HBC 2404: PROJECT MANAGEMENT

TOPIC 1: INTRODUCTION TO PROJECT MANAGEMENT

Definition of terms:
1. A project: can be defined as any sort of planned undertaking.

Or
Any series of activities and tasks that;
 Have a specific objective to be completed within certain specifications
 Have a defined start and definite end
 Have budget limit (where applicable)
 Consume human and non-human resources
 Are multifunctional (cuts across functions)

Example of projects would include:

a. Personal projects: Obtain an MBA, Write a report, Plan a wedding, Plant a garden
and Build a house extension
b. Industrial projects: Construct a building, provide a gas supply to an industrial estate,
c. Business projects: Develop a new course, Develop a computer system, Introduce a new
product, Prepare an annual report and Set up a new office.

2. Project management: The planning, monitoring, and control of all aspects of a project
and the motivation of all those involved in it, in order to achieve the project objectives
within agreed criteria of time, cost, and performance.
Project planning will involve:
a. Definition of work requirements
b. Definition of quantity and quality of work
c. Definition of resources needed
Project Monitoring will involve:
a. Tracking progress
b. Comparing actual performance and predicted outcome
c. Analyzing impact
d. Making adjustments
Project management involves managing company resources on a given activity,
within given time, costs and performance/ technology. If the project is for outside
customer, it has to be achieved within customer relations.

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cost

Resources

Time Perfomance

3. A project manager: may be defined as: “The individual or body with authority,
accountability and responsibility for managing a project to achieve specific objectives”
The project manager bears the responsibility for the success and failure of the project. He
works through others to achieve the objectives of the firm. He is responsible for
coordinating and integrating activities across multiple, functional lines.
He is responsible for effectively managing the following
a) Work so that all necessary activities are accomplished within desired sequences
b) Human resources so that working environment has a direction of motivation
c) Communication to enhance everyone has the information needed to accomplish their
tasks
d) Quality to ensure performance objectives are realized
e) Time so that the project is complete on time
f) Cost to ensure the project is complete within set budgets.
4. An activity or task is the smallest unit of work effort within the project and consumes
both time and resources which are under the control of the project manager.
5. A schedule allocates resources to accomplish the activities within a timeframe. The
schedule sets priorities, start times and finish times.

Features of projects.
1. Projects are often carried out by a team of people who have been assembled for
that specific purpose. The activities of this team may be coordinated by a project
manager.
2. Project teams may consist of people from different backgrounds and different parts of
the organization. In some cases project teams may consist of people from different
organizations.
3. Project teams may be inter-disciplinary groups and are likely to lie outside the normal
organization hierarchies.
4. The project team will be responsible for delivery of the project end product to some
sponsor within or outside the organization. The full benefit of any project will not
become available until the project has been completed.

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The purpose of project management.
The purpose of project management is to achieve successful project completion with the
resources available. A successful project is one which:
- Has been finished on time
- Is within its cost budget
- P e r f o r m a n c e standard which satisfies the end user.

Benefits of Project Management

 Identification of functional responsibilities to ensure that all activities are accounted for
 Minimizes need for continuous reporting
 Identification of time limits for scheduling
 Measurements of accomplishments against plans
 Early identification of problems for corrective action
 Improved estimating capability for future planning
 Knowing when objectives cannot be met or when exceeded.

Key Decisions in Project Management

Much of the decisions of projects depend on some key managerial decisions
a) Deciding which project to implement: this will involve considering the budget,
availability of knowledge and skills and the cost benefit considerations
b) Selecting the project manager: he is the key person in the project and he determines the
success or failure of the project
c) Selecting the project team: they can influence the success or failure of a project since the
may be coming from different departments
d) Planning and designing the project: Project planning requires decision on project goals, a
time table for project completion, what need to be done, how it will be done, what
resources etc.
e) Managing and controlling project resources: it involves managing personal resources,
budgets, managing progress and taking corrective action when needed
f) Deciding if and when the project should be terminated: sometimes it’s better to terminate
the project than investing more resources and whether resources would be better utilized
elsewhere.

Role of a project manager

Project management is quite different from line management. Projects are designed to change
something: the manager must be able to cope with the risks involved in managing changes. People
working on the project may come from other areas indeed they me be contractors or sub-contractors
or employees of member firms who are in a joint venture.
Role of a project manager is as follows:

1. Estimating and planning : the project manager has to collect information about what exactly
needs to be done and how it is to be organized; how much it will cost and how long it will take;

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and the task, skills and other resources. A project manager has to prepare a project plan and a
budget.
2. Assembling or developing a team: a project team can make or break a team. Often a project
manager has to assemble the team from people with the right skills who are not assigned to work
of a higher priority than the project. A project manager’s skill lies in assembling people and
making them into a team (through motivating them, managing conflict amongst them and
ensuring good communication).
3. Reporting and liaising: the project manager is the spokesperson for the project. It is his or her
job to liaise with senior management, clients, regulatory bodied and everyone contributing to the
project.
4. Managing and coordinating work: once the project work begins, the project manager’s job is to
manage the work that is done and to coordinate the efforts of different team members and
different bodies within the organization in order to achieve project’s objectives.
5. Managing change: a few projects end exactly as they were initially planned. Problems arise
that require changes to plans: these may be short term (for example delaying a particular task
because a necessary material or resource is not available at the right time). The users or clients
may change their requirements as they learn more about the product they will be receiving at the
end of the project. The regulatory, legislative or financial climate in which the project operates
may change during the execution of the project. A project manager normally institutes a formal
way of noting, estimating and carrying out approved changes
6. Putting things in place: a number of tools exist to help manage and control projects, and to
undertake estimating and reporting. Specific tools also exist for specific types of projects: in the
case of the software projects tools range from appropriate hardware and operating system
software, through language compilers and test harnesses to computer-aided software engineering
tools. The manager has to see that the appropriate tools for the job are available or obtained.

Principles of project management

Few authors appear to have addressed the issue of project management principles, although many use the
term ‘principles‘ to describe ‘practices’ all as defined above. One exception, however, is an article by
Bing in which he describes eight “Principles of Successful Projects” based on his extensive practical
experience in the field. This article appears to have received remarkably little attention. In it, Bing
presents his eight principles as follows:

1) There must be a project as defined and not just a task or an ongoing activity.
2) There must be a single leader (project manager), who is experienced and willing to take the
responsibility for the work.

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3) There must be an informed and supportive management that delegates appropriate authority to the
project manager.
4) There must be a dedicated team of qualified people to do the work of the project.
5) The project goal must be clearly defined along with priorities of the “shareholders.”
6) There must be an integrated plan that outlines the action required in order to reach the goal.
7) There must be a schedule establishing the time goals of the project.
8) There must be a budget of costs and/or resources required for the project.
There must be a system to accommodate changes.

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TOPIC 2: PROJECT MANAGEMENT PROCESS.

Remember that project management will involve the following:

a. Definition of work requirements
b. Definition of quantity and quality of work
c. Definition of resources needed

The project management process will involve:

Project planning is part of project management, which relates to the use of schedules such as
Gantt charts to plan and subsequently report progress within the project environment. It will
involve:

1. Identification of objectives.
2. Composition of the term.
3. Allocations of responsibilities which should match skills.
4. Resources required.
5. Determining the required time.

1. Identification of objectives.
An important first step is to set the objectives and then define the project, breaking it down
into a set of activities and related costs.
A major decision at the initial stages of any project is to decide upon the organization
and composition of the project team. It is worth remembering that many members will have
dual responsibilities of involvement in the project in addition to a commitment to other
projects or management of a functional area on a day-to-day basis. It is at this stage that a
project manager should be appointed and responsibilities made explicit for all members of the
team.
2. Composition of the term.
Selection of the team should be done and will dependent upon the skill requirements of the
project, individuals will be borrowed from different department within the organization or even
outside the organization.
3. Allocations of responsibilities which should math skills.
The allocation of tasks to the team members should be based on skills
a n d e x p e r i e n c e t h a t i n d i v i d u a l h a v e t h a t i s matching of those skills with the
task. There may be a conflict here with hierarchical status.
4. Resources allocation.
The various tasks should have the approximated resources required to undertake them that is
estimates should be made.
5. Determining the required time.
This will involve coming up with a schedule on how the activities will be undertaken.
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Project Scheduling.
This phase is primarily concerned with attaching a timescale and sequence to the activities
to be conducted within the project. Materials and people needed at each stage of the project
are determined and the time each is to take will be set.
A popular and easy to use technique for scheduling is the use of Gantt charts. Gantt charts
reflect time estimates and can be easily understood. Horizontal bars are drawn against a time
scale for each project activity, the length of which represent the time taken to complete.
Letters or symbols can also be added to the left of each bar to show which other activities need
to be completed before that one can begin.
Constraints on the completion of projects.
a) Time
Our definition of a project stated that it was an activity which had a defined beginning and
ending point. Most projects will be close-ended in terms of there being a requirement for
completion by a certain point in time. This point may be the result of an external factor
such as new legislation, or may be derived from organizational requirements. It may also
be partly determined by other constraints. There is likely to be some relationship between
the time taken for a project and its cost. A trade-off between the two constraining factors
may then be necessary.
b) Resource Availability
There is likely to be a budget for the project and this will clearly be a major constraint.
Cost constraints may be set in a number of ways, for example as an overall cash limit or as
a detailed budget broken down over a number of expenditure headings. Labour resources
in particular may be a limiting factor on the completion of the project. In the short run it is
likely that labour will be fixed in supply. Whilst the overall resource available may in
theory be sufficient to complete the project, there may be difficulties arising out of the way
in which the project h as been scheduled. That is, there may be a number of activities
scheduled to take place at the same time and this may not be possible given the amount of
resources available.
c) Quality factors
Whether the project delivers the goods to the right quality.
There are techniques which can be used to overcome the problems referred to above.
These include:
a. Budgeting, and the corresponding control of the project budget through budgetary control
procedures.
b. Project planning and control techniques such as Gantt charts and network analysis.
An important point to note at this stage is how the various constraints on project
completion are likely to be interlinked with each other. For example, problems with time
constraints or resource constraints may be overcome by spending more through working
overtime, employing more people or purchasing better machines.
It is important to remember that while project management techniques are important,
they tend to understate the importance of the key resource: people. In a fact changing
environment where tasks are often difficult, controversial with uncertain outcomes, "people
management" skills are called for.

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TOPIC THREE: PROJECT LIFE CYCLE

 Phases of project cycle,

 Project Cycle Management (PCM),
 Characteristics of PCM,
 PCM principles.
Introduction:
Most, if not all, projects go through a life cycle that varies with the size and complexity of the
project. However there is no agreement among industries, or even companies within the same
industry about the life-cycles phases of projects. The phases include
 Conception phase
 Feasibility/ definition phase
 Planning phase
 Implementation/ execution phase
 Termination phase
Initiation/ Conception phase
The initiation phase is the beginning of the project. In this phase, the idea for the project is
explored and elaborated. The goal of this phase is to examine the feasibility of the project. In
addition, decisions are made concerning who is to carry out the project, which party (or parties)
will be involved and whether the project has an adequate base of support among those who are
involved.
In this phase, the current or prospective project leader writes a proposal, which contains a
description of the above-mentioned matters. Examples of this type of project proposal include
business plans and grant applications. The prospective sponsors of the project evaluate the
proposal and, upon approval, provide the necessary financing. The project officially begins at the
time of approval. Questions to be answered in the initiation phase include the following:
• Why this project?
• Is it feasible?
• Who are possible partners in this project?
• What should the results be?
• What are the boundaries of this project (what is outside the scope of the project)?
Definition phase
After the project plan (which was developed in the initiation phase) has been approved, the
project enters the second phase: the definition phase. In this phase, the requirements that are

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associated with a project result are specified as clearly as possible. This involves identifying the
expectations that all of the involved parties have with regard to the project result. It involves
examining the expected costs and risks of undertaking the project.
Design/Planning phase
The list of requirements that is developed in the definition phase can be used to make design
choices. In the design phase, one or more designs are developed, with which the project result
can apparently be achieved. It involves identifying project infrastructure, system designs,
schedules and budgets.
Implementation phase
The project takes shape during the implementation phase. This phase involves the construction of
the actual project result. As far as the volume of work is concerned 80-85% of project work is
done in this phase. People will always want this phase to be complete as fast as possible but all
project management tools must be applied.
At the end of the implementation phase, the result is evaluated according to the list of
requirements that was created in the definition phase. It is also evaluated according to the
designs. This phase is complete when all of the requirements have been met and when the result
corresponds to the design.
Termination Phase
This involves closure and reallocation of resources. It evaluates the efforts of the total system
and serves as an input to the conceptual phases for new projects. This is also a transition phase in
which the consumers take full charge

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TOPIC 4: PROJECT CONTEXT / PROJECT ENVIRONMENT

Project environment

Virtually all projects are planned and implemented in a social, economic, and environmental
context, and have intended and unintended positive and/or negative impacts. The project team
should consider the project in its cultural, social, international, political, and physical
environmentalcontexts.

     •      Cultural and social environment. The team needs to understand how the project
affects people and how people affect the project. This may require an understanding of aspects of
the economic, demographic, educational, ethical, ethnic, religious, and other characteristics of
the people whom the project affects or who may have an interest in the project. The project
manager should also examine the organizational culture and determine whether project
management is recognized as a valid role with accountability and authority for managing the
project.

     •      International and political environment. Some team members may need to be familiar
with applicable international, national, regional, and local laws and customs, as well as the
political climate that could affect the project. Other international factors to consider are time-
zone differences, national and regional holidays, travel requirements for face-to-face meetings,
and the logistics of teleconferencing.

     •      Physical environment. If the project will affect its physical surroundings, some team
members should be knowledgeable about the local ecology and physical geography that could
affect the project or be affected by the project.

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TOPIC 4: PROJECT ORGANIZATION STRUCTURE

To manage a project, a company or authority has to set up a project organization, which can
supply the resources for the project and service it during its life cycle. The purpose of the
structure is the division of work among the organization and the coordination of the activities so
that they are directed towards the goals and objectives.
Objectives of Organization Structure
 For efficient performance of organization
 Proper resource utilization
 Monitoring the activities of the organization
 For social satisfaction among the members
Types of the Organization Structures
 Pure project organization structure/ traditional
 Functional project organization structure
 Matrix organization structure
Pure project organization structure
This is a structure whereby the team works full time in a self-contained environment. The
advantages to this structure are
 Project manager has full authority over the project
 Team members report to one boss
 Decisions are made quickly
 There is team pride and motivation is high
 Staff can maintain expertise on a given project
Disadvantages include
 Duplication of resources since people and other resources aren’t shared
 Organization goals and policies are ignored
 Members worry about life after the project is terminated
 Lack of career continuity

Week 7 Project Organization-Presented are alternate organizational structures for projects. Organizing
multinational projects are discussed. A checklist of factors to consider when organizing international
projects and some recommendations.

 Organizational Breakdown Structure

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o Where a Project Breakdown Structure PBS refers to the breaking down of tasks the
Organizational Breakdown Structure OBS refers to the organization of an environment
within which a project is to be carried out.
o The OBS model provides a way of organizing resources into groups for better
management into an organization.
o Provides a method to track resources and specific work assignments.
o Good team organization is essential. Below are some requirements of a good OBS team:
 Background of the team leader: experience, education, technical knowledge.
 Scope of work to be accomplished: hours, skills, locations.
 Estimate of the number and type of personnel required.
 Equipment and work space requirements
 Reporting procedures.

 Selecting an Organization Structure.

o Primary function is to facilitate effective information flow.

o Before its selection, the team should make an assessment of the nature of the job to be
performed and its requirements.
o Traditional organization structure is one that is still used by many organizations today.
Some of the positive attributes are:
 Availability of broad personnel base.
 Identifiable technical line of control.
 Grouping of specialist to share knowledge.
 Collective line of responsibility.
 Possible assignment of personnel to several different projects.
 Clear hierarchy for supervision.
 Continuity and consistency of functional disciplines.
 Possibility for departmental policies, procedures, and missions.

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o Some negative attributes:
 No one individual is directly responsible for the total project.
 Project-oriented planning may be impeded.
 There may not be clear line of reporting up from the lower levels.
 Coordination is complex.
 A higher level of cooperation is required between adjacent levels.
 The strongest functional group may wrongfully claim project authority.
 Formal Versus Informal Structure
o Both structures are practiced in every project environment.
o Informal structure develops when people organize themselves in an unofficial way to
work towards an objective. Can be subtle, i.e., not everyone is aware of its existence. A
functional area that may appear as a formal structure may have some informal elements.
o Formal is the officially sanctioned structure.

 Span of Control
 The span of management (control) can be wide or narrow.
o Wide span of management permits several subordinate units
report to the same boss.
 Can be effective in a favorable project environment.
 Workers tend to relate better with upper management
because of fewer layers.

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 More economical because of fewer layers of supervisors
or middle managers.
 More professional growth because workers have more
responsibilities.
o Narrow span of management in an organization is beneficial
where there are several mutually exclusive skill levels.
o Influences that decide a type of control
 Level of planning required.
 Level of communication desired.
 Effectiveness of delegating authority.
 Dynamism and nature of the subordinate’s job. (Type A
personality, low skill, high skill)
 Competence of the subordinate in performing their job.

 Functional Organization. A formal org. is a.k.a. functional org. whereby people are organized into
groups dedicated to particular functions. Projects that are organized along functional lines are
normally resident in a specific department or area of specialization, i.e. manufacturing operations
are under the control of the vice president of manufacturing.
o Advantages:
 Improved accountability
 Discernible line of control
 Flexibility in manpower utilization

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 Enhanced comradeship of technical staff
 Improved productivity of specially skilled personnel
 Potential for staff advancement along functional path
 Use of the company home office can serve as a refuge for project problems.
o Disadvantages of functional organization structure:
 Divided attention between project goals and regular functions
 Conflict between project objectives and regular functions
 Poor coordination of similar project responsibilities
 Unreceptive attitude by the surrogate department
 Multiple layers of management
 Lack of concentrated effort
 Table 3-1 shows a comparison of the views of the functional and project environments. Though it
is difficult to sometimes separate a project environment from the traditional functional
environment there must be integration.

 Product Organization. This approach organizes a project to use the end product or goal of the
project as the determining factor for personnel structure. You have a unique entity within a parent
organization. It has a dedicated staff and administration focused on the mission. Linked to the
parent via progress reports, policies, procedures and funding.
o Advantages are:
 Simplicity of structure
 Unity of project purpose
 Localization of project failures
 Condensed and focused communication lines
 Full authority in the project manager
 Quicker decisions due to a centralized authority

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 Skill development due to project specialization
 Improved motivation, commitment and concentration
 Flexibility in determining time, cost and performance trade-offs
 Accountability of project team to one boss (project manager)
 Individual acquisition and maintenance of expertise on a given project
o Disadvantages are:
 Narrow view of project personnel (as opposed to global organization view)
 Mutually exclusive allocation of resources (one man to one project)
 Duplication of efforts on different but similar projects
 Monopoly of organizational resources
 Concern about life after the project
 Reduced skill diversification

 Matrix Organization Structure- exists where there are multiple managerial accountability and
responsibility for a job function. It combines the advantages of traditional structure (time and
schedule are sacrificed) and the product organization structure (limited technology utilization and
resource sharing because no single group is responsible for overall project planning). The project
manager has total responsibility for the project success. The functional managers have the
responsibility to achieve and maintain high technical performance of the project.
o Advantages:
 Good team interation
 Consolidation of objectives
 Multilateral flow of information

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 Lateral mobility for job advancement
 Opportunity to work on a variety of projects
 Efficient sharing and utilization of resources
 Reduced project cost due to sharing of personnel
 Continuity of functions after project completion
 Stimulating interactions with other functional teams
 Cooperation of functional lines to support project efforts
 Home office for personnel after project completion
 Equal availability of company knowledge base to all projects.
o Disadvantages:
 Slow matrix response time for fast paced projects
 Independent operation of each project organization
 High overhead cost due to additional lines of command
 Potential conflict of project priorities
 Problems of multiple bosses
 Complexity of structure

 Mixed Organization Structures is a combination of the functional, product and matrix structures.
An advantage is better flexibility in a special problem situation and that it can adapt to the needs
of the project and a disadvantage difficulty in identifying responsibility within a project
 New Organization Structures. Bubble, Market, Chronological, Sequential.

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 Organizing Multinational Projects

o Some considerations:
 Product
 Technology
 Political and Social Environment
 Labor
 Market
 Plant and residential amenities
 Financial Services

o Case Study- A large scale international project that consists of the engineering,
procurement, and construction of 7 liquid natural gas (LNG) tanks together with their
ancillary system and control building in a Middle Eastern country. The requirements are
as follows:
 3 LNG tanks of 80,000 cubic meters each
 2 LPG propane tanks of 50,000 cubic meters each
 2 LPG butane tanks of 50,000 cubic meters each
 The ancillary system which are part of the project include:
 1 propane and butane vapor recovery system
 1 low pressure flare system
 1 offsite control room

 Project Setting
 Technical Requirements
 Organizational Relationships
 Safety and Environmental Considerations
 Analysis of project scenario
 Sources of possible problems
 Parent-Child relationship
 Too many companies involved
 Communications
 Population increase
 Logistics
 Factors to consider and suggestions from the author
 Strategic Planning
 Cost/Benefit Analysis
 Technology Assessment
 Acquisition
 Trade Agreements
 Different Labor Practices
 Different Governmental and Political Ideologies
 Information Management
 Recommendations
 Simplify the levels of responsibilities by contracting with fewer
companies.

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 Minimize the interdependencies of companies by using nonsubsidiary
companies.
 Predetermine communication time zones that are compatible with the
timing of project decisions.
 Reevaluate the level of technology required for the project.
 Arrange for special favorable trade exceptions to facilitate movement of
personnel and materials.

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