholders.

Reporting Process

1.Prepare Reports

 Types of Reports: Status reports, progress reports, final reports.

 Content: Include performance metrics, achievements, issues, and recommendations.

2.Frequency and Format

 Regular Updates: Provide periodic updates as per the project plan (e.g., weekly,
monthly).
 Final Report: A comprehensive report delivered at project completion.

3.Communicate Findings
  Stakeholder Communication: Ensure reports are shared with all relevant stakeholders.
 Presentation: Use clear and concise language, supported by visuals like charts and
graphs.\

4.Evaluate Effectiveness

 Feedback: Gather feedback on the reporting process to improve future reports.

 Adjustments: Make necessary adjustments to reporting methods based on feedback.

Key Components of Project Reports

 Executive Summary: High-level overview of the project status and outcomes.

 Project Performance: Detailed analysis of performance metrics, including cost, schedule,
and quality.
 Issues and Risks: Description of major issues encountered and how they were managed.
 Lessons Learned: Insights gained during the project that can benefit future projects.

PROJECT TERMINATION

Project termination is the process of formally closing a project. It involves finalizing all project
activities, documenting outcomes, and ensuring that all contractual and administrative tasks are
completed.

Termination Process

1.Confirm Completion

 Deliverables: Ensure all project deliverables are completed and accepted by stakeholders.
 Contractual Obligations: Verify that all contractual obligations have been met.

2.Finalize Documentation

 Project Records: Archive all project documents, including contracts, reports, and
correspondence.
 Final Accounts: Complete and reconcile all financial transactions related to the project.

3.Conduct Post-Implementation Review

 Review Meeting: Hold a meeting with key stakeholders to review project outcomes and
performance.
 Lessons Learned: Document lessons learned and best practices for future projects.
4.Celebrate and Acknowledge

 Recognition: Acknowledge and celebrate the contributions of team members and

stakeholders.
 Closure: Formally close the project and release project resources.

Termination Types

1.Normal Termination

Scenario: The project is completed as planned.

Actions: Conduct final review, document outcomes, and formally close the project.

2.Premature Termination

Scenario: The project is terminated before completion due to various reasons (e.g., scope
changes, funding issues).
Actions: Address remaining tasks, manage stakeholder expectations, and document reasons for
termination.

3.Successful Termination

Scenario: The project meets or exceeds its objectives.

Actions: Document success and provide recommendations for future projects.

4.Failed Termination

Scenario: The project does not meet its objectives or deliverables.

Actions: Document failures, analyze causes, and provide recommendations for improvement.

PROJECT SUCCESS AND FAILURE - LESSONS

Understanding project success and failure is crucial for improving project management practices.
By analyzing the factors leading to both success and failure, organizations can learn valuable
lessons to enhance future projects.

Project Success

Definition: Project success is achieved when a project meets or exceeds its predefined objectives
within the constraints of time, cost, and quality.

Success can be viewed from multiple perspectives:

 Stakeholder Satisfaction: Meeting the expectations and needs of stakeholders.

  Deliverables: Completing project deliverables as specified in the project scope.
 Financial Performance: Staying within budget and achieving financial targets.

Criteria for Success:

 On-Time Delivery: Completing the project by the agreed deadline.

 On-Budget Performance: Delivering the project within the approved budget.
 Quality Standards: Meeting or exceeding the quality requirements set forth in the project
scope.
 Stakeholder Satisfaction: Ensuring that all stakeholders are satisfied with the project
outcomes and deliverables.

Project Failure

Definition: Project failure occurs when a project does not meet its objectives, exceeds budget, or
fails to deliver expected quality or stakeholder satisfaction.

Indicators of Failure:

 Missed Deadlines: Failing to deliver the project on time.

 Budget Overruns: Exceeding the allocated budget.
 Quality Issues: Delivering products or services that do not meet the required standards.
 Stakeholder Discontent: Failing to satisfy stakeholders' needs and expectations.

Common Causes of Project Success

1. Effective Project Planning

 Clear Objectives: Well-defined goals and objectives guide project direction and ensure
alignment.
 Detailed Project Plan: Comprehensive planning covering scope, schedule, resources, and
risk management.
 Stakeholder Involvement: Engaging stakeholders early and maintaining regular
communication.

2. Strong Leadership

 Project Sponsor Support: Active support from senior management or project sponsors.
 Skilled Project Manager: A competent project manager who can navigate challenges and
lead the team effectively.
 Decision-Making: Prompt and informed decision-making to address issues as they arise.

3. Adequate Resources
  Resource Allocation: Proper allocation of resources, including personnel, technology, and
budget.
 Risk Management: Identifying and mitigating risks proactively to avoid potential
problems.
 Training and Development: Providing necessary training and development opportunities
for the project team.

4. Effective Communication

 Regular Updates: Frequent and transparent communication with stakeholders and team
members.
 Feedback Mechanisms: Implementing feedback loops to gather input and make
improvements.
 Issue Resolution: Addressing issues and conflicts quickly and effectively.

Common Causes of Project Failure

1. Poor Planning

 Unclear Objectives: Vague or unrealistic goals that lead to misalignment and confusion.
 Inadequate Risk Management: Failure to identify and address potential risks.
 Scope Creep: Uncontrolled changes or continuous expansion of project scope without
proper management.

2. Ineffective Leadership

 Lack of Sponsor Support: Insufficient backing from senior management.

 Inexperienced Project Manager: Inability to manage complexities and challenges
effectively.
 Ineffective Decision-Making: Delayed or poor decision-making impacting project
progress.

3. Resource Constraints

 Budget Overruns: Insufficient budget allocation or unexpected cost increases.

 Resource Shortages: Lack of necessary resources or personnel.
 Training Deficiencies: Inadequate training and development leading to poor team
performance.

4.Poor Communication

 Inadequate Stakeholder Engagement: Lack of involvement and communication with key

stakeholders.
  Miscommunication: Failure to convey clear and accurate information to team members
and stakeholders.
 Conflict Management: Poor handling of conflicts and disagreements within the project
team.

LESSONS LEARNED FROM PROJECT SUCCESS AND FAILURE

Key Lessons from Successful Projects

 Importance of Clear Goals: Establishing clear, achievable goals is fundamental to project

success.
 Effective Planning: Comprehensive planning and risk management contribute to smooth
project execution.
 Strong Leadership: Supportive and competent leadership drives project success and team
motivation.
 Resource Management: Proper allocation and management of resources are critical for
achieving project objectives.

Key Lessons from Failed Projects

 Avoid Scope Creep: Implement strict change management processes to control project
scope.
 Improve Risk Management: Develop robust risk management plans to anticipate and
address potential issues.
 Enhance Communication: Foster open and effective communication channels to ensure
alignment and address issues promptly.
 Learn from Mistakes: Analyze project failures to understand root causes and avoid
repeating mistakes.