Project Management Introduction

Entrepreneurship &
Project Management
(Module II: Project Management)
MBA(N) 3rd Semester
General Paper
Code: MB 301

What is ‘PROJECT’?
Project is a unique process, consist of a set of coordinated and
controlled activities with start and finish dates, undertaken to
achieve an objective confirming to specific requirements, including
the constraints of time cost and resource. Hence a Project is a
sequence of unique, complex, and connected activities having one
goal or purpose and that must be completed by a specific time,
within budget, and according to specification.
Project is a one-time activity that produces a specific output and or
outcome, (for example, a building or a major new computer system)
which is in contrast to a program that is an ongoing process, (such
as a quality control program) or an activity to manage a number of
multiple projects together.
Project is temporary in the sense that it has a defined beginning and
end in time, and therefore defined scope and resources. And a
project is unique in that it is not a routine operation, but a specific
set of operations designed to accomplish a singular goal.

Attributes/Features of PROJECT
1. Every project has the main objective or objectives, defined in terms of
scope (or requirements), schedule, and cost.
2. A project is a one time or unique endeavor.
3. Every project is given a specific time frame, has either a fixed
beginning and end or a fixed duration.
4. Every project has a structured system of interdependent activities and
outcomes.
5. Every project needs certain resources (human resources, financial
resources, infrastructure, etc).
6. The funding institution (or customer) will usually determine the main
features of the project outcome and formulate the main requirements
(for example, quality requirements).
7. Every project is a unique undertaking and therefore has certain level of
Uncertainty and risks. Even if the project team already ran a similar
project before, in the mean time changes occurred in the work
environment and with technical and software tools; the team
composition or legal regulations may cause additional uncertainty.
8. The contractor or coordinating institution

3 Aspects of Project Deliverables

Basic Elements of Project
There are three basic elements which must be considered in a project cycle.
These are discussed below:
1. Operations
Operations are the activities or jobs which must be performed to meet the
project objectives. These activities should be identified and arranged in a
logical sequence. After determining the job sequence, the method of
performing each operation must be determined in advance. The method, in
turn, predetermines the time and cost required to perform each activity.
2. Resources
The second of the project elements, resource can be classified under
manpower, money, methods, material, machines and time. Time and cost
estimates are associated with the method of performance, where the cost
estimate relates resource expenditure to a common measure of cost in money
alone and the time estimate defines the expected duration of the resource use.
3. Conditions or Restraints
The third project element refers to externally imposed conditions or
restraints, like supply of materials, machines, and designs by outside agencies.
The delivery system should be planned carefully in co-ordination with the
activities to be undertaken.

Project Performance Dimensions
Three major dimensions that define the project performance are scope, time,
and resource. These parameters are interrelated and interactive. The
relationship generally represented as an equilateral triangle. In management
literature, this equilateral triangle is also referred as the “Quality triangle”
of the project. The relationship is shown in figure
It is evident that any change in any one of dimensions would affect the other.
For example, if the scope is enlarged, project would require more time for
completion and the cost would also go up. If time is reduced the scope and
cost would also be required to be reduced. Similarly any change in cost would
be reflected in scope and time. Thus the performance of a project is
measured by the degree to which these three parameters (scope, time
and cost) are achieved.
Mathematically Project Performance = f(Scope, Cost, Time)

What is a Stakeholder in Project?
• Stakeholders are people or organisations:
• With an interest in the project
• Who can affect a project
• Who may be affected by a project
Stakeholders may be within the organisation, or external to it -
Internal stakeholders may be managers, staff, other dept. heads, your own
team, subject matter experts.
External stakeholders may be from anywhere – other companies, public
bodies, legislative bodies, competitors
What do Stakeholders Do?
Sponsors, stakeholders and champions link the team to the management
power structure across locations & organisational boundaries.
How can Stakeholders Affect a Project?
They can pull their support, which may be:
• Political
• Financial
• Resource Provider
• Influencer – political, media, morale
• Not buying the product (customers)
• Advocate against the project/product

What is Project Management
Project Management is the application of knowledge, skills, tools, and
techniques to project activities to meet the project requirements that is to
say;
Project Management is the planning, organizing and managing the effort
to accomplish a successful project.
Project management should assure that the project outcome:
• Will be reached in time,
• Will be reached within the limits of the resources of the project,
• Will have a predefined quality level.
Denoting outcome and quality combined by the term scope, we can build
the Project Management Triangle
The Project Management Triangle visualizes the fact that time; cost and
the scope of a project are interdependent; changing one of them causes
changes in the other two. As a general project management methodology,
a structural approach is most widely used.

Main sets of Structures are considered in Project Management:
• Project management Knowledge Areas,
• Project management Process Groups,
• Project management Activities.
• Project management Artifacts.
Project Management Goals
• Cost Control – Complete within the owner's budget
• Time Control – Finish within the owner's required timeframe
• Quality Control – Meeting final product expectations, objectives,
standards and intended purpose
• Scope – Complete in accordance with design, legal, contractual
parameters
• Safety to all resources.
• Environmental safeguarding
• Social development by economic upswing in living style

Issues and Problems in Project Management
(a) Common Problems in Projects
1. Poor Planning – includes not prioritizing effectively, not having a proper
business plan, not breaking down the development into phases.
2. Lack of Leadership – If the Project Manager lacks the relevant
business/management expertise this will lead to poor decision making.
3. People Problems – leads to unresolved conflicts which could have a
detrimental effect on the project. A Project Manager needs expert
communication skills to keep everybody on board and in agreement.
4. Vague/Changing Requirements – it’s essential that the project
requirements are defined clearly and completely from the start. Change
requests can cause the project to drift and miss deadlines.
5. Lifecycle Problems – often caused by poor planning or changing
requirements. Initial testing techniques should be rigorous in order to avoid
repeated errors.
6. Inefficient Communication Process – it’s vital to keep everybody
informed on the project status at all times. Lack of efficient communication
will lead to errors and delays.
7. Inadequate Funding – this issue is most likely to affect projects with
changing requirements.

8. Stakeholder Approval – effective stakeholder management is the ability to
identify individuals affected by/likely to affect the successful outcome of the
project. A skilled project manager will ensure a collaborative working
environment where project phases can be analyzed and discussed by all
stakeholders.
9. Schedule absence – no Established Schedule for tasks, operational activities
and objectives.
10. Missed Deadlines – delays in phases of the project leading to a missed
deadline for the project.
(b) Project Issues
A Project Issue is an event or condition that has negative consequences for a
project. The term implies a situation that is recoverable or that can be mitigated
in some way. An issue differs from a risk in that a risk hasn't occurred yet.
Issues differ from failures in that failures are in the past and can no longer be
managed. The following are examples of project issues.
• Poor Quality: Deliverables are low quality causing delays or rejection of
deliverables.
• Change Management: A project is pushed to except more work without
more budget and time.
• Benefit Shortfall: A business unit begins to realize that a project isn't going
to be commercially successful.

• Design Issues: The architecture for software relies on an unstable
component.
• Integration: A part in an engine doesn't respond to commands as in
specifications causing integration testing to fail.
• Technical Issues: Developers can't find the root cause of a defect in
software.
• Resistance to Change: A team wants a project to fail and take actions
to stand in the way of task progress such as political roadblocks based
on technicalities.
• Resources: A subject matter expert resigns in the middle of a project.
• Performance A developer delivers work late at low quality. She often
disregards communications such as emails and skips meetings.
• Skills: A developer is new to a technology. At the start of a project it is
assumed the developer will be able to come up to speed with a little
training. When they start work it becomes clear that an expert is
required.
• Sponsor Support: A sponsor is disengaged and unresponsive to
requests to help clear political roadblocks such as denied budget
approvals.
• Legal: A neighbor sues to stop a construction project after trucks block
access to their property.
• Compliance: A project team realizes that a product fails to comply
with laws, regulations or standards.

The Project Life Cycle
The Project Life Cycle is a series of activities which are essential for
accomplishing project objectives or targets. Projects may have different
dimensions and difficulty level, but, whatever the size: large or small, may be
all projects could be mapped to the given lifecycle structure.
This life cycle for the project includes four phases-
• Initiation Phase
• Planning Phase
• Execution Phase
• Monitoring, Controlling & Closing Phase
Project Life Cycle Path
The life cycle of a project from start to completion follows either a “S” shaped
path or a “J“ shaped path. In “S” shape path the progress is slow at the
starting and terminal phase and is fast in the implementation phase. For
example, implementation of watershed project. At the beginning detailed
sectoral planning and coordination among various implementing agencies etc.
makes progress slow and similarly towards termination, creating
institutional arrangement for transfer and maintenance of assets to the
stakeholders progresses slowly.

In “J” type cycle path the progress in beginning is slow and as the time
moves on the progress of the project improves at fast rate.
Example, in a project of developing an energy plantation the land
preparation progresses slowly and as soon as the land and seedling are
transplantation is under taken.

(A) Project Initiation Phase
Initiation phase defines those processes that are required to start a new
project. The purpose of the project initiation phase is to determine what
the project should accomplish.
This phase mainly composed of two main activities
• Develop a Project Charter and
• Identify Stakeholders
All the information related to the project are entered in a documents
called Project Charter and Stakeholder Register. When the project
charter is approved, the project becomes officially authorized.
The Project Charter defines the project's main elements
• Project goals
• Project constraints and Problem statements
• Assign project manager
• Stakeholder list
• High-level schedule and budget
• Milestones
• Approvals

The Stakeholder Register will have information like
• Type of stakeholder
• Expectation of stakeholder
• Role in Project ( Business Analyst, Tech architect, Client PM)
• Designation (Director, Business Lead, etc.)
• Type Communication ( Weekly/Monthly)
• Influence on the project ( Partial/Supportive/Influensive)
The Stakeholder Register and Project Charter are used as inputs to the
other process groups such as planning process group.

(B) Project Planning Phase
Project planning phase covers about 50% of the whole process. Planning phase
determines the scope of the project as well as the objective of the project. It begins
with the outputs of initiation phase (charter, preliminary scope statement, and
project manager). The output of the planning phase serves as the input for the
execution phase. The important aspects of planning process are -
* Planning phase should not be executed before your initial planning is finished
* Until the execution process does not start, you should not stop revising plans
(i) For any successful project creation of WBS (Work Breakdown Structure)
is important. Following steps are to create WBS.
• Conduct a brainstorm to list all the tasks
• Involve your whole team for brainstorming
• Write down the structure tree of the task also known as WBS (work breakdown
structure)
• Further breakdown your top WBS into a hierarchical set of activities, for
instance, categories, sub-categories, etc. For example hardware, software,
trainee, management teams, etc.
• Define how to record the items into your WBS
• Ask other people - it can be an expert, experienced personnel, etc.
• Granularity- how detailed your task should you have? Estimating cost and time
for higher granularity is hard while for lower granularity it will be bogged down
with too detailed information
• Granularity should be of right level not too high or not too low

(ii) Planning the Project Schedule & Management
Plan Scheduling is the process of establishing the procedure, policies and
documentation for planning, managing, executing and controlling the project
schedule.
The Inputs are
• Project management plan
• Project Charter
• Enterprise environmental factors
• Organizational process assets
The Output are
• Schedule management plan
(iii) Defining Activities
Defining Activities is the procedure for documenting and identifying specific
actions to be performed to produce the project deliverables. In define activities,
each work packages is broken down into individual work schedule activities.
The Inputs are The Outputs are
• Schedule Management plan a. Activity list
• Scope baseline b. Activity attributes
• Enterprise Environmental factors c. Milestone list

(iv) Sequencing of Project Activities
A sequence of activities is nothing but logically organizing the output of "define
activities". It determines the order in which the activities need to be performed.
The main output from the sequence activity process is "Network Diagram“ which
is nothing but posting the task on a board in a logical order.
(v) Estimating Activity Resources
It describes the process of estimating the work effort and resources required to
complete the task keeping in mind the availability of resources. While estimating
resources, the focus should be on the longest path of the plan (Critical Path),
which going to consume more time and money.
Inputs To Estimate Resources
• Schedule Management Plan
• Activity list
• Resource Calendar
Outputs are
• Activity resource requirements
• Resource breakdown structure
• Project documents updates

All the activity that is done so far (define activities + sequence activities +
Estimate activity resources) is going to help in "Develop Schedule.”
(vi) Estimating Activity Durations
It is the process of estimating the number of work periods (weeks/months)
required to complete the individual task with estimated resources. Calculation of
activity duration can not be done without calculating the work effort and
resources required to complete the task. Activity Duration Estimating process
should be done in this order a. Estimate work effort first
b. Followed by estimating the resources
c. Followed by Estimating the duration of task
Inputs to Activity Duration Estimates :-
• Activity list & Activity attributes
• Resource calendars
• Project scope statement
Outputs of Activity Duration Estimates:-
• Estimate activity durations
• Estimate activity durations-project document updates
This technique is also called PERT estimation

(vii) Developing the Project Schedule
Develop Schedule is the process of analyzing activity sequences, resource
requirements, durations and schedule constraints to create the project
schedule model. For scheduling each task, three main factors are taken into
consideration a. Duration
b. Task dependencies
c. Constraints
Using these factors project calculates the start date and finish date for each
task.
(viii) Controlling the Schedule
The last stage of the planning phase is Control Schedule. It is the process of
monitoring the status of project activities to update project process and
manage changes to the schedule baseline. Main Outputs of control schedule
process are:- 1. Project management plan
2. Schedule baseline
3. Schedule management plan
4. Project schedule
5. Work performance information
6. Organizational process assets

(C) Project Execution Phase
The executing phase consists of those activities that are defined in project
management plan. This process involves managing stakeholder
expectations, coordinating with people and resources, as well as
performing other activities related to project deliverables.
Inputs to Project Execution:-
• Project Management Plan
• Approved change request
• EEFs (Enterprise Environmental Factors)
• OPAs (Organizational Process Assets)
Outputs to Project Execution:-
• Deliverables
• Work performance data
• Change request
• Project Management plan updates
• Project documents updates

(D) Monitoring and Controlling & Closing Phase in Project
After execution phase, to check the project is on right track,
monitoring and controlling phase becomes active. This stage involves
tracking, reviewing and regulating the progress in order to meet the
objective of the project. It also ensures that the deliverables are
according to the project management plan. The main focus of this step
is to identify any changes made from the point of project management
plan to determine appropriate preventive action.
The inputs for this stage include
• Project management plan
• Performance reports
• Cost forecasts
• Schedule forecasts
• Validate changes

Project Feasibility Study
• Feasibility Study forms the backbone of Project Formulation and presents
a balanced picture incorporating all aspects of possible concern. The study
investigates practicalities, ways of achieving objectives, strategy options,
methodology, and predict likely outcome, risk and the consequences of
each course of action.
• Feasibility Study is used to determine the viability of an idea, such as
ensuring a project is legally and technically feasible as well as
economically justifiable.
In other words, Feasibility Study involves an examination of the operations,
financial, HR and marketing aspects of a business on ex-ante (before the
venture comes into existence) basis.
Pre-feasibility Study/Opportunity Study
A pre-feasibility study should be viewed as an intermediate stage
between a project opportunity study and a detailed feasibility study. A pre-
feasibility study should be viewed as an intermediate stage between a project
opportunity study and a detailed feasibility study. It is the process of
gathering facts and opinions pertaining to the project. This information is
then vetted for the purpose of tentatively determining whether the project
idea is worth pursuing furthering. It is conducted by a small team and are
designed to give company stakeholders the basic information they need to
green light a project or choose between potential investments.

Content of Feasibility Study
1. Executive Summary/Project Goal - description of the impact of the project on
its environment and the potential for success (or failure) based on the analysis.
2. Project Description – (i) Anticipated As–Built Condition as envisioned, including
magnitude, location, community impact (ii) Anticipated Outputs
3. Project Environment – (i) Financial, (ii) Physical, (iii) Socio-Cultural
4. Similar Efforts - i) Scenarios: The section provides an outline of similar efforts and
a synopsis of their effects on the finances and physical and social environments of
their project organizations and communities. ii) Similarities and Implications:
Determination of the degree of similarity between the scenarios outlined and the
project(s) under scrutiny in the feasibility analysis is covered.
5. Sensitivity Analyses - i) Financial: A “what – if” analysis of finances to determine if
the project is deemed viable is an important aspect of a feasibility analysis and ii)
Physical Environment: It involves a “what-if” analysis of the physical environment if the
project is deemed viable.
6. Marketing/Public Relations - i) Market Analysis: The market analysis includes an
assessment of the potential market for the project or its outputs, ii) Forecasts:
Predictions regarding sales, returns and buying trends related to the project and its
outputs are included in the forecasting section, iii) Competitive Environment
7. Conclusions & Recommendations - conclusions that can be drawn regarding the
viability (or non-viability) of the project, given the environment in which it will be
developed and implemented.

Types/Areas of Project Feasibility Study
1) Technical Feasibility: The technical feasibility refers to the ability of the
process to take advantage of the current state of art technology in pursuing
further improvement. The technical capability of the personnel as well as the
capability of the available technology in relation to the requirements of the
proposed project idea should be considered and the extent of compatibility
should be studied.
2) Managerial Feasibility: The managerial feasibility involves the capability of
the infrastructure of a process to achieve and sustain process improvement.
Management support, employee involvement and commitment are the key
elements required to ascertain managerial feasibility.
3) Economic Feasibility: The economic feasibility analyzes sis, the feasibility of
the proposed project to generate economic benefits. A cost-benefit analysis
and a break-even analysis are used while evaluating the economic feasibility
of new industrial projects. In a cost – benefit analysis, all tangible benefits and
costs as well as intangible benefits and costs are identified before obtaining
the B_C ratio. The break- even analysis helps to find the break- even quantity
at which the project has no loss or gain.
4) Financial Feasibility: The financial feasibility attempts to assess the
capability of the project organization to raise the appropriate funds needed to
implement the proposed project. Loan availability, credit worthiness, equity
and loan schedule are important aspects of financial feasibility analysis.

5) Cultural Feasibility: The cultural feasibility deals with the compatibility of
the proposed project with the cultural set-up of the project environment.
In labor intensive projects, planned functions must be integrated with the
local cultural practices and benefits. Some examples of cultural factors are
religion, custom- life style, etc.
6) Political Feasibility: The political feasibility deals with the initial
acceptance of the project and sustenance of the project in the long-run by
the prevailing political system. This is particularly true for the large
projects with national visibility that may have significant government
inputs and political implications. The issues on which political
intervention may arise are conversion of land from agricultural use to
industrial us, anticipated health hazard if the project is implemented,
possible air pollution and water pollution, possible unemployment due to
hi-tech projects, etc.
7) Environmental Feasibility: The environmental feasibility is very much
important. If the commissioning of the project results with any kind of
pollution, it will be visible to the public, administrators and politicians. If
necessary corrections and preventive measures are not taken by the
project firm to prevent/curtail pollution, the project will be forced to meet
certain problems in terms of opposition from different circles. As a result,
sometime, the project firm may be pushed to the corner of closure/re-
location of the project itself which will cost the organization more.

Benefits of Conducting a Feasibility Study
The importance of a feasibility study is based on organizational desire
to “get it right” before committing resources, time, or budget. Below
are some key benefits of conducting a feasibility study:
• Improves project teams’ focus
• Identifies new opportunities
• Provides valuable information for a “go/no-go” decision
• Narrows the business alternatives
• Identifies a valid reason to undertake the project
• Enhances the success rate by evaluating multiple parameters
• Aids decision-making on the project
• Identifies reasons not to proceed
Apart from the approaches to feasibility study listed above, some
projects also require for other constraints to be analyzed -
Internal Project Constraints: Technical, Technology, Budget, Resource,
etc.
Internal Corporate Constraints: Financial, Marketing, Export, etc.
External Constraints: Logistics, Environment, Laws and Regulations, etc

Steps of Feasibility Analysis
1) Need Analysis i) Is the need significant enough to justify the proposed project?
ii) Will the need still exist by the time the project is completed?
iii) What art h alternate means of satisfying the need?
iv) What is the economic impact of the need?
2) Process work: This is the preliminary analysis done to determine what will be
required to satisfy the need. The work may be performed by a consultant who
is a subject matter expert in the project field. The preliminary study often
involves system models or prototypes.
3) Engineering and Design: This involves a detailed technical study of the
proposed project. Written quotations are obtained from suppliers and sub-
contractors as needed. Technology capabilities are evaluated as needed.
Product design, if needed, should be done at this stage.
4) Cost Estimate: This involves estimating project cost to an acceptable level of
accuracy. Levels of around 5% to +15% are common at this level of a project
plan. Both the initial and operating costs are included in the cost estimation.
Estimate of capital investment, recurring and non-recurring costs should also
be contained in the cost estimate document.

Work Breakdown Structure (WBS)
A work breakdown structure provides a bird’s eye view of the project and
helps identifying various dependencies in the project. Work breakdown
structure is the key deliverable of the project planning and forms an input for
various planning activities. In this stage, a project is broken into small and
atomic individual activities that can be managed efficiently. In a work
breakdown structure, it is to identify the smallest units of the work items that
can be started and completed as a unit. A component of element of a work
breakdown structure can be data, product, service, or it can be a combination
of these elements.
During creation of a work breakdown structure, it is essentially a
hierarchical decomposition of complex project into simple phases,
deliverables, and work packages. It is usually an inverted tree structure; with
each branch of this tree you indicate a subdivision of efforts required to
accomplish an objective. To create a work breakdown structure, you start
with the final objective of the project and then subdivide it into manageable
components. Each component includes all steps that the team needs to
perform for achieving the objective.
Each level of the WBS is a level of detail created by decomposition.
Decomposition is the process of breaking down the work into smaller, more
manageable components. The elements at the lowest level of the WBS are
called tasks.

Work Breakdown Structure (WBS) – Example
you are assigned as the project manager of a New Product Development project.
The new product you are developing is a new toy for children age's five through
nine. The objective of this product development project is to increase the revenue
of the organization by ten percent.
In the example above, brochures, advertising and commercials are all work
packages or tasks. In Project Insight, project management software, control
accounts are called 'summary tasks.' Marketing collateral is on a summary level
called a control account in project management parlance.

Project Management Introduction

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