Q1 – Discuss in detail and giving examples the correlation between strategic planning & project management. Also explain how product lifecycle & project lifecycle are related?

Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people.

Strategic planning can be as follows: Vision - Define the vision and set a mission statement with hierarchy of goals and objectives SWOT - Analysis conducted according to the desired goals Formulate - Formulate actions and processes to be taken to attain these goals Implement - Implementation of the agreed upon processes Control - Monitor and get feedback from implemented processes to fully control the operation

There are several factors to assess in the external situation analysis:1) Markets (customers), 2) Competition, 3)Technology, 4)Supplier markets, 5)Labor markets, 6) The

economy, 7) The regulatory environment

PROJECT:• A project is a temporary endeavor undertaken to create a unique:– Product– Service– Result• One time – unique eg erection of plant• Schedule-has finite start and end dates• Budget-finance has a limit called budget• Objective/scope-to achieve something• Milestones-monitoring points• Critical success factors-criteria for success

Projects and Strategic Planning• Market demand – build new refinery• Organization need, training, new office• Client request• Technological advance• Legal requirements

Example:• Develop new product or service• Restructuring, reorganization• Develop new car• Construct a building; Develop new MIS• Running a campaign; Making of advertisement, film, documentary

GAS Answer:

Project management is rapidly becoming a standard way of doing business in many organisations. The key to productivity is often found in how we manage projects, which are the tools of implementing the business strategy of an organisation.

Every project in an organisation should contribute to its strategic plan. But how can we ensure this linkage? We need to make sure that we integrate projects within the strategic plan. This integration requires a process for prioritising projects by their contribution to the plan.

The strategic management processIn a customer-driven organisations, mission and goals are set to meet the needs of the customers. The mission typically covers "what we want to become" and should be communicated throughout the organisation. Goals translate the mission into specific, measurable, and tangible terms. The goals answer in detail where a corporation is heading or when it is going to get there.

The development of strategies to meet these needs and goals should focus on "what we need to do to achieve these goals." It requires an extensive analysis of the internal and external environments. Based on a political, economic, social, and technological analysis (PEST), we analyze the external environment to identify opportunities and threats. We analyze the internal environment by looking for strengths and weaknesses such as management, facilities, core competencies, product quality, technology, and financial resources. The deliverable of this analysis is a set of strategies designed to best meet the needs of the customers.

Implementation of these strategies requires actions and completing tasks, and should focus on how to realise these strategies. Implementation must include attention to the following key points:

Executing the work requires allocation of resources such as funds, people, and equipment. Organisational resources are limited. In addition, multiple goals frequently impose conflicting demands on resources. This requires a mechanism for allocating resources based on organisational priorities.

Implementation requires an organisational structure that supports projects.

Project management processes for planning, executing, and controlling are essential to ensure that we are able to implement strategies effectively and efficiently.

We need a project selection and priority system to ensure strong linkages between projects and the strategic plan.

The strategic management process and its relationship to projects is shown in Figure A:

The strategic management processA project management approach to business problems and opportunities is becoming the norm rather than the exception. Projects are the tools for implementing the strategy of the organisation. Effective project management starts with selecting and prioritising projects that support the organisational mission and strategy. The priority system focuses attention on the mission and major goals of the organisation and fosters consensus to which projects are of highest priority. It results in a portfolio of projects that balance threats and opportunities and provides a better utilisation of resources.

Project Life Cycle and Product Life cycle: Relation/Differences

Product Life Cycle Project Life Cycle

1. A product life cycle talks about the various stages a product goes through before it actually declines, on the other hand the project life cycle is the set of activities that you need to complete to finish the project (i.e. create a product/service/result)

2. The stages in the product life cycle are controlled by external factors like entry of competitors, the cost structure, customer response etc. but project life cycle is controlled by the one who is carrying it out.

3. The steps in the project life cycle can be delayed or skipped but this is not possible in the product life cycle. All products go through the same stages, some progress quickly while others do so slowly.

4. Generally people try to speed up the project and complete it as early as possible while they would prefer to slow down the product life cycle stages.

5. There can be many different project lifecycles within a product lifecycle. E.g. a computer:a. Project 1: Manufacturingb. Project 2: Deployment of 5,000 computers to a bankc. Project 3: H/w & S/w upgrades d. Project 4: Replacement of computers where the product is destroyed as it is no longer

deployable/reusable6. Organization structure is different7. Product life cycle stages: Introduction, Growth, Maturity, Decline. General project lifecycle stages:

Initiation, Planning, Execution & Controlling, Closure. There are various models for project lifecycle as well like the waterfall model.

(Other short answer -

Project Lifecycle

• Defines the phases that connect the beginning of a project to its end• Technical work to be done as part of the project• Schedules deliverables• Identifies who all are involved• How to control and approve each phase• Phases are generally sequential• Cost and staffing levels are low at the start, peak during intermediate phases, drop rapidly at the

end• Project cost and staffing levels change with phases• Stakeholders influence reduces over time• Cost of changes goes up towards the end• Sequence of phases:– Idea– Charter– Project team formation– Scope statement– Plan– Execute– Acceptance and approval– Handover

Difference in Project Lifecycle and Product Lifecycle• Project lifecycle goes through a series of phases to create the product• Project lifecycle is part of product lifecycle• Organisation structure is different

Project Lifecycle Generally defines:• What technical work to do in each phase• When the deliverables are to be generated• Who is involved in each phase• How to control and monitor and approve each phase

Project lifecycle characteristics• Phases are generally sequential• Costs and staffing levels are low initially, peak during intermediate phase and drop rapidly at the

end• Risk of uncertainty is the highest at the beginning and hence risks are highest at the initial period• Influence of stakeholder is very high initially and lowers progressively• Cost of change is low initially and goes up progressively )

Q2 – What are project management knowledge areas? Briefly describe each knowledge area.

A Guide to the Project Management Body of Knowledge (PMBOK) is a project management guide, and an internationally recognized standard, that provides the fundamentals of project management as they apply to a wide range of projects. The Guide recognizes 44 processes that fall into five basic process groups and nine knowledge areas that are typical of almost all projects. Each of the nine knowledge areas contains the processes that need to be accomplished within its discipline in order to achieve an effective project management program. Each of these processes also falls into one of the five basic process groups, creating a matrix structure such that every process can be related to one knowledge area and one process group.

Nine Project Management Knowledge Areas:1. Project Integration Management• Develop project charter• Preliminary scope document• Project Management plan• Direct and Manage project execution• Monitor and control project work• Integrated change control• Close the project

2. Project Scope Management• Scope planning – How to define project scope, verify, control and WBS• Scope Definitions: detailed scope statement• Create WBS• Scope verification • Scope control

3. Project Time Management• Activity definition• Activity sequencing• Activity resource estimation• Activity duration estimation• Schedule development• Schedule control

4. Project Cost Management• Cost estimating• Cost budgeting• Cost control

5. Project Quality Management• Quality planning• Perform Quality assurance• Perform Quality Control

6. Project Human Resource Management• Human Resource planning• Acquire project team• Develop project team• Manage project team

7. Communications Management• Communication planning• Information distribution• Performance reporting• Manage stakeholders

8. Risk Management• Risk Management planning

• Risk identification• Qualitative risk analysis• Quantitative risk analysis• Risk response planning• Risk monitoring and control

9. Procurement Management• Plan purchases and acquisitions• Plan contracting• Request seller responses• Select sellers• Contract administration• Contract closure

For example, let’s take project integration management. The definition of integration in the context of project management and the PMBOK Guide refers to making choices on where to concentrate resources and efforts, anticipating and dealing with issues affecting the project and coordinating the project work. Based on this, you can imagine the important role this knowledge areas plays in managing the interaction of processes. In a sense, it creates the core structure of the project. For example, it creates the project management plan, which is flushed out of the other knowledge areas. The “integrate and change control” board and guidelines are created and managed here and this controls and monitors the changes throughout the project. It begins and ends the project and it includes the execution, monitoring and controlling of the project work.

Q4 – Explain the term social cost benefit analysis. Give example of any project where such an evaluation is made giving brief details.

The main objective of an individual, a firm or a company in investing on a project is to earn maximum possible returns for an investment or commercial profitability of a project. There are some projects, which may not be as attractive with respect to returns or profitability, but still they are undertaken for social cause. Such public projects like road, railway, bridge, transport, power, irrigation etc have social implication but may not have commercial benefit.

Social Cost Benefit Analysis considers the total impact that a project will have on an economy, also taking into account the hidden factors. These often tend to differ from the costs incurred in monetary terms and benefits earned in monetary terms by the project.

The principal reasons for the discrepancy are which may arise during the analysis include the following:

1. Market imperfections2. Externalities3. Taxes4. Concern for saving5. Concern for redistribution6. Merit and demerit goods

The main objectives of SCBA are as follows:1. Contribution of the project to the GDP2. Contribution of the project to improve the benefits to the poorer section of the society and to

reduce regional imbalance in growth and development3. Justification of the use of scarce resources of the economy by the project

There are two main approaches to SCBA: UNIDO Approach Little-Mirrless Approach

Both approaches use the shadow price and discounted cash flow (DCF) technique and are based on the principle of equity. UNIDO approach measures shadow prices in terms of domestic prices while LM approach measures shadow price in terms of international prices. UNIDO approach measures costs and benefits in terms of consumption while the LM approach measures cost and benefits in terms of uncommitted social benefits.

UNIDO approach is more popular but none of the approaches can be said to have a universal application. Even modifications to these approaches sometimes need to be tuned with ground realities. UNIDO approaches places emphasis on “aggregate consumption” as it is one of the important parameters for measurement of the standard of living of the people. Consumption level is measured by measuring consumer surplus and consumer’s willingness to pay as calculation of aggregate consumption maybe difficult for a heterogeneous bundle of goods.

UNIDO approach consists of the following stages:1. Arriving at the financial profitability of the project based on market prices2. Using shadow prices for the resources to arrive at the net benefit of the project3. Adjustment of the net benefit for the project impact on saving and investment4. Adjustment of the net benefit for the project’s impact on income distribution5. Adjustment of the impact of the project on merit goods and demerit goods whose social values differ

from their economic values

Every stage of the project determines the desirability of the project from a different angle. The financial analysis when done using market prices serves its purpose for private sector projects. For a public sector project the objective is the maximization of social welfare. Even for public sector projects, the analysis is done on same lines as private sector. The difference is that the results are adjusted to reflect the social welfare implications.

Q7 – What are the stages of project appraisals? Explain in detail techniques used for financial appraisal of a project. What do u understand by financial closure?

Modes/Stages of Projectt Appraisal1. Technical Project Appraisala. Selection of technology and processb. Availability of infrastructurec. Project scheduling and implementationd. Operations work flowe. Raw material

f. Operational know howg. Product mixh. Plant layouti. Location of projectj. Technology obsolescencek. Collaboration agreements2. Commercial Project Appraisala. Demand for productb. Supply position for product and raw materialc. Distribution channelsd. Product pricinge. Government policies3. Economic project appraisala. Measures effect of project on national economyb. Includes infrastructural projects, import substitution4. Financial Project Appraisala. Arriving at project costb. Arriving at means to fund project5. Management Project Appraisala. Most important factor in project appraisalb. Involves quality of management overseeing the project and their ability to complete such projects

within the stated time quality cost

Techniques used for Financial Appraisal of Project:1. Discounting criteria’sa. Net Present Value (NPV)

i. It is sum of the present values of all the cash flows, positive or negative, that are expected to occur over the life of the project

ii. –ve NPV: Project is terminatediii. Drawbacks: Absolute term- so scale of investment not considered | Life of project not considered

b. Benefit Cost Ratio (BCR)i. Net Present value of Benefits (NPB) / Investments (I)

ii. Drawback: Not suitable while comparing aggregating smaller projects to a large one | Not recommended when outflows spread over multiple years

c. IRRi. Discount rate that makes NPV zero

ii. Drawbacks: Fails when multiple rate of returns | mutually exclusive projects2. Non discounting criteria’sa. Payback period

i. Length of time required to recover the initial cash outlay on the projectii. Drawbacks: Fails to consider time value of money | Ignores cash flows beyond the payback period |

Measure of project’s capital recovery and not profitabilityb. Accounting rate of returns

i. Average Income after tax/Initial invest or average investii. Avg income after tax but before int/initial invest or average invest

iii. Avg income before int and taxes/initial invest or average investiv. Drawbacks: Based on accounting profits and not cash flow | Does not take in to account time value of

money

Difference between Benefit Cost Ratio and NPV

NET PRESENT VALUE • Sum of present values of all the positive and negative cash flows that are expected to occur over

the life of the project• Npv=total of all ct/(1+r)**t• Ct=cash flow at end of year t• R = discount rate• Eg npv of a project which has return of 2 lac in yr 1 and 2 lac in yr 2 is • Npv=(200000)/(1.10)**1 + (200000)/(1.10)**2 =181818 + 165289 =347107

BENEFIT COST RATIO• Ratio of the present value of benefits to the initial investment costs• Bcr = pvb/i • Net bcr (nbcr) = bcr – 1• Pvb = present value of benefits• I=initial investment costs• When bcr > 1 or nbcr > 0 accept• When bcr = 0 or nbcr = 0 indifferent• When bcr < 1 or nbcr < 0 reject

Example of benefit cost ratio• Initial investment 100000• Benefit year 1 25000• Benefit year 2 40000• Benefit year 3 40000• Benefit year 4 50000• Benefit cost ratio = ((25000/1.12)+(40000/(1.12)**2)+(40000/ (1.12)**3)+(50000/(1.12)**4))=1.145• Nbcr = bcr – 1 = 0.145

Principle of cash flow establishmentsCash flow estimation is a must for assessing the investment decisions of any kind. The basic principles of

cash flow estimation are:

1. Consistency principle2. Separation principle3. Post-tax principle4. Incremental principle

Consistency Principle: According to this principle, consistency in the cash flows is very necessary. At the same time, consistency in the applicable discount rates on the cash flows should also be maintained. There are two important factors that are related to the Consistency Principle. These two are the investor group and the inflation

Investor Group: The Consistency Principle holds that while estimating the project cash flow, it is also important to consider the investor's opinion or view. There are different types of investors in a firm like the

lenders or the stockholders and so on. Again, if it is not possible to consider every kind of investors' view, then the stockholder's view regarding the cash flow may be considered.

Inflation: In case of inflation, there are two ways of estimating the project cash flow of a particular project. The first option is to merge a likely inflation in the project cash flow estimates. After this, a nominal discount rate is applied on the amount. Another way of handling the inflation factor is to calculate the project cash flows of the future in real terms with real discount rates.

The Separation Principle treats the cash flow in a different way:

At first, the project is divided in two parts. The first part deals with the investment side and the later part is related to the financing side. To get proper picture of the project cash flow, the cash flow is separated according to its relation with the investment of financing side.

One of these features is that the cash flow related to the investment side of the project never considers the cost of financing. On the other hand, these charges of financing are considered while the cash flow calculations related to the financing side are done.

Another important feature of separation principle is that the interest rates on the debt securities are excluded at the time of calculating the profits and payable taxes.

Post Tax Principle: This is used to bring out the project cash flows with accuracy. After tax calculations are suggested by the Post Tax Principle for the project cash flow.

Tax Rate: There are two different tax rates termed as the average tax rate and the marginal tax rate. The average tax rate is considered as the entire tax as a proposal of the overall earning from the business. On the other hand, the marginal tax rate represents those taxes that are imposed on the earnings at margin. The tax rates are often found as progressive and because of this, the average tax rates are always lower than the marginal tax rate. The firms run some particular projects and the income from these projects are considered as marginal because this income is a kind of additional income as the existing assets of the firm are the main source of income. Because of this, the payable taxes on the project are estimated through the marginal tax rate, as it is the most appropriate rate to do that.

Handling the Losses: The post tax principle holds that there remains possibility of losses for both the firm as well as the particular project. There are several ways of minimizing these losses. In certain situations, the tax saving is postponed until the firm or the particular project makes profit.

Non-Cash Charges: The post tax principle also holds that whenever the tax liabilities are affected by the non-cash charges, the project cash flow estimation will be affected. Depreciation is one of these non-cash charges.

Incremental Principle: The incremental principle is used to measure the profit potential of a project. According to this theory, a project is sound if it increases total profit more than total cost. Several guidelines should be maintained:

Incidental Effects: Any kind of project taken by a company remains related to the other activities of the firm. Because of this, the particular project influences all the other activities carried out, either negatively or positively. It can increase the profits for the firm or it may cause losses. These incidental effects must be considered.

Sunk Costs: These costs should not be considered. Sunk costs represent an expenditure done by the firm in the past. These expenditures are not related with any particular project. These costs denote all those expenditures that are done for the preliminary work related to the project, unrecoverable in any case.

Overhead Cost: All the costs that are not related directly with a service but have indirect influences are considered as overhead charges. There are the legal and administrative expenses, rentals and many more. Whenever a company takes a new project, these costs are assigned.

Working Capital: Proper estimation is essential and should be considered at the time when the budget for the project's profit potential is prepared.

Q8 – Land Selection Process ( Copper plant case in 2010 ppr ) 2011 Q2 infra

Location & SiteThere are number of important factors that influence industrial location because the site may significantly

influence the cost of the production and distribution, distribution efficiency, the operating environment, etc. The important factors that influence industrial location:

1. Raw Material Supplies2. Proximity of Markets3. Transportation Facilities4. Power and Fuel Supply5. Water6. Manpower7. Labour Laws and Government Policies8. Natural & Climatic Factors9. Strategic Considerations10. Taxes & Fees11. Incentives & Disincentives12. Site & Services13. Socio-economic and Political Factors14. Miscellaneous Factors - The attitude of the local community, proximity of complementary

industries, prospects of development of the region, service faculty acquired by the industry, recreational & social facilities, personal factors, historical factors etc.

Site selectionFactors to be considered:1. Load bearing capacity of the site towards flood and earthquakes hazards2. Access to transportation facilities3. Facilities for water supply and effluent discharge4. Ecological factors etc. (Environmental pollution is a serious problem that certain industries have to

confront with)

Size of Plant/Scale of Operation:The size of plant or scale of operation is an important factor that determines the economic and financial

viability of a project. This is one of the important reasons for poor performance of many industrial units in India. The Government of India in this context has emphasized that the plant or scale of operations should be of economic size.

Industry Policy Resolution (6th April, 1948)The Resolution emphasized at the following:1. The importance to the economy of securing a continuous increase in production2. Its equitable distribution3. State must play of progressively active role in the development of Industries

4. It laid down that besides arms and ammunition, atomic energy and railway transport, which would be the monopoly of the Central Government, the State would be exclusively responsible for the establishment of new undertakings in six basic industries-except where, in the national interest, the State itself found it necessary to secure the cooperation of private enterprise.

5. The rest of the industrial field was left open to private enterprise though it was made clear that the State would also progressively participate in this field

Q9 – What are the typical obstacles in project management? What are the effects of obstacles on overall project management? What do you mean by project risk management?

Obstacles in Project Management & its effects on overall project

Obstacles:1. Project complexity2. Project risks3. Unstable economy4. Cost inflation5. Project input shortages6. Customer special requirements and scope changes7. Organizational restructuring8. Technology changes9. Societal concerns10. Quality of work

Effects:1. Increased manpower2. Cost overruns, delays, penalties3. Decreased profits4. Inability to cope with new technology5. New products introduced too late6. Hasty decisions costing dearly7. Difficulty in achieving on time target objectives in real time8. Problems in relating cost to technical performance & scheduling during project execution

Causes of Bad Project ManagementCauses:1. Top management not committed2. No one project manager3. Too many projects going on at the same time4. Overcommitted resources5. Unrealistic planning and scheduling6. Impossible schedule commitments7. No integrated planning and control8. Poor control of customer changes9. Poor understanding of customers true requirements10. No cost accountability

Effects of Bad Project Management:1. Late activities completion2. Cost overruns3. Substandard performance

4. High turnover in project

Project Risk Management

Risk involves element of uncertainty Risk is a measure of the probability and consequence of not achieving a defined project goal Impact of risk is a very serious consideration Risk has two primary componentso Probability of occurrence of evento Impact of event occurring in money termso Thus, Risk is a function of likelihood and impact Risk constitutes a lack of knowledge of future events (outcomes)o Favourable outcomes are called opportunities and unfavourable risks

Project Risks: Project Initiation Risk Project Completion Risk Project Budgeting Risk Price Increase Risk Exchange Rate Risk Resource Availability Risk Technology Risk Political Risk Commercial Risk Physical Risk Economic Risk Operational Risk Partnership Risk

Managing Project Risk: Potential effects of risks range from inconvenience to disasters Project mgt risk assessment deals with identifying the probability and severity of these risks and

deciding how to reduce potential impact

Risk Management involves:1. Planning for risk - Process of developing and documenting an organized comprehensive strategy2. Assessing (Identifying & Analysis) - Level of Risk: Rating = Severity (Chances) X Impact

3. Developing risk handling optionsa. Identifies, evaluates, selects & implements options in order to set risk at acceptable levelsb. Includes specifics on What should be done, When it should be accomplished , Who is responsible &

Associated costs and schedulec. Risk handling options include Assumption, Avoidance, Mitigation & Transferd. Assumption/retention = risk exists, aware of consequences & willing to wait and see what happens

Accept the risk and impacte. Avoidance = will not accept the riskf. Risk mitigation/control = take required measures to control risk by developing contingency plansg. Risk transfer = share risk with others4. Monitoring risks

a. Process that systematically tracks and evaluates performance of risk handling actions against established metrics throughout the acquisition process

b. Techniques suitable for risk monitoring include:i. Earned Value

ii. Scheduled Performance Monitoring

Risk mgt should be coupled with project processes

Describe Sensitivity Analysis It is a type of quantitative risk analysis technique It simply determines the effect on the whole project of changing one of its risk variables such as delays

in design or the cost of materials What will happen to the viability of the project when some variables deviates from its expected value

i.e. Carrying out “What-if” scenario’s Its importance is that it often highlights how the effect of a single change in one risk variable can

produce a marked difference in the project outcome Shows how robust or vulnerable a project is to changes in values of variables Indicates areas where caution needs to be exercised Very appealing as articulates the concerns In practice, a sensitivity analysis will be performed for more than one risk, perhaps all identified risks,

in order to establish those which have a potentially high impact on the cost or time-scale of the project Project management can easily convey the results of a sensitivity analysis through the use of a tornado

diagram. The differences among the risks can be easily seen since the analysis is a quantitative value. Rather than qualifiers describing the risks, the impact of each is quantified in a numerical value. This facilitates comparisons between the various elements to quickly discern which risks are worth taking. Project management can use the sensitivity analysis to create priorities in dealing with elemental risks to the project. By knowing which affects the objective the most, more efforts can be concentrated to lessen that risk.

Shortcomings: Doesn’t answer how likely? Sensitivity to multiple (more than 2) variables might become difficult Subjective

Q10 – Discuss in detail applications of IT in project management? What are the typical challenges encountered in IT? ( Answer Not sure )

Features of Project Mgmt Information systems:1. Scheduling2. Network Planning3. Resource mgmt4. Budgeting5. Cost control 6. Performance Analysis7. Reporting , Graphics, Communiacation8. Interface, Flexibilty , Ease of Use

Functions:1. Planning & scheduling2. Budgeting

3. Work Authorization & control4. Control of changes5. Communicating

Examples:1. MS Project2. Project Scheduler3. Welcom – open Plan , Cobra , Spider4. Trakker5. Primavera

Challenges Encountered:

One of the challenges an IT Project Manager faces include un-certainty of capturing customer requirements. Getting complete customer requirements is one of the greatest challenges, as well as getting customers to agree to what they have stated. Many times they do not come to the surface until very late in the project, typically when the customer first tests the system. Only when the customer sees what has been developed first hand in an interactive way do they bring forward the associated underlying 'requirements' which they 'must have' to fulfill the business objective. This is an area of great frustration to the project manager, development team and has considerable impact to development schedule and resources. This is an area where the Agile methodology of project management can mitigate the challenge through it's iterative approach in development and validation. This issue has also given rise to the importance of the role of the Business Analyst, who can be an essential member of an IT project team. The customer’s requirements elicitation, analysis, communication to the development team and focal point for fulfillment validation is their area of expertise and responsibility.

Q12 - Projects: Definition, Characteristics & Constraints; Project management & its elementsProject: A temporary endeavor undertaken to create a unique Product/Service/ResultCharacteristics: Temporary Unique Social/Environmental/Economic Impact Progressive collaborationConstraints: Scope Time CostProject Management: Application of knowledge, skills, tools and techniques to project activitiesElements of Project Management: Initiating Planning Executing Monitoring Controlling Closing

Q13 –

PMO function:• Resource coordination• Methodology, processes, standards• Policies, procedures, templates• KM• Communication manangement • Monitoring• Quality• Scope, time, cost management

A Project Management Office (PMO) is a group or department within a business, agency or enterprise that defines and maintains standards for project management within the organization.

The primary goal of a PMO is to achieve benefits from standardizing and following project management policies, processes, and methods. Over time, a PMO generally will become the source for guidance, documentation, and metrics related to the practices involved in managing and implementing projects within the organization.

A PMO generally bases its project management principles, practices and processes on some kind of industry standard methodology such as PMBOK (Project Management Body of Knowledge) or PRINCE2 (Project in Controlled Environments). Such approaches are consistent with the requirements related to ISO9000 and to government regulatory requirements such as the US Sarbanes-Oxley (SOX) program.

A PMO may also get involved in project-related tasks and follow up on project activities through completion. The office may report on project activities, problems, and requirements to executive management as a strategic tool in keeping implementers and decision makers moving toward consistent, business- or mission-focused goals and objectives. 

Other functions include:

1.       Generate Concept

a.       Prioritize project in terms of an organization’s overall governance, project portfolio processes

b.       Assist project leaders with business case development

c.       Ensure the project links to a company’s strategic goals

2.       Plan Resources

a.       Add project to the project management or portfolio system

b.       Assign staff and resources to the project

c.       Lay out governance standards, including repeatable project processes, training and metrics

3.       Launch Project

a.       Provide coaching and mentoring to project managers

b.       Begin to facilitate ongoing project planning sessions

c.       Ensure proper tracking of project data and milestones

4.       Provide Ongoing Project Management

a.       Ensure regular project status reports are available to decision-makers

b.       Coordinate communications across business units

c.       Conduct regular quality assurance reviews

5.       Complete Project

a.       Lead post-implementation reviews

b.       Capture and record lessons learned

c.       Ensure that project data and project team evaluations are recorded and distributed to decision-makers

Q14 – Project Organisation & Roles of Various stakeholders

Organisation is the way we deliver projects. Effective organisation is crucial to the successful delivery of projects on time, to budget and to specification.

Effective Project Organisation involves, for example: Identifying all key roles across the wider project (i.e. not just your own element) Defining crystal clear terms of reference and accountabilities for all key roles and bodies; e.g. project

manager; steering committee etc Defining clear supplier/ partner / customer interfaces, at all levels, and their specific responsibilities

towards the project Defining ‘ways of working' for your team, describing how you will work with key partners, supplier

and the customer(s)

Organisation can also involve areas such as: Effective mobilisation of new projects Developing team charters Defining a Governance structure for your Project Developing all key controls, specific measures of performance and metrics that will be used by the

entire team

It Comprises of: Project stakeholders Project Sponsor Project Manager Project Management team Project team members

Project Stakeholders:

Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion. They may also exert influence over the project’s objectives and outcomes. The project management team must identify the stakeholders, determine their requirements and expectations, and, to the extent possible, manage their influence in relation

to the requirements to ensure a successful project. The following figure illustrates the relationship between stakeholders and the project team.

Key stakeholders on every project include:

Project manager: The person responsible for managing the project Customer & user: The person or organization that will use the project’s product. There may be

multiple layers of customers. For example, Pharma comp – doctors, patients Performing organization: The enterprise whose employees are most directly involved in doing the

work of the project Project team members: The group that is performing the work of the project Project management team: The members of the project team who are directly involved in project

management activities Sponsor: The person or group that provides the financial resources, in cash or in kind, for the project Influencers: People or groups that are not directly related to the acquisition or use of the project’s

product, but due to an individual’s position in the customer organization or performing organization, can influence, positively or negatively, the course of the project

PMO: If it exists in the performing organization, the PMO can be a stakeholder if it has direct orindirect responsibility for the outcome of the project. 

The responsibility of project stakeholders:1. Provide resources (time, money, ...) to the project team2. Educate developers about their business

3. Spend the time to provide and clarify requirements

4. Be specific and precise about requirements

5. Make timely decisions

6. Respect a developer's assessment of cost and feasibility

7. Set requirement priorities

8. Review and provide timely feedback regarding relevant work artifacts of developers

9. Promptly communicate changes to requirements

Q15 – Give any five criteria to assess a project.

Main criteria Specific questions: 1.     Scientific quality of the project a.     Quality of the literature analysisb.    Are the objectives clear, well arguedc.     Is the methodology satisfactory?d.    Is the project innovative? 2.     Relevance of the project: a.     Is the project in the framework of the call for proposals?b.    Is it well adapted to the professionals’ expectations?c.     Quality of the partnership (are the stakeholders actived.    and diversified)e.     Can the goals be reached within the duration of the project? 3.     Quality of the project’s management a.     Consistency between the goals and the technical /financial means devoted to the projectb.    Relevance of the planningc.     Organisation of the project / breakdown of the work 4.     Financial assessment  Are the expected means realistic according to the goals and methods 5.     Overall assessment

Q16 – Describe the long term project's assessment of cost.

Many techniques, books and software packages exist to help with estimating project costs. A few basic rules will also help ensure that an accurate and realistic estimate is produced.

Assume that resources will only be productive for 80 percent of their time.

Resources working on multiple projects take longer to complete tasks because of time lost switching between them.

People are generally optimistic and often underestimate how long tasks will take.

Make use of other people's experiences and your own.

Obtain an expert view.

Include management time in any estimate.

Always build in contingency for problem solving, meetings and other unexpected events.

Cost each task in the Work Breakdown Structure to arrive at a total, rather than trying to cost the project as a whole.

Agree a tolerance with your customer for additional work that is not yet defined.

Communicate any assumptions, exclusions or constraints you have to your customer.

Provide regular budget statements to your customer, copying your team, so that they are always aware of the current position.

Three point estimating is a technique that helps project managers produce better estimates. Rather than a ballpark estimate, project managers can use three point estimating to gain a greater degree of control over how the end value is calculated. The end value is the weighted average of three estimates.

To do three point estimating for a particular task or activity, ask the resource for their best case, most likely and worst case estimates. Add the best case estimate to four times the most likely, then the worst case and divide by six. This gives you your estimate (E value) which is a slightly more balanced view of how long the task or activity is likely to take.

The formula can be expressed as: E = (B + 4 M + W)/6

B = best case (1/6); M = most likely (4/6); W = worst case (1/6)

The Monte Carlo method of estimating project cost is based on the generation of multiple trials to determine the expected value of a random variable. There are a number of commercial packages that run Monte Carlo simulation; however a basic spreadsheet such as Microsoft Excel can be used to run a simulation.