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PROJECT MANAGEMENT PROCESS
SUBMITTED BY
ADEPITAN BABATOLA FASORO
MBA 6951(Managing Complex Projects) Final Project
COLUMBIA SOUTHERN UNIVERSITY, USA
Introduction The purpose of the of this presentation is to discuss the project management process with focus on
effectiveness and ways teams can prevent some pitfalls to a project as required for final project for
course MBA 6951 (Managing Complex Project) of Columbia Southern University, Alabama , USA.
This presentation will be discussing on the topic with outlines below:
The purpose of a project proposal
The project scope document
The importance of estimating costs, budgets, and earned value
Risk management, risk mitigation, and risk response
Communication between the project team, project manager, and the stakeholders
The importance of the project manager
PROJECT MANAGEMENT PROCESS
Project management is planning, organizing, coordinating, leading, and controlling resources to accomplish the project
objectives. The project management process involves planning the work and then working the plan. The project management
process involves two major functions: first establishing a plan and then executing that plan to accomplish the project objective.
( Gido J. & Clements J., 2012).
THE 5 PROCESS GROUPS:
1. Initiating
2. Planning
3. Executing
4. Monitoring & Controlling
5. Closing
PROJECT MANAGEMENT PROCESS ( CONTD.)
10 Knowledge Areas are:
1. Integration Management
2. Scope Management
3. Time Management
4. Cost Management
5. Quality Management
6. Human Resource Management
7. Communication Management
8. Risk Management
9. Procurement Management
10. Stakeholders Management
THE PURPOSE OF PROJECT PROPOSAL
Evaluating whether to go forward with the preparation of a proposal is sometimes referred to as the bid/no-bid decision. A
contractor might consider the following factors in deciding whether to develop a proposal in response to an request for proposal:
1. Competition: Giving various contractors an opportunities to submit proposal and to see which of this contractors have a
competitive advantage, because of either pre-request for proposal marketing efforts or their previous work for or reputation with
the customers.
2. Risk: To access if there is a risk that the project will be unsuccessful-technically or financially.
3. Mission: To see if the proposed project is consistent with the contractor’s business mission.
4. Extension Of Capabilities: To know if the proposed project provide the contractor with an opportunity to extend and enhance
its capabilities.
5. Reputation: To know if the contractor has successfully completed projects for the same customer in the past, or were there
problems that left the customer dissatisfied?.
THE PURPOSE FOR PROJECT PROPOSAL ( Contd.)
6. Customer funds: To know if the customer if the customer really have funds available to go forward with project? Or is the
customer on a “ fishing expedition”-issuing an request for proposal although unsure whether the project will ever be funded.
7. Proposal resources: To know if appropriate resources are available to prepare a quality proposal, it is enough for a contractor
to just prepare a proposal. It is imperative that the proposal be of sufficient quality to have a good chance of wining .
8. Project resources: To know if there are appropriate resources available to perform the project if the contractor is selected as
the winner for the project, contractors need to be sure that the appropriate individuals within the organization will be available
to work on the project. ( Gido J & Clements J. 2012).
THE PROJECT SCOPE DOCUMENT
The project scope defines what needs to be done. It is all the work that must be done to produce all
the project deliverables, satisfy the sponsor or customer that all the work and deliverables meet the
requirements or acceptable criteria, and accomplish the project objective. The project charter or
request for proposal establishes the framework for further elaboration of the project scope.( Gido J.
& Clements J. 2012)
The project scope document is prepared by the project team or contractor, and it includes many of
the items contained in the project charter, RFP, or contractor’s proposal, but in much greater detail.
The document is valuable for establishing a common understanding among project stakeholders
regarding the scope of the project.
The project scope document usually contains the following sections:
PROJECT SCOPE DOCUMENT ( Contd .)
1. Customer requirements: This document define the functional or performance specifications for the project’s end product and
other project deliverables. The requirements can include specifications regarding size, color, weight, or performance parameters,
such as speed, uptime, throughout, processing time or operating temperature range, that the project result must satisfy.
2. Statement of Work (SOW): This defines the major tasks or work elements that will need to be performed to accomplish the
work that needs to be done and produce all the project deliverables. The SOW defines what the project team or contractor will
do. If something is not included in the statement of work, then it should be assumed that it will not be done or provided. Having
the contractor or project team review the statement of work with the sponsor or customer provides an opportunity to make sure
everything that the customer expects is included.
3. Deliverables: Deliverables are the products or outputs that the project team or contractor will produce and provide to the
customer during and at the completion of the performance of the project. Although major or key deliverables may be stated in
the project charter or request for proposal (RFP), they need to be expanded on in greater detail in the project scope document.
PROJECT SCOPE DOCUMENT (Contd.)
4. Acceptance criteria: for all project deliverables must be described in greater detail than what is stated in the project charter or
request for proposal. For each deliverable, the quantitative measures or references to specifications, standards, or codes that will
be used should be stated, as the criteria will be the basis for the customer agreeing that a deliverable is acceptable. The inclusion
of specifications or standards will help assure quality of the deliverable. ( Gido J. & Clements J. 2012).
5. Work Breakdown Structure (WBS): The major work elements defined in the statement of work section along with the detailed
list of deliverables provide the basis for creating a work breakdown structure, which is hierarchical decomposition of the
project work scope into work packages, that produce the project deliverables. It is a technique for organizing and subdividing
all the project work and deliverables into more manageable components. The WBS establishes the framework for further
planning to create a baseline plan for performing the project work. It should be noted at the beginning of the project that it
might not be possible to define all of the requirements, work elements, and deliverable at detailed level, but as the project
progresses or move from phase to phase, the project team or contractor can progressively elaborate the details as more
information is known or becomes clear. ( Gido J. & Clements J. 2012).
The importance of estimating costs, budget and earned value are numerous, and some of the critical success factors to this includes
the following:
Estimated activity costs must be based on the estimated activity resources
The person who will be responsible for performing the activity should estimate the costs for that activity. This generates
commitment from the person.
Cost estimates should reasonable and realistic.
Once the project starts, it is importance to monitor actual costs and work performance to ensure that everything is within the
budget.
A system should be established to collect, on a regular and timely basis, data on costs actually expended and committed, and
the earned value (percent complete) of the work performed, so they can be compared to the cumulative budgeted cost (CBC).
THE IMPORTANCE OF ESTIMATING COSTS, BUDGET AND EARNED VALUE
If at any time during the project it is determined that the project is overrunning the budget, or the value of the work performed
is not keeping up with the actual amount of costs expended, corrective actions must be taken immediately.
It is important to use the time-phased cumulative budgeted cost (CBC), rather than the total budgeted cost (TBC), as the
baseline against which cumulative actual cost (CAC) is compared. It would be misleading to compare the actual costs
expended to the total budgeted cost, because cost performance will always look good as long as actual costs are below the
TBC. (Gido J & Clements J 2012)
To permit a realistic comparison of cumulative actual cost to cumulative budgeted costs , portions of the committed costs
should be assigned to actual costs while the associated work is in progress.
The earned value of the work actually performed is a key parameter that must be determined and reported throughout the
project. (Gido J. & Clements J. 2012)
THE IMPORTANCE OF ESTIMATING COSTS, BUDGET, AND EARNED VALUE (Contd.)
For each reporting period, the percent complete data should be obtained from the person responsible for the work. It is
important that the person make an honest assessment of the work performed relative to the entire work scope.
One way to prevent inflated percent complete estimates is to keep the work packages or activities small in term of scope and
duration. It is important that the person estimating the percent complete assess not only how much work has been performed
but also what work remains to be done.( Gido J. & Clements J. 2012)
The Key to effective cost control is to analyze cost performance on a timely and regular basis. Early identification of cost
variances (CV) allows corrective actions to be taken immediately, before the situation gets worse.
For analyzing cost performance, it is important that all the data collected be as current as possible and based on the same
reporting period. (Gido J & Clements J. 2012)
Trends in the cost performance index (CPI) should be monitored carefully. If the CPI goes below 1.0 or gradually decrease,
corrective actions should taken.
THE IMPORTANCE OF ESTIMATING COSTS, BUDGET, AND EARNED VALUE (Contd.)
As part of the regular cost performance analysis, the estimated or forecasted cost at completion (FCAC) should be calculated.
The key to effective cost control is to aggressively address work packages or activities with negative cost variances and cost
inefficiencies as soon as they are identified. A concentrated effort must be applied in these areas. The amount of negative cost
variance should determine the priority for applying these concentrated efforts.
When attempting to reduces negative cost variances, focus on activities that will be performed in the near term and on activities
that have large estimated costs. ( Gido J. & Clements J. 2012).
The key to managing cash flow is to ensure that cash comes in faster than it goes out.
It is desirable to receive payments ( cash inflow) from the customer as early as possible, and to delay making payments (cash
outflow) to suppliers or subcontractors as long as possible.
And lastly, Addressing cost problems early will minimize the negative impact on scope and schedule. Once costs get out of
control, getting it back within budget becomes more difficult. (Gido J. & Clements J 2012?
THE IMPORTANCE OF ESTIMATING COSTS, BUDGET, AND EARNED VALUE (Contd.)
Risk is an uncertain event that, if it occurs, can jeopardize accomplishing the project objective. Risk management involves
identifying, assessing, and responding to project risks in order to minimize the likelihood of occurrence and/ or potential impact of
adverse events on the accomplishment of the project objective. Addressing risks proactively will increase the chances of
accomplishing the project objective. Waiting for unfavorable events to occur and then reacting to them can result in panic and
costly responses. Managing risk includes taking action to prevent or minimize the likelihood of occurrence or the impact of such
unfavorable events.( Gido J. & Clements J. 2012)
Some level of risk planning should be done during the initiating phase of the project life cycle to make sure, for example, that a
contractor understands the risks involved with bidding on a proposed project. With knowledge of potential risks, the contractor
can include contingency or management reserve amounts in the bid price. On the other hand, if the risks seem too great, the
contractor may decide to not bid on a proposed project. ( Gido J. & Clements J. 2012)
A project manager cannot be risk averse. She must accept that risk is a part of the project management and has to address it head-
on. Furthermore, the project manager needs to set the tone for encouraging open and timely discussion of risk among project team
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE
RISK MANAGEMENT-A FOUR –STAGE PROCESS
Systematic risk management comprises four distinct Steps:
Risk Identification: A risk is an uncertain event that, if it occurs, can jeopardize accomplishing the project objective. Risk
Identification includes determining which risks may adversely affect the project objective and what the impact of each risk
might be if it occurs. Sometimes a sponsor identifies major risks in the project charter when the project is authorized. A
contractor may also identify risks in a proposal to a customer. It can show the customer that the contractor has experience and a
realistic approach to performing the project and wants to avoid surprises. It is also a means of managing customers
expectations. Another approach is to establish risk categories and identify risks that might occur for each category. Examples of
risk categories along some other risks for each are:
a) Technical: such as Failure to meet customer performance requirements, New application for technology, and failure to meet
standards.
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE (Contd.)
b. Schedule: Vendor delay in delivery of critical equipment.
c. Cost: Material costs escalate more than anticipated
d. Human Resources: May not have people available when required to staff the request
e. External: Such as, Inclement weather, Changes in government regulations, change in customers preferences or local protesters
file legal .
f. Sponsor/ customer: Delays in approval, security of the sponsor funding. ( Gido J. & Clements J. 2012).
ASSESS RISKS: Assessing each risk involves determining the likelihood that the risk event will occur and the degree of
impact the event will have on the project objective. Each of these factors can be assigned a rating of high, medium, or low, for
example, or some other rating scale (1-5, 1-10, percent, etc.). The project manager, in consultation with appriopate team
members or other experts who are most knowledgeable about the potential risk, should determine ratings for each risk.
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE ( Contd.)
Historical data from prior similar projects can also be helpful. For example, if severe weather is a risk, historical daily weather data
or consultation with weather forecasting service may be careful. Based on the likelihood of occurrence and a high degree of impact
should be assigned a higher a higher priority for more serious consideration than risks that have a low likelihood of occurrence and
a low degree of impact. Another factor to consider in prioritizing risks is whether a risk is related to activities that are on critical
paths. If so, perhaps such risks should be given higher priority because if the risk occurs, it would have a greater impact on the
schedule than if it was associated with activities on a path that has a large positive value of total slack. (Gido J. & Clements J.
2012).
PLAN RISK RESPONSES: A risk response plan is defined set of a actions to prevent or reduce the likelihood of occurrence
or the impact of a risk, or to implement if the risk event occurs. Risk response planning involves developing an action plan to
reduce the likelihood of occurrence or potential impact of each risk, establishing a trigger point for when to implement the
actions to address each risk, and assigning responsibility to specific individuals for implementing each response plan.
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE (Contd.)
A risk response plan can be to avoid the risk, mitigate the risk, or accept the risk. Avoidance means to eliminate the risk by
choosing a different course of action. Examples of avoiding risk would be to decide to use conventional technology rather than
advanced state-of-art technology in a new product, or deciding to hold a weekend festival indoors to avoid the possibility of a
rainout. Mitigating the risk involves taking action to reduce the likelihood that the risk event will occur or to reduce the potential
impact. ( Gido J. & Clements J. 2012).
A risk response plan should include a trigger point or warning flag for when to implement the action plan for each risk. A trigger
point for when to purchase a rare material may be if the current price increase more than 5 percent above the amount budgeted for
purchasing material. The trigger point for deciding to incorporate advanced technology in a new product may be the completion of
an engineering feasibility study. Another example would be to authorize over-time if the project falls behind schedule by more than
5 percent of the remaining project duration.
Implementing risk response plan often requires spending additional funds for additional resources, working overtime, paying for
expedited shipments, purchasing additional materials, and so forth.( Gido J. & Clements J. 2012).
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE (Contd.)
MONITOR RISKS: Risk monitoring involves regularly reviewing the risk management matrix throughout the project. During
the project, it is important to regularly review and evaluate all risks to determine if there are any changes to the likelihood of
occurrences or the potential impact of any of the risks. These factors can be determine if a particular risk has increased in
priority for attention or if the risk has diminished in importance. Furthermore, new risks may be identified that were not
considered as a risk earlier in the project but now need to be added to the risk assessment matrix. For example, early tests of
the prototype of a new product indicate the product may now not meet the original performance specifications. Another
situation may be that due to previous delays in the design phase, the construction phase of a facility expansion is now
scheduled to take place in the middle of the hurricane session. During a project, the customer may initiate changes to the
project work scope, schedule, or the budget that could also affect the assessment of previously defined risks or result in the
identification of the new risks. Project meetings are a good forum for regularly reviewing, updating, and addressing risks. The
agenda for the project status review meetings should include an item regarding risk assessment. Particular attention should be
given to reviewing the trigger points for each risk to determine if any risk response plans are on the verge of having to be
implemented. ( Gido J. & Clements J. 2012 ).
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE (Contd.
RISK MITIGATION: The next stage in risk management is the development of the effective risk mitigation strategies. In a
general sense, there are four possible alternatives a project organization can adopt deciding how to address risks: (1) Accept
risk, (2) minimize risk, (3) share risk or (4) transfer risk. ( Pinto J.K. 2010)
1. Accept Risk: One option that a project team must always consider is whether the risk is sufficiently strong that any action is
unwarranted. Any number of risks of a relatively minor nature may be present in a project as a matter of course. However,
because the likelihood of their occurrence is so small or the consequences of their impact are so minor, they can be judged to be
acceptable and ignored. (Pinto J.K. 2010)
2. Minimize Risk: One method to minimize risk is to insist that all significant vendors maintain continuous direct contact with
quality assessment team, this will minimize the resultant risk by adopting strategies that allow it to directly affect the production
processes of its suppliers. ( Pinto J.K. 2010).
RISK MANAGEMNT, RISK MITIGATION, AND RISK RESPONSE ( Contd.)
3. Share Risk: Risk may be allocated proportionately among multiple members of the project. Ameliorating risk through sharing
can be achieved contractually. Many project organizations create partnerships with suppliers and customers that include legal
requirements for risk to be shared among those involved in the project. ( Pinto J.K. 2010).
4. Transfer Risk: In some circumstance, when it is impossible to change the change nature of the risk, either through elimination
or minimization, it may be possible to shift the risks bound up in project to another party. This option of transferring risk to other
parties when feasible, acknowledges that even in the case a risk cannot be reduced, it may not have to be accepted by the project
organization, provided that there is a reasonable means of passing the risk along. There are several methods that companies uses to
transfer the risk, this includes: Fixed-price contracts, establish a firm , fixed price for the project up front; should the project
budget begin to slip, the project organization must bear the full cost of these overruns. The other method is Liquidated
damages: under the concept of liquidated damages offers a way to transfer risk through contracts, it represent project penalties
clauses that kick in mutually agreed-on-points in the project’ s development and implementation. (Pinto J.K. 2010).
RISK MANAGEMENT, RISK MITIGATION, AND RISK RESPONSE ( Contd.)
Project communication takes various forms, including personal communication, meeting, presentations, reports, and project
documentation. Communication can be face-to-face, or use some medium, including telephones, voice mail, e-mail, text
messages, videoconferencing, or groupware. It can be formal or informal. Personal communication can be oral or written. Oral
communication can be face-to-face or via telephone. Information can be communicated in a more accurate and timely manner
through verbal communication. Such communication provides a forum for discussion, clarification, understanding, and
immediate feedback. Body language and tone are important elements in verbal communication. Body language and customs
reflect of cultural diversity must be considered in communication. Verbal communication should be straightforward,
unambiguous, free of technical jargon, and not offensive. Asking for or providing feedback enhances understanding. Personal
written communication is generally carried out through internal or external correspondence. Such means can be used to
communicate effectively with a large a group of people, but should not be used for trivial matters. Written communications
should be clear and concise and should be used mostly to inform, confirm, or request. ( Gido J. & Clements J. 2012).
COMMUNICATION BETWEEN PROJECT TEAM, PROJECT MANAGER, AND THE STAKEHOLDERS.
Listening is an important part of making communication effective. Failure to listen can cause a breakdown in communication.
Common barriers to effective listening include pretending to listen, distraction, bias and close-mindedness, impatience, and
jumping to conclusion. Listening skills can be improved by focusing on the person talking, engaging in active listening, asking
questions and not interrupting.
Project meetings are another forum for project communication. The three most common types of project meetings are status
review, problem-solving, and design review meetings. The purpose of a status review meeting are to inform, identify problems,
and establish action items. Items often covered include accomplishment since the previous meeting, cost, schedule, and the
work scope- status, trends, forecasts, and variances, risk assessment update, corrective actions, opportunities for improvement,
and action item assessment. Problem-solving meetings are called when problems or potential problems arises. They should be
used to develop a problem statement, identify potential causes, gather data, identify and evaluate possible solutions, determine
the best solution, revise the plan, implement the solutions, and evaluate it. Design review meetings are for project that include a
design phase. ( Gido & Clements 2012).
COMMUNICATION BETWEEN THE PROJECT TEAM, PROJECT MANAGER, AND THE STAKEHOLDERS.( Contd.)
Some critical success factors for an effective communication between the project team, project manager and the project
stakeholders include
1. Effective and frequent personal communication is crucial to successful project management.
2. A high degree of face-to-face communication is important early in the project to foster team building, develop good working
relationships and establish mutual expectations.
3. Body language and customs reflective of cultural diversity must be considered in communications.
4. Be careful not to use remarks, words, or phrases that can be construed to be sexiest, racist, prejudicial or offensive.
5. The heart of communication is understanding- not only to be understood, but to understand, Half of making communication
effective is listening, failure to listen can cause a breakdown in communication.
6. Communication should be clear, concise, honest, unambiguous, free of jargon, and not offensive.
COMMUNICATION BETWEEN THE PROJECT TEAM, PROJECT MANAGER, AND THE STAKEHOLDERS. (Contd.)
7. Achieving customer satisfaction requires ongoing communication with the customer to keep customer informed and to
determine whether expectations have changed. Regularly ask the customer about the level of satisfaction with the progress of
the project.
8. Keep the customer and the project team informed of the project status and potential problems in a timely manner.
9. Project status meetings should be held on a regular basis. Have the team develop meeting guidelines at the project kickoff
meeting at the beginning of the project so that everyone understands and is committed to what behavior is expected during the
project meetings.
10. Written documents are updated, they should immediately be distributed to all team members whose work will be affected.
11. Reports must be written to address what is of interest to the readers, not what is of interest to the person writing the reports.
12. A project communication plan must be prepare at the beginning of the project to ensure that all stakeholders will receive
information and documents they need. ( Gido J. & Clements J. 2012 ).
COMMUNICATION BETWEEN THE PROJECT TEAM, PROJECT MANAGER, AND THE STAKEHOLDERS. (Contd.)
The wide range of duties that a project manager is expected to take on covers everything from direct supervision to indirect
influence, from managing “hard” technical to details controlling “soft” people issues, from developing detailed project plans
and budgets to adjudicating team member quarrels and smoothing stakeholders concerns. In short, the project manager’ job
encapsulates, in many ways, the role of a mini-CEO, someone who is expected to manage holistically, focusing on the
complete project management process from start to finish. (Pinto J.K. 2010 )
Acquiring Project Resources: Project resources refer to all personnel and material resources necessary to successfully
accomplish project objectives. Many projects are underfunded in the concept stage. This lack of resources support can occur
for several reasons, including:
1. The project’s goals are deliberately vague
2. The project lacks a top management sponsor
3. The project requirements were deliberately understated
THE IMPORTANCE OF THE PROJECT MANAGER
Regardless of the reasons for the lack of project resources, there is no doubt that many projects face extremely tight budgets
and inadequate human resources. Yet there are some options open to project managers as they seek to supplement their project’
resources support.
Motivating and Building Teams: The process of molding a diverse group of functional experts into a cohesive and
collaborative team is not a challenge to be undertaken lightly. Team building and motivation present enormously complex
hurdles and dealing comfortably with human processes is not part of every manager’s background. In considering on how to
motivate individuals on the project teams, it is important to recognize that motivation ultimately comes from within each of us,
it cannot be simulated solely by an external presence. Successful project manager must recognize that one vital element of the
job description is the ability to recognize talent, recruit it to the project team, begin to mold a team of interactive and
collaborative workers, and apply motivational techniques as necessary. ( Pinto J.K. 2010)
Having a vision and fighting fires: Successful project managers must operate on the boundaries. Sometimes those boundaries
divide technical and behavioral problems, and the project managers need to be comfortable with both tasks. Another boundary
THE IMPORTANCE OF THE PROJECT MANAGER
refers to the distinction between being a strategic visionary and a day-to-day firefighter. Project managers work with conceptual
plans, develop the project scope in line with organizational directives, and understand how their project is expected to fit into
company’s project portfolio. In addition, they are expected to keep their eyes firmly fixed on the ultimate prize: the completed
project.
Communicating: One of the most critical means by which a project manager can communicated is through their ability
to run productive meetings. Meeting skills are so important because project managers spend a large amount of time in
meetings, meeting with project team, top management, clients, and other critical project stakeholders, the ability of the project
managers to become adept at running them in an efficient and productive manner is critical. (Pinto J. K. 2010 )
THE IMPORTANCE OF THE PROJECT MANAGER (Contd.)
Gido J. & Clements J. (2012) Successful Project Management (5th Ed.) Mason, OH: Southwestern.
Pinto J.K. (2010) Project Management: Achieving Competitive Advantage (2nd Ed.) Upper Saddle River, NJ: Prentice Hall.
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