The Principles of Project Management - Essay Example

Project Management for Business Part one: Elements of projects are the universal considerations whichproject managers need to comprehend for the success of their projects. Any project whether it is meant to initiate projects, or manage an ongoing project share in terms of the elements which are prerequisite for their ultimate success. The elements may vary but the most common elements revolve around the following: strategic planning, product development, communication, resources and people. Strategic planning enhances the understanding of the project goals and objectives (UNDERDAHL, 2005, pp. 88). Measures need to be enacted to evaluate the achievement and progress of the objectives. Project managers are therefore tasked to liaise with all the stakeholders to set up objectives which are commonly agreed on. Products in which a project engages are varied and can be classified as new, processes or services. Any kind of product that is dealt with need to be developed to meet the company objectives and also to add value to the organization. Articulation of the project benefits is vital at the initiation. This will provide a clear roadmap to the success and benefits of the project. Communication is vital element of the project. Clear information need to be relayed to those who are likely to be affected by the project. The end users should also be made to comprehend the potential benefits that are likely to accrue from the introduction of a given product. Proper communication mechanisms will help to battle the possible human reluctance to change in cases of new or totally improved products (KLOPPENBORG, 1900, np). Resources that are needed to implement the objectives should be identified and put in place to ensure smooth running of the project. These are in terms of time, technical, financial as well as human resources. People are the last major element that is required for the success of a project. They are the stakeholders and people who have other roles and vested interest which are geared toward the success of the project (KLOPPENBORG, 1900, np). The most crucial people in a project are the sponsors, the project manager, the team members and the potential customers. The principles of project management revolve around five pillars: initiation, planning, execution, monitoring and control then lastly closure. They are like the processes through which a project has to pass, right from its inception to winding up. The initiating process involves the procedures which are put in place in order to jumpstart a project. At this stage, new projects may require to procure licenses to provide them with the legal go ahead with the activities of the project (SCHWANINGER, 2009, pp. 192). The planning process requires that the objectives are fine tuned, the scope of the project established and the course of action defined. Planning is an ongoing process throughout the project life. At the execution level is where the activities are geared towards the attainment of the set objectives of the project to fulfill the project specifications. Each step is predictable at this level. One is able to preempt what is likely to follow the other activity. The principle of monitoring and evaluation, require that there be put in place a set of activities that would track, review and also regulate the progress of events during the project life. Areas that may need overhaul in the plan can be identified and recommendations made on the appropriate changes. A project manager is one who is mandated to carry out project management duties. They seldom engage in the activities directly but maintain the progress and interaction of the day to day operations to reduce the risk of overall failure of the project. They endeavor to minimize costs while maximizing benefits (LEWIS, 1998, pp.24-25). He is responsible for accomplishment of stated project objectives. They are responsible for drafting clear and attainable objectives. Project manager is one who provides the project requirements. Project managers also manage the constraints of the project management triangle which are costs, time, scope and quality (NEWELL & GRASHINA 2004 pp 8-10). A project manager therefore has the responsibility of ensuring that initiation, planning, execution, monitoring, control and closure are professionally executed. Based on Net Present Value criterion for project appraisal, we will examine the annual present values for the three projects at 5% rate of return. We will then add the totals for the present values followed by taking away the initial investment. This will lead us to the net present value as at the end of year three. An investment which breaks even is one with NPV which is equal to zero. If this is not realized, then a decision will be arrived at based on which of the projects attains NPV which is closer to zero as at the time of appraisal. Project Year 1 Year 2 Year 3 Total Investment NPV A 250000/1.05 =238,095.2381 5000/(1.05)2 =4,535.147392 18000/(1.05)3 =15,549.07677 258,179.463 -400,000 -141,820.537 B 150000/1.05 =142,857.1429 20000/(1.05)2 =18,140.58957 26000/(1.05)3 =22,459.77756 183,457.51 -400,000 -216,542.49 C 200000/1.05 =190,476.1905 10000/(1.05)2 =9,070.294785 50000/(1.05)3 =43,191.87993 242,738.3652 -400,000 -157,261.6348 Based on the table above, project A would rank the best on the basis of the fact that the NPV after the three year period is the closest to zero. This means that although none of the projects breaks even at that period, project A has a NPV which is closer to zero. This gives the impression of being closer to the point when the project breaks even which is attainable at the point when NPV is equal to zero. Using the IRR based approach: Project A: -400,000 +273,000/ (1.05)3 = -164,172.3356 Project B: -400,000 +196,000/ (1.05)3 = -230,687.8307 Project C: -400,000 +260,000/ (1.05)3 = -175,402.2244 Based on IRR, the policy is to accept the projects with IRR that is greater than the opportunity cost of capital. If the opportunity cost is greater than IRR, then it follows that NPV will be less than zero. Using a rate more than the IRR will therefore make the NPV positive. Project A then will qualify eve in this case to be better than the rest because at the rate of 5%, it will be closer to zero. The two appraisal techniques rank the projects in a similar manner because they have a uniform scale and the timing is also the same (RUNKE et al., 2013, np). Some of the causes of project failure are: requirements which are not clearly stated lack of agreement, unclear priority, contradicting, ambiguous and not precise. To mitigate this, the project may need to be redefined. The second is resource based either in their shortage or conflicts and also poor planning. It may call for resource reorganization, addition or removal of some resources. Thirdly the schedules could be so tight that they are not realized, or overly optimistic. Planning could have been based on insufficient data or poor estimates. Proper planning need to be done alleviate problems of unrealistic schedules and improper estimates. Poor risk management strategies (KENDRICK, 2010, pp. 201). This can be mitigated through change of project manager to engage one who is sensitive to manage risks. Project management system refers to a set of procedures that are put in place to facilitate and execute activities of the project management lifecycle in totality. The search of a working project management system starts with the analysis of end to end capabilities for the enterprise to manage the entire project cycle. A good PMS should address the following intricately; identification, prioritization, planning, coordination, delivery on the expectations and measure of the projects results. The principles behind project management systems and procedures which a PM needs to comprehend include though not limited to the following: infrastructure management, communication, quality management and implementation (KENDRICK, 2010, pp. 222). The rationale behind infrastructure management is to ensure that the rightful procedures are sequentially executed at the appropriate time, with the right personnel and proper arrangement. Communications management is implemented by a PM through three crucial processes which include identification, coverage and allocation. Identification entails the process of identifying the information to be common to all the stakeholders. It also specifies when the PM should relay the information to the parties concerned and the modalities for its dissemination. Coverage involves the process of consolidating and preparing the information to be relayed out to the parties concerned. Allocation entails the distribution of the information as well as singling out the procedures for the storage and the storage facilities. Quality Management ensures that the right procedures are followed by the PM. It ascertains that the specifications are being accurately transformed in to a working system. It is a business centered approach which traverses throughout the developmental stages. It ensures the achievement of the goals and objectives of the business. Quality need to be confirmed during the planning for the project requirements, the development and also at the level of acceptance testing. Implementation is very vital in the process development, it assures that the system deliverables of the project meet the requirements of the project team and goes on to provide value for their implementation. The termination of a project can be executed when the project life has been completed and the objectives achieved or during the project life due to varied reasons. The terminating procedures should be planned and not arrived at spontaneously to avoid erroneous procedures from being involved in the process (GIDO, 2009, pp. 103). Projects may be terminated before completion due to factors like prohibitive costs, dissatisfaction from the customer as well as at the customers will. The procedures may include organizing and proper filing of the project documents. Making and receiving final payments is also a crucial step. The PM may be required to prepare a written performance evaluation for each member of the project (NICHOLAS et al., 2008, pp. 460- 466). Celebration however small place is essential. Post project evaluation meetings need to be conducted. A post completion project review should be conducted to: review initial project objectives in terms of technical performance, schedule and cost. The activities and relationship among the project team members throughout the project. Involvement of the stakeholders should be documented. Failures and successes need to be comprehensively analyzed to pave way for the knowledge of weaknesses and strengths. A comprehensive list of lessons that were learned during the project should be arrived at. Part two: An organizational structure elaborates the roles of the parties involved in a project. There are three major categories of organizational structures; functional, projectised and matrix (Andongndou et al., 2009, pp. 38). The most appropriate one for AURA is the matrix organizational structure which is a hybrid of functional and projectised. AURA has a general manager who will appoint a functional manager and several project managers to run each separate project. The workers under this structure report to one functional manager and one project manager. For the relocation project the roles will be issued as follows: the general manager, the functional manager, the project manager, the team leader and lastly the team members. There is a possibility of reporting to multiple project managers if an employee is working for two projects concurrently. In this arrangement the functional managers are in charge of the administrative duties of assigning the workers to projects. PMs on the other hand are responsible for the projects execution. One merit of this structure lies on the shared role in the appraisal of the employees (BAKER, 2010, pp. 52). The project leaders are entitled to support from the PM for advisory, guidance and mentoring to aid them achieve their project objectives. The team members are comprised of the staff working for the various projects. The project manager: personal specification- should be of age 30 and above, must have an experience of more than six years in project management preferably in a construction sector. Demonstrated ability to lead a team will be an added advantage. Duties and responsibilities: responsible for project completion, will have authority to approve the work, offering support in completing the work, informing the functional manager about the project progress on timely basis. Project control need to be operational throughout the project life. It’s responsible for the verification and evaluation duties during the life of the project so that the defined performance is reinforced. The control functions are exhibited in the following strategies: investment, cost –benefit, value-benefit, risk profiling, milestone trend, cost trend, expert surveys, simulation calculations, surcharge calculations and target –actual comparison. Coordination on the other hand has the function of providing linkages to the various distinct departments of an organization so that they operate as a unit. In cost- benefit analysis the control unit will evaluate the costs incurred against the benefits in totality to gauge the project productivity. Audits will have to be done with the management providing direction to counter possible risks in the process. Recruitment of staff to make up for the lost time may come with the challenges which may include: failure to recruit personnel with the right qualifications owing to the haste with which the recruitment may be conducted. The costs of hiring which include training and remuneration plus other benefits are likely to be high. More employees are likely to strain the facilities; this may lead to increase in facilities to accommodate them. On the other hand this recruitment is likely to make AURA maintain its reputation of being able to complete its project in time. New employees are likely to bring in new force that will challenge the already fatigued workers to move on (ASWATHAPPA, 2005, pp. 146). A project leader is the chairperson of the team. He should be talented to step back to oversee the project. He ought to be capable of delegating tasks to the right person. A project leader should have the potential to identify the capabilities in others. Ability to clarify decisions to the workers is an asset. A construction project leader is charged with the duty of to setting up the estimates. He manages the budgets and the construction timetable for the client and develops the construction strategy (CORNICK & MATHER, 1999, pp. 51). He selects the subcontractors and laborers and provides required explanations for the builders and other professionals associated with the project. He coordinates and collaborates with the architects, engineers and specialists. The construction manager also ensures compliance with all building codes and any other legal or regulatory requirements. In the event of any problems like delays, employee unrest, it is the project manager that is the first respondent. Any subcontracting has four basic stages in its life cycle: the contractual stage, the transition stage, ongoing stage and the return stage. These stages though distinct are likely to overlap depending on the speed with which the client moves. Contractual stage begins with the service bid and culminates with the signing of the contract. At the transition stage the service team gains the requisite knowledge, while at the same time continues with their other responsibilities. During the ongoing stage which begins with the measurement stage. It finds when the service has gained stability. Indicators that were defined previously are measured. Mechanisms for follow up are defined at this stage. The return stage is the stage at which the completed project is returned to the client (Sera et al., 2009, pp. 28- 29). The construction industry underscores the significance of competitive tendering which goes through a series of processes: qualification, compilation of tender list, tender invitation and submission, tender assessment and finally tender acceptance (CONSTRUCTION INDUSTRY BOARD, 1997, pp. 5-6). Mix of skills which enhances productivity is one merit that comes with outsourcing. The costs of production are usually transferred to the vendor. The costs paid to the vendor are usually lower than the costs which could have been met by the out sourcing organization. Out sourcing provides the opportunity to concentrate on the core activity of a project and this gives room to advance technologically. It leads to use of more innovative approaches to the project, majorly because the outsourced companies are always striving to outdo their competitors (Hira, 2009, pp. 29). Part three: Project plan and report To create a project plan, it is essential to use the project evaluation and review technique. In this method, the tasks that can be done concurrently are arranged in a way that the project runs within the stipulated time. To achieve this, the tasks’ expected time of completion is calculated using a formula derived from the optimistic time, the pessimistic time of completion of the task, and the normal time expected for the task to be completed. When this has been achieved, the project manager can then draw a Gantt chart that illustrates the flow of activities of the project. It is essential to note that before this is begun, the project team and manager have to list down all the activities that will be in the project For the project of the LSBM Departmental Relocation project, it is essential to list all the activities that are involved in the project and their timelines in order to draw the Gantt chart. The expected time is calculated using the formula (O+4N+P)/6 where O is the optimistic time, N is the normal time and P is the pessimistic time that each event is expected to be finished. This can be listed in the table as below: all the times are in weeks (Ochola et al., 2010, pp 355). No. Predecessor event Task name Optimistic time Normal time Pessimistic time Expected time A ---- Site selection 1 2 3 2 B ----- General excavation 5 6 7 6 C A Grading of the area. 3 4 5 4 D B C Excavation of drainage and utility 18 20 22 20 E BC Civil constructional works 4 5 6 5 F ABCDE Installation of utilities 3 4 5 4 G ABCDF Pouring concrete on utilities 3 4 5 5 H ABCDFG Finishing of main house 4 5 6 5 The Gantt chart for this project would then look like as demonstrated bellow. In most cases the diagram is created using MS project or the Omni-plan software. And the critical path is usually indicated by the software automatically. Estimation of time and expenses Once the Gantt chart has been developed, the next task could be cost estimations or the actual estimation of time. This can also be achieved through the use of the PERT technique. In order to do this a forward pass that indicates the maximum time taken for the project and a backward pass that will show the slack is done. To achieve this, the earliest stat time of each task is defined. To determine the earliest finish, the duration of each task is added to the earliest start of each task. At this point a network diagram can be drawn with each node representing a task. The attributes of the task include the earliest start time, the duration, the earliest finish time, the latest start, the latest finish and the slack if any. Project evaluation There are a number of project evaluation techniques that are used in project management today. Some of the methodologies include the use of the S curve, the earned value management, highlight report, the exception report, the milestone chart and the check point report. All of these methodologies have advantages and disadvantages that are associated with each methodology. The S- Curve is a method indicates the resources that have been consumed by the project overtime. It is essential for the monitoring the consumption of resources in a project over time (Nadarajan, 2003, pp. 227). However, the consumption of resources does not indicate the milestones achieved over time. An escalation of expense could be due to challenges that were unforeseen in a project and not the completion of major tasks in a project. The highlight report method is the best methodology to evaluate the project in terms of the completion of tasks. It would indicate the degree of performance of each task and the show the tasks that are completed. As compared to the S curve, the highlight report is effective in showing the details of the tasks and the costs incurred in completing the same. This gives the actual picture of the position of the project (Barker, 2013, np) Project Change Control Procedures The control of a project requires the manager to implement changes that are critical to the business needs of a project. This could be essential in aligning the project with the business needs of a project or preventing future negative performance of the project that were unforeseen (Heldman, 2011, pp. 441). In managing the change of a project, the project control board has to propose a change, indicate the impact of the change, make a decision on whether to implement the change and implement the change if it is accepted. Unnecessary changes would result in the waste of time and resources. This means that for the project control board to make efficient the use of available resources and time, the change control procedures must be correctly followed. This is usually initiated by and individual who makes the case for change through a request form. The change is then recorded in a change log with all the decisions taken. In the end a change is closed upon completion or rejection by the project control board (Taylor, 2007, pp189). References: ANDONGNDOU, PRESSLER & MARCH, (2009).FCS project management L3. 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New York, AMACOM. http://public.eblib.com/choice/publicfullrecord.aspx?p=434982. KENDRICK, T. (2010). The project management tool kit 100 tips and techniques for getting the job done right. New York, AMACOM American Management Association. http://www.books24x7.com/marc.asp?bookid=34156. KLOPPENBORG, T. J. (1900). Contemporary Project Management. Place, South-Western College Pub. LEWIS, J. P. (1998). Team-based project management. New York, American Management Association. NATIONAL CONFERENCE ON MATHEMATICAL AND COMPUTATIONAL MODELS, ARULMOZHI, G., & NADARAJAN, R. (2003). Proceedings of the second National Conference on Mathematical and Computational Models: NCMCM 2003, December 11-12, 2003. New Delhi, Allied Publishers. NEWELL, M. W., & GRASHINA, M. N. (2004). The project management question and answer book. New York, AMACOM, American Management Association. NICHOLAS, J. M., STEYN, H., & NICHOLAS, J. M. (2008). Project management for business, engineering, and technology: principles and practice. Burlington, Mass, Butterworth-Heinemann. OCHOLA, W. O., SANGINGA, P. C., & BEKALO, I. (2010). Managing natural resources for development in Africa: a resource book. Nairobi, Co-published by University of Nairobi Press in association with RUNKLE, D. E., DEFUSCO, R. A., ANSON, M. J. P., PINTO, J. E., & MCLEAVEY, D. W. (2013). Quantitative investment analysis. Hoboken, N.J., Wiley. http://rbdigital.oneclickdigital.com. SCHWANINGER, M. (2009). Intelligent organizations: powerful models for systemic management. Berlin, Springer SERA, LEE, R., ISHII, N., DU, W., KIM, H.-K., & XU, S. (2009). Software engineering research, management and applications 2009. Berlin, Springer. TAYLOR, J. (2008). Project scheduling and cost control: planning, monitoring and controlling the baseline. Ft. Lauderdale, Fla, J. Ross Pub. UNDERDAHL, K. (2005). Adobe Premiere Elements for dummies. Hoboken, NJ, Wiley Pub. http://www.123library.org/book_details/?id=10707. WILLIAMS, M. (2008). The principles of project management. Collingwood, Site point. Read More