1. Basics of Project Management
N.K.Agarwal

2. Project Management
• Project
– A temporary endeavor undertaken to create a unique
product or service
– A specific, finite task to be accomplished
• Large or small is immaterial but to be seen as a unit is
relevant
• Modern project management said to have begun with
the Manhattan project.

3. Nature of a Project
Resource
(Budget)
Quantity
(Planned Results)
Schedule (Time)
An Enterprise undertaken to
Achieve Planned Results
within a Time Limit, and
a Budgeted Resource

4. Historical Overview-Old to New
• Mankind involved in project activities for a long time
– Designing and building the Pyramids in 2100 B.C.
– Building the seven wonders of the world
• Modern Project Management(MPM) supposed to
have its origin in the U.S.A. in the mid-to late 1950s
with the Manhattan project
– Two organisations working hard with the development of
solution systems to reduce risks in the undertaking of certain
projects
• US Navy engaged in Polaris nuclear submarine
programme
– Engaged the help of Booze Allen Hamilton, a
management consultant, and the outcome was
PERT in 1958

5. Historical Overview-Old to New
• Dupont trying to reduce the outage time during major
maintenance at their chemical plant
– A mathematical technique CPM was developed
using network diagrams to analyse the integration of
activities and overall duration of the project

6. Historical Overview-Old to New
• Myth that Project Management covers only Planning
and Scheduling
• In reality, Project Management covers, in addition, a
wide range of management areas
– Project scope,time, cost, quality, human resources,
communications, risk, procurement, etc.

7. Project Management
• All projects require a degree in planning ( no matter
what their size is) and this in turn requires forward
thinking by the Project Manager
• No matter how well a project is planned, there are
bound to be problems
• Successful projects need certain pre-requisites
–
–
–
–
–
–
–
–
Explicit goals
A skilled and knowledgeable project manager
Senior management support
Effective project team
Adequate resources
Effective means of communication
Feedback mechanism
Close liaison with clients

8. Project Management
• Project environment
– Before people become involved in a project, they must be
aware of the environment in which it will operate
– They will need to know and understand factors such as
• Location
• Who the customers are and their individual
expectations?
• End user requirements, and
• The resources available
– A true project environment is unique to each project and
cannot be highlighted in a few lines

9. Project Phases
• Projects have to pass through 4 phases
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–
–
–
Project Planning
Project Implementation
Project Monitoring
Project Evaluation

10. Basic Five Part Management Model
Client Requirement
Planning
Reprogramming
Organising
& Staffing
Directing &
Leading
Controlling
Reporting

11. Project Phases-Planning
• Project Planning
– Comprises of a series of steps to be taken to convert an idea
into a feasible plan of action
– Aims at a systematic analysis of project potential with the
ultimate objective of arriving at an investment decision
– An objective assessment from all possible angles starting
from identification of investment options up to its appraisal
stage
– Includes identification, technical analysis, financial analysis
and project appraisal
– A cyclic process

12. Project Phases-Planning
• Project planning
– Planning helps us to know how the project is progressing
– Lack of planning in projects can result in expensive errors
being made, particularly when there are huge funds are at
stake
– Effective project planning will look at costing, non-financial
resources, work allocation and possible changes that may
have to be made later on
– All major projects need the services of a contractor to
complete the project
• For getting the project executed through a contractor, the
company has to sign a contract with the contractor

13. Project Phases- Implementation
• Project Implementation
– Implies initiating the project , specifying and
scheduling the work, clarifying authority
responsibility relationship, obtaining resources,
establishing control system, directing and
controlling
– Involves allocation of tasks to groups within the
project organisation
– Deficiencies in implementation also found due to
inadequate planning of projects at the initial stage

14. Project Phases- Implementation
– Purpose is to ensure that the project activities are
completed with in the schedule and the budgeted
provision
• Leading to satisfactory quantum of benefits
flowing there from

15. Project Phases-Monitoring
• Project Monitoring
– Involves watching the progress, resources and
performance schedules during the execution of the
project and identifying lagging areas requiring
timely attention and action
– Enables a continuing critique of the project
implementation
– Also facilitates imparting constructive suggestions
like rescheduling the project, rebudgeting or
reassessing the staff
– Projects are relatively short lives and require
control in order to minimise, if not eliminate, time
as well as cost overruns

16. Project Phases-Control
• Project control involves scheduling, estimating, cost
control and material control
• Scheduling
– Design and develop timetables that highlight times at which
different aspects of the project can be started and when they
must be completed
• Estimating
– Predict volumes of materials, numbers of employees and
costs that will be associated with a specific project
• Cost control
– Calculates ongoing costs associated with a particular
project, and ensure expenditure is in line with estimates
• Material control
– Issue orders for materials and track their whereabouts and
usage throughout the life of the project
– Ideally, materials are delivered only when needed

17. Project Phases-Evaluation
• Project Evaluation
– Primary purpose is to provide objective,
systematic and comprehensive evidence on the
degree to which the project achieves its intended
objectives, plus
– The degree to which it produces unanticipated
consequences
– Designed to examine the worth, significance,
degree or condition of any given project
– An integrated objective assessment of progress
and its overall impact

18. Contract Agreement
• Contract agreement is a one sheet document binding both the
contractor and the owner to execute the defined work at the
agreed upon price in the manner stipulated in the contract as
per details given in various annexure as under
–
–
–
–
–
–
–
–
–
The tender invitation
Instruction to tenderes
The tender
The tender drawings and specifications
Bills of quantities and schedule of rates
General contract conditions
Special conditions of contract
Letter of acceptance/intent
Contractor’s acceptance of letter of intent/allotment

19. Critical Path Analysis (CPA)
• Most commonly used tool to manage any project, and
bring about its completion in the shortest possible
time and most economical way
• CPA breaks a job into its component tasks,
sequencing and allocating completion times for each
of them
• This sequence is drawn up as a network that
highlights the critical tasks that could delay the
project as a whole
• The string of critical tasks is known as the Critical
Path
• The duration of the project on the Critical Path is
calculated through what is known and Forward pass
and Backward pass

20. PERT / CPM Network
• Difference between PERT & CPM
– PERT
• Event oriented
• Interest is focused on the start , stop or completion of
events rather than activities themselves
– CPM
• Activity oriented
• No allowance is made for the uncertainties in the
duration of time involved
• Times are related to costs

21. PERT / CPM Network
– The distinction between the two is fast diminishing
• With minor modifications, both have given rise to various
programmes
– PEP: Programme Evaluation Procedure
– LESS: Least Cost Estimating & Scheduling
– SCANS: Scheduling & Control by Automated
Network Systems

22. PERT / CPM Network
• Some basic terms
– Activity
• Time consuming part of a project
• Represents a job
• Shown by an arrow
– Event
• Also called node is either the beginning or end
of a job
• Represented by a circle or rectangle
• Does not consume time or resources
– Events and activities connected logically and
sequentially to form a network

23. PERT / CPM Network
• Events
– Predecessor events
• Event/s that come immediately before another event
without any intervening event
– Successor event
• Event/s that follows immediately another event without
any intervening event
• Dummies
– Activities that connects events showing their
interdependencies but do not take any real time or
resources for themselves
– Shown in dotted lines
• Activity duration
– In CPM, this means the best estimated time to complete an
activity
– In PERT, the expected time or average time to complete an
activity

24. B
D
A
F
C
PERT NETWORKEVENT ORIENTED
E
C
A
E
CPM NETWORKACTIVITY ORIENTED
B
F
D
ACTIVITY
ACTIVITY A
EVENT
EVENT
C
EVENT
E
EVENT
DUMMY ACTIVITY
B
EVENT
D
EVENT
F
BASIC NETWORKEVENTS CONNECTED
BY ACTIVITIES

25. PERT NETWORK

26. Project Closure
• Project closure ensures and benefits as under
– Ensures completion of the project
– Work of the current project team is acknowledged and that
the lessons to be learned from the project are formally
investigated and recorded for use on the next project
– Establishes mechanism for the continued development or
improvement of the final product of the project
– Improves the standard process and estimating model for this
type of future projects
– Facilitates resources redeployment

27. Project Closure
• Post Implementation Review
– Items that are still open should be closed or resolved
– All aspects of the project reviewed and lessons learned
documented for future use
• Objectives, review, performance criteria, financial criteria,
resource utilisation, slips and gains of time, quality of
work, adherence to the project definition and plans
– Methods used for review
• Meetings,
• Quality reviews,
• Project closure meetings,
• Group discussions
– Risk management plan to be updated

28. Project Closure
• Close out
– A closing event to formally round off the project
– Project review and project report
– A note is sent to the finance department to ensure that they
are aware that the project is closed

29. Project Management
• Project management tools offers the means of
implementing new or one-off scenarios with minimum
disruption
– An organisation moving offices will want to complete the task
as quickly as possible
– By breaking the office move down into component tasks and
using critical path analysis, delays can be minimised
• Project management tools help in achieving
efficiency and economy in business operations

30. Thank You

31. References
• Project Management : Jack R. Meredith / Samuel J.
Mantel
• Projects – Planning, Analysis, Financing,
Implementation & Review : Prasanna Chandra
• Project Management – A Comprehensive Handbook :
R. Turner & S. Simister
• Operations Management : Sean Naughton
• Project Management: Kerzner

33. Project Management
– No matter what their size, all projects have defined starting
and finishing dates- and a pre-determined end condition of
course
• Construction of Channel Tunnel,
• Construction of Worli-Bandra sea link
• Organising a college-day event , etc
• While they may seem different, the above examples
have many things in common
–
–
–
–
–
–
An objective
A degree of complexity
Each is a one-off
A degree of uncertainty
They are short-term
Each has a finite life cycle

34. Project Management
• Various aspects of Project Management include
–
–
–
–
–
–
Linking project management with operations management
Project environment
Project definition
Project planning
Project implementation
Project control
• Linking project management with operations
management
– Many projects are run within Operations Management
environments
– Projects are usually but not always concerned with
complicated and often large scale activities

35. Project Management
• Project definition
– Running projects requires clarity
– Everyone must know precisely what tasks they are to
perform and when
– Prior to issuing the workforce with such details, the project
manager must clarify what objectives and range the project
will have
– Extra details may also be added including specified
deadlines, any budgets and costs involved, and factors such
as quality standards that must be met

36. Mode of representation
EVENT
EVENT
A
EE
B
TEXT OF ACTIVITY A-B
LE
D
EE
LE

37. PERT / CPM Network
• Activity duration
– Optimistic or shortest time (to OR ts)
• Time for completing an activity if everything goes well –
used in PERT
– Pessimistic or longest time (tp OR tl)
• Time for completing an activity if everything goes wrongused in PERT
– Most likely time (tm)
• Time for completing an activity that is the consensus best
estimate- used in PERT
– Expected time (te)
• Average time for completing an activity –used in PERT
• For β- Distribution, this is taken as
te = (ts+4tm+tl) / 6 OR = (to+4tm+tp)/6

38. PERT / CPM Network
• Earliest start (Es)
– Earliest an activity can start from the beginning of the project
• Earliest finish (EF)
– Earliest an activity can finish from the beginning of the project
• Latest start (Ls)
– Latest an activity can start from the beginning of the project, without
causing a delay in the completion of the project
• Latest finish (LF)
– Latest an activity can finish from the beginning of the project, without
causing a delay in the completion of the project

39. Critical Path Analysis (CPA)
• Forward Pass
– The process of calculating the earliest time a project can
finish
• Beginning with the first event- zero time- the earliest
starting time of each activity is added to its duration
• This provides the earliest finish time
– When a single activity arrives at a node (an event), this is
taken as the earliest start time for that event
– When more than one activity arrives at a node, the last of
the earliest finish times is used
• This is because all activities arriving at the node must be
complete before any activities leaving it can begin
– Once complete, the forward pass indicates the earliest
completion time for the entire project which is then used for
calculating the backward pass

40. Critical Path Analysis (CPA)
• Backward Pass
– Shows the latest time the activities arriving at a node can
finish without delaying the project
– The backward pass starts at the last event in the network,
and deducts each activity’s time away from the latest
finishing time
– When only one activity leaves a node, this is the latest time
for that particular event
– If there is more than one activity, the earliest of the latest
start times is used
• If any other latest time were used, the project would get
delayed
– This gives us the latest time the project can start

41. B
D
A
F
C
PERT NETWORKEVENT ORIENTED
E
C
A
E
CPM NETWORKACTIVITY ORIENTED
B
F
D
ACTIVITY
ACTIVITY A
EVENT
EVENT
C
EVENT
E
EVENT
DUMMY ACTIVITY
B
EVENT
D
EVENT
F
BASIC NETWORKEVENTS CONNECTED
BY ACTIVITIES

42. Project Management
• All projects must go through the following stages if
they are to be successful
–
–
–
–
–
Stage 1: Project environment
Stage 2: Project definition
Stage 3: Project planning
Stage 4: Implementation
Stage 5: Project control

43. Project Phases
• Projects have to pass through 4 phases
–
–
–
–
Project Planning
Project Implementation
Project Monitoring
Project Evaluation

44. Project Phases
• Project Planning
– A cyclic process
– Comprises of a series of steps to be taken to convert an idea
into a feasible plan of action
– Aims at a systematic analysis of project potential with the
ultimate objective of arriving at an investment decision
– An objective assessment from all possible angles starting
from identification of investment options up to its appraisal
stage
– Includes identification, technical analysis, financial analysis
and project appraisal

45. Project Phases
• Project Implementation
– Involves allocation of tasks to groups within the
project organisation
– Deficiencies in implementation also found due to
inadequate planning of projects at the initial stage
– Purpose is to ensure that the project activities are
completed with in the schedule and the budgeted
provision
• Leading to satisfactory quantum of benefits
flowing there from

46. Project Phases
– Implies initiating the project , specifying and
scheduling the work, clarifying authority
responsibility relationship, obtaining resources,
establishing control system, directing and
controlling

47. Project Phases
• Project Monitoring
– Enables a continuing critique of the project
implementation
– Involves watching the progress, resources and
performance schedules during the execution of the
project and identifying lagging areas requiring
timely attention and action
– Also facilitates imparting constructive suggestions
like rescheduling the project, rebudgeting or
reassessing the staff

48. Project Phases
• Project Evaluation
– Designed to examine the worth, significance,
degree or condition of any given project
– Primary purpose is to provide objective,
systematic and comprehensive evidence on the
degree to which the project achieves its intended
objectives plus the degree to which it produces
unanticipated consequences
– An integrated objective assessment of progress
and its overall impact

49. Project Management
• Project control
– Projects are relatively short lived and require control- without
it they overrun from a time and cost perspective
• Some projects could even be left incomplete
– Project control incorporates scheduling, estimating, cost
control and material control
– Scheduling
• Design and develop timetables that highlight times at
which different aspects of the project can be started and
when they must be completed
– Estimating
• Predict volumes of materials, numbers of employees and
costs that will be associated with a specific project

50. Project Management
– Cost control
• Calculate ongoing costs associated with a particular
project, and ensure expenditure is in line with estimates
– Material control
• Issue orders for materials and track their whereabouts
and usage throughout the life of the project
• Ideally,materials are delivered only when needed on a
JIT basis
• Various reports are generated to monitor and control
the progress ( time and cost) of the project

51. Time & Cost Control
• First major task in time and cost control is the preparation of
master schedule and master budget for the project
• From these, detailed schedules of time and resources are
prepared
• Some of the important schedules used for the time and cost
control are
– Master time schedule
– Engineering / Procurement / Fabrication / Construction /
commissioning time schedules
– Schedule of contracting
– Integrated schedule of critical equipment with time phased
budgeted cost
– Integrated schedule of all other materials with time phased
budgeted cost

52. Time & Cost Control
– Labour, equipment and other resources schedules with
individual budgeted cost
– All other project-specific schedules and budgets, both
integrated and independent, and time phased
– Crashing economy analysis
• Some of the important reports generated
– Progress reports
– Total project cost till the achievement of every important
milestone
– Progress and Cost build up curves for
• Total project implementation
• Engineering, design and drafting
• Purchase ordering
• Construction
– Fund flow curve

53. Time & Cost Control
– Reports on
• Progress status
• Cost status
• Bottlenecks and constraints
• Cost trends
• Change control and contingency rundown
• Overall performance
• Review of progress on the construction activities
made periodically at various levels of authorities
• Period of review for the progress by various
authorities can be based on practical convenience
ranging from weekly at the GM level to Six monthly or
annually at the Board level