PROJECT MANAGEMENT
Petr Smutný
petr.smutny@econ.muni.cz
Agenda
̶Why a lecture on Project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Why project management?
1. Changing nature of environment and its impact on
management of companies;
2. Requirements on pretenders to managerial positions.
Ad 1) Changing nature of environment …
• rapid development of new products;
• frequent and rapid changes of processes;
• individualization of products according to
customer demand
=> All of these factors require a one-shot managed set of
activities.
Ad 2) Requirements on pretenders …
Why project management?
=> increasing importance of project
management knowledge and skills for
businesses and graduates
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Project (definition)
̶ A project is a temporary organisation that is
created for the purpose of delivering one or
more business products according to an agreed
business case.
̶ short-term effort undertaken to create a unique
objective (product / service).
1. temporariness = start and completion dates are set.
2. uniqueness
goal
technology
people (=KSA)
outer influence and risks
=> specific (one-shot) = every project is realized only once.
Why projects fail
̶Lack of project justification, no valid business case.
̶Insufficient attention to quality from the start and through
development.
̶Poorly defined outcomes, confusion over what the project needs
to achieve.
̶Lack of communication amongst stakeholders.
̶Poorly defined roles and responsibilities amongst project
personnel.
̶Poor cost and time estimating.
̶Poor planning and resource coordination.
̶Insufficient measurables and lack of progress control.
̶Lack of quality control.
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
What is project management
̶Project Management is the planning, delegating, monitoring and
controlling of all aspects of the project, and the motivation of those
involved, to achieve the project objectives within the expected
performance targets for time, cost, quality, scope, benefits, and
risks.
Plan
Delegate
Monitor
Control
Distinctions of PM
 What makes PM different from traditional
management approaches?
̶temporariness;
̶uniqueness;
̶use of resources allocated based on the project’s needs.
Advantages of PM
̶rigorous delegation of authority and responsibility;
̶use of resources allocated based on the project’s needs
=> flexibility;
̶creates environment for progress checks (to achieve the
project’s goals);
̶system approach.
Disadvantages / risks of PM
̶specific demands of customers arise only during realization
phase;
̶need for frequent org. changes;
̶need for planning and valuation ex-ante (before realization).
Three bases of PM
Project is a unique
sequence of coordinated
activities and tasks:
̶with a specific goal (final
value);
̶with a time framework;
̶with a framework for
drawing on resources.
Problem of interdependence
̶individual bases are interdependent
̶specifics of the project define relative importance of every single
level (base)
=> need to seek balanced solutions. It is
more an optimization problem
(x maximization of individual categories).
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Lifecycle of a project
Sequence of phases
̶Initiation
̶Planning
̶Execution (coordination,
monitoring and control)
̶Closing
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Goals setting
̶Project goal = new final value resulting form the
project.
̶S.M.A.R.T.
̶Specific
̶Measurable
̶Assignable
̶Realistic
̶Time-bound =>critera for evaluation
Defintion
(Outline) Business Case
Composition
̶Defines the justification for
undertaking a project based on
estimated costs against the
anticipated benefits to be
gained and offset by any
associated risks.
̶Reasons for undertaking the project
̶(Business) options = how to reach the
goals. => analysis and reasoned
recommendation for which one option to
choose => project approach
Do nothing
Do the minimum
Do something
̶Expected benefits – desired outcomes
(qualitative and quantitative) should be
expressed in measurable terms.
̶Expected dis-benefits – (potential)
negative outcomes of project activities
̶Timescale
̶(Estimated) costs
̶(Expected) major risks
Definition
Project Brief
Composition
- is used to provide full and firm
foundation for the initiation of
the project and is created
during starting up a project.
- Project definition – explains what the
project needs to achieve. It covers the
background, definition of project
objectives, desired outcomes, project
scope and exclusions, constraints and
assumptions, and project tolerances.
- Outline business case (see previous
slide)
- Project product description –
explaining quality expectations and
acceptance criteria.
- Project management team structure
– describing the role of those in the
project management team.
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
What to plan for?
̶time
̶cost
̶quality
̶scope
̶benefits
̶risks
Work Breakdown Structure
̶is a hierarchical structure of tasks ensuring a
successful accomplishment of the set project goal
̶it is important resource for managing all three
bases of project management
allocation of resources (who will do what?)
time schedule (when?)
budget (how much is it going to be?)
WBS – example 1
WBS – example 2
WBS – example 3
Time scheduling
̶defines sequence and deadlines of activities within a project.
̶tools:
̶line segment charts (Gantt charts)
+ easy-to-create
+ easy-to-follow
- inability to display the connections between activities
- inability to show the completion rate as a percentage
̶network diagrams
C.P.M. – based on analysis of a critical path = longest sequence of activities
without any float time (reserves).
P.E.R.T. – duration set according to pessimistic, realistic and optimistic
alternatives.
G.E.R.T – improvement of PERT method
+ present interdependencies
+ allow for seeking alternative solutions
+ define critical path
- complex
- not that easy-to-follow
Critical Path Method (CPM)
̶to determine the critical activities = the activities whose delays will cause a delay in
the completion of the entire project (or their shortening will mean earlier
completion of the entire project).
̶ ET = earliest possible time = time at which the activity can commence at the
earliest (given the constraints, i.e. technology, resources);
ET = max {ET(x) + t(x)}; where x = immediately preceding activity
̶ LT = latest possible time = time at which the activity can be completed at the
latest without a delay in the completion of the whole project;
LT = min {LT(x) – t(x)}; where x = immediately following activity
̶ FT = float time = the longest possible delay in the activity that will not cause a
delay in the completion of the entire project.
FT = LT – ET – t; for each activity If FT = 0 then no delay is possible
this activity is the critical activity!!
Project plan
Critical path method - example
CPM calculations
Activity Duration ET LT FT
Training 6
initial activity
0
LT(3) = 26-8=18
LT(4) = 16-7=9
9
9-0-6
3
Purchasing 9
initial activity
0
LT(3) = 26-8=18
LT(4) = 16-7=9
9
9-0-9
0
Production 8
ET(1) = 0+6=6
ET(2) = 0+9=9
9
LT(6) = 38-12=26
26
26-9-8
9
Quality
control
7
ET(1) = 0+6=6
ET(2) = 0+9=9
9
LT(5) = 26-10=16
16
16-9-7
0
Assembling 10
ET(4) = 9+7=16
16
LT(6) = 38-12=26
26
26-16-10
0
Transporting 12
ET(3) = 8+9=17
ET(5) = 16+10=26
26
terminal activity
38
38-26-12
0
Activity Duration
(days)
Immediate
predecessors
1. Training 6 none
2. Purchasing materials 9 none
3. Production 8 1, 2
4. Quality control 7 1, 2
5. Assembling 10 4
6. Transporting 12 3, 5
No. 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
1Training 6 ft = 3
2Purchasing 9
3Production 8 ft = 9 days
4Quality control 7
5Assembling 10
6Transporting 12
Budgeting
̶timed plan represented with monetary or working (labor) units:
̶general x detailed
̶timed according to presumed time of spending the resources
̶methods
Definition
Project Plan
Structure
̶provides a statement of how and when
objectives are to be achieved, by
providing the major products, activities
and resources required for the scope of
the plan. It identifies the management
stages and other major control points.
̶A plan should cover not just the
activities to create products but also
the activities to manage product
creation.
- planning assumptions;
- products description;
- tolerances – time, cost and scope
tolerances;
- budgets – time and cost budgets,
including provisions for risk and
changes;
- schedule – incl. a Gannt chart and
work breakdown structure;
- monitoring and control details
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Progress tracking
̶involves measuring actual
progress against the
performance targets of time,
cost, quality, scope, benefits
and risk.
̶Plans need to be fit for
progress tracking
̶Progress tracking is a forward
looking excercise
̶Estimates „to comlete“
̶Estimates „at completion“
̶Monitor progress.
̶Compare level of achievement
with plan.
̶Review plans and options
against future situations.
̶Detect problems and identify
risks.
̶Initiate corrective action.
̶Authorize further work.
Agenda
̶Why (a lecture on) project management?
̶Project – definition
̶Project management
̶Process approach to a project
̶Initiation of a project
̶Planning of a project
̶Management and coordination of a project
̶Closure of a project
Project Closure
̶Verify user acceptance of the project’s products and ensure that
the host site is able to support the products when the project is
disbanded.
̶Review the performance of the project against its baselines.
̶Assess any benefits that have already been realized and update
the benefits management approach to include any post-project
benefit reviews.
̶Ensure that provision has been made to address all open issues
and risks, with follow-on action recommendations.
Thank you!
… any questions?