Chapter -1
Introduction to Project Management
What is a Project?
A project is a temporary endeavour undertaken to create a unique product, service or result.
A project is temporary in that it has a defined beginning and end 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 single goal. So, a project team often includes people who don’t usually work
together – sometimes from different organizations and across multiple geographies.
Examples of Project
• The development of software for an improved business process
• The construction of a building or bridge
• The relief effort after a natural disaster
• The expansion of sales into a new geographic market — all are projects
And all of them must be expertly managed to deliver them on-time, on-budget results, learning and
integration that organizations need.
Program & Program Management
A program is a group of related projects managed in a coordinated manner to obtain benefits not
available from managing them individually.
Program management is the application of knowledge, skills, tools and techniques to meet program
requirements.
Portfolio & Portfolio Management
A portfolio refers to a grouping of projects, and programs. It can also include other project related
activities and responsibilities. A portfolio also helps establish standardized governance across the
organization. The purpose of creating and managing a portfolio is to ensure the business is taking on
the right projects, and making sure they align with the company’s values, strategies, and goals.
Portfolio Management is the centralized management of one or more portfolios to achieve an
organization’s strategic objectives. It’s critical to look not only at programs and projects at the
individual level, but also holistically to know how these align with the organization’s overarching
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goals. Beyond prioritizing and selecting projects and programs, portfolio management is balancing
the portfolio so that the right projects and programs are selected and implemented
Project Vs Program vs Portfolio
The easiest way to explain the difference in how project, program, and portfolio managers work is:
A Project manager works to deliver a project efficiently and reliably. They are responsible for the
day-to-day management that brings a project to fruition.
Program managers are more concerned with strategic alignment: Understanding what individual
project managers are doing and enabling effective communication between them in order to
understand where projects are and in order to provide support where necessary.
Portfolio managers, meanwhile, coordinate between various programs in order to ensure that
things stay on track and that the organization is meeting its overarching strategic initiatives. They are
often tasked with asking “Why?” (i.e. why is a particular project being proposed, why is certain work
being done, etc.).
Project Management
Project Management, then, is the application of knowledge, skills, tools, and techniques to project
activities to meet the project requirements.
It has always been practiced informally, but began to emerge as a distinct profession in the mid-20th
century. PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide) identifies
its recurring elements:
History of Project Management
It is tempting to think of project management as a modern discipline, but its major concepts have
their roots in the late nineteenth century. Let us go through the brief story of how modern
management theory was influenced by over a century's worth of scientific, social, and business
methodologies.
Project management, in its modern form, began to take root only a few decades ago.
Starting in the early 1960s, businesses and other organizations began to see the benefit of organizing
work around projects. This project-centric view of the organization evolved further as organizations
began to understand the critical need for their employees to communicate and collaborate while
integrating their work across multiple departments and professions and in some cases, whole
industries.
Today, the basic precepts of project management are represented by the project triangle (project
triangle: The interrelationship of time, money, and scope. If you adjust any one of these elements,
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the other two are affected. For example, if you adjust the project plan to shorten the schedule, you
might increase costs and decrease scope.), a symbol popularized by Harold Kerzner.
The early years: Late Nineteenth Century
We can travel back even further, to the latter half of the nineteenth century, when the business
world was becoming increasingly complex, to see how project management evolved from basic
management principles. Large-scale government projects were the impetus for making important
decisions that became the basis for project management methodology. In the United States, for
example, the first truly large government project was the transcontinental railroad, which began
construction in the 1860s. Suddenly, business leaders found themselves faced with the daunting task
of organizing the manual labor of thousands of workers and the processing and assembly of
unprecedented quantities of raw material.
Early Twentieth century
Near the turn of the century, Frederick Taylor (1856–1915) began his detailed studies of work. He
applied scientific reasoning to work by showing that labor can be analyzed and improved by focusing
on its elementary parts. He applied his thinking to tasks found in steel mills, such as shoveling sand &
lifting and moving parts. Before then, the only way to improve productivity was to demand harder
work and longer hours from workers. Taylor introduced the concept of working more efficiently,
rather than working harder and longer. The inscription on Taylor's tomb in Philadelphia attests to his
place in the history of management: "The Father of Scientific Management."
Taylor's associate, Henry Gantt (1861–1919), studied in great detail the order of operations in work.
His studies of management focused on navy ship construction during World War I. His Gantt Charts ,
complete with task bars and milestone markers, outline the sequence and duration of all tasks in a
process. Gantt Chart diagrams proved to be such a powerful analytical tool for managers that they
remained virtually unchanged for almost a hundred years. It wasn't until the early 1990s that
Microsoft Office Project first added link lines to these task bars, depicting more precise
dependencies between tasks.
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Today, Henry Gantt's legacy is remembered by a medal given out in his name by the American
Society of Mechanical Engineers.
Taylor, Gantt and others helped make project management a distinct business function that requires
study and discipline. In the decades leading up to World War II, marketing approaches, industrial
psychology, and human relations began to take hold as integral parts of project management.
Mid-Twentieth Century
During World War II, complex government and military projects and a shrinking war-time labor
supply demanded new organizational structures. Complex network diagrams, called PERT [Program,
Evaluation, and Review Technique] charts and the critical path method were introduced, giving
managers more control over massively engineered and very complex projects (such as military
weapon systems with their huge variety of tasks and numerous interactions at many points in time).
Soon, these techniques spread to all kinds of industries as business leaders sought new management
strategies and tools to handle their growth in a quickly changing and competitive world. In the early
1960s, businesses began to apply general system theories to business interactions. In their book, The
Theory and Management of Systems, Richard Johnson, Fremont Kast, and James Rosenzweig
described how a modern business is like a human organism, with a skeletal system, a muscular
system, circulatory system, nervous system, and so on.
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This view of business as a human organism implies that for a business to survive and prosper, all its
functional parts must work in concert toward specific goals, or projects. In decades since the 1960s,
this approach toward project management began to take root in its modern forms. While various
business models evolved during this period, they all shared a common underlying structure: a
project manager manages the project, puts together a team, and ensures the integration and
communication of the workflow horizontally across different departments.
Within the last fifteen years, project management has continued to evolve. Two significant trends
are emerging:
Bottom-up planning - This trend emphasizes simpler project designs, shorter project cycles,
efficient collaboration among team members, stronger team member involvement and
decision making. This trend is broadly known as agile project management, and includes a
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number or related methodologies, such as Scrum, Crystal, Extreme Programming, Unified
Process, and many others.
Top-down planning and reviewing - This trend is characterized by enterprise-wide decision
making about the portfolio of projects that an organization should have, as well as by
enabling data-mining technologies to make information in the portfolio more transparent.
Purpose of Planning
The ultimate purpose of planning is to build a model that enables you to predict which
activities and resources are critical to the timely completion of the project. Strategies may
then be implemented to ensure that these activities and resources are managed properly,
thus ensuring that the project will be delivered both On Time and Within Budget.
Planning aims to:
• Identify the total scope of the project and plan to deliver it,
• Evaluate different project delivery methods,
• Identify Products/Deliverables required to deliver a project under a logical breakdown of
the project
• Identify and optimize the use of resources and evaluate if target dates may be met,
• Identify risks, plan to minimize them and set priorities,
• Provide a baseline plan against which progress is measured,
• Assist in stakeholders’ communication, identifying what is to be done, when and by
whom?
• Assist management to think ahead and make informed decisions.
Planning helps to avoid or assist in evaluating:
• Increased project costs or reduction in scope and/or quality,
• Additional changeover and/or operation costs,
• Extensions of time claims against your customer or client,
• Loss of your client’s revenue,
• Contractual disputes and associated resolution costs,
• The loss of reputation of those involved in a project, and
• Loss of a facility or asset in the event of a total project failure.
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Planning Cycle
The planning cycle is an integral part
of managing a project. A software
package such as Primavera makes
this activity much easier.
Project Management processes fall into five groups:
1. Initiating
2. Planning
3. Executing
4. Monitoring & Controlling
5. Closing
Project Management knowledge draws on ten areas:
1. Integration
2. Scope
3. Time
4. Cost
5. Quality
6. Procurement
7. Human resources
8. Communications
9. Risk management
10. Stakeholder management
Project Life Cycle
Every project has a beginning, a middle period during which activities move the project toward
completion, and an ending (either successful or unsuccessful). A standard project typically has the
following four major phases (each with its own agenda of tasks and issues): initiation, planning,
implementation and closure. Taken together, these phases represent the path a project takes from
the beginning to its end and are generally referred to as the project “life cycle.”
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Project Triangle (Project Constraints)
The project management triangle defines the basic constraints that a
project operates within, namely:
• Cost
• Time
• Scope
These are the three main interdependent constraints for every
project. This is also known as Triple Constraints. A change in any one
of these components normally results in a change in one or more of
the others. Quality is not a part of the project management triangle,
but it is the ultimate objective of every delivery. Hence, the project
management triangle representation implies quality.
Network Analysis
Network Analysis scheduling techniques provide managers with a powerful tool for scheduling and
controlling their programs/projects. In general, they permit the graphic portrayal of project activities
and relationships among the activities. This provides the basis for determining the project’s critical
path, predicting shortages, and identifying possible reallocation of resources to solve problems.
Through the use of readily available software, network schedules are fairly easy to update and
rework, thus providing managers with current program/project status information and control over
activities and schedules. Projects are broken down into individual tasks or activities, which are
arranged in logical sequence. It is also decided that which tasks will be performed
simultaneously and which other sequentially.
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The Critical Path (CPM)
The Critical Path is a technique that is used to predict how long a project will take. It analyses which
sequence of activities has the least amount of scheduling flexibility. The technique was developed by
Dupont in 1957 to help work through the complexities of shuttering chemical plants for routine
maintenance. The Critical Path proved so successful that it saved Dupont $1 million the first year it
used it.
Program Evaluation & Review Technique (PERT)
In 1958, the United States Department of Defense’s US Navy Special Projects Office developed the
Program Evaluation Review (PERT). It was developed as a method to analyze the tasks involved in
completing a Polaris mobile submarine-launched ballistic missile project. It focused on the time
needed to complete each task and identified the minimum amount of time required to finish the
whole project. Program Evaluation and Review Technique (PERT) is a method used to
examine the tasked that are in a schedule and determine a variation of the Critical Path
Method (CPM). It analyses the time required to complete each task and its associated
dependencies to determine the minimum time to complete a project. It estimates the
shortest possible time each activity will take, the most likely length of time, and the longest
time that might be taken if the activity takes longer than expected.
To conduct PERT Analysis, three time estimates are obtained (optimistic, pessimistic, and
most likely) for every activity along the Critical Path. Then use those estimates in the
formula below to calculate how much time for each project stage:
Expected Time (Te) = (P+4M+O)/6
• Optimistic Time (O): the minimum possible time required to accomplish a task,
assuming everything proceeds better than is normally expected.
• Pessimistic Time (P): the maximum possible time required to accomplish a task,
assuming everything goes wrong (excluding major catastrophes).
• Most likely Time (M): the best estimate of the time required to accomplish a task,
assuming everything proceeds as normal.
Precedence Diagram Method (PDM)
Precedence Diagram Method (PDM) is a visual representation technique that depicts the
activities involved in a project. It is a method of constructing a project schedule network
diagram that uses boxes/nodes to represent activities and connects them with arrows that
show the dependencies. The Program Evaluation and Review Technique (PERT) and Critical
Path Method (CPM) techniques are essentially limited to “finish-start” relationships. PDM
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was developed subsequent to the PERT/CPM techniques and its function is to permit a more
accurate depiction of relationships among various activities.
There are four types of dependencies that you need to be aware of before creating a
Precedence Diagram.
• Finish-Start: In this dependency, an activity cannot start before a previous activity
has ended. This is the most commonly used dependency.
• Start-Start: In this dependency, there is a defined relationship between the start of
activities.
• Finish-Finish: In this dependency, there is a defined relationship between the end
dates of activities.
• Start-Finish: In this dependency, there is a defined relationship between the start of
one activity and the end date of a successor activity. This dependency is rarely used.
NOTE: - Most current project planning and scheduling software, including Primavera, uses
PDM.
