DIPLOMA IN ADVANCED MANAGEMENT
MODULE 6
PRINCIPLES OF PROJECT MANAGEMENT
STUDY GUIDE
Copyright © 2013
MANAGEMENT COLLEGE OF SOUTHERN AFRICA
All rights reserved; no part of this book may be reproduced in any form or by any means, including
photocopying machines, without the written permission of the publisher
REF: PPM
TABLE OF CONTENTS
MODULE CONTENTS
PAGE
Chapter 1: Project Management Concepts
6
Chapter 2 : Project Management Life Cycle
26
Chapter 3 : Initiating the Project
33
Chapter 4: Project Planning Part 1
50
Chapter 5: Project Planning Part 2
79
Chapter 6: Project Execution
102
Chapter 7: Project Monitoring and Control
114
Chapter 8: Project Closure
127
Bibliography
134
Typical Exam Questions
136
PRINCIPLES OF PROJECT MANAGEMENT
Aims of the Module
The aims of this Module are:

To broaden the student’s knowledge of Project Management so that he/she is
able to relate to a real business situation.

To enhance the technical and management aspects associated with effectively
managing projects.

To enable students to plan, establish and manage a simple to moderately
complex project and project team whilst using a variety of routine and nonroutine processes.

To ensure students are able to select from a wide choice of standard and nonstandard procedures (PMBOK).

Equip students with the necessary skills so that they are able to take full
responsibility for the nature, quantity and quality of output.

To enhance students’ skills and ability to confidently take responsibility for
work group output as required.

Equip students with a wide range of scholastic and/or technical skills
applicable in the field of project management.
Outcomes of the Module
At the end of this course the student will be able to:

Initiate and plan a project.

Execute, monitor and control a project.

Hand over and close a project.

Use and apply concepts and terminology of project management

Recall various documentation required in the various phases of a project
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How to use this Study Guide
This study guide is a “snap shot” of the topics discussed here. It describes the topics
covered in little detail and its objective is to focus and guide students in their learning
of the syllabus content.
The study guide must be used in conjunction with the prescribed book where students
will get the details of the subject matter. To broaden their knowledge base, students
are encouraged to cover material in the recommended books, journals, papers and any
other material they can find covering the project management subject.
At the beginning of each section, you will find a list of outcomes. These outcomes
outline the main points that you should understand when you have completed the
section
Avoid reading all the material at one time. Each study session should be no longer
than two hours without a break.
In the module sections, you will find the following symbols and instructions. These
are designed to help you study.
THINK POINT
A think point asks you to stop and think about an issue. Sometimes you are asked to
apply a concept to your own experience or to think of an example.
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SELF ASSESSMENT ACTIVITY
You may come across some activities, which ask you to carry out specific tasks or
answer some questions. The aim of these activities is to give you an opportunity to
apply what which will test your understanding of what you have learnt up to that
point.
The following websites are among the many websites that can be visited to gain more
exposure in the field of project management:
www.pmi.com
www.pmisa.org.za
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TEXTBOOKS
Prescribed Textbook:
Clements, J.P. and Gido, C. (2012). Effective Project Management. 5th edition
South-Western Cengage Learning.
Recommended Reading:
A Guide to the Project Management Body of Knowledge (PMBOK Guide). Third
Edition. American National Standard. Project Management Institute, 2004
Schwalbe, K (2009). Introduction to Project Management. Cengage Learning.
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CHAPTER ONE
PROJECT MANAGEMENT CONCEPTS
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Chapter One
PROJECT MANAGEMENT CONCEPTS
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

Understand the growing importance of project management.

Define a project and it attributes

Define project management and its application.

Describe project management and key elements of the project management
framework.

Understand the nine knowledge areas

Discuss the relationship between project, programme, and portfolio
management
and their contribution to organisational success

Benefits of Project Management
READING
This section is to be read is conjunction with the following textbooks:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third
Edition. Newtonw Square, PA: Project Management Institue, 2004
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1.1 Introduction
Project Management is the way of living; it is the way we manage our lives and
affairs to achieve our goals. The difference is that we plan and execute these
activities without realizing so.
Many organisations are now more aware of the benefits of restructuring
themselves into a project type environment because projects by their very nature
implement and realize programmes and portfolios, which can achieve the
strategic objectives of these firms.
Project management is seen by many professionals as a step up towards a
project management career. These professionals start their careers as IT
specialists, Engineers, Accountants, Medical Doctors and others, however, as
they gain more experience in the field of project management they tend to
improve their competencies by enrolling for project management programmes
such as this one.
One of the biggest advantages project management has is that it can be applied
across a range of disciplines, industries, professions whilst the basic
methodology remains generic across such disciplines.
1.2 What is a Project?
A project is a temporary endeavour undertaken to create a unique product,
service or result (Clements and Gido, 2012:04).
If one draws a comparison between projects and operations, it is notable that
operations are repetitive in nature and are ongoing. Therefore operations have
dedicated resources, and have a longer lifespan than projects. The objectives of
operations are to sustain businesses.
On the other hand, projects are undertaken to address specific operational
challenges and as mentioned above, they have a definite start and end date.
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Projects are authorized as a result of the following strategic intents (adapted
from Clements and Gido (2012):

A market demand e.g. building of a new cement plant to supply cement
shortages for infrastructure projects.

A legal requirement e.g. the government authorizes a new project to legislate
use of unleaded fuel to substitute leaded fuel.

An organisational need e.g. an organisation authorizes a project management
course for its employees to improve its project competencies;

A customer request e.g. a body corporate of a townhouse complex authorizes
a
project to build a crèche to serve its tenants.

A technological advance e.g. the department of transport authorizes the
eNatis project to automate its business processes.

The environmental consideration e.g. the mining company authorizes a
project to rehabilitate a closed down mining operation.
Projects come in different forms. For example there are IT, engineering, energy
and research and development projects, to mention a few. All these projects
have different characteristics. For example energy projects such as designing
and building of power stations take a long time to execute because of the capital
expenditure, risks and complexities involved. Research and development
projects can be open ended projects with uncertain contract values and periods
because of their long term approach.
The following are some of the significant projects undertaken in the recent past
both locally and internationally:
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
Y2K projects. Organisations globally authorized Y2K projects to ensure
their computer software interprets year 2000 appropriately.

Gautrain Project. This project was authorized to alleviate road traffic
between Pretoria and Johannesburg.

2010 FIFA World Cup. The construction of soccer stadia to ensure that
South Africa has world class facilities for the world

cup.
Coega Industrial Development Zone. The South African government
authorized this project to stimulate local economic development.
Projects vary in size, monetary value, and time durations depending on their
complexities. Normally complex projects have high financial values, and
involve high risks, which demand a high level of planning. For example, hosting
a FIFA soccer world cup is a complex project with a high budget. Therefore this
project would demand a high level of planning compared to building a house.
Even though different projects require different levels of planning, the basic
project management principles remain the same.
Projects demand that thorough planning is conducted to reduce risks and
increase the probability of success. When organisations undertake projects, not
only do they stand to lose money if they don’t succeed but also their reputation
and goodwill. An organisation’s reputation is built over time and if it is lost it
can take a lifetime to re-gain it. Therefore this means that projects are not just
about schedules and budgets but also about the ability of firms to execute them
successfully.
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1.3 Attributes of Projects
According to Clements and Gido (2012:4-5) there are a number of attributes that
define a project:

A project has a clear objective that establishes what is to be
accomplished

A project is carried through a series of interdependent tasks- that is a
number of non-repetitive tasks that need to be accomplished in a certain
sequence in order to achieve the project objective.

A project has a specific time frame, or finite life span.

A project may be unique or a one-time endeavor,

A project has a sponsor or customer

A project involves a degree of uncertainty.
THINK POINT
What is the difference between a project and an operation? Give examples of both.
1.4 Project Management
Project Management is the application of knowledge, skills, tools and
techniques to satisfy stakeholder expectations from a project (PMBOK Guide,
2004:8).
Project management is achieved by applying and integrating project
management processes which include: initiating, planning, executing, control
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and monitoring, and closing. These are referred to as process groups and they
dictate the life cycle of a project.
Apart from process groups there are knowledge areas, which are the backbone
and knowledge base of project management. The knowledge areas consist of
project
integration,
scope,
time,
cost,
quality,
human
resources,
communications, risk, and procurement management.
These different knowledge base focus areas have to be applied to specific parts
of the project. It must always be remembered that in a project environment,
knowledge areas are applied concurrently to different project areas and are not
applied in isolation.
1.5 Project Stakeholders
Project stakeholders include organisations and individuals who are interested or
affected by the project being executed. Stakeholders may have an influence over
the project objectives or outcomes. The success of the project is dependent on
the stakeholders as they may decide to embrace and support it or they may also
decide to stop the project. For example if a property development company
wants to build a golf course in a tribal land. If such a project is to succeed, the
property company as a client must identify and recognize the local community
as a major stakeholder for the project otherwise the local community can
actually impede the project.
It is the responsibility of the project management team to identify stakeholders,
and to determine their roles, requirements and expectations, so that they are able
to analyse and manage them properly in the interest of the project.
Stakeholders cannot be classified under one umbrella as they have varying
levels of authority and responsibilities, which is why the project management
team needs to conduct an analysis of its stakeholders so that they understand
each stakeholder’s needs and interest.
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There are positive stakeholders who have a positive influence on the project.
These are the stakeholders who tend to benefit from the project or see some
benefit of the project. In the golf course example, these would be people hoping
to open businesses as a result of the traffic that will be caused by the building of
the golf course, or people hoping to get employment from the golf course.
On the other hand negative stakeholders have a negative influence on the project
because they feel threatened by it. These may be people who have vested
interest in the area such as indigenous people who have been living in the area
for a long time with their ancestor’s graves in the area, for example.
The project management team needs to focus more energy on the negative
stakeholders to ensure buy-in from them and success of the project. The
following is a list of typical key stakeholders in any industry or sector:

Project Sponsor – The person that provides the financial resources for the
project.

Project Manager – The single point responsibility of a project.

PMO – The project management office provides support to the project.

Customer or user – This is the person or entity that will use the project’s
product.

Project management team – the members of the project team who are
directly involved in executing the project management functions.

Influencers – People or groups who are directly or indirectly interested or
affected by the project. They can also influence the project positively or
negatively.

Investors – A person or entity making the investment in a project.
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
Contractor – A contractor is normally the person or organisation that is
entrusted with supplying the services and/or goods to achieve project
deliverables.

Government – The government is in most cases a stakeholder in projects
whether they are public or private sector projects because it has an interest in the
project, e.g. collecting taxes.
1.6 Programmes and Project Portfolio Management
Project programmes and portfolios are tactics used by organisations to
implement their corporate and business strategies. The objective of programmes
and portfolios is to breakdown business strategies into manageable chunks so
that specific resources can be allocated to them. Following that, Programme
Managers and Portfolio Managers are assigned to take charge of these
initiatives.
1.6.1 Programmes and Programme Management
A programme is a group of related projects clustered together with the
programme manager taking overall group management responsibility.
Programmes use a co-ordinated approach to manage projects and they exploit
resource synergies across the projects, thereby reducing the overall costs.
An example of a programme is the South African government’s infrastructural
group of projects. The group consists of various tar road upgrades across the
country. These projects have separate project teams including separate
contractors, however they are managed as a programme because they are interrelated. Refer to Figure 1-5 for a sample programme (Schwalbe, 2009:14).
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1.6.2 Portfolios and Portfolio Management
A portfolio is a collection of projects or programs and other work that are
grouped together to facilitate effective management of that work to meet
strategic business objectives (PMBOK Guide, 2004:16). Unlike a programme,
the projects or programmes in a portfolio may not necessarily be related or interdependent. Portfolio managers must always ensure that projects and
programmes included in a portfolio support the business strategy and improves
profitability of an organisation. Portfolio managers are likely to be senior
managers or senior management teams and they focus on the big picture of the
organisation.
The difference between Portfolio management and Programme management is
that projects or programmes in a portfolio do not have to be related to each other
compared to a Programme where projects are related or inter-dependent.
1.7 The Community of Project Management
Project Management has grown significantly as a profession. There are a
number of associations worldwide representing various countries. Some of these
are covered below:

Project Management Institute (PMI) in the US.

Project Management South Africa (PMSA).

Association for Project Management (APM) in the UK, also in
Netherlands and Scandinavian countries as well as other European
countries.

International Project Management Association (IPMA)

Australian Institute of Project Management (AIPM).
Even though there are a number of bodies of knowledge (BOK) such as the one
developed by the APM in the nineties, there seems to be some agreement
globally that the PMI’s project management body of knowledge (PMBOK) is an
international benchmark for project management.
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1.8 PMBOK and the nine knowledge areas
PMI publishes A Guide to the Project Management Body of Knowledge
(PMBOK Guide) which provides the framework of processes and guidelines for
the association of project management concepts, practices and techniques.
PMBOK recognises five basic process groups and nine knowledge areas typical
of almost all projects. The basic concepts are applicable to projects, programmes
and operations. The five basic process groups are:
1. Initiating
2. Planning
3. Executing
4. Monitoring and Controlling
5. Closing
Processes overlap and interact throughout a project or phase. Processes are
described in terms of:

Inputs (documents, plans, designs, etc.)

Tools and Techniques (mechanisms applied to inputs)

Outputs (documents, products, etc.)
The nine knowledge areas are:
1. Project Integration Management
2. Project Scope Management
3. Project Time Management
4. Project Cost Management
5. Project Quality Management
6. Project Human Resource Management
7. Project Communications Management
8. Project Risk Management
9. Project Procurement Management
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TIP : A way of remembering the nine knowledge areas are via the following
mnemonic:
I Saw The Contented Queen Humming while Chewing Raisin Pudding
The body of knowledge can be subdivided into four core elements which determine
the deliverable objectives of the project:
• Scope
• Time
• Cost
• Quality
The other knowledge areas provide the means of achieving the deliverable objectives,
namely:
• Integration
• Human resources
• Communication
• Risk
• Procurement.
The PMBOK (2004) describes project management under the following nine
knowledge areas:
• Project Scope Management: Deals with the processes required to ensure that
the project includes all the work required, and only the work required, to
complete the project successfully. It is primarily concerned with defining and
controlling what is or is not included in the project, to meet the clients's and
stakeholders' goals and objectives. It consists of authorisation, scope planning,
scope definition, scope change management and scope verification.
• Project Time Management: Includes the process required to ensure timely
performance of the project. It consists of activity definition, activity
sequencing,
duration estimating, schedule development and time control
• Project Cost Management: Includes the process required to ensure that the
project is completed within the approved budget. It consists of resource
planning, cost estimating, cost budgeting, cashflow and cost control.
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• Project Quality Management: Includes the process required to ensure that the
project will satisfy the needs for which it was undertaken. It consists of
determining the required condition, quality planning, assurance and control.
• Project Human Resource Management: Includes the process required to
make the most effective use of the people involved with the project. It consists
of organisation planning, staff acquisition and team development.
• Project Communications Management: Includes the process required to
ensure proper collection and dissemination of project information. It consists
of communication planning, information distribution, project meetings,
progress reporting and administrative closure.
• Project Risk Management: Includes the process concerned with identifying,
quantifying, and responding to project risk. It consists of controlling the risk
management plan and being prepared for disaster recovery.
• Project Procurement Management: Includes the process required to acquire
goods and services from outside the company. It consists of procurement
planning, solicitation, source selection, contract administration and contract
closeout.
• Project Integration: Integrates the three main project management processes
of planning, execution and control - where inputs from several knowledge areas
are brought together.
The diagram below best illustrates the relationship between the project life cycle
and the nine knowledge areas:
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Knowledge Area
Integration
Management
Project Management Process Groups
Initiating
Planning
Executing
Monitoring &
Controlling
Closing
Project charter
Prelim scope
statement
Project management
plan
Direct and
manage
execution
Monitor and control
project work, integrate
change control
Close
project
Scope
Management
Plan scope, def ine
scope, WBS
Verif y scope, control
scope
Time
Management
Activity seq, estimate,
resources, duration,
develop schedule
Control schedule
Cost
Management
Estimate, cost, Cost
budget
Control Cost
Quality
Management
Plan f or QA
Perf orma QA
Perf orm QC
HR Management
Develop HR plan
Acquire &
develop team
Manage team
Risk
Management
Plan risk
management, identif y
risks, perf orm
qualitative rand
quantitative risk
analysis ,plan risk
response
Communications
Management
Plan f or
communication
Distribute inf o
Report perf ormance,
manage stakeholders
Procurement
Management
Procurement
management plan,
RFQ
Procurement
document
packages
&contracts
contract change
control systems,
buyer perf ormance
reviews, claims
administration,
records management
Monitor and control
risk
Figure 1: The relationship between the Knowledge Areas and Project Life
Cycle. Adapted from PMBOK (2004)
This module is structured as per the table above. Study this Table thoroughly as it will
aid in your overall understanding of project management
1.9 The Triple Constraint
Like any human undertaking, projects need to be performed and delivered under
certain constraints. Traditionally, these constraints have been listed as "scope,"
"time," and cost". These are also referred to as the "project management triangle" or
the Triple Constraint, where each side represents a constraint. One side of the triangle
cannot be changed without affecting the others. A further refinement of the
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Contract
closure
PRINCIPLES OF PROJECT MANAGEMENT
constraints separates product "quality" or "performance" from scope, and turns quality
into a fourth constraint.
Figure 2: The Triple Constraint
The time constraint refers to the amount of time available to complete a project. The
cost constraint refers to the budgeted amount available for the project. The scope
constraint refers to what must be done to produce the project's end result. These three
constraints are often competing constraints: increased scope typically means increased
time and increased cost, a tight time constraint could mean increased costs and
reduced scope, and a tight budget could mean increased time and reduced scope.
Successful completion of a project requires finishing the scope of work within budget
and a certain time frame whilst managing resource utilization, meeting quality
expectations and managing risks. All this must be done while assuring customer
satisfaction. This is explained more clearly in Figure 3 below:
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Scope
Quality
Budget
Risk
Factors
constraining
Project
Success
Resources
Schedule
Customer
Satisfaction
Figure 3: Factors constraining Project Success. (Adapted from Clements and Gido
(2012:8))
1.10 The Project Manager
A project manager is the person responsible for accomplishing the stated project
objectives. Key project management responsibilities include creating clear and
attainable project objectives, building the project requirements, and managing the
triple constraint for projects, which are cost, time, and scope.
A project manager is often a client representative and has to determine and implement
the exact needs of the client, based on knowledge of the firm they are representing.
The ability to adapt to the various internal procedures of the contracting party, and to
form close links with the nominated representatives, is essential in ensuring that the
key issues of cost, time, quality and above all, client satisfaction, can be realized.
The term and title 'project manager' has come to be used generically to describe
anyone given responsibility to complete a project. However, it is more properly used
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to describe a person with full responsibility and the same level of authority required to
complete a project. If a person does not have high levels of both responsibility and
authority then they are better described as a project administrator, coordinator,
facilitator or expeditor.
1.10.1 The Project Manager’s Skills
Today many people are referred to as project managers, and at the same time a
lot of projects fail.
According to Clements and Gido (2012: 304-314) the project manager must
have the following skills

Leadership ability
This is getting things done through others. It involves inspiring
people/project team to work as a team and achieve the project objectives.
This is done via the empowerment and involvement of the project team.

General management skills
These include financial management, marketing management, human
resources management, operations management, strategic management,
contracts and commercial law, logistics, supply chain and procurement,
information technology, health and safety practices. The general
management skills enable a project manager to have the capacity to make
prompt decisions in the interest of the project.

Interpersonal skills
A project manager must be able to work with people because he/she spends a
large percent of his time communicating with stakeholders. He/She therefore
needs to communicate effectively, resolve conflicts and problems timeously,
negotiate contracts, allocate resources, persuade people to buy into the project,
influence stakeholders, motivate the team, and play an overall leadership role
for the project.
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
Communication skills
A project manager must be a good communicator and be able to
communicate regularly to the project team. Communication needs to be
timely, honest and unambiguous.

Able to handle stress
A project manager must be able to handle stress effectively. Stress can arise
when the project is in jeopardy of not meetings its objective due to cost
overrun, a schedule delay or technical problems.

Problem solving skills
He/she needs to be a good problem solver by identifying the problems early.
The project managers needs to encourage the team to identify problems early
and solve them on their own.

Negotiating skills
Good negotiating skills are essential for project managers. The goal of
negotiating is for 2 or more people to or parties to arrive at a mutually
acceptable agreement on an issue. It is a form of problem solving and required
effective listening skills.

Time management skills
The project manager must manger his/her time well. Project require a lot of
energy because of the concurrent activities and unexpected events. Project
managers therefore need to have self discipline, to be able to priortise and
show a willingness to delegate.
Based on the above analysis, it can be seen that a project manager is somebody
who has a variety of skills and their interest is not only the project deliverables
but also the people and resources under their control.
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In addition to the above skills a project manager must be well versed and
continuously informed about the profession and its development in the local and
global context. He/She must understand international economics and their
impact on the domestic markets.
SELF ASSESSMENT ACTIVITY
1. After reading Chapter 1 of your prescribed textbook, what is the
ultimate benefit of Project management?
2. What is the Triple Constraint? Explain with the aid of a simple
sketch.
3. Give some examples of resources used in a project
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Solution to Think Point:
In any organization, only two aspects of work exist—on-going operations and
projects. Projects are defined as unique, temporary endeavors with a specific
beginning and end. Operations constitute an organization's on-going, repetitive
activities, such as accounting or production.
Since all work and/or efforts performed within an organization are characterized as
either operations or projects, all of the costs of an organization must be distributed to
either operations or projects.
An example of a project would be the construction of the Moses Mabida Stadium and
an operation would be the Shell Operation in Europe.
Solution to Self Assessment Activity
1. Answer on page 22 of your prescribed textbook
2. Answer on page 19-22 of this module.
3. Answer on page 4 of your prescribed textbook.
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CHAPTER TWO
PROJECT LIFE CYCLE PROCESS
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Chapter Two
PROJECT LIFE CYCLE PROCESS
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

Identify the different stages of a project life cycle.
READING
This section is to be read is conjunction with the following prescribed textbook:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
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2.1 Introduction
The project life cycle refers to the different stages undertaken in a project to achieve
its goals and objectives. The project life cycle is different from operations life cycle or
product life cycle in that it is normally of a shorter duration. It is also different
because a project has a specific time frame with start and end dates.
The nature and type of project informs the project life cycle process and the stages
needed for a specific project. Similar projects can have different lifecycles because
the approach and perhaps the project implementation plans are different.
2.2 The Project Life Cycle Process
Clements and Gido (2012:9) maintain that there are four phases in a typical project
life cycle: initiating, planning, performing and closing of the project. The four phases
are depicted in Figure 4 below:
Effort
Initiating
Project
Charter
Planning
Baseline
Plan
Performing
Accepted
Deliverables
Closing
Archive
Project
Documents
Time
Figure 4: Project Life Cycle (Source: Clements and Gido, 2012:9)
Initiating Phase
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In the initiating phase projects are identified and selected. This phase relates to a
project set-up and it facilitates the formal authorization to start a new project or phase.
The result of this process is the development of a project charter and a preliminary
scope of the project. The project charter ensures that all stakeholders involved in the
project are aligned regarding the purpose and objectives of the project.
This process includes mobilizing the project team, resources, work areas, holding a
kick-off meeting and alignment sessions to ensure that all involved understand the
business problem that the project is striving to address at this early stage.
This process is critical in defining the real business problem, which the main reason
why the project was initiated. Many projects fail because the business problem is not
defined thoroughly and the project ends up addressing the symptoms and not the real
cause of the problem that the organisation intends to resolve.
Planning Phase
The objective of this phase is to plan and manage various activities with the ultimate
result of achieving set goals for the project within specified time frames. The output
of the project planning process is the development of a project management plan,
which incorporates different area plans such as the controls, scope management plan,
budgets, schedules, risks, communications plan, procurement strategy, human
resources plan, and quality plans.
The different plans are integrated into one under the project management plan. The
project management plan has different terminology in various industries, it can also
be known as Project execution plan, or project implementation manual.
Stakeholders play a vital role in this phase of the project as their input and influence is
high. As the project progresses and plans are implemented the influence of
stakeholders diminishes because the confidence of the project grows and uncertainty
is reduced.
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Executing/Performing Phase
The Performing / Executing Phase ensures that the project management plan’s
deliverables are executed accordingly. This process group involves proper allocation,
co-ordination and management of human resources and other resources such as
material, equipment, and budgets. The level of integration of activities will determine
the success of project execution.
The focus of the execution plan is the methodology to be followed to execute the
project. The greater percentage of the project budget is spent on this process group
therefore it indicates the level of significance it has in the entire lifecycle.
Closing Phase
The closing phase is concerned with formalizing acceptance of the product or service
and brings the project or phase to an orderly end. This process verifies that all the
other process groups have been completed, and formally establishes that the project or
project phase is completed.
The closing process group consists of two sub-processes. The Administrative
closureensures that all the documentation regarding the project including a close out
report is issued.The second sub-process is Contract closure, which ensures that all
contracts in a project are settled, outstanding issues are resolved and that they are
closed.
In the entire project life cycle the closing phase is the most ignored as a result many
projects are not closed off properly.
Monitoring and Controlling
Throughout the life cycle of the project there must be continual monitoring and
controlling. This involves comparing the actual work done against the project
management plan.
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Variances are continuously monitored and where they exist, corrective action is
implemented to ensure that the project parameters set in the project management plan
are achieved.
THINK POINT
Think of a project that you have been involved in or familiar with. Can you break the
project down into the respective life cycle phases?
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SELF ASSESSMENT ACTIVITY
1. With the aid of a diagram, explain the project life cycle.
Solution to Self Assessment Activity
1. Answer on page 9 of your prescribed textbook or Section 2.2 of
your module.
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CHAPTER THREE
INITIATING A PROJECT
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Chapter Three
INITIATING A PROJECT
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

Discuss how projects are identified, selected, authorized and outsourced.

Explain how projects and prioritized and selected.

Explain the process of project selection.

Summarise the various methods used to evaluate projects for selection.

Discuss the various project initiating tasks and outputs
READING
This section was written using the following textbook:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third
Edition. Newtonw Square, PA: Project Management Institue, 2004
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3.1 Introduction
The fundamental objective of many organisations is to make a profit. In order for
these organisations to achieve this fundamental goal, they have to implement projects
and programmes that will support their business strategies in order to improve their
profitability.
The question we will look into in this chapter is “how do organisations select the
appropriate projects that will support their business strategies?”
Projects cannot be selected based on one’s intuition or popularity. A selection process
must be carried out and the numbers must decide which projects qualify to be
selected.
According to Clements and Gido (2012:33) project selection involves evaluating the
potential projects and then deciding which of these should move forward to be
implemented.
3.2 Aligning Projects with Business Strategy
Organisations must continuously ensure that their projects and programmes support
their business strategy at all times. When projects and programmes become
misaligned to the business strategy they should be terminated. A business strategy
exists to focus the organisations resources in achieving it.
Global conditions are continuously undergoing a process of change and so too are
those of organisations. Business strategies are dynamic because they are affected by
the external forces. An example of this is the global financial crisis that banks in the
United States and Europe were afflicted with in 2009. These had a negative impact on
the rest of the world particularly the developing world and have forced organisations
to review their business strategies to deal with this phenomenon.
The above illustrates the importance of aligning projects with business strategy, as
some of the most significant projects had to be put on hold or terminated during this
depression phase because they did not support the business strategy any longer.
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3.2.1
Strategic Planning
Strategic planning refers to the process of reviewing the current status of a business
by analyzing the internal and external environments and determining long term
objectives. In a new business venture a similar process is followed except that the
emphasis will be more on the existing players at the time.
Strategic plans are cascaded down to tactical plans which inform the project selection
process. In order for an organisation to craft a new strategy it should first conduct its
own internal analysis to identify its strengths and weaknesses. At the same time the
organisation should conduct its external analysis to identify opportunities it can
exploit and threats that hinder it from achieving its objectives. SWOT (Strengths,
Opportunities, Weakness, Threats) analysis, as the above process in known, is used to
make a holistic analysis of the organisation in order for it to counter the weaknesses
and threats and use its strengths to exploit opportunities.
Let ussuppose that an established Australian based mining company, Paladin Energy
wants to invest in the mining industry in South Africa. In their view, will such an
investment bear good returns?
To assist the company to make a decision, a SWOT analysis might be undertaken.
Below is an example of the way the SWOT analysis could be carried out:
Strengths (company’s strengths – internal analysis)

Strong mining background (have key competences).

Have the capital to invest.

Already have a customer base for commodities.
Weaknesses

Do not know the South African mining environment well.

Need to adapt to the laws of the host country including the Mining
Charter.
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
Do not have presence in SA.
Opportunities

Mineral resources in abundance.

Low cost of production.

South Africa is a stable country.
Threats

Call by some stakeholders to nationalize the mining industry.

Falling commodity prices.

Stringent regulations regarding rehabilitation processes after mining.
Having gone through this process Paladin might want to continue to invest in mining
in South Africa because of the attractiveness of business.
3.3 Steps in the Project Selection Process
Clements and Gido (2012:33-35) explain
in detail the steps involved in
selecting projects. A summary of the steps is given below:
1. Develop a set of criteria against which the project will be
evaluated. These could include:

Alignment with company goals

Anticipated sales volume

Increase in market share

Establishment of new markets

Investment required

Human resource impact

Regulatory approval

Risks

Return on Investment

Estimated manufacturing cost per unit

Technology development required
2. List assumptions that will be used as a basis for each project.
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3. Gather data and information for each project to help ensure an
intelligent decision regarding project selection.
4. Evaluate each project against the criteria.
3.4 Project Selection Methods
Now that the organisation has a pool of potential projects, which it believes should
support the organisation’s strategy, managers are now faced with the challenge of
deciding on the final list of projects to be authorized.
There are a number of methods used to select a project namely:
 Focus on strategy and organisational needs
 Performing a financial model
 Using the weighted scoring model
 Implementing a balanced scorecard
 Addressing problems, opportunities and directives
 Considering project time frames, and
 Considering project priorities.
These will be discussed further below:
3.4.1
Focus on Strategy and organisational needs
Under this method the emphasis is on aligning selected projects to strategy and
organisational needs. Projects that address competitive strategy are more likely to be
successful because they add value to the organisation’s needs. For example, if one
takes the example of the best company to work for as a strategy, a project to recognize
the best performing employees will support the business strategy.
A project such as, improving employee safety will be aligned to broad organisational
needs. It is not easy to estimate the value of such a project, however all stakeholders
might agree that such a project will add value.
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3.4.2
Financial Methods
Financial methods are often used as part of the selection process. The advantage about
these financial methods is that their analysis is objective and based on the projected
cash flows and operating costs of the project, which means that the integrity of the
numbers being used to arrive at the costs and cash flows need to be high.
Most companies prepare business cases for projects to be approved for selection, and
part of the business case is the financial projections of the project. In this module we
are going to discuss the Net Present Value (NPV) analysis, Return on Investment
(ROI), and Pay Back analysis.

Net Present Value Analysis
Net Present Value analysis is a method of calculating the expected net value (gain or
loss) by discounting all expected future cash inflows and outflows to the present time.
If financial consideration is a key decider for a project selection, then companies
should only consider a project under the following:

If the NPV is greater than or equal to zero rands, accept the project.

If the NPV is less than zero rands, reject the project.

Accept projects with higher NPV’s than lower NPV’s if all other factors are
equal.
A positive value of NPV indicates that the firm will earn a return equal to or greater
than its cost of capital.

Return on Investment
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Return on investment is the rate of return (in percentage) an investor receives out of
an investment commitment. This percentage is the result of subtracting the project
costs from the benefits accrued and then dividing by the costs. For example, if an
investment of R500 is made today and it is worth R550 the following year, the ROI is
calculated as follows:
ROI = (550 – 500)/500 = 0.10 or 10%
The ROI is always represented in percentage. Projects with higher ROI are selected
having considered all the other economic factors. Many organisations stipulate an
acceptable rate of return for projects.

Payback Analysis
Payback analysis is used to determine the amount of time it will take to recoup (net
cash inflows) the total investment made on a project. Payback analysis shows the time
that will pass before realized benefits overtake accrued and continuing costs. Payback
occurs in the year when the cumulative benefits minus costs reach zero. The project
owners are interested in those projects with the shortest payback periods.
3.4.3
Using a Weighted Scoring Model
A weighted scoring model is a tool that facilitates the systematic process for selecting
projects based on a combination of different criteria. Possible criteria may include
such factors as meeting strategic goals or specific organisational needs, addressing
specific problems or opportunities, the amount of time it will take to complete the
project, the overall priority of the project, and the projected financial performance of
the project. The first step in creating a weighted scoring model is to identify the
criteria that are considered important to the project selection process. Reaching
agreement of these criteria does not happen overnight but often takes time to develop.
Holding facilitated brainstorming sessions or using software to exchange ideas can aid
in developing these criteria. Once the criteria have been identified, a weight is
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assigned to each criterion such that the weights for all the criteria add up to 100
percent. The next step is to assign numerical scores to each criterion for each project.
The final step is to calculate the weighted scores by multiplying the weight for each
criterion by its score and adding the resulting values.
3.4.4
Implementing a Balanced scorecard
Dr. Robert Kaplan and Dr. David Norton developed the balanced scorecard approach
to assist select and manage projects that align with business strategy.
The balanced scorecard is a methodology that converts an organisation’s core values
such as customer service, innovation, operational efficiency and financial
performance to a series of defined metrics.
MORE READING
The website www.balancedscorecard.org contains more information regarding this
subject and students are encouraged to visit it.
3.4.5
Project time frame
Another approach to project selection is based on the time it will take to complete a
project or the date by which it must be done. For example, some potential projects
must be finished within a specific time period; like the construction of world cup
stadia. If such projects cannot be finished by this set date, the projects become invalid.
Some projects can be completed very quickly, even within a few weeks. However,
even though many projects can be completed quickly, it is still important to prioritise
them.
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THINK POINT
How does an organisation select the appropriate projects that will support their
business strategies?
What financial models are used in your organisation?
3.5 Project Initiation Tasks and Outputs
The project initiating process group consists of processes that facilitate the formal
authorization to start a new project or project phase.
Some of the objectives of initiating a project are:

Agree on whether there is sufficient justification to proceed with the
project.

Document and confirm that an acceptable business case exists for the
project.

Agree to commit resources to initiate the project.

Provide baseline information for decision making processes required
during the project’s life.

Ensure that the project will return the investment committed, taking into
account risks associated with the project.
It is good practice to set up the project properly from the beginning as this ensures
smooth running and sound controls at a later stage. Once the project is authorized, it is
the responsibility of senior managers to carry out some tasks prior to the normal tasks
relating to the initiating process group. Some of these important tasks are as follows:

Determine the high level scope, time frame, budget for the project.

Identify the Project Sponsor and Project Manager.
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
Discuss the project with the Project Manager.

Determine the high level implementation approach of the project.
The Project Manager must be appointed to take ownership of the project at this early
stage. Once he/she is appointed he must ensure that the required resources at this
stage are brought in so that the following tasks are undertaken:

Stakeholder identification and analysis.

Compile a Business Case.

Create a Project Charter.

Organise a Kick-off meeting.

Compile a preliminary scope statement

Request for Proposal
3.5.1 Stakeholder identification and analysis
Project stakeholders are individuals or companies/entities involved, affected or
interested in the project. There are internal and external stakeholders and internal
stakeholders include: senior management, project sponsor, project team, project office
staff, functional managers, and other project managers.
External stakeholders include customers, government, suppliers, and communities
around the project, business people, and any other external person or companies that
are potentially involved or affected by the project.
The stakeholders’ analysis is about the stakeholders’ demands and expectations of the
project. This information is critical because it enables the project manager to manage
the stakeholders. Stakeholders are different and all expect something from the project
therefore it is important to understand them.
The stakeholder analyses include information such as: names and organisations of key
stakeholders, their roles and responsibilities on the project, their profile, their level of
influence on the project. Out of the analysis the project manager must compile a
strategy to manage stakeholder relationships. Some of the information about the
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stakeholders can be confidential therefore this document cannot be in the public
domain.
The risk of project failure is at its highest during the initiating phase of the project
because there are many unknowns and the thinking of stakeholders is at a macro level
at this stage with no details.
This results in the ability of stakeholders to influence the final scope and
characteristics of the project’s product and the final cost of the project being very
high. As the project progresses the stakeholders influence in the project decreases
because the changes are minimal.
3.5.2 Preparing a business case for the project
The cornerstone of any successful project is to define its business problem that it is
seeking to address thoroughly. Organisations have various business needs based on
their strategic intents and it is imperative that correct projects are selected during the
project selection process. The best way to select correct projects to achieve
organisational goals is through the presentation of business cases. The business case
answers the following question: “why must the organisation invest in this project?”
Business cases can come in various forms, however the following content is found in
most business cases:

Introduction/Background.

Business Objectives.

Current Situation and Problem/Opportunity Statement.

Critical Assumptions and Constraints.

Analysis of Options and Recommendation.

Preliminary Project Requirements/Budget Estimate and Financial Analysis.

Schedule Estimate.

Potential Risks.

Exhibits.
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The business case must indicate the attractiveness of the project in terms of the rate of
investment return to stakeholders. It acts as a basis for investors to make a “go or no
go” decision.
3.5.3 Creating a Project Charter
The project charter authorizes project initiation. It is one of the outputs of the project
initiation process group. It documents the business needs and the new product,
service, or other desired results that the project is intended to achieve.
PMBOK(2004:81) defines the project charter as; “…the document that formally
authorizes a project”. This document provides the project manager with the authority
to commit organisational resources to project activities.
The project charter terminology is the most common terminology acceptable world
wide, however, it can also be called terms of reference, or project mission. It is
imperative that the project charter is signed-off by all the key stakeholders to signify
its validity.
The contents of the project charter should include among other information the
following:

Project Title and date of authorization.

Background to the project.

Key assumptions.

Business needs and other commercial needs.

Scope of work.

Key milestones.

Project scheduling including estimated start and finish dates.

Project estimated budget.

Approach.

Roles and responsibilities of project team and project organisation.
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MORE READING
Refer to Clements and Gido (2012:41) for a detailed description and example of a
Project Charter.
3.5.4 Holding a Project Kick-off Meeting
One of the most important project meetings is the kick-off meeting. A lot can go
wrong in a project just because of not having held a proper kick-off. This is the first
meeting where key stakeholders meet each other formally and deliberate about the
project.
The primary purpose of the kick-off meeting is to integrate and align all stakeholders
so that the entire team has a common understanding of the project’s objectives. This
ensures that all the stakeholders direct and focus their resources for a common good.
A typical agenda for a kick off meeting is depicted in Figure 5.
Project Name: Construction of the Moses Mabida Stadium in Durban
Meeting objective: Get the project off to an effective start by introducing key
stakeholders, reviewing project goals and discussing future plans.
Agenda
1. Introduction of attendees
2. Review of the project background
3. Review of project related documents (i.e. business case, project charter)
4. Discussion of project organisational structure
5.Disucssion of project scope, time and cost goals
6.Disucssion of other important items
7. List of action items from meeting
Action Item
Assigned To:
Due Date
Date and time of next meeting:
Figure 5: Agenda for a Project Kick-Off Meeting.
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3.5.5 Developing a preliminary scope statement
According to PMBOK “this is the process necessary for producing a preliminary
high-level definition of the project using the Project Charter with other inputs of the
initiating processes. It is an important step in the building blocks of a project plan
because it translates the business needs into tangible deliverables. It defines the
product or service requirements, boundaries or battery limits of a project, methods of
acceptance, and high level scope control.
The following are typical contents of a scope statement:

The product or service requirements and characteristics.

Scope of work included.

Boundaries/battery limits.

Scope of work excluded.

Deliverables.

References to related documents.
The contents and length of a preliminary scope statement will depend of the nature
and size of a project.
3.5.6 Request for Proposal (RFP)
In some cases the organisation does not have the expertise or staff capacity to plan
and perform the project or major portions of the project; therefore it decides to
outsource the work to an external resource /contractor (Clements and Gido: 2012, 41).
The purpose of a preparing a request for proposal is to state, comprehensively and in
detail what is required, from the sponsors’/customers’ point of view, to address the
identified need.
MORE READING
Refer to Clements and Gido (2012:41-47) for the guidelines to construct a RFP and an
example of a typical RFP.
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SELF ASSESSMENT ACTIVITY
1. Compile a project charter for a project of your choice using the
example
on page 39-41 of your prescribed textbook
2. What are some of the elements that need to be included in a Request
for proposal?
3. Discuss the numeric project selection methods.
4. What are the disadvantages and advantages of the payback method?
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Solution to Think Point:
Students to obtain answers from their relevant organisations and compare it to the
theory discussed.
Solution to Self Assessment Activity
1. Students to use the example in Clement and Gido (2012:39-41) and
construct their own Project Charter.
2. Answer on page 41-43 of your prescribed textbook
3. Numeric methods are the financial methods discussed in this chapter.
4. The advantages and disadvantages of the payback period method of project
appraisal are set out below.
Advantages

easy to understand

widely used

helps to minimise risk by giving greater weight to earlier cash
flows.
Disadvantages

simple payback does not take into account the time value of
money

it ignores cash flows received after the end of the payback
period

it does not take into account the overall profitability of the
project.
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CHAPTER FOUR
PROJECT PLANNING
PART 1
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Chapter Four
PROJECT PLANNING PART 1
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

Define and understand Project Integration Management

Understand Project Scope Management

Create a work breakdown structure

Explore the Project Time Management.

Draw network diagrams

Understand Project Cost Management.
READING
This section was written using the following textbook:
Clements, J.P. and Gido, C. (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
A Guide to the Project Management Body of Knowledge (PMBOK Guide). Third
Edition. Newtown Square, PA: Project Management Institute, 2004
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4.1 Introduction
Projects are unique and complex and as a result they require a great deal of effort to
plan. The diverse and separate activities that need to be performed, the different
resources required at differing times and the many groups of people involved can
create implementation and control problems.
The primary purpose of planning is to ensure that project objectives are met, risks
mitigated and that the probability of success of the project is improved. Planning
determines the amount of resources, time, and effort required to implement the
project. Without a plan the team would not be able to implement the project
successfully.
A project plan is not a static document, it is a working document because things
change during the duration of the project. There could be unforeseen strikes by
workers, global economic crises, interest rate instability, foreign exchange volatility,
excessive inclement weather e.g. tsunami, political instability, and changes in the
market conditions reducing the demand of the project’s product. These are all real
examples which would impact directly on the project’s viability. Some of these risks
can be covered to an extent, for example, foreign exchange volatility can be covered
by the forward cover at a cost, however, no one anticipated the unprecedented fall of
world markets due to the global financial crisis in late 2008.
All of the above illustrates the importance of planning. If it is done thoroughly the
probability of failure is reduced. Unforeseen circumstances and acts can always be
factored in to the planning process.
4.2 Project Integration Management
Project Integration Management refers to the integration of all the nine knowledge
areas and five project phases, co-coordinating project activities to ensure that the team
is working in a consolidated fashion. This ensures that project resources are focused
on delivery throughout its life cycle.
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Developing a detailed project plan is important for among other reasons the
following:

It guides project execution and gives direction to the project.

It acts as basis for managing change during the project.

It facilitates communication among stakeholders.

It documents planning decisions with regards to the alternatives chosen.

It documents project planning assumptions and outlines reasons for
assumptions, which can be tested at a later stage.

It provides a means to measure progress and control.

It verifies the final delivered project’s product against the project plan.
Integration management is the only knowledge area that includes processes from each
of the five process groups.
The main project integration management tasks include:

the development of the project charter (described in Chapter 3) – part of
project initiating

the creation of team contracts – part of project planning

the development of a project management plan- part of project planning

Directing and managing project execution – part of project execution

Monitoring and controlling project work –part of project monitoring and
control

Performing integrated project control – part of project monitoring and
control

4.2.1
Closing project or phase – part of project closure
Team Contracts
Team contracts assist in promoting teamwork and clarifying team communication
channels. A team contract outlines the ground rules for a project team . The process
normally includes the core project team members reviewing a template and then
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working in small groups to prepare inputs for their team contract. Benefits include
promoting buy-in, commitment, and common values as well as setting clear expectations
and procedures for making decisions
The project manager should act as a coach or facilitator, observing the different
personalities of team members and seeing how well they work together. Everyone
involved in creating the team contract should sign it, and as new project team
members are added, the project manager should review ground rules with them and
have them read and sign the contract as well.
Team contracts should be customized to meet the needs of the project and the team.
However, there are some general topics that should be covered, as follows:
Code of Conduct
Participation
Communication
Problem Solving
Meeting Guidelines
A sample team contract is shown in Figure 6 below.
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Sample Team Contract
A. Code of Conduct
As a project team, we will:
1. Work proactively, anticipating potential problems and working to prevent them
2. Keep other team members informed of information related to the project
3. Focus on what is best for the whole project team
4. See the team project through to completion
B. Participation
We will:
1. Be honest and open during all project activities
2. Encourage diversity in team work
3. Provide the opportunity for equal participation
4. Be open to new approaches and consider new ideas
5. Have one discussion at a time
6. Let the project manager know well in advance if a team member has to miss a
meeting or may have trouble meeting a deadline for a given task
C. Communication
We will:
1. Decide as a team on the best way to communicate various information
2. Focus on solving problems, not blaming people
3. Present ideas clearly and concisely
4. Keep discussions on track
5. Have one discussion at a time
D. Problem Solving
We will:
1. Encourage everyone to participate in solving problems
2. Only use constructive criticism
3. Strive to build on each other’s ideas
E. Meeting Guidelines
We will:
1. Plan to meet ten minutes before every class period in our classroom
2. Rotate who will record meeting minutes and send them out via e-mail within 24
hours of all project meetings
3. Develop an agenda before all meetings with our project sponsor
4. Document major issues and decisions related to the project and send them out via
e-mail to all team members and the project sponsor
Figure 6: Sample Team Contract. (Adapted from Source Griffin Gate Templates http://www.pmtraining.com.tw/member_pmp/Team%20Contract%202.0.pdf)
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4.2.2
Project Management Plans
A project management plan is a document used to coordinate all project planning
documents and to assist guide the project’s execution and control. Plans created in the
other knowledge areas are the subsidiary parts of the overall project management plan
and provide more detailed information about that knowledge area.
Project management plans facilitate communication among stakeholders and provide
a baseline for the progress measurement and project control. A baseline is a starting
point, a measurement, or an observation that is documented so that it can be used for
future comparison, also defined as the original project plan plus approved changes.
Project management plans should be dynamic, flexible, and receptive to change if and
when the environment or project changes. It is important to tailor all planning
documentation to the needs of specific projects.
The following are common elements in project management plans:

Introduction/overview of the project

Project organisation

Management and technical processes

Work to be performed

Schedule information

Budget information

References to other project planning documents
The project management plan is a simple document that entails adequate and useful
information about the project.
THINK POINT
Why are team contracts important?
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4.3 Project Scope Management
Project Scope Management focuses on defining the business problem or need. Enough
time must be dedicated here to define the project scope thoroughly to ensure that the
business problem is addressed.
The project scope defines all what needs to be done. It is all the work that must be
done to product all the project deliverables, satisfy the sponsor or customer that all the
work and deliverables meet the requirements or acceptance criteria and accomplish
the project objective. The project charter establishes the framework for further
elaboration of the project scope.
Project Scope Management can be broken down into the following processes:

Scope planning which will be discussed in this chapter

Scope definition – part of planning phase.

Creating the WBS – part of the planning phase

Scope Verification – part of monitoring and controlling phase

Scope Control – part of monitoring and controlling phase
The main documents produced in the planning phase are a scope management plan,
scope statement, WBS, and WBS dictionary.
4.3.1 Scope Planning and the Scope Management Plan
A project’s size, complexity, importance as well as other factors determines the
amount of effort to be spent on the scope planning. The main output of scope planning
is a scope management plan. The scope management plan documents include:

A process to prepare a detailed project scope statement based upon the
preliminary project scope statement.

A process that enables the creation of the WBS from the detailed scope
statement, and establishes how the WBS will be maintained and approved.

A process that specifies how formal verification and acceptance of the
completed project deliverables will be obtained.
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
A process to control how requests for changes to the detailed project scope
statement will be processed. This process is directly linked to the integrated
change control process.
An example of the Scope Management Plan can be seen in Figure 7 below:
Example of a Scope Management Plan
Project Name:
e.g. xxx Project
Introduction:
e.g. the purpose and suggestions or guidance
Creating the Work Breakdown Structure (WBS):
e.g. the tasks required to complete each deliverable and a guideline for determining
the level of detail necessary.
Verifying Completion of Project Deliverables:
e.g. develop a process and determine who is responsible, the project manager or a
steering committee
Managing Requests for Changes to Project Scope:
e.g. formal change-control procedures to follow to prevent project creep
Figure 7: Scope Management Plan
4.3.2
Scope Definition and Scope Statement
The WBS is a basis for the estimating of project cost, schedule, and resources. In
order for these estimates to be accurate the WBS needs to be detailed and represents a
true scope of work, and this is only possible if the project scope is defined thoroughly.
The scope definition and scope statement (Figure 8) are also basis for performance
measurement, project control, and assist in communicating clear work responsibilities.
When this process is being undertaken project teams need to observe the following:
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
Work that is not part of the scope statement should not be included.

The main output of scope definition is project scope statement.

The preliminary project scope statement should provide basic scope
information, and subsequent scope statements should clarify and provide more
specific information.
Example of a Scope Statement
Project Title e.g. xxx Training Project
Project Justification e.g. improving productivity and reducing costs by developing a
training program to look at key topics or areas of improvement
Product Characteristics and Requirements e.g. supplier management training,
negotiating skills training
Deliverables:
Project Management-Related Deliverables e.g. team contract, project management
plan, scope management plan, scope statement, WBS
Product-Related Deliverables e.g. a needs assessment for training, research,
partnerships, course development
Project Success Criteria e.g. quality outcomes and standards to be met
Substantial effort should go into initiating projects as it is crucial to get them off to a
good start
Figure 8: Scope Statement
4.3.3
Creating the Work Breakdown Structure (WBS)
According to Clements and Gido (2012:97), the WBS is a deliverable-oriented
hierarchical decomposition of the project work scope into work packages that produce
the required project deliverables.
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The WBS cascades the entire project scope into smaller manageable pieces of work.
These are arranged in a hierarchical form with the bottom level more detailed than the
upper one. The lowest level of the WBS components are referred to as work packages
and they can be treated as mini projects, schedules, cost estimates, and can be
monitored and controlled separately.
The WBS is a foundation document of the project which is a base for the rest of the
planning process. Therefore it makes sense to say that the WBS’s accuracy level
needs to be taken seriously during its creation.
Examples of work breakdown structures are illustrated in Figures 4-1, 4.2 and 4-3 of
Clements and Gido (2012:98-101).
It takes a lot of effort and time to create a good WBS. A fair amount of time must
have been spent in the scope definition to create a detailed WBS. The project manager
and the team must decide on how to organize the project work and the number of
levels that need to be included in the WBS. The approved project scope statement and
its associated WBS and WBS dictionary form the scope baseline.
A WBS dictionary is a document that describes each WBS task in detail. The format
can vary based on project needs. It might be appropriate to have a short paragraph
describing each work package. For a more complex project, an entire page or more
might be needed for the work package descriptions. The typical information contained
in the WBS dictionary might include: responsible person or organisation, resource
requirements, estimated costs, and other information.
Steps to create a WBS:

Identify all the project deliverables and artifacts. Keep the list textual at
this stage rather than graphical. Level 0 of the WBS will be the
projectLook for any inherent categorization and rearrange the list
necessary to organize it under main categories. These categories will be
the first level of the hierarchy in the WBS.
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
Don’t forget to include the project management or other related activities.
They are also requirements of the project.

Decompose the deliverables down into the major activities needed to
produce them.

Continue decomposing until you have a level of work packages that are
applicable to the project that can be assigned, scheduled, estimated and
managed.

Review the list of deliverables, components and work packages.

Create the graphical WBS from the textual lists. Review it for clarity and
visual aesthetics.
4.3.4
Scope Baseline
The scope baseline is defined as the approved project scope statement and its
associated WBS and WBS dictionary. The scope baseline acts as the basis for
measuring project performance.
4.3.5
Scope Creep
Scope creep is informally making changes to the project scope without appropriate
approval. Many projects overspend their budget or are not completed on time due to
scope creep caused by additional work that was not documented or approved, or was
not communicated and in turn caused errors or rework for other elements of the
project.
4.4 Project Time Management
Project Time Management involves the process of defining, sequencing and
estimating durations to project activities with the view of creating a project schedule.
Project Time management processes include:
 Activity definition
 Activity sequencing
 Estimating activity resources and durations
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 Develop the schedule
The above processes fall under the planning phase
 Controlling the schedule – part of monitoring and controlling phase
4.4.1
Activity Definition
Using the WBS, the project team must define the activities that need to be performed
to produce the deliverables of each work package. An activity also referred to as a
task is a defined piece of work that consumes time (Clements and Gido, 2012: 103). It
does not necessarily require the expenditure of effort by people – for example waiting
for concrete to harden can take several days but does not require any human effort.
4.4.2
Creating the Activity List and Attributes
The activity list is a comprehensive list of activities that are planned to be included on
a project. It should include the activity name, an activity identifier or number, and a
brief description of the activity, such as predecessors, successors, logical
relationships, leads and lags, resource requirements, constraints, imposed dates, and
assumptions related to the activity. Both should be in agreement with the WBS and
WBS dictionary and be reviewed by key project stakeholders.
4.4.3
Creating a Milestone List
A milestone identifies important events or checkpoints in the project’s life at which
specific reviews can be undertaken. There is usually no cost or duration for a
milestone. Senior managers and Project sponsors are normally interested in the
milestone achievements rather than activities because milestones signify a key
achievement.
Milestones for many projects include: Sign off key documents e.g. project hand-over
certificate, completion of specific products, and completion of important process
related work, such as awarding a contract to a supplier.
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4.4.4
Activity Sequencing
Activity sequencing involves identifying and documenting the logical relationships
among schedule activities. Schedule activities can be logically sequenced with proper
precedence relationships, as well as leads and lags to support late development of a
realistic and achievable project schedule. A dependency or relationship relates to the
sequencing of project activities or tasks.
Activity sequencing has a significant impact on developing and managing a project
schedule.
There are three main types of dependencies,

Mandatory dependencies, which are inherent in the nature of the work being
performed on a project, for example, on a building project you cannot pour
concrete before digging the trenches.

Discretionary dependencies, which are procedural issues defined by the
project team. A project team might follow the practice of not starting detailed
design work until key stakeholders sign off all the analysis work.

External dependencies which involve relationships between project and nonproject activities. The installation of new software might depend on delivery
of new hardware from an external supplier.
A network diagram is a tool that arranges specific activities into an appropriate
sequence and defines their dependent relationship.
4.4.5
Gantt Chart
Gantt charts provide a standard format for displaying schedule information by listing
activities with their corresponding start and finish dates with a calendar. The activities
listed should coincide with the information on the WBS, activity and milestone lists.
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A low cost, easy to understand method using horizontal bars to depict each project
activity along a time line to make sure:
1) all activities are planned for
2) their order of performance is accounted for
3) activity time estimates are recorded.
4) overall project time is developed
However they do not adequately illustrate interrelationships and dependencies
between activities and resources.
A Gantt chart must be developed as a time structure for the procurement schedule,
resource histogram and the cashflow statement. The activities or scope of work are
listed in the left hand column, with a time scale along the top. Scheduling for each
activity is represented by a horizontal line showing start to finish. The calendar time
scale can be shown in days or weeks, as well as hours or months or sometimes years.
In the example below, there is a list of activity data for a house-building project. The
information is taken and depicted with a calendar time scale.
Activity
Duration
Start Date
Finish Date
Lay foundations
4 days
1 March
4 March
Build walls
7 days
5 March
11 March
Install roof
3 days
12 March
14 March
Description
A simple Gantt chart
Activity
Mon
Tue
Wed
Thur
1
2
3
4
Fri 5
Sat 6
Sun
Mon
Tue
Wed
Thur
Fri
Sat
Sun
7
8
9
10
11
12
13
14
Description
Lay
foundations
Build walls
Install roof
Figure 9: Gantt Chart: House Building Project
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4.4.6
Network Diagrams
As mentioned in the section above, network diagrams are the preferred technique for
showing activity sequencing. A network diagram is a schematic display of the logical
relationships among, or sequencing of, project activities.
There are two types of network diagrams:

Activity-on-Arrow (AOA)

Activity-on-Node (AON)
In the Activity-on-Arrow (AOA) approach, or the Arrow Diagramming Method
(ADM), activities are represented by arrows and connected at points called nodes
(starting and ending point of an activity) to illustrate the sequence of activities.
An example of an AOA diagram can be seen in Figure 9 below:
6 weeks
4
B
8 weeks
3 weeks
E
2
D
A
G
11 weeks
1
5
6
1 week
C
4 weeks
F
9 weeks
3
Figure 10: AOA Diagram
The AOA only uses the finish-to-start dependency.
AOA uses a dummy activity to clarify the logic, but it is possible to have a double
dummy that is illogical.
The precedence diagramming method (PDM) (Refer to Figure 10 below) is a network
diagramming technique in which boxes represent activities and is also known as
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Activity-on-Node (AON) technique. These are more widely used as they can show all
dependency types.
B
E
A
D
St
C
G
F
Figure 11: AON Diagram
The benefits of Precedence Diagramming Method (PDM) AON:

PDM offers a number of logical relationships between the activities, such as
start-to-start, where activity A cannot start until activity B starts. Finish-tofinish relationship, which means activity A, must finish before activity B
finishes. Other relationships are finish-to-start with activity A finishing before
activity B starting, and start-to-finish where activity A must start before
activity B can be finished. This overcomes the AOA’s need for dummy
activities.
Guidelines for creating an AON Network diagram

Find all of the activities that start at Node 1. Draw their finish nodes, and draw
arrows between Node 1 and each of those finish nodes. Put the activity letter
or name on the associated arrow. If you have duration estimate write it next to
the activity letter or name.

Continue drawing the network diagram working from left to right. Look for
bursts and merges. Bursts occur when two or more activities follow a single
node. A merge occurs when two or more nodes precede a single node.

Continue drawing the AON network diagram until all activities with
dependencies are included on the diagram.
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
As a rule of thumb all arrowheads should face toward the right, and no arrows
should cross on an AON network diagram. You might need to redraw the
diagram to make it look presentable.
Keep in mind that the network diagram represents activities that must be done to
complete the project. It is not the race to get from the first node to the last. Every
activity on the network diagram must be completed for the project to finish. Not every
item on the WBS needs to be on the network diagram, only activities with
dependencies need to be shown on the network diagram.
4.4.7
Critical Path Analysis
The critical path method (CPM) is a schedule network analysis technique that is
performed using the schedule model. The critical path method calculates the
theoretical early start and finishes dates and late start and finish dates.
The main difference between the CPM and PERT is how they address activity time
duration. The accuracy of an activity’s time estimate usually depends on the
information available from previous projects. If an activity has been performed
before, its duration can be reasonably accurately estimated. However, activities with a
new scope of work, which are difficult to measure or dependent on other uncertain
variables, may have a range of possible time duration.
A critical path of a project is the series of activities that determines the earliest time
by which the project can be completed. It is the longest path through the network
diagram and has the least amount of slack or float. Slack or float is the amount of time
an activity may be delayed without delaying a succeeding activity or the project finish
date. The longest path or the path containing the critical tasks drives the completion
date of the project.
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Steps involved in calculating the critical path:
 Once the network diagram is completed, identify all paths from the start that
will lead you to the end.
 Calculate the durations of each path
 Select the path with the longest duration, which will be the critical path.
If we had to calculate the critical path of the AON diagram - Figure 11 using the
steps mentioned above, and using the following information:
Activity
Duration
A
8
B
4
C
3
D
5
E
1
F
2
G
2
The identified paths will be:
Path 1:ABEG = 8+4+1+2 = 15
Path 2: ADG=8+5+1=14
Path 3:CFG = 3+2+2=7
Path 2 will be the critical path due to the longest duration.
THINK POINT
Will the AOA and AON diagrams of the same project yield the identical critical
paths?
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4.4.8
Float and Slack
Float also referred to as slack is how much leeway an activity’s duration has before it
causes delays in successor activities or the project itself.
4.4.9
Activity Resource Estimation
Estimating schedule activity resources involves determining what resources (people,
equipment, or material). It is important to know the full scope of work and have a
WBS when undertaking this process as that determines the accuracy of the process.
Experienced personnel in similar projects can add value in this process because they
can source the relevant information easier.
Some of the points to consider during this process are listed below:

How difficult will it be to perform specific activities on this project?

Is there some uniqueness covered under the project’s scope statement that can
have an impact on resources?

What is the organisation’s experience and track record in undertaking similar
activities?

Does the organization possess appropriate resources to carry out the work?
Are there any organizational policies that might affect the availability of
resources?

Does the organization need to acquire more resources to accomplish the work?
Is outsourcing an option?
The above questions will provide a base within which to start planning. A closer look
at the Human Resources is important because it involves salaries and benefits, and
these are a source of disputes in many projects which could lead to unnecessary
industrial action.
The key output of the activity resource estimating is activity resource requirements,
which identifies and describe the types and quantities of resources required for each
schedule activity in a work package.
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Other outputs are activity attributes, resource breakdown structure, resource calendar,
and requested changes.
4.4.10 Activity Duration Estimation
Now that the activities have been defined and listed, sequenced, with successors and
predecessors, network diagrams drawn, resources estimated, it is time to estimate the
duration of each activity.
The activity duration is the amount of time it takes to achieve such activity and is not
to be confused with the effort. For example the activity “Building layout plans” for
extensions to your house is not just to draw the plans, it also involves the approval
process undertaken by the municipality. The house cannot be built if the plans are not
approved yet.
This process includes estimates of schedule activity durations using information on
schedule activity scope of work, required resource types, estimated resource
quantities, and resource calendars with resource availabilities.
The outputs of activity duration estimating are activity duration estimates and updated
activity attributes.
Among other tools and techniques used in the activity duration estimating process, a
three point estimate is used. The three point estimate includes an optimistic, most
likely, and pessimistic estimates. The optimistic estimate is the best scenario, while
pessimistic and most likely estimates are the worst case and the most realistic
estimates respectively.
4.4.10.1
Program Evaluation and Review Technique (PERT)
Program Evaluation and Review Technique is a network analysis technique used to
estimate project duration when there is a high degree of uncertainty about the
individual activity duration estimates.
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4.4.11 Schedule Development
Schedule development determines planned start and finish dates for project activities.
Schedule development can require that duration estimates and resource estimates to
be reviewed and revised to create an approved project schedule that can serve as a
baseline against which progress can be tracked.
It uses the results of all the preceding project time management processes to
determine the start and end dates of project activities and of the entire project. The
resulting project schedule is often shown on a Gantt chart, a standard format for
displaying project schedule information by listing project activities and their
corresponding start and finish dates in a calendar format.
The ultimate goal of schedule development is to create a realistic project schedule that
provides a basis for monitoring project progress for the time duration of the project.
4.5 Project Cost Management
Project Cost Management refers to the process of preparing a project budget. This is
done through estimating the identified activities and resources.
Project Cost Management involves:
 Cost estimating – part of project planning
 Cost budgeting – part of project planning
 Cost Control – Part of Cost Control
4.5.1
Cost Estimating
Cost estimating involves the process of developing an approximation of the costs of
the resources needed to complete project activities. Project teams normally prepare
cost estimates at various stages of a project, and these estimates should be updated
and improved as more information becomes available over time. It is also important to
provide supporting details for the estimates, including ground rules and assumptions.
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4.5.2
Cost Estimating Tools and Techniques
To develop an accurate and quality cost estimate takes a lot of time and effort and a
good quality WBS needs to be used as basis for the cost estimate. The more accurate
and detailed the WBS the better the cost estimate. The following tools and techniques
are generally used to develop cost estimates:

Analogous Estimating
Analogous cost estimating means using the actual cost of previous, similar
projects as the basis for estimating the cost of the current project and is also
called top-down estimating.

Bottom-up estimating
Bottom up estimating involve estimating individual activities from the lowest
level to the highest level. Once individual activities are estimated at different
levels of the WBS, they are then rolled and summed up to arrive at a total cost.
This estimating technique is more accurate but can also take time to conclude,
and is expensive to carry out. The project manager must determine the
accuracy level required for the cost estimate and then choose the most cost
effective technique to deliver the cost estimate.

Parametric Modeling
Parametric estimating is a technique that uses a statistical relationship between
historical data and other variables (e.g. square meters in construction, lines of
code in software development, required labour hours) to calculate a cost estimate
for a schedule activity resource. The cost and accuracy of parametric models vary.
They are most reliable when the historical data used to develop the model is
correct, the parameters used in the model are readily quantifiable and the model is
scalable i.e. can be applied to very large as well as very small projects.
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4.5.3
Cost Budgeting
Cost budgeting involves allocating cost estimates to activities over a period of time or
project duration. The activities are based on the WBS for the project and the main
goal of the cost budgeting process is to produce a cost baseline. The cost baseline is
defined as a time phased budget that is used as a basis against which to measure,
monitor, and control overall cost performance on the project.
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SELF ASSESSMENT ACTIVITY
1. Construct a AOA network diagram for the following project:
Activity
Description
Predecessor
Duration
A
Locate facilities -
8 weeks
B
Order furniture
A
6 weeks
C
Interview
-
4 weeks
D
remodel
A
11 weeks
E
Furniture setup
B
3 weeks
F
Hire and train
C
9 weeks
G
Move in
E,D,F
1 week
2. Draw a Gantt Chart using the following information
Activity Description
Duration
Get recipe
1min
Organise ingredients
3 min
Preheat oven to 180oC
15 min
Sift flour
1 min
Beat eggs
1 min
Add eggs
1 min
Add milk and mix well
1 min
Add sugar and mix well
1 min
Mix well
1 min
Pour in baking tray
1 min
Place in oven for baking
25 min
Make icing
5 min
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Remove cake and let it cool
10 min
Ice cake
10 min
3. Arrange the following activities into the WBS to show how the work items
decompose into activities.

Shop for shoes

Create guest list

Tailoring and fitting

Shop for dress

Find caterer

Cater the wedding

Wait for RSVPs

Mail the invitations

Finalize the menu

Print the invitations

Choose the bouquet
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Solution to Self Assessment Activity
1.
6 weeks
4
B
8 weeks
3 weeks
E
2
D
11 weeks
1
A
5
G
1 week
C
4 weeks
9 weeks
3
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75
6
180oC
Sift flour
Beat eggs
Add eggs and mix
well
Add milk and mix
well
Add sugar and mix
well
Mix well
Pour in baking tray
Place in oven for
baking
Make icing
Remove cake and
let it cool
Ice cake
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61
Get recipe
Organise
ingredients
Preheat oven to
PRINCIPLES OF PROJECT MANAGEMENT
2. Gantt Chart solution
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3.
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CHAPTER FIVE
PROJECT PLANNING 2
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Chapter Five
PROJECT PLANNING 2
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

Discuss the project quality management.

Analyse project human resources requirements.

Set up project communications.

Manage project risks

Discuss the project procurement.
READING
This section was written using the following textbook:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third
Edition. Newtown Square, PA: Project Management Institute, 2004
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5.1 Project Quality Management
According to the PMBOK (2004), project quality management processes include all
the activities of the performing organisation that determine quality policies,
objectives, and responsibilities so that the project will satisfy the needs for which it
was established. This means that quality can mean different things to different people
if the quality requirements in a project are not determined upfront. The most relevant
description of quality is “fit for purpose”.
Project quality must therefore be weighed against the project cost and time
constraints. For example if the level of quality is increased, the result could be a
higher budget and longer project duration.
Project Quality management comprises of three processes:
 Quality planning – establishing the planning for meeting project quality
requirements.
 Quality assurance – ensuring the project is meeting the requirements established
in the project quality management plan. This will be discussed in Chapter 6 –
Project Execution.
 Quality control – making sure the deliverables are meeting their quality
requirements. This will be discussed in Chapter 7 - Project Monitoring and
Control.
5.1.1
Quality Planning and the Quality Management Plan
Quality planning includes identifying which quality standards are relevant to the
project and determining how to satisfy them. It also involves designing quality into
the product of the project as well as the processes involved in managing the project.
Like other plans, the size and complexity of quality management plans varies to meet
project needs. A metric is a standard of measurement. They allow organisations to
measure their performance in certain areas and to compare them over time or with
other organisations.
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The outputs of quality planning are the quality management plan, quality metrics,
quality checklists, process improvement plan, and quality baseline. The quality
management plan describes how the project management team will implement the
organisation’s quality policy.
5.1.2
Attributes of a Project Quality Plan
A project quality plan has the following attributes:

It describes all the quality definitions and standards relevant to the project.

It highlights the standards that must be followed (regulatory requirements).

It describes the conditions that the services and materials must posses in
order to satisfy the needs and expectations of the project stakeholders.

It describes the situations or conditions that make an output fall below
quality standards, this information is used to gain a common understanding
among the project team to help them identify what is above and what is
below a quality standard.

The quality plan also includes the procedure to ensure that the quality
standards are being followed by all project staff. The plan also includes the
steps required to monitor and control quality and the approval process to
make changes to the quality standards and the quality plan.
5.1.3
Quality Metrics
A metric is an operational definition that describes in very specific terms, what
something is and how the quality control process measures it. Quality metrics are used
in the QA (Quality Audit) and QC (Quality Control) processes.
5.1.4
Quality Metrics
A checklist is a structured tool, usually for a specific component, used to verify that a
set of required steps had been performed. Checklists may be simple or complex.
Different projects have different checklists, for example a change management
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process can have a checklist to ensure that all the necessary steps have been followed
before a change is actually effected.
5.1.5
Quality Planning Tools and Techniques
There are numerous quality planning tools and techniques. A few are outlined below:
Benefit / cost analysis
Quality planning must consider cost benefit tradeoffs. The primary benefit of
meeting quality requirements is less rework, the primary cost is the expense
associated with project quality management activities.
Benchmarking
In benchmarking, a comparison is done between the actual and planned activities
to those of other projects to generate ideas for improvement. It also provides a
standard by which to measure performance.
Flowcharting
Flowcharts are diagrams that show how various elements of a system relate. One
such example of a flow chart is the Cause and Effect Diagram. This will be
discussed in detailed in Chapter 11: Performing Quality Control.
Design of experiments (DOE)
This is an analytical technique that helps identify which variables have the most
influence on the overall outcome.
An example would be in the automotive
industry where automotive designers use this technique to determine which
combination of tyres and suspension will produce the most desirable ride at a
reasonable cost.
Additional quality planning tools
Other tools used to plan more effective project quality management activities
include: brainstorming, affinity diagrams, force field analysis, matrix diagrams
and prioritization matrices.
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5.2
Project Human Resource Management
Project human resource management includes the processes that organize and manage
the project. It involves the use of soft skills - interpersonal, leadership, motivational,
negotiation and conflict management. It is unlike our technical skills which can be
easily measured, but the ultimate measure of success is an efficient, effective and
cohesive project team.
Project Human Resource Management can be broken down into four processes:
 Developing the Human Resource Plan – this is part of project planning phase
 Acquiring the Project Team - part of Project Execution Phase
 Developing the Project Team – part of Project Execution Phase
 Managing the Project Team – part of Project Execution Phase
Human resources planning is concerned with identifying and documenting project
roles, responsibilities, and reporting relationships, as well as creating the staffing
management plan. Key outputs produced as part of project human resource
management planning include a project organisational chart, responsibility
assignment matrix, resource histogram, and a staffing management plan.
5.2.1
Project Organisational Charts
The project organisational chart is similar to a company’s organisational chart. It is a
hierarchical graphical representation of how authority and responsibility are
distributed within the project. The size and complexity of the project determines the
simplicity or complexity of the organisational chart. A sample organisational chart is
illustrated in Figure 12 below:
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Figure 12: Project Organisational Charts
5.2.2 Resource Histograms
A resource histogram is a column chart that shows the number of resources required
for or assigned to a particular project over time. In planning project staffing needs,
senior managers often create a resource histogram in which columns represent the
number of people needed in each skill category. By stacking the columns, you can see
the total number of people needed each month. After resources are assigned to a
project, you can view a resource histogram for each person to see how his/her time
has been allocated.
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A diagram of a resource histogram is shown in Figure 13 below:
Figure 13: Resource Histogram
Source: http://www.anvari.net/BUS517%20Proj%20Mang/chap09.ppt#295,1,Chapter 9: Project Human Resource
Management
5.2.3 Staffing Management Plans
The staffing management plan describes when and how human resource requirements
will be met. It describes procedures to be followed when hiring and reassigning team
members. It describes the types of people needed to work on the project, the numbers
needed over a specific time, and how these resources will be acquired, trained,
rewarded and reassigned after the project.
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5.3
Project Communications Management
It is normally said that project managers spend about 90% percent of their time in a
project communicating. This indicates that project communications management is
one of the critical areas and the project manager should take the time to plan
thoroughly. Yet most of the challenges faced in projects are as a result of
communication breakdown, information not reaching the intended destination,
information being filtered and the message getting lost on the way.
Project Communication has the following processes:
 Identifying stakeholders – part of Project Initiation
 Communication planning – discussed in this chapter
 Distributing information – part of Project Execution
 Manage Stakeholders Expectations – part of Project Execution
 Reporting Performance – part of Monitoring and Control.
Project Communication is important due to the following reasons:
 Dual purpose:
 causes some action or agreement to take place, and
 makes a record that might be needed later.
 Inefficiencies in communication, and especially the lack of communication, can
severely affect a project’s schedule and chances for success
 Is a critical success factor for managing the expectations of the customer and the
stakeholders
 Provides the critical link among people, ideas and information that is necessary
for success.
Communication planning is focused on determining the information and
communications needs of the stakeholders: Who needs what information, when
will they need it, and how will it be given to them
Project communication management plan is a framework and should be a living,
evolving document that can be revised when appropriate.
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5.3.1 Communications Management Plan
The communications management plan is a guiding document, which provides
communication channels, what to communicate, with whom, and how is it going to be
communicated among other things. The communications management plan provides
the following:

Stakeholder communications requirements.

Information to be communicated, including format, content, and level of
detail.

Person responsible for communicating the information.

Person or group who will receive the information.

Methods or technologies used to convey the information, such as memoranda,
e-mail, and/or press releases.

Frequency of the communication, such as daily, weekly, monthly, etc.

Escalation process-identifying time frames and the management chain (names)
for escalation of issues that cannot be resolved at a lower staff level.

Method for updating and refining the communications management plan as the
project progresses and develops.

Glossary of common terminology.
5.3.2 Project Web Sites
Project web sites provide a centralized way of delivering project documents and other
communications. Some project teams also create blogs. Blogs are easy to use journals
on the web that allow users to write entries, create links and upload pictures, while
allowing readers to post comments to particular journal entries. Project teams can
develop project web sites using web-authoring tools, such as Microsoft FrontPage as
an example
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THINK POINT
What would happen if the project team was not kept informed about the project
development?
5.4 Project Risk Management
Project risk management is one of the areas normally ignored by many project
managers and yet it is one of the most important areas to analyse. It is reported that at
the early stages of a project, risks are high because of the high uncertainty and low
confidence that the project has. As the project progresses and the project’s product is
delivered, the level of uncertainty is reduced and the confidence among stakeholders
is improved, thus reducing the risk. By the time the project is completed and handed
over the project risk is almost none.
To reduce the project risk the project team needs to understand the risks that the
project is exposed to so that they can be analysed and a contingency plan developed to
increase the probability of success.
Project Risk Management involves the following processes:

Risk management planning

Identifying risks

Performing Qualitative risk analysis

Performing Quantitative risk analysis

Planning risk responses
The above will be discussed in this chapter as it falls under project planning

Monitoring and controlling risk – part of project monitoring and controlling.
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5.4.1 Risk Management Plan
The risk management plan describes how risk management will be structured and
performed on the project. The risk management plan includes the following:

Methodology. Defines the approaches, tools, and data sources that may be
used to perform risk management on the project.

Roles and responsibilities. Define the lead, support, and risk management
team.

Budgeting. Assigns resources and estimates costs needed for risk management
for inclusion in the project cost baseline.

Timing. Defines when and how often the risk management process will be
performed throughout the project life cycle.

Risk categories. Provides a structure that ensures a comprehensive process of
systematically identifying risk to a consistent level of detail and contributes to
the effectiveness and quality of risk identification.

Definition of risk probability.
The risk management plans include contingency plans, reserves/allowances, and
fallback plans. Contingency plans refers to actions determined as part of the risk
assessment should the identified risks occur. Contingency allowances are funds held
by the project sponsor specifically set aside for unforeseen risks should they arise.
Fallback plans are developed for risks that have a high impact on meeting project
objectives, and are put into effect if attempts to reduce the risk are not effective.
5.4.2 Risk Factors
A risk factor is a situation that may give rise to one or more project risk (Portny,
2007:151). An example of a risk factor would be a project undertaken by a company
where there has been no prior experience in it or where no similar project like the one
its presently undertaking has been done before. Due to the fact that the company has
no prior experience in this type of project, activities or resources may be overlooked
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that could be required to complete the project. Having no prior experience does not
guarantee that the company may not have problems but it increases the probability of
a problem occurring.
5.4.3 Identifying Risks
Sound risk assessment and risk management planning throughout project
implementation can have a big payoff. The earlier a risk is identified and dealt with,
the less likely it is to negatively affect project outcomes. Risks are both more
probable and more easily addressed early in a project. By contrast, risks can be more
difficult to deal with and more likely to have significant negative impact if they occur
later in a project.
Risk identification determines what might happen that could affect the objectives of
the
project, and how those things might happen.
The following example cited from Portny (2007:155) explains the relationship
between risk factor and risk identification.
Suppose you plan a new technology in your project. The risk factor will be use of the
new technology. Risks arising from this risk factor could be broken down to product,
schedule and resource risks and are further explained below:

Product Risk: the new technology may not produce the desired results.

Schedule Risk: tasks using the new technology may take longer than
anticipated.

Resource Risk: Existing facilities and equipment may not be adequate to
support the use of the new technology.
5.4.4 Risk Identification Process
The risk identification process must be comprehensive, as risks that have not been
identified cannot be assessed, and their emergence at a later time may threaten the
success of the project and cause unpleasant surprises. The process should be
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structured using the key elements to examine risks systematically, in each area of the
project to be addressed.
A number of techniques can be used for risk identification, but brainstorming is a
preferred method because of its flexibility and capability. It allows one to collect a
wide range of risks.
Information used in the risk identification process may include historical data,
theoretical
analysis, empirical data and analysis, informed opinions of the project team and other
experts, and the concerns of stakeholders.
It is important to be specific when describing a risk. The more specifically you
describe a risk, the better you can assess its potential effect.
The output is a comprehensive list of possible risks to the successful outcome of the
project, usually in the form of a risk register, with management responsibilities (risk
owners) allocated to them.
The risk identification process is an iterative process as new risks may arise or
become known during the progression of the project through its lifecycle.
The Wheel of Misfortune below shows the besides project risks, there are a whole
range of other risks to consider.
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THE WHEEL OF MISFORTUNE
Product
Liability
Fire
Floods
Competition
New
Technology
Business
Risks
Property
Risks
Poor Info
Personal
Risks
Financial
Risks
Employee
Dishonesty
Theft
Bankruptcy
Bad Debts
Key team
members
leaving
Cashflows
Figure 14: The Wheel of Misfortune ,Source: Burke, 2008:121
5.4.5 Risk Events and Probability/Impact Matrices
Risk events refer to specific, uncertain events that may occur to the detriment or
enhancement of the project.
There are two broad categories of risk events namely negative and positive risk
events. Negative risk events include the performance failure of a product produced as
part of a project, delays in completing work as scheduled, increases in estimated costs,
supply shortages, litigation against the company, and strikes.
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Positive risk events include completing work sooner than planned or at an
unexpectedly reduced cost, collaborating with suppliers to produce better products,
and obtaining good publicity from the project.
Work done by outside suppliers or sellers should be well documented in contracts,
which are mutually binding agreements that obligate the seller to provide the specified
products or services at the right time, at the right cost and correct quantity, and
obligate the buyer to pay for them.
Project managers should include clauses in contracts to help manage project risks by
using:

Incentive or penalty clauses.

Certain types of contracts, such as fixed-price contracts, to reduce their risk of
incurring higher costs than expected.

Competition for supplying goods and services to help reduce negative risks
and enhance positive risks on projects.
Once the risks of a project have been identified, the risks would need to be analyzed.
There are two methods that will be discussed: Qualitative ad Quantitative Risk
Analysis
5.4.6 Qualitative Risk Analysis
Qualitative Risk Analysis includes the methods for prioritizing the identified risks for
further action. It also assesses the priority of the identified risk using the probability
of occurring, and the severity of the risk should it occur. It also looks at other factors
like the impact the identified risk will have on the schedule, cost, scope and quality
(PMBOK, 2004:249).
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5.4.7
Qualitative Risk Analysis
This analysis is performed after the qualitative risk analysis. In quantitative risk
analysis, the effect o the overall project objectives of identified risk is numerically
analysed. It is performed on risks that have been prioritized in the qualitative risk
analysis process as potentially and substantially impacting the projects competing
demands (PMBOK, 2004:254).
Having identified, quantified and prioritised the risk, a risk response plan would need
to be developed.
5.4.8
Risk Response Planning
In risk response planning, options and actions to enhance opportunities and to reduce
threats to project objectives are developed. It also includes the identification and
assignment of one or more persons to take responsibility for each agreed to and
funded risk response.
There are a range of responses which should be developed in advance during the
planning
phase:

Eliminate risk

Mitigate the risk

Deflect risk

Accept risk
These are not mutually exclusive and the response may contain a combination of them
all.
Eliminate the risk
This should be the initial consideration when dealing with the risk. Look into
ways of avoiding the risk completely by removing the cause or taking an alternate
action.
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Mitigate the risk
The word mitigate means to minimise or reduce. To reduce the risk’s probability
one could develop prototypes, simulate or conduct model testing.
Deflect the risk
This is where the risk is transferred in part or whole to another party. This can be
achieved by:

Contracting: Here the risk is moved away from the client and onto the
contractor or supplier.

Retention: The client retains a percentage of the contractor’s income
against the contractor failing to complete the contractual obligation.

Performance bonds: Contractors often offer their clients a performance
bond through a bank. The bond could be held against lack of performance
or poor work quality.

Insurance: A third party accepts the insurable risk in exchange for the
payment of a premium.
Accept the risk
The consequence of the risk occurring is accepted but a contingency plan is
developed to protect the organization from the risk event happening. It is also
termed self-insurance.
A contingency plan defines actions you take ahead of time. An example would be
if your backed up files in the office gets damaged, you would keep a separate set
of files offsite
5.4.9
Risk Register
The risk register is the output of the risk identification process and it includes a list of
identified risks, list of potential responses, root causes of risks, and updated risk
categories. A typical risk register is seen in Schwalbe (2009:184).
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THINK POINT
South Africa is undertaking massive public infrastructure projects such
as the construction and upgrading of roads and bridges in time for the FIFA 2010
soccer world cup and beyond. Identify potential risks posed by these projects and rate
them according their probability and impact on a sliding scale between low to high
5.5 Project Procurement Management
Project procurement management includes the processes to purchase or acquire the
products, services, or results needed from outside the project team to perform the
work. The project team needs to determine the project’s needs regarding acquiring of
goods so need to develop a procurement strategy that will satisfy those project’s
needs. Key outputs include make or buy analysis, procurement management plans,
requests for proposals or quotes, contract statements of work, and supplier evaluation
matrices.
The processes in procurement management include:

Procurement planning

Conducting procurement

Administrating procurement

Closing procurement
The first three processes are part of project planning and the last process is part of
project closure phase.
5.5.1 Procurement Management Plan
A procurement management plan is a document that describes how the procurement
processes will be managed, from developing documentation for making outside
purchases or acquisitions, to contract closure.
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The procurement management plan should include:

Guidelines on types of contracts to be used in different situations.

Standard procurement documents or templates to be used, if applicable.

Guidelines for creating contract Work Breakdown Structures, Statements of
Work, and other procurements documents.

Roles and responsibilities of the project team and related departments, such as
the purchasing or legal department.
5.5.2 Requests for Proposal or Quote
A request for proposal or quote, it is a document that requests potential bidders to
tender for a proposal or quote to the proposing organisation based on the specification
or statement of work or product that the project organisation intends to purchase.
5.5.3 Types of Contracts
Different types of contracts are used for different types of projects and purchases. The
type of contract used and the specific contract terms and conditions set the degree of
risk being assumed by both the buyer and seller. The three main categories of
contracts are as follows:

Fixed price or lump sum contracts
These contracts involve a fixed total price for a well defined product or
service. The assumption is that once the price has been fixed, it cannot be
changed except on customer goodwill.

Cost-reimbursable contracts
Cost-reimbursable contracts involve payments to the seller for direct and
indirect actual costs.
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
Time and material contracts
Time and material contracts are a hybrid type of contractual arrangement that
contains aspects of both cost-reimbursable and fixed-price type arrangements.
These types of contracts resemble cost-reimbursable type arrangements in that
they are open ended.
5.5.4 Contract Statement of Work
The contract Statement of Work defines, for those items being purchased or acquired,
just the portion of the project scope that is included within the related contract. The
Statement of Work for the contract is developed from the project scope statement and
the Work Breakdown Structure. The contract Statement of Work must be written
clearly, complete, and concise. The sample contract Statement of Work is illustrated
in the figure below.
5.5.5 Supplier Evaluation Matrix
After doing a thorough evaluation of potential suppliers, many organisations
summarize evaluations using a supplier evaluation matrix (a type of weighted scoring
model). Suppliers are often evaluated on criteria related to cost, quality, technology,
past performance, and management. See Figure 5-22 from Schwalbe (2009) of a
sample supplier evaluation matrix.
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THINK POINT
Identify a large project that you are familiar with. Describe some of the tasks
performed in planning the quality, human resources, communications, and
procurement aspects of the project
SELF ASSESSMENT ACTIVITY
1. Outline a few risk that may have been considered for the Moses Mabhida
Stadium Construction
2. Draw the organogram of your company.
3. Explain the 3 processes of Project Quality Management in relation to the
Project Life cycle.
4. What are the different types of contracts that one can use in projects?
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Solution to Self Assessment Activities
1. The following risk could have been considered in the stadium
construction:

Strikes

Delays in construction material

Lack of skilled staff

Weather
2. The solution will vary depending on your organization type. An
example of an organogram is seen below:
3. Refer to Section 5.1
4. Refer to Section 5.5.3
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CHAPTER SIX
PROJECT EXECUTION
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Chapter Six
PROJECT EXECUTION
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

List several outputs of project execution under the different knowledge areas.

Discuss the tasks performed in directing and managing project execution as
part of project integration management.

Explain the importance of recommending corrective action and updating
project plans as part of quality assurance process.
This section was written using the following textbook:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
Schwalbe, K (2009) Introduction to Project Management Cengage Learning
Refer to Chapter 2
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6.1 Introduction
The executing process group consists of the processes used to complete the work
defined in the project management plan to accomplish the project’s requirements. The
project team should determine which of the processes are required for the team’s
specific project. This process group involves coordinating people and resources as
well as integrating and performing the activities of the project in accordance with the
project management plan.
6.2 Project Execution Outputs
Key outputs of the executing process relating to the project integration management
include: project deliverables, requested changes, implemented change requests,
implemented corrective actions, implemented preventive actions, and implemented
defect repair.
Executing outputs relating to project quality management include: requested changes,
recommended corrective actions, organisational process assets update, and updated
project management plans.
Executing outputs relating to project human resources management knowledge area
include: project staff assignments, resource availability, updated staffing management
plan and, team performance assessment.
6.3
Project Execution Tasks
Project execution tasks are the series of actions that are taken by the project
stakeholders in carrying out the project plans. Most project sponsors would argue that
the most important output of any project is its deliverables. Deliverables are products
or services produced or provided as part of a project. As illustrated above, project
execution tasks are also carried out under each of the different project management
knowledge areas.
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6.3.1 Executing Tasks for Project Integration Management
To effectively direct and manage project stakeholders, project managers can follow
several important practices which include:

Coordinated planning and execution
The main objective of project planning is to ensure the successful execution of the
project. If proper planning was done from the outset, the project will be better to
execute. However, to execute projects thoroughly, the project manager must be
consistent in his/her monitoring and control throughout the project. This assists in
identifying gaps such as schedule slippage or cost over-runs. When the execution
process is monitored closely these gaps are easily identified and corrective action can
be implemented.

Development and use of soft skills
Soft skills are essential for a project manager to have simply because he/she deals
with people all the time and spends a large percentage (about 90%) of their time
communicating with people. The project manager, therefore, cannot afford to work in
isolation. He/she has to manage the team and inspire them to deliver on the project.
Soft skills include: strong leadership, effective team building, strong communication,
ability to motivate, negotiations, and conflict management just to mention a few. The
project manager is the focal point of the project. Below and around him/her they have
to manage the project team. Above them they have to manage the project sponsor,
executives and steering committee members. They also have to manage the external
environment such as the government, customer, suppliers, contractors and subcontractors. Because they communicate at different levels they have to possess the
soft skills to persuade, motivate, charm, and convince the stakeholders all the time.
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
Provide a supportive organisational culture
Project execution is made easier with a supportive organisational structure.
Organisational structures must allow for easy flow of communication, and have a
clear line of authority to ensure prompt decision making. The flatter the organisational
structure the more flexible and productive the organisation is and the quicker the
decisions are made. It is important for project managers to create a supportive climate
within their sphere of responsibility for effective project execution.

Break the rules when needed
Occasionally it may be necessary to bend or even break the organisation’s rules or
policies for the good of the project. For example, where a particular software is the
preferred choice of the company, it makes sense for the project manager to break the
rules and get cheaper but more effective software.

Capitalise on product, business, and application knowledge area
The project manager and his/her team need to have in depth knowledge of the various
project knowledge areas. It is normal in a complex project to bring in people with
specialist knowledge in the various areas to enhance the chances of a successful
project execution. In general, the project manager must use his/her expertise to guide
the project team.

Use project execution tools and techniques
The various project execution tools and techniques should be used for the good of the
project.
Naturally project teams will meet a lot of problems and challenges. Some challenges
can be avoided by doing a good job of initiating, planning, or monitoring and
controlling the project, but other challenges cannot be avoided. Some common
problems encountered during project execution are described in this chapter, but
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project managers must be creative and flexible in dealing with problems that occur on
their projects. For example one of the challenges a project can face is if the project is
not viable anymore (technology improvement substituting the project need) that is, the
need for the project is no more.
6.3.2 Executing Tasks for Project Quality Management
Quality assurance includes all the activities related to satisfying the relevant quality
standards for the project. Another goal of quality assurance is continual quality
improvement. Key outputs of quality assurance include recommended corrective
actions and project plan updates.
This section discusses three important quality improvement techniques namely:
benchmarking, quality audits, and cause-and-effect diagrams.
Benchmarking compares specific project practices or product characteristics to those
of other projects or products within or outside an organisation itself (for example,
training costs per employee) with a view to improving quality.
A quality audit is an analysis of specific quality management activities that helps
identify lessons learned, which could improve performance on current or future
projects. Either internal auditors or third parties with experience in specific areas can
perform quality audits. Quality audits may be scheduled at specific points in time or
they may be carried out randomly.
Cause and effect diagrams, which is also known as Fishbone Diagrams or Ishikawa
diagrams can assist in ensuring and improving quality by finding the root causes of
quality problems. Figure 15 adapted from Schwalbe (2009) illustrates a sample cause
and effect diagram.
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INTERACTIVITY
CONTENT
Too simple
Not enough examples
Too little interaction
No online support
Low course rating
Too simple
Assessment results very slow
Colours too wild
Fonts too small
SPEED
GRAPHICS/FONT
Figure 15: Cause and Effect Diagram for Low Course Rating, Adapted from
Schwalbe (2009:217)
6.3.3 Executing Tasks for Project Human Resource Management
In the human resources management knowledge area the two main tasks the project
manager performs are the acquiring of a project team and developing the project team.
The key outputs include project staffing assignments, resource availability, staffing
management plan updates, and team performance assessment. Project managers must
understand motivation theories to effectively execute projects. Psychologists,
managers, co-workers, teachers, parents, and most people in general still struggle to
understand what motivates people, or why they do what they do. Intrinsic motivation
causes people to participate in an activity for their own enjoyment. Extrinsic
motivation causes people to do something for a reward or to avoid a penalty.
Maslow’s hierarchy of needs is presented as Figure 16 is a simple way of
understanding people’s needs and where they are in their lives in relation to the
hierarchy.
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Figure 16: Maslow Hierarchy of Needs
Source: http://tutor2u.net/business/people/motivation_theory_maslow.asp
Maslow's theory consisted of two parts:
(1) The classification of human needs, and
(2) Consideration of how the classes are related to each other
Up to date information on current project members can be kept on a simple team
roster. The team roster can include names, roles, and contact information of project
team members. Supplier details (those involved in the project) can also be added to
the team roster.
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A sample team roster is shown in Figure 17 below:
TEAM ROSTER
October 1, 2010
Name
Role on Project
Position
Email
Mike Sandy
Project Champion
HR Manager
Mike.sandy@ppp.com
Lucy Smith
Project Sponsor
Training Manager
Lucy.smith@ppp.com
Rene Pillay
Team Member
Senior programmer
Rene.pillay@ppp.com
Kim Naidoo
Team Member
designer
Kim.naidoo@ppp.com
Phone
Figure 17: Team Roster
6.3.4 Executing Tasks for Project Communications Management
Good communications management is crucial to project execution. Information
distribution is the main communications management task performed during project
execution. The main output of this task is updating business processes. Some project
managers say 90 percent of their job is communicating, therefore, it is important to
address concepts related to improving project communications.
It is not enough for project team members to submit formal status reports to project
managers and other stakeholders and assume that everyone who needs to know that
information will read the reports. In fact, many people may prefer to have an
informal, two way conversation about project information. Project managers must be
good at nurturing relationships through good communications.
6.3.5 Executing tasks for Project Procurement Management
The main executing tasks performed as part of project procurement include requesting
seller responses and then selecting them. Key outputs include procurement document
packages, contracts, and management plans. It is important to address important
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concepts related to improving project communications. It must be emphasized that
people make or break projects. In general, people like to interact with each other to
get a true feeling for how a project is progressing. The project manager must facilitate
this interaction.
THINK POINT
Discuss the impact of acquiring a project team with the right skills for successful
project execution.
6.4
Project Library
A Project library is a system for storing, organizing and controlling all documentation
produced or used by the project. It is administered to agreed procedures and
standards. It can be an electronic/digital filing system.
The library must also contain Project staff and / or consultant information records in
accordance with instructions.
A project coordinator / administrator is responsible for maintaining and administering
the project library, collecting and processing information pertaining to requests for
project change and administering the project library.
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SELF ASSESSMENT ACTIVITY
1. Tabulate the effect of the knowledge areas on the Executing phase.
2. Discuss the three important quality techniques used in the Execution phase of
a project.
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Solution to Self Assessment Activities
1.
Knowledge Area
Executing
Integration Management
Direct and manage
execution
Quality
Performa QA
Management
HR Management
Acquire & develop team
Communications
Distribute info
Management
Procurement
Procurement document
Management
packages &contracts
2. Refer to Section 6.3.2
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CHAPTER SEVEN
PROJECT MONITORING AND
CONTROLLING
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Chapter Seven
PROJECT MONITORING AND CONTROLLING
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

List the project monitoring and control outputs common to all knowledge
areas.

Use control as part of project integration management and explain how to use
earned value management.

Explain the importance of scope verification, scope control, and acceptance
deliverables.

Construct
the
schedule
control
process
and
schedule
performance
measurement tools, such as tracking Gantt charts.

Analyse the quality control and monitoring techniques and process.

Identify the tasks performed as part of project communications management.

Evaluate the risk monitoring and control processes.
This section was written using the following textbook:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
Schwalbe, K (2009) Introduction to Project Management. Cengage Learning
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7.1 Introduction
The monitoring and control focuses on those processes performed to observe project
execution so that potential problems can be identified in a timely manner and
corrective action can be taken, if and when necessary. The project team should
determine which of the processes are required for the team’s specific project. The key
benefit of this process group is that project performance is observed and measured
regularly to identify variances from the project management plan.
7.2 Project Monitoring and Controlling Outputs
Outputs common to all knowledge areas include requested changes, recommended
corrective actions, and updates to applicable plant and processes.
The monitoring and controlling tasks for each knowledge area are tabulated below:
Knowledge Area
Monitoring and Controlling Tasks
Project Integration Management
Monitoring and controlling project work,
integrated change control
Project Scope Management
Verify scope, control scope
Project Time Management
Control schedule
Project Quality Management
Perform quality control
Project Cost Management
Control cost
Project HR Management
Manage Team
Project
Communication Report
performance,
manage
Management
stakeholders
Project Risk Management
Monitor and control risk
Project Procurement Management
Contract change control systems, buyer
performance reviews, claims
administrations, record management
Table 1: Monitoring and Controlling Tasks
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7.3
Monitoring and Control Tasks for Project Integration Management
Project monitoring and control assures project delivery progress. This process is
normally achieved by measuring performance of the actual progress of work done
compared to the project plan. Where there are gaps or variations, corrective action is
taken to ensure that the plan is on schedule. The main tasks of monitoring and control
of a project is performing integrated change control.
7.3.1 Monitoring and Controlling Project Work
Monitoring and controlling project work involves collecting, measuring, and
disseminating performance information as well as assessing measurements and
analyzing trends to determine what process improvements can be made. On the other
hand, performing integrated change control involves identifying, evaluating, and
managing changes throughout the project’s life cycle. Every project will experience
changes at one point or another. It is therefore important to develop a process of
monitoring, controlling and documenting project changes.
Two methods are particularly invaluable in this regard, forecasting with the Earned
Value Management and Earned Value Charts.
Earned Value Management (EVM)
Earned Value Management is a project performance measurement technique that
integrates scope, time and cost data. Given a baseline, project managers and their
teams can determine how well the project is meeting scope, time and cost objectives
by entering actual information and then comparing it to the baseline. The baseline
information includes:

Scope data - WBS tasks

Time data - start and finish estimates for each task

Cost date – cost estimates for each task
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Earned value management can be used at either a detailed or summary level.
It is important to be familiar with a number of earned value terms including:

Planned Value (PV) is that portion of the approved total cost estimate planned
to be spent on an activity during a given period.

Actual Cost (AC) is the total direct and indirect costs incurred in
accomplishing work on an activity during a given period.

Earned Value (EV) is an estimate of the value of the physical work actually
completed. It is based on the original planned costs for the activity and the rate
at which the team is completing work on the activity to date.

Rate of performance (RP) is the ratio of actual work completed to the
percentage of work planned to have been completed at any given time.
Earned Value Charts
Earned value information can be plotted onto a graph and are important for tracking
project performance and forecasts. This information is required by project
stakeholders to enable them to make certain decisions.
7.3.2 Integrated Change Control
Integrated change control is the process of identifying, evaluating and managing
changes throughout the project life cycle.
Integrated change control serves three main purposes:
7.4

To influence factors that causes change.

To determine if a change has occurred.

To manage changes as they occur.
Monitoring and Controlling Tasks for Project Scope Management
The monitoring and controlling tasks performed as part of project scope management
are scope verification and scope control as discussed below.
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7.4.1 Scope Verification
Scope verification involves formal acceptance of the completed project scope by the
project sponsor or designated stakeholders. Acceptance is often achieved through
customer inspection who then sign-off on key deliverables. The project team must
develop clear documentation of the project’s end product and procedures, which the
stakeholders can then evaluate for the degree of project completion and express their
satisfaction or dissatisfaction with the results.
7.4.2 Deliverables
Deliverables are the ultimate project results that benefit the customer. These are the
results that the project was originally set for. Projects usually include many
deliverables. A committee consisting of project sponsor, steering committee, and
other stakeholders are normally involved in verifying acceptance of deliverables.
7.4.3 Scope Control
It is difficult to control the scope of a project unless it is clearly defined and
documented. It is equally important to develop a process for soliciting and monitoring
changes to project scope. In this regard, project stakeholders are particularly
encouraged to suggest beneficial changes. However stakeholders should be
discouraged from suggesting unnecessary changes.
7.5
Monitoring and Controlling Tasks for Project Time Management
The main monitoring and control task performed under project time management is
schedule control. The project schedule is one of the most important measures for a
project’s success and is normally constrained by budget and quality parameters.
During project execution in particular, the project schedule becomes a source of
conflict because time extensions often equate to additional budget requirements.
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The key output of the schedule control is performance measurements, which are
provided by:
7.6

Indicators, whether the project is on schedule or not.

Milestone completion.

Performance review meetings and tracking through Gantt charts.
Monitoring and Controlling Tasks for Project Cost Management
The main objective of controlling costs is to ensure that the project budgeted amount
is not exceeded. The project manager’s goal is to deliver a good quality project at the
budgeted amount, or at a lesser amount than budgeted.
The main monitoring and control task performed as part of project cost management
is cost control. Cost control includes monitoring cost performance, ensuring that only
appropriate project changes are included in a revised cost baseline, and informing
project stakeholders of the cost of authorized changes. Outputs include project
management plan updates, documentation on corrective action, revised estimates for
project completion, requested changes, and updates to organisational process assets,
such as lessons-learned documents.
7.7
Monitoring and Controlling Tasks for Project Quality Management
To achieve quality objectives the project must deliver on what it was initiated for. The
project’s product must be fit for purpose and be used for its intended purpose. The key
outputs in this area include quality control measurements, validated defect repair, and
validated deliverables. The main outcomes of this process are acceptance decisions,
rework, and process adjustments.
7.7.1 Adherence to the Principles of Total Quality Management (TQM)
The principles of TQM require an intense focus on the customer and as a result a
partnership with customers and suppliers is formed. There is concern for continuous
improvement as everyone in the organisation should be viewed as a customer. There
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must be a preoccupation with quality improvement in everything the organisation
does. In addition, accurate measurement, statistical control and cycle times for new
products and services, is improved. Empowerment of employees in taking more
responsibility in what they do and becoming accountable for their own actions is part
of this process.
THINK POINT
Discuss the impact of ‘rework’ due to poor quality.
7.8
Monitoring and Controlling Tasks for Project Human Resource
Management
The main tasks performed under human resource management as part of the
monitoring and control of a project, is managing the project team. The major task for
the project manager is to manage his/her team, that is, he/she must ensure that their
team delivers at all times. They must use their soft skills to inspire and motivate the
team to perform optimally.
The following tools and techniques are used to manage teams:

Observation and conversation. Team observation and talking (formal or
informal) to team members is important.

Project performance appraisals. Measure team performance and implement
development plans where needed.

Conflict management. The project manager must have strategies to manage
conflict.

Issue Logs. These are used to log issues and actions to resolve them.
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7.9
Monitoring
and
Controlling
Tasks
for
Project
Communication
Management
The main communications management tasks include performance reporting and
managing stakeholders’ expectations. Key outputs include performance reports,
forecasts, and resolved issues and some of these are discussed below.
7.9.1 Performance Reporting
Performance reporting keeps stakeholders informed about how resources are being
used to achieve project objectives. Refer to Figure 18 for a template for Project
Progress Report.
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Harvard ManageMentor — PROJECT MANAGEMENT TOOLS
Project Progress Report
Use this form to help assess progress, present this information to others, and think through next steps.
Project:
Prepared by:
For the period from:
to:
Current Status
Key milestones for this period:
Achieved (list)
Coming up next (list)
Key issues or problems:
Resolved (list)
Need to be resolved (list)
Key decisions:
Made (list)
Need to be made: (list)
By whom
When
Budget status:
Implications
Changes in objectives, timeline/delivery dates, project scope, resource allocation (including people and financial)
Next steps
List the specific action steps that will be done to help move this project forward successfully. Put a name and date next to each
step if possible.
Step
Person Responsible
Date
Comments:
© 1999 by the President and Fellows of Harvard College and its licensors. All rights reserved.
Figure 18: Progress Report
Source: http://www.elearning.hbsp.org/businesstools/downloads/pm01_p.rtf
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7.9.2 Status report
The status report describes where the project stands at a specific point in time. This
gives a snapshot to stakeholders of the exact position of a project.
7.9.3 Progress reports
Progress reports describe what the project team has accomplished during a certain
period. Key project stakeholders require this information regularly in order to track
project progress.
7.9.4 Forecasts
Forecasts predict future project status and progress based on past information and
trends. A rough idea of the kind of progress that the project can achieve in the future
is important if facilitating the adoption of any corrective measures.
7.10
Monitoring and Controlling Tasks for Project Risk Management
Monitoring and controlling risks involves executing risk management processes to
respond to potential risks.
Carrying out individual risk management plans involves monitoring risks based on
defined milestones and making decisions regarding risks and their response strategies.
In the absence of contingency plans, project teams sometimes use workarounds in the
event of risk. Workarounds are unplanned responses to risk events. The output of
monitoring and controlling risks are requested changes, recommended corrective and
preventive actions and updates to the risk register, project management plan, or
organisation process assets. Such lessons learnt provide information that might help
future projects.
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7.11
Monitoring and Controlling Tasks for Project Procurement Management
Contract administration ensures that the seller’s performance meets contractual
requirements. The contractual relationship is a legal relationship and disagreements
may result in litigation. When contracts are written, it is important that lawyers and
other contracting professionals are involved. A key output of contract administration
is contract documentation.
7.11.1 Tools and Techniques for Contract Administration
The tools and techniques for contract administration include: formal contract change
control systems, buyer conducted performance reviews, inspections and audits,
performance reporting, payment systems, claims administration, records management
and information technology to support contract administration.
THINK POINT
Discuss the concept of Earned Value Management and its importance in managing the
performance of projects
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SELF ASSESSMENT ACTIVITY
1. What are the objectives of integrated change control?
2. How would you manage a project team?
3. Differentiate between scope verification and scope control and justify their
importance to project success.
Solution to Self Assessment Activities
1. Refer to Section 7.3.2
2. Refer to Section 7.8
3. Refer to Section 7.4
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CHAPTER EIGHT
PROJECT CLOSURE
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Chapter Eight
PROJECT CLOSURE
LEARNING OBJECTIVES
Upon successful completion of this chapter, the student will be able to:

Summarise project closing outputs.

List project closing tasks and outputs.

Discuss the process of closing a project performed as part of project
integration management.

Explain the process of contract closure performed as part of project
procurement management.

Identify several best practices used in project management.
This section was written using the following textbook:
Clements, J.P and Gido, C (2012). Effective Project Management. 5rth edition SouthWestern Cengage Learning
Schwalbe, K (2009) Introduction to Project Management Cengage Learning
Refer to Chapter 2
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8.1 Introduction
The closing process group is the most neglected project phase of all the phases in a
project. This phase includes processes used to formally terminate all the activities of
the project or phase. The project success or failure is evaluated and the project is
handed over to the client. The project experiences or lessons learnt are documented.
Closing projects involves stakeholder and customer acceptance of the final product or
service, and bringing the project to an orderly end.
8.2 Summary of Project Closing Tasks
A number of outputs confirm that a project was closed in a proper manner.
Documents are stored and archived for future use maybe as reference.
The knowledge areas that are affected in the closing phase are Project Integration
Management and Project Procurement Management.
8.3 Project Closing Tasks for Project Integration Management
The final task in project integration is to bring the project to an end. It is important in
closing projects that all activities are finalized and the completed project is transferred
to the appropriate people. In situations where a project was not completed but
cancelled, steps must still be taken to bring the project to closure. The main outputs of
closing projects are as follows:
8.3.1 Contract closure procedure
Project teams must follow all procedures to ensure that projects are closed off
administratively.
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8.3.2 Contract closure procedure
Many projects involve contracts, which are legally binding agreements on all the
signatories. Contract closure procedures describe the methods for ensuring that the
contract has been completed including both delivery of goods and services and the
subsequent payment for them.
8.3.3 Final products, services or results
Project sponsors are more interested in making sure that final product, services or
results are delivered on schedule, within budget and with acceptable quality. A final
project report and presentation are common features used during project closure.
8.3.4 Updates to organisational process assets
Updates to company policies and procedures are carried out based on the experiences
of the project. The lessons learnt report is a collection of positive and negative lessons
learnt by all stakeholders during the project and a template is shown in Figure 19
below:
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Project
Name
Enter the Project Name
Date
Enter the Date (mm/dd/yy)
Lessons Learned are
recorded
Project Lifecycle Information
Project
Lifecycle
and Phases
(select one
Lifecycle and
Phase only)
Knowledge
Area
Scope
Project Management
System Development
Requirements Analysis
Design
System Termination
Project Funding Approval
Initiation
Project Closeout
Acquisition
Planning
Contracting
Product Acceptance
Development
Test
Implementation
Lesson
Learned That
Worked
1. Describe the
lesson learned
that worked so
that a novice
would
understand.
Add/Delete
numbers as
needed for
each
knowledge
area.
What Worked
Lesson
What Didn’t
Well
Learned
Work Well
Recommendation That Didn’t Recommendation
Work
1. Provide a
1. Describe
1. Provide a
recommendation
for continued use
for each lesson
learned that
worked well.
Add/Delete
numbers as
needed for each
knowledge area.
the lesson
learned
that didn’t
work so
that a
novice
would
understand.
Add/Delete
numbers as
needed for
each
knowledge
area.
2.
3.
2.
3.
recommendation
for improvement
for each lesson
learned that
didn’t work well.
Include details
such as: 1.
Role/Position of
who needs to
make the
change.
2.
3.
2.
3.
Time
1.
1.
1.
1.
Cost
1.
1.
1.
1.
Quality
1.
1.
1.
1.
Communication
1.
1.
1.
1.
Risk
Management
Human
Resources
Procurement
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
1.
Figure 19: Lessons Learnt Report Template
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8.4
Closing Tasks for Project Procurement Management
Contract closure involves completion and settlement of contracts including the
resolution of any outstanding items. The following tools and techniques are used to
assist in contract closure:

Procurement audits that identify lessons learnt in the entire procurement
process.

A records management system which provides the ability to easily organize,
find, and archive procurement related documents.
Outputs include updates to organisational process assets and closed contracts.
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SELF ASSESSMENT ACTIVITY
1. Discuss the reasons why the project has to be formally closed.
Solution to Self Assessment Activities
1. It is important in closing projects that all activities are finalized and the
completed project is transferred to the appropriate people. In situations where
a project was not completed but cancelled, steps must still be taken to bring
the project to closure.
.
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BIBLIOGRAPHY
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Burke, R. (2009). Project Management Techniques. (College Edition). Burke
Publishing International.
Clements, J.P.
and Gido, C. (2012). Effective Project Management. 5rth edition.
Boston:Cengage Learning
Portny, S.E. 2007. Project Management for Dummies. Indiana: Wiley Publishing,
Inc..
Project Management Institiute. 2004. A Guide to the Project Management Body of
Knowledge. An American National Standard ANSI/PMI9-001-2004
Schwalbe, K (2009) Introduction to Project Management. Boston: Cengage Learning.
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TYPICAL EXAM QUESTIONS
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TYPICAL EXAM QUESTIONS
1.Draw a network diagram, showing the paths and critical path for the following
set of activities:
Activity
Preceding Activity
Start
Duration, days
0
A
Start
2
B
A
3
C
A
6
D
A
2
E
B
5
F
C
7
G
D
3
H
E,F, G
1
Finish
H
0
2. Discuss this tools and techniques used in any four knowledge areas
3. Discuss the term project stakeholders and give examples of the most
important stakeholders usually in a project
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SOLUTION TO TYPICAL EXAM QUESTIONS
1.
start
2
A
3
B
5
E
1
3
C
7
D
3
F
1
0
H
end
1
6
G
Paths:
Start-A-B-E-H = 2+ 3+5+1=11
Start-A-C-F-H =2+3+7+1=13
Start-A-D-G-H=2+6+3+1=12
Critical path is Start –A-C-F-H with duration of 13
2. Any 4 from the table below will be accepted:
Knowledge Areas
Tools and Techniques
Scope Management
Scope statements, work breakdown structures, statement of
work, scope management plans, scope verification
techniques, scope change control
Time Management
Gantt charts, project network diagrams, critical path analysis,
crashing, fast tracking, schedule performance measurements
Cost Management
Net present value, return on investment, payback analysis,
earned value management, project portfolio management,
cost estimates, cost management plans, cost baselines.
Quality Management
Quality metrics, checklists quality control charts, pareto
diagrams, fishbone or cause and effect diagrams, maturity
models, statistical analysis
Human Resource Management
Motivation techniques, empathetic listening, responsibility
assignment matrices, project organisational charts, resource
histograms, team building exercises
Communications Management
Communications management plans, conflict management,
communications media selection, status reports, virtual
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communications, templates, project web sites
Risk Management
Risk management plans, risk registers, probability/impact
matrices, risk ranking, decision trees
Procurement Management
Make or buy analyses, contracts, requests for proposals or
quotes, source selections, supplier evaluation matrices
Integration Management
Project selection methods, project management
methodology, stakeholder analysis, project charters, project
management plans, project management software, change
control boards, project review meetings, and lessons learned
reports.
3. Project stakeholders include organizations and individuals who are interested
or affected by the project being executed. Stakeholders may have an influence
over the projects objectives or outcomes. The success of the project is dependant
on the stakeholders as they may decide to embrace and support it or they may
also decide to stop the project. For example if a property development company
wants to build a golf course in a tribal land. For such a project to succeed the
property company as a client must identify and recognize the local community
as a major stakeholder for the project otherwise the local community can
actually stop the project.
It is the responsibility of the project management team to identify stakeholders,
determine their roles, requirements and expectations, so that they are able to
analyse and manage them properly in the interest of the project.
Stakeholders cannot be classified under one umbrella as they have varying
levels of authority and responsibilities, which is why the project management
team needs to conduct an analysis of its stakeholders so that they understand
each stakeholder’s needs and interest.
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There are positive stakeholders who have a positive influence on the project.
These are the stakeholders who tend to benefit from the project or see some
benefit of the project. In the golf course example, these would be people hoping
to open businesses as a result of the traffic that will be caused by the building of
the golf course, or people hoping to get employment from the golf course.
On the other hand negative stakeholders have a negative influence on the project
because they feel threatened by it. These may be people who have vested
interest in the area such as indigenous people who have been living in the area
for a long time with their ancestor’s graves in the area, for example.
The project management team needs to focus more energy on the negative
stakeholders to ensure buy in and success of the project. The following is a list
of typical key stakeholders in any industry or sector:

Project Sponsor – The person that provides the financial resources for the
project.

Project Manager – The single point responsibility of a project.

PMO – The project management office provides support to the project.

Customer or user – This is the person or entity that will use the project’s
product.

Project management team – the members of the project team who are
directly involved in executing the project management functions.

Influencers – People or groups who are directly or indirectly interested or
affected by the project. They can also influence the project positively or
negatively.

Investors – A person or entity making the investment in a project.
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
Contractor – A contractor is normally the person or organization that is
entrusted with
supplying the services and/or goods to achieve project
deliverables.

Government – The government is in most cases a stakeholder in projects
whether they are public or private sector projects because it has an interest on
the project, e.g. collecting taxes.
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