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ECH 3603

PROJECT DEVELOPMENT AND MANAGEMENT

Prof Dr Azni Idris

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Course Evaluation:- Assignment 20%- Test 1 20%- Test 2 20%- Final exam 40%

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Main Synopsis

• Introduction to project management• Project development and management• Management in detail design• Project evaluation and cost analysis• Project financing and quality assurance• Malaysian government regulations• Case studies

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Program outcome (PO)

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References 1. Clements, J.P. and J. Gido. Effective Project Management, 5 th Edn,

South Western, 2012. 2. Chitkara, K.K., Construction Project Management – Planning,

Scheduling and Controlling, Tata McGraw Hill, Delhi, 20043. Lawson, G., Wearne S.H. and Iles-Smith, P., Project Management for

Process Industries, IChemE, London, 1999.4. Meredith, J.R. and Mantel, S.J., Project Management: A

ManagementApproach, 4th Ed, John Wiley & Sons, New York, 2000.5. Park, C.S., Contemporary Engineering Economics, Addison-Wesley

Publishing Company, New York, 1993.6. Wysocki, R.K. and McGray, R., Effective Project Management, 3rd

Ed., Wiley Publishing, Indiana, 2003.

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What is a project ?

• A Project is a series of related jobs usually directed toward some major output and requiring a significant period of time to perform.

• It is temporary in nature, with specific start and end dates.

• Every project has its unique features and construction procedure.

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Type of projectsGive examples of a project ….

Chemicals processing …• A Processing Plant or factory • A Processing Plant Upgrading facilities• A Production change or renovation works

Mechanical project … ?Civil and structure project ….?Utilities project ….?

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• Basic components in a project:– Planning– Design– Procurement– Construction or fabrication– Commissioning

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Other projects ….

• Management projects- Planning a training sessions- Business and feasibility studies- Safety audits- Environmental Impact Assessment- Research projects

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Characteristics of a Project

Key features of these definitions are that a project has the following characteristics:

• A project is a unique undertaking: each one will differ from every other in some respect.

• Projects have specific objectives (or goals) to achieve.• Projects require resources.• Projects have budgets.• Projects have schedules.• Projects require the effort of people.• Measures of quality apply.

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Objectives of a Project• Project Objectives:

– Performance– Time– Cost

• Expectations of clients inherent part of the project specifications

• There are ancillary (process) goals:– Improving the organization's project management

competency & methods– Individual managerial experience gained– The health of the project team and the organization– Environment

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What is Project Management ?

Definition:1. A novel undertaking or systematic process to

create a new product or service the delivery of which signals a completion. Projects involve risk and are typically constrained by limited resources.

2. A process for conducting work that produces a new product of one sort or another.

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3. A process or undertaking that encompasses an entire set of activities having a definable starting point and well defined objectives, the delivery of which signal the completion of the project. Projects are usually required to be accomplished within limited resources.

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Project Concept

• An imaginative arrangement of a set of ideas.• Concept definition document

- A document describing the concept selected for development and the results of investigating alternative system concepts. It is used to derive the System Specifications and the Statement of Work. Also known as System Concept Document.

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Concept Phase

• The first phase of a project in which the need is examined, alternatives are assessed, the goals and objectives of the project are established and a sponsor is identified.

• The first of four sequential phases in the generic project life cycle. Also known as Idea, Economics, Feasibility or pre-Feasibility Phase.

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Concept Study

• Consideration of an idea that includes a review of its practicability, suitability, cost-effectiveness, etc. usually followed by a recommendation whether or not to proceed with a/ the project.

• A broad-scale plan that takes place well before begins; the recognition of a need for a project and a study to decide whether it is practical or not.

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From concept to finish…

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Learning outcome…..

• What are the 3 most important lessons learnt ?

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Project Life Cycle• Project Life Cycle: changing

patterns of resource usage and level of activity over the course of the project.

• Time distribution of project effort is characterized by slow-rapid-slow process.

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• Stages of a conventional project:–Slow beginning–Buildup of size–Peak–Begin a decline–Termination

(See Figure … nxt slide…)

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Actualtime

Cumulative time

How project moves with time..

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The Project Life Cycle: Four Basic Phases typical project life cycle separated into its generally accepted four fundamental phases.

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Time Distribution of Project Effort

Leve

l of e

ffort

Time

Conception Selection Planning, Scheduling, Monitoring Evaluation & Termination

Peak Effort Level

• Minimal effort at the beginning stage• Increasing effort during implementation• Decreasing effort when project moves towards the completion

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Project Bar chart schedule

typical building project bar chart which relates the master schedule activities to the phases. You will see that the acceptance of a tender and award of the major contract is taken as an arbitrary zero on the time base. This is because it is a clearly defined point in time and its significance in the life of a project is commonly understood.

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PROJECT CYCLE

Project cycle in software development

Example:

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Project Initiation Phase

• Initiate the project - definition• Identify the Project Manager• Develop the Project Charter• Conduct a Feasibility Study• Define Planning Phase• Sign off on the Project Charter

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Project Planning Phase

• Organize and staff the project• Develop a Project Plan• Sign off on the Project Plan

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Project Execution Phase

• Execute the Project Plan• Manage the Project Plan• Implement the project’s results• Sign off on project’s completion

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Project Close-out Phase

• Document the lessons learned during the project

• After-implementation review• Provide performance feedback• Close-out contracts• Complete administrative close-out• Deliver project completion report

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Project size

Project Classification — Sizing Matrix Project Size Work Effort (Hours) Budget

1 <100 < $3,0002 100 - 300 $3,000 - $10,0003 300 - 600 $10,000 - $25,0004 600 - 5,000 $25,000 - $150,0005 > 5,000 > $150,000

Sizing A Project Project size is based on work effort represented by the estimated effort (not duration) required to complete the work, and on the budget required (if any) to complete the project. Select Project Size using either work effort or budget, whichever results in the higher class.

 

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Project Management Principles

i. Pre-planningii. Detailed Planningiii. Implementationiv. Post-project review

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Risk during life cycle

• With most projects there is some uncertainty about the ability to meet project goals

• Uncertainty of outcome is the greatest during the beginning of a project

• Uncertainty declines as the project moves toward completion

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Proj

ect C

ost

Time0

Risk in making a costing… uncertainty

estimates

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• Cost estimation is done during project implementation

• Degree of uncertainty is reduced after each forecast at T1 and T2

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4 phases of the Project Life Cycle:

1. Conceptual and initiation phase• Start project• Establish need – Terms of Reference (TOR)• Pre-feasibility carried out

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• Feasibility study– To check whether the project is feasible or not

Questions:Do you need the project?When is the project needed?Does the project depend on other projects?Is there any other way to achieve the sameobjectives?

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PROJECT – Term of Reference (TOR)• Define objective

– Identify the objectives of the project

• Develop Terms of Reference (TOR)– What is TOR?– Set-up the project brief, justification, targets.

TOR:Provide a brief description of the project and the surrounding context (up to 1 page of narrative). Include critical aspects of the biodiversity, policy, social, and economic context of the project. Identify major stakeholders and their interests and concerns. Detailed background information (e.g. project action plan/ logical framework)

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TOR• Terms of reference are used to describe the purpose roles and structures of

projects, working groups, reference groups and committees. They are guidelines for the way group members will work with each other and are usually the first task undertaken by a group. They are usually documented by the project manager and presented to the group for approval. This provides members of the group with a clear definition of the project's scope.

• Terms of reference provide a written basis for making decisions, confirming a common understanding between members how they will make decisions and work together. Terms of reference should include • What is to be achieved - Vision, objectives, scope and deliverables • Who will participate - stakeholders, roles and responsibilities • How it will be achieved - resource, financial and quality plans • When the work will be achieved - a schedule and the duration of the group

Terms of reference set out a road map and give a clear pathway for the progression of the activity. They state what needs to be achieved by whom and when.

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Project Location Specify the region, country, or landscape as appropriate.

Project Name xxxxxxProject reference number yyyyyyProject budget State the total budget for this donor (noting the

contract currency and exchange rate used). Also state the global (total) budget for this project.

Donor(s)/ funding sources State all donors and (where applicable) the precise funding sources.

Project duration State the project duration and the evaluation period (if different)

lmplementing agency and partners

State which organization(s) are implementing the project

Project executant Name of project owner, consultant, contractors, etc

TEMPLATE FOR TERMS OF REFERENCE

Project Background and Context .Provide also the following key information:

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2. Design and development phase• Product or service design start• Establish Detailed schedule (work plan)• Establish completion plan and dates

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3. Implementation or construction phase/fabrication

• Implement following Phase 2 requirement• Follows time and schedule set in Phase 2

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4. Commissioning and handover phase• Acceptance of project• Completion of project• Project termination• Start up phase (after handover)

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Phase 1 – Conceptualization/ InitiationKey activities Deliverable of each Phase-Develop business case and conduct Project Definition Workshop-Identify key stakeholders and draft Stakeholder Matrix-Perform Project Selection techniques to determine Cost/ Benefit-Appoint Project Manager- Establish Project Manager-Establish Project and business objectives-Establish Project and business goals-Tendering/ drawing up Request for Proposals (RFP’s) or Request for Information (RFI’s)

-Approval and sign-off of the Business Case- Appointment of Project Sponsor and/ or Project Owner-Project Definition Report (PDR)- Previous project close- out reports - High-level timeline, milestones, deliverable, Work Breakdown Structure (WBS)-Project Charter

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Phase 2 – Design & Development

Key activities Deliverable of each Phase-Develop detailed project plan-Feasibility study -Design and develop best alternative / solution-Develop detailed blueprints/ diagrams for the solution

-Detailed design and/ or blueprint for the preferred alternative-Detailed financial costs and benefits-Prototype, pilot or reference site -Implementation plan-Rollout plan-Detailed project plan-Approval of the solution(s) and mandate to continue-Change readiness

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Phase 3 - ImplementationKey activities Deliverable of each

Phase- This phase is described as the ‘doing’ phase where the actual solution or design is implemented in the live environment-Change management plays a big role -By now the design/ solution should be robust enough to work in the ‘live’ environment-Some tweaking of the design may be required-The project plan is closely monitored and progress is tracked-Earned value and project accounting is conducted-Contractors are instructed to commence work

-Solution and/ or completed design and/ or implemented-Quality control report-Change management reports-User acceptance reports-Earned value schedules-Project accounts -Progress reports -Timesheets

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Phase 4 – Commissioning/ HandoverKey activities Deliverable of each

Phase-Final touches-Final testing-Minor details-Throwing the ‘big switch’-Turning on the new plant-Commissioning/ Handover-Developing training materials-Developing user manual-Completing training/ transfer of knowledge

-Project close-out report-Signed-off project-Client acceptance report/ signature-$$$$/ profits!!!

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Initiating Process

Planning Process

Executing Process

Controlling Process

Closing Process

Links among process groups in a phase

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Initiating Process

Planning Process

Executing Process

Controlling Process

Closing Process

Initiating Process

Planning Process

Executing Process

Controlling Process

Closing Process

Implementation Phase

Design PhasePrior Phase

Subsequent Phase

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Learning outcomes ….

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Project Team

People and their roles in a project

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Who is in a project team?Names Other names Definition

Project Hierarchy Widely used Group name for all persons involved

Project Director Output Manager Knowledgeable persons to make a project work-They own the project-Involve at strategic level

Quality Control Monitoring/ advisory group Acts like a steering committee

Project manager Project leader Person responsible at operation level

Project leader Project leader Leads as sub-project

Project team Widely used People selected to carry out the duties because of their skill

Core team Widely used People in the 1st phase of a large project

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Project Hierarchy

• Objectives – to ensure the strategic requirement are considered.

• E.g.: chart to represent organization structure.- relationship between boss and the employee- line of command in project & how project are controlled

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Project Manager

Team Member

Team Member Team Member

Project Director

Quality Control Group

People officially involved in the project(Hierarchy)

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Project Director

Jobs:- To set priorities- Delegate authority- Monitor performance- Allocate resources- Provide guidelines and support- Act as mentor for inexperienced project

managers

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Project Manager

Jobs:- To plan the work – NOT to do the work himself- To organize and coordinates all jobs- To lead and supervise activities- To monitor and control project- To select the best team for a job

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Project Manager (cont)

Other duties- Produce progress reports- Carry out problem solving- Negotiating purchase- Cost control

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Sales & Marketing Director

Managing Director (CEO)

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Branch Manager

Supervisor

Staff StaffStaff

Divisional Manager

Divisional Manager

Supervisor

Divisional Manager

Supervisor

Corporation XCorporation X

Human ResourcesHuman

Resources

MarketingMarketing EngineeringEngineering ProcurementProcurementManufacturingManufacturing

Finance &Administration

Finance &Administration

Project Manager

Project Team

MA1MA1 MA2MA2 MA3MA3 EN1EN1 EN2EN2 EN3EN3 MF1MF1 MF2MF2 MF3MF3 PR1PR1 PR2PR2

Forming a (Dedicated) Project Team

Staff are assigned away from various departments to work full-time on the project.

Other Areas

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3 significant learning outcomes ……