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Project Management 1 Notes

1. Introduction to Project Management
Project: Planned set of interrelated tasks to be executed over a fixed period and
within certain cost and other limitations.
Project management: The application of knowledge, skills, tools, and techniques to
project activities to meet the project requirements.
2. Organization of a Project
Before we go any further, we need to
establish the basic organizational structure of a project. The key people involved in
a project are defined as follows:
1. Project Sponsor. One level above the project manager, this person is the
organizational contact for the project. They often deal with funding the project,
providing resources and support and are usually accountable for project
success. They can be internal or external to the organization carrying out the
2. Project Manager. The person that handles the day-to-day administration of the
project and project team and is directly accountable for its success. Large
projects can be managed by a project management team.
3. Project Team. The person or people who perform the project’s technical work,
reporting to the project manager.
4. Stakeholders. A party that has an interest in the work being performed by the
project. This ranges from investors to affected parties to government
regulators. I often refer to the project sponsor as a stakeholder – they are
effectively the most important stakeholder – although this might confuse the
definition a bit.
5. Project life cycle: Subdivides a project into a number of sequential phases. A
phase consists of a number of related activities that come together to produce
a specific deliverable. A project life cycle consists of strategy phases, project
phases and operational phases.
6. Project phase: A collection of logically related project activities that
concludes in the completion of one or more deliverables.
7. The purpose of a business case: The business case outlines the corporate
strategy indicating how to solve the problems, requirements and opportunities
with a number of proposals. The business case seeks to justify the use of
resources to pursue each course of action.
8. Feasibility study: A process conducted to assess if the project can be
performed according to the requirements, with the effective use of resources
and within the defined constraints.
9. Project Charter: The document that outlines the purpose of the project and
how it should be managed.
10. Specification: A document that specifies, in a complete, precise, verifiable
manner, the requirements, design or other characteristics of a system,
component, product, result or service, and the procedures for determining
whether these provisions have been satisfied.
11. Build-method: Outlines how to make the project with the facilities available.
12. Commissioning: The advancement of an installation from the stage of static
completion to full working order and achievement of the specified operational
13. Deliverable: Any distinct, unique and verifiable product, result or capability
which a project phase produces that combine with other deliverables to
produce the project’s main deliverable.
3. how to create a WBS
1. The output of the WBS development process might seem simple: a short
document with a list of deliverables. To create it, however, you need a
thorough understanding of the project’s scope, your team’s capabilities, and
your stakeholders’ requirements.
2. Here’s a process for creating a WBS from scratch.
3. Understand the project’s scope
4. The WBS is one of the key documents created at the end of the ‘Planning’
Project scope statement to understand the project’s scope in detail.
Project scope management plan to understand how to deal with changes to the
project’s scope (which will affect your deliverables).
You’ll want to refer to your project charter to develop the scope statement and scope
management plan.
The output of the entire WBS development process is as follows:
Work breakdown structure
- WBS dictionary
- Scope baseline
4. Four P’s of Project Management
Phases: The project life cycle explains how the project timeline can be
subdivided into a number of phases with different deliverables, and how the
level of effort, level of influence and costs vary over the project’s life cycle.
Processes: The project management process explains how the project
phases can be subdivided into a number of management process groups to
initiate, plan, execute and close the phase.
Plans: The project plan explains how the management processes can be
subdivided into a number of individual plans that combine to form the baseline
People: The project organisation structure explains how the leadership and
management of the project personnel, and other interested stakeholders can
be subdivided into the project organisation structure.
Estonian Process: A process is a systematic series of actions or functions to bring
about a required change or result
5. Organisational Structures
Which organisation structure is also known as the traditional organisation
structure and why?
The functional organisation structure is also known as the traditional organisation
structure, because this structure is based on the subdivision of product lines or
disciplines into separate departments, together with a vertical hierarchy of
responsibility and authority.
Functional Organisational Structure
In a functional organisation structure, the project manager and all the resources work
in the same company division, such as the sales and marketing department.
Generally, the functional manager has more authority than the project manager.
The functional structure gives you the least power as a project manager, but offers
plenty of other advantages:
control over the team members and other resources required.
ou can easily access the experts you need because they are in the same
functional area.
is relatively small and simple.
because it provides them with career opportunities. Project work can be a great way
to motivate your team.
o a functional team, it’s going to be the
functional team you work in, which can make closing a project easier.
Although this structure has plenty of advantages, also consider some downsides:
that you don’t have access to people
outside your functional division.
manager than to their work on the project, which can create conflicts.
a functional project manager for each function. It
can result in work falling through the cracks if all project managers don’t work
harmoniously together.
widely with the company. Maintaining a strategic focus can be harder.
Project Organisational Structure
Dedicated teams are put together to work on projects in a project organisational
structure. The project manager probably has line management responsibility for the
project team members. Examples of this would include large construction builds, but
also corporate initiatives that require a dedicated team. The project manager has
ultimate authority, reporting to the project sponsor and the project board. The
individuals on the team work directly for the project manager.
The obvious advantage of a project structure is that you have more control over the
team, but other advantages are in place, too.
siest structure within which
to create a strong team culture.
the day job for the people working on the project. Their day job is the project.
You’ll know when the team members are available and there’s no risk that they’ll be
pulled off at short notice to business-as-usual work for another manager.
this structure are great environments for improving your project
management skills as well as more technical leadership skills.
The project structure is the easiest to work with but still has some drawbacks.
one project is an expensive commitment. It tends to
be an option only on big projects.
back, especially if the project is long. Project work is stretching, and returning to what
you did before after a period working in a multidisciplinary environment on a new,
challenging project isn’t an appealing prospect for many people. Managing the
transition of the team when you close a project becomes even more important.
mes closing a project can mean losing your job if the business has moved
on and another role isn’t available for you.
They can limit the number of projects the company can do at any one time,
especially when different projects require the same skills.
which means spending time and effort on human resource tasks that you wouldn’t
have to do in other structures. If you enjoy this element of working with people, this
factor could be an advantage.
Matrix Organisational Structure
The third option is a matrix structure. Resources are shared across both businessas-usual work and project work. It might mean having two managers or ‘dotted-line’
responsibility to a project manager as well as to the team manager. The functional
management line structure is normally in place first, and the project manager takes
the dotted line.
This structure splits power and authority between the functional or division team
manager and the project manager. You’ll need to use your negotiating skills to their
full power.
Matrix structures are very common because they allow managers to make flexible
choices with how people spend their time. You’ll likely work in a matrix environment
at some point in your career. The advantages of this structure are as follows:
You can work on lots of different things, sometimes in parallel – although this
point can be argued as a disadvantage as well.
along that has to take priority, it’s easy enough to pivot and suddenly focus on
something else. You can’t do that easily in a project structure, which takes longer to
disband and regroup.
cycle and methodology, so moving between projects is easy. People can join a
project team with relatively little onboarding required when the terminology and
processes are common.
As with all setups, this one has its pitfalls, too. Despite it being a common
structure, not many modern workplaces have cracked the problems of overload.
Giving individuals too much to do can be easy if you don’t have systems in place to
manage and monitor the entirety of their workload. Other disadvantages are as
the same resources as another project.
-fenced the best resources – the most
appropriate people with the right skills – or their line manager might not make them
available for project work.
-as-usual tasks and project
work for individuals, especially when both managers are giving them different
their future careers. Although you might know that you want to stay in project
management, you may have the option of progressing into a more senior functional
role or a more project-orientated role. But having lots of career options is a good
thing, even if it does make for difficult decisions.
An organisational structure that works perfectly for all the business-as-usual work
doesn’t always work for projects, and you have to manage within the environment in
which you work. Getting some experience in each of these structures is a good idea
so that you can experience them first-hand. It will help you decide which environment
suits you best and fits your skills and preferences. Then you can make an informed
choice if you have the chance to decide your future job environment.
6. Phases of a Project
The foundation upon which the PMBOK is built consists of the five process
groups that every project goes through. They are like phases, except that they aren’t
necessarily always in chronological order:
1. Initiating. The tasks required to authorize, fund and define the project,
generally on the organizational level (above the project). The organization
defines a business need the project is meant to satisfy.
2. Planning. The project management team define how the project will be carried
out, who will do the work, how long it will take, and so forth. The planning
phase should define the project in sufficient detail that all stakeholders’
expectations are understood.
3. Execution. The project work is completed and the end product or service is
achieved while secondary stakeholder requirements are satisfied.
4. Monitoring & Controlling. Concurrent to the project work (execution phase)
the project management team monitors and controls all aspects of the project –
schedule, cost, stakeholder’s requirements, etc. If any part causes problems,
changes to the project plan are made.
5. Closing. The project has completed it’s product or service, and the project
must be closed.
In each process groups, one or more project management documents are
created. These consist of:
Project Documents
Project Charter
Project Management Plan
Status Updates
Stakeholder Communications
Variance analysis
Project change documentation
Final reporting
The part that is frequently underestimated is the second phase: Project
planning. The Project Management Institute has suggested that planning effort be
roughly 20-30% of the total work. This may seem like a lot but it reduces problems
further on.
In fact, the planning group is by far the largest within the PMBOK. It contains more
than half of the processes even though it is one out of five process
groups. The project management plan that is generated during the planning phase
encompasses all of the knowledge areas, and it should be scaled to the size of the
7. Project Management Knowledge Areas
The five project phases (i.e. process groups) are in chronological order, but within
each phase are various parts of different “knowledge areas.” Thus, the
ten knowledge areas are encountered at various times during a project.
The knowledge areas are:
Project Integration Management. The stuff that doesn’t fit in any other
category, like developing the project management plan itself, making changes to
the project, etc.
Project Scope Management. Scope is the work that is included in the
project. It should be defined in the planning phase (i.e. the project management
plan) and changes should be well defined.
Project Time Management. Creating, monitoring and enforcing the project
schedule, milestones, and completion dates.
Project Cost Management. Estimating the project costs, and monitoring and
controlling them throughout the project.
Project Quality Management. Determining the quality standards that apply to
the project, and monitoring the quality of work produced.
Project Human Resource Management. Ascertaining the people requirements
of the project, acquiring them, and developing them to ensure they produce the
required results.
Project Communications Management. Establishing the communication
needs of each stakeholder, and making sure they are involved to the required
Project Risk Management. Figuring out who the biggest alligators under the
bed are, and how to make sure you never see them.
Project Procurement Management. Hiring the outside consultants and
contractors necessary to get the job done, and managing them.
Project Stakeholder Management. Identifying each stakeholder and making
sure they’re happy.
8. The Project Management Plan
The project management plan is the central foundation of project management, and
as such we will focus a separate section on it. It is a document that gives the project
manager their direction throughout the project, aiding in decision making. It
manages the stakeholder’s expectations. But most importantly, it tells the project
sponsor, who is usually the project manager’s boss, how the project will be
managed. Thus, it can also be a career-changer.
It should contain enough detail to define the project so that all stakeholders
understand how the project will be managed. When project changes occur
(deadlines, budgets, etc.) the project management plan should be updated. The
project manager should always have a current “plan.”
This plan should be available to all project stakeholders, if not directly provided to
them. But the project sponsor should absolutely be familiar with it and understand
how the project is being managed.
Within the project management plan are various sections which define the project
and should be updated when project changes occur:
Scope Statement. Many projects encounter problems because it’s easy to
insert small tasks into the project, veer slightly off course, perform non-important
tasks, and the like. The scope statement should be detailed, including
exclusions for things that might be part of similar projects (Does the house
include a garage?). It should be set in stone and untouchable without a project
Stakeholder list. All of the stakeholders in the project should be identified. But
beware, the biggest problems originate with the minor, seemingly insignificant
stakeholders that get glanced over because you hope you don’t ever have to talk
to them. This passivity will only ensure that you eventually will.
Task List. To govern a project effectively, it must be carved up into tasks. Each
task will be assigned a duration (time) and budget (cost).
Schedule. For small projects this could involve the specification of few project
milestones, ranging up to a full graphical project schedule. For larger projects,
each task is assigned a start and end date, and/or dependencies on other tasks
(i.e. Task B can’t start until Task A finishes). During the project, leaving the
schedule simply to gather dust is not acceptable. If the schedule is not being
met, action is required by the project manager. Even if the schedule will be
“crashed,” meaning more resources applied to get back on track, doing nothing
is tantamount to letting the schedule gather dust on the shelf and renders in
Cost/Budget. Each task has a cost associated with it. When the actual costs
are found to be higher (or lower), even before the task is complete, action should
be taken to recover and limit propogation effects to the rest of the project.
Quality Standards. All industries have written quality standards that apply to
the products and services that are produces in that industry. Appropriate quality
standards should be written into the project management plan, and quality
control and quality assurance performed throughout the project.
Project Team. It is often a part of a strong project management plan, when the
project team is spelled out as well as their roles and
responsibilities. Organizational charts can provide overall
perspective. Additionally, the project manager, project sponsor, and other
stakeholders on the organizational level could be identified.
Vendors. Any subconsultants, subcontractors, and outside vendors should be
identified. Payment methods, unit prices, or standard contracts and the like can
be identified. Also, details on how they will be managed can be beneficial, such
as action to be taken when they are late, submit scope changes, etc.
9. The Other Documents
The other documents which round out my list of introductory project management
documents are:
Project Charter
Optional for small projects, this document authorizes the project to proceed,
outlines funding status, and provides an overview of the project from the
organizational point of view.
Status updates
Since a project has a finite beginning and end, providing regular status updates
during project execution is very important. The frequency and amount of detail
depends on the project, of course, but I would suggest the existence of status
updates is almost universal to good project management.
Stakeholder communications
As a minimum, the project manager must communicate with the project sponsor
and project team throughout the project. On top of that, almost all projects have
stakeholders who are either actively influencing the outcome, passively
interested in the outcome, or actively opposed to the outcome. Correspondence
that can influence the project success should be in writing, even email if
possible. Keep a paper trail.
Variance analysis
This involves the calculation of, as a minimum, the cost variance and schedule
variance. It requires an estimate of the percent complete of each task, and the
resulting variance (cost or schedule) tells you how far ahead or behind the
project is. This is an excellent early warning signal for project distress and takes
only about 5 minutes once you’ve figured out how to do it via spreadsheets or
project management software. That’s why I include it within introductory project
Project change documentation
When a change is made to the project management plan, it should be
documented. For small projects this could be as simple as an “update log”
within the project management plan. The important thing is not so much the
format, but the underlying concept that the project has been planned out and
changes to it need to be official. All project changes should be approved and
signed off by the project sponsor. Change can involve the schedule (deadlines),
costs, quality requirements, etc.
Final Reporting
I have yet to see a project that doesn’t need some sort of closure. Final details
of the product as-built, as-designed, or as-performed, and completion certificates
for vendors’ contracts. This tends to be underrated while at the same time it
tends to be highly visible to the project manager’s bosses. Do your career a
favour and close the project well.
Project Management Calculations
1. Variance
Cost Variance = Earned Value - Actual Cost
The Cost Variance tells a project manager whether you've exceeded your budget or
you're under budget.
2. Performance Index
Cost Performance Index = Earned Value / Actual Costs
The CPI also indicates whether you've exceeded your budget or you're under budget
however it gives more information about the degree of variation.
If the CPI is less than 1, then the task is over budget
If the CPI is equal to 1, then the task is on budget
If the CPI is greater than 1, then the task is under budget
For example, if your EV = $5,000 and the AC= $3,700
CPI = 5,000/3,700 = 1.35, therefore your project is 35% under budget.
Schedule Performance Index = Earned Value/ Planned Value
The SPI also helps a project manager determine whether the project is ahead of
schedule or behind schedule.
If the SPI is less than 1, then the project is behind schedule
If the SPI is equal to 1, then the project is on schedule
If the SPI is greater than 1, then the project is ahead of schedule
For example is your EV= $14,000 and the PV= $7,000:
SPI = $14,000/$9,000= 1,56, this means that your project is ahead of schedule
by 56%.
If your CPI is greater than 1 and your SPI greater than 1 then your project is under
budget and ahead of schedule. Hurray! However, if your CPI is greater than 1 but
your SPI is less than 1, then your project is under budget but it's behind schedule,
this means that you should have completed more tasks by now.
These performance indices provide insight into time and cost, they will give you more
information on what will happen if the project continues at the same pace.
Essentially, they will help you find out in which direction your project is heading and
which corrective actions you should take to ensure the project is delivered on time
and within budget.
Total Float
Float is also known as total float. Total float is how long an activity can be delayed,
without delaying the project completion date. On a critical path, the total float is zero.
Total float is often known as the slack. You can calculate the total float by subtracting
the Early Start date of an activity from its Late Start date.
Total Float = Late Start date – Early Start date
You can get it by subtracting the activity’s Early Finish date from its Late Finish date.
Total Float = Late Finish date – Early Finish date
Free Float
Free float is how long an activity can be delayed, without delaying the Early Start of
its successor activity.
You can calculate the free float by subtracting the Early Finish date of the activity
from the Early Start date of the next.
Free Float = ES of next Activity – EF of current Activity
Please note that if two activities are converging into a single activity, only one of
these two activities may have a free float.
Example of Planned Value (PV)
You have a project to be completed in 12 months. The budget of the project is
100,000 USD. Six months have passed and the schedule says that 50% of the work
should be completed.
What is the project’s Planned Value (PV)?
Given in this question.
Project duration: 12 months
Project cost (BAC): 100,000 USD
Time elapsed: 6 months
Percent complete: 50% (as per the schedule)
Planned Value is the value of the work that should have been completed so far (as
per the schedule). In this case, we should have completed 50% of the total work.
Planned Value = 50% of the value of the total work
= 50% of BAC
= 50% of 100,000
= (50/100) X 100,000
= 50,000 USD
Therefore, the project’s Planned Value (PV) is 50,000 USD.
Example of Actual Cost (AC)
You have a project to be completed in 12 months. The budget of the project is
100,000 USD. Six months have passed and 60,000 USD has been spent, but on
closer review, you find that only 40% of the work has been completed so far.
What is the project’s Actual Cost (AC)?
Actual Cost is the amount of money that you have spent so far.
In the question, you have spent 60,000 USD on the project so far.
Hence, The project’s Actual Cost is 60,000 USD.
Example of Earned Value (EV)
You have a project to be completed in 12 months. The budget of the project is
100,000 USD. Six months have passed, and 60,000 USD has been spent. On closer
review, you find that only 40% of the work has been completed so far.
What is the project’s Earned Value (EV)?
In the above question, you can clearly see that only 40% of the work is actually
completed, and the definition of Earned Value states that it is the value of the project
that has been earned.
Earned Value = 40% of the value of total work
= 40% of BAC
= 40% of 100,000
= 0.4 X 100,000
= 40,000 USD
Therefore, the project’s Earned Value (EV) is 40,000 USD.
Why identify and analyse stakeholders and their interests?
The most important reason for identifying and understanding stakeholders is
that it allows you to recruit them as part of the effort. The Community Toolbox
believes that, in most cases, a participatory effort that involves representation of as
many stakeholders as possible has a number of important advantages:
It puts more ideas on the table than would be the case if the development
and implementation of the effort were confined to a single organisation or to a
small group of like-minded people.
It includes varied perspectives from all sectors and elements of the
community affected, thus giving a clearer picture of the community context
and potential pitfalls and assets.
It gains buy-in and support for the effort from all stakeholders by making
them an integral part of its development, planning, implementation, and
evaluation. It becomes their effort, and they’ll do their best to make it work.
It’s fair to everyone. All stakeholders can have a say in the development of
an effort that may seriously affect them.
It saves you from being blindsided by concerns you didn’t know about.
If everyone has a seat at the table, concerns can be aired and resolved before
they become stumbling blocks. Even if they can’t be resolved, they won’t
come as surprises that derail the effort just when you thought everything was
going well.
It strengthens your position if there’s opposition. Having all stakeholders
on board makes a huge difference in terms of political and moral clout.
It creates bridging social capital for the community. Social capital is the
web of acquaintances, friendships, family ties, favours, obligations, and other
social currency that can be used to cement relationships and strengthen
community. Bridging social capital, which creates connections among diverse
groups that might not otherwise interact, is perhaps the most valuable kind. It
makes possible a community without barriers of class or economics, where
people from all walks of life can know and value one another. A participatory
process, often including everyone from welfare recipients to bank officers and
physicians, can help to create just this sort of situation.
It increases the credibility of your organisation. Involving and attending to
the concerns of all stakeholders establishes your organisation as fair, ethical,
and transparent, and makes it more likely that others will work with you in
other circumstances.
It increases the chances for the success of your effort. For all of the
above reasons, identifying stakeholders and responding to their concerns
makes it far more likely that your effort will have both the community support it
needs and the appropriate focus to be effective.
Problem solving and the need for problem solving in project management
Some problems are small and can be resolved quickly. Other problems are large and
may require significant time and effort to solve. These larger problems are often
tackled by turning them into formal projects.
Whether the problem you are focusing on is small or large, using a systematic
approach for solving it will help you be a more effective project manager.
This approach defines five problem solving steps you can use for most problems...
 Define the problem
 Determine the causes
 Generate ideas
 Select the best solution
 Take action.
Define the Problem
The most important of the problem-solving steps is to define the problem
correctly. The way you define the problem will determine how you attempt to
solve it.
For example, if you receive a complaint about one of your project team
members from a client, the solutions you come up with will be different based
on the way you define the problem.
If you define the problem as poor performance by the team member you will
develop different solutions than if you define the problem as poor expectation
setting with the client.
Determine the Causes
Once you have defined the problem, you are ready to dig deeper and start to
determine what is causing it. You can use a fishbone diagram to help you perform a
cause and effect analysis.
Generate Ideas
Once the hard work of defining the problem and determining its causes has been
completed, it's time to get creative and develop possible solutions to the problem.
Two great problem-solving methods you can use for coming up with solutions are
brainstorming and mind mapping
Select the Best Solution
After you come up with several ideas that can solve the problem, one problemsolving technique you can use to decide which one is the best solution to your
problem is a simple trade-off analysis.
To perform the trade-off analysis, define the critical criteria for the problem that you
can use to evaluate how each solution compares to each other. The evaluation can
be done using a simple matrix. The highest-ranking solution will be your best solution
for this problem.
Take Action
Once you've determined which solution you will implement, it's time to take action. If
the solution involves several actions or requires action from others, it is a good idea
to create an action plan and treat it as a mini project.
Using this simple five-step approach can inc.