The Project Management as the System of Managing Sequence of Events - Essay Example

Project Management Question a) Explain what is meant by the two terms 'critical path' and 'critical chain'. How do they differ How they each are worked out The Critical Path Method (CPM) is one the most widely used network techniques for project management. In CPM, the activities are represented as per the sequence of their appearance and is based on the duration of the activities. But often the duration is influenced by resource constrains too. When the the network is drawn after the leveling the resources , the longest path that demands the resource constrains for its completion is refereed to as Critical Chain. Critical path is computed based on the duration. The path that needs maximum duration in termed as critical path. While the path that has maximum constrains for the resources needed for the completion is refereed as critical chain. b) Discuss the different ways that an infra-structure' project and an 'ROI' project might be considered and justified during a feasibility study. Explain why there would be a difference. The two major factors that any infrastructure project must be analyzed for feasibility are the Existence of long term demand for the initiative and the existing governance framework are the two important aspects to be considered here. Thus the infrastructure projects are not built with unmet expectations besides linking them with other well functioning infrastructure projects. The stand alone infrastructure development initiatives are very difficult to be very successful (Booz Allen Hamilton, 2002). Infrastructure projects them selves may not directly be revenue generating but they provide necessary support systems which could create centers of high rate of revenue generation. But in the case of ROI the proposals are very clear and clear quantification of the return is possible. The ROI also offers opportunities that could structure the project to attain the benefits in a very quick way. c) Draw up a Decision Tree for the above situation, and identify which of the options has the better EMV. What other factors would one wish to consider in making the decision Package A Cost of package : 30,000 The expected money value = 80 % of 60,000 + 20 % of 40,000 48,000 + 8000 = 56,000 Profit anticipated : 56,000 - 30,000 = 26,000 Package B Cost of package : 40,000 The expected money value : 80 % of 75,000 + 20 % of 50,000 60,000 + 0,000 = 70,000 Profit anticipated : 70,000 - 40,000 = 30,000 Better option is Scenario B 30,000 EMV 56,000 40,000 EMV 70,000 d) In the past, the organisation that you work for has used a simple 'gut feel' approach to estimation, but it now hopes to become ISO 9000 accredited. You have been asked by your manager to: 1. Examine what kind of project management information system might be needed, 2. describe such a system (with simple example illustrations), and 3. suggest how such a system could be obtained and set up. The ISO implementation process for the project management operations shall be planned as per the stipulated ISO standard : ISO 25100. This standard would be able to give necessary guidelines to create a common framework for project operations mainly communication and knowledge transfer across different units of the project team. The process would involve five key different steps namely planning, analysis, design, implementation and maintenance. The planning operation refers to creation of the logical sequence of events explaining how each step in the project information system could be operationalised. This step must foresee the resource requirement and possible threats expected from the system at the time of implementation. This is followed by the analysis where the strength, weakness opportunities and treats of the system would be brought to light. The observations and findings about the project system would lead to the design of the most effective system that would be not only operationally effective but also acceptable to the team members of the project. The implementation is the next stage to follow. This would consists of series of sessions for training, discussions and using different techniques of group dynamics and collective responsibility. Even after a successful implementation, it is not at all certain about the long term viability of the new project information system. Appropriate maintenance and corrective stage is meant to correct the pitfalls and errors in the implementation of quality standards . The identified errors need to be corrected and system need to be set right to derive the benefits of the initiatives. The steps that are planned to finally arrive at the system are as follows. (i) Development of proper documentation system : The document prepared must clearly explain the policies, objectives , scope of the proposed quality systems and how they interact within the system. The document prepared shall consist of system manual, administrative document, operating instructions and reference manual. (ii) Collection and analyzing the past information that was prevalent in the system management. This pertains to the minutes recorded in management meetings, audit records, various training programmes etc. (iii) Successfully implementing the necessary physical and administrative changes needed to meet the requirements. The change management team shall be designed appropriately to motivate the employees to incorporate the recommendations of the consultants or experts. Question 2. (a) Build a simple Critical Path Analysis model (i.e. a network model) to represent the project for which the task dependencies are listed below (make sure that you use the standards taught in this module). b) Using this information in the list of activity durations, mark up the diagram with the appropriate EETs and LETs, and mark in the critical path on your diagram. How long should the project take Total duration is 13 weeks and the critical path is C-F-J c) If we were to make use of the full PERT technique (as opposed to the simpler CPA) what extra information would we need to include What additional steps need to be carried out, and what more information and benefit could be obtained The PERT charts would require three different estimates of time for each activity. They are most probable time, most likely time and pessimistic time. The expected time for project completion is determining by combining them as follows. The expected time = (Optimistic time + 4* Likely time + Pessimistic time)/6 This would be a better estimate of time of completion unlike the CPM method where it is more averaged. d) If you were carrying out a cost benefit analysis during the feasibility study for a medium sized project (say 12 person-months development) into what categories and under what headings would you organise and arrange your findings The cost benefit analysis would be undertaken using two different ways. The first one is by relating the present value of benefits to initial investment. C/B = (Present value of investment) / Initial investment The other ways is by relating the net present value to initial investment. Net cost benefit ratio = Net present value / Investment Question 3 a) An organisation is considering outsourcing the whole of its IT department. What are the benefits of such an approach What are the risks What processes must the company go through in order to carry out such a strategy The benefits of outsourcing IT operations in an organization shall be assessed against the reasons leading to such a decision. If the major concern is the lack of in-house resources to undertake this task then the creation of such sophisticated teams may not be necessary considering the long-term objective of the organization. Thus outsourcing would result in keeping the working overheads lower and could maintain the internal working environment undisturbed. Further, outsourcing these activities could shift the responsibility of tasks to a different group outside the organization and the organization could concentrate on their core business activities and usability of the IT systems. The major risk involved is, when the operations of the business organization turns more I.T. driven they would be over dependent on the external support group. This could result in some form of organizational dependence where the outsourced organization would become a critical part in the business operations. Thus the role of trust that relates both the organization is the major risk in the whole process. And also, as IT is the rapidly advancing field, the benefits of t he IT to the business operations would depend on the learning ability of the group to which the entire operations are outsourced. The steps that organization must undertake in order to effectively implement the IT infrastructure would be following. The organization must have an Information Manager who could over see all the decisions related to organization's IT policies. The IT manager shall be responsible for devising policies related to the extend of outsourcing, hiring of I.T. support staff, ensuring proper implementation of the I.T. project, preparing and undertaking the training programme for the in-house employees and ensuring a knowledge based working system in the organization. b) What is TQM What is the essential philosophy behind it c) How is it applied in the IT department, especially with regard to project management One of the effective ways to ensure quality of organizational function is through Total Quality Management (TQM). The basic philosophy of TQM is establish high quality operations in all the segments of the organization like marketing, finance, design, engineering production, customer relations etc with the objective of meeting organizational objectives and needs of the customer (BNet, n.d.). TQM believes that organization is a continuously transforming place by creating highly knowledgeable and committed workforce capable to deliver the expectations of the customers (Issac et al, 2004). The total quality management in software industries have been developed based on the concepts of system development lifecycle (Li et al, 2000) . Important framework that need to be considered in this initiative are as follows * Creation of constancy and purpose in every step of development process is very essential. The software development team is made responsible for the outputs and not to be next set of personals in the opertions line (Li et al, 2000) . * Establishing an in built quality benchmarks among the development team rather than an external quality checking group (Li et al, 2000) . * Outsourcing decisions to be taken on the quality aspect of the partner rather than the cost aspect. As poor quality low cost association would soon turn out as a high cost partner (Li et al, 2000) . * Creating continuously improving system which takes care of the learning workforce and effective leadership (Lli et al, 2000). c) Explain what is meant by 'discounted cash flow'. What is the purpose of the technique that calculates it List and describe the stages in the use of the technique, and show how it might be used during a feasibility study. Illustrate your answer with a simple example. Discounted cash flow is a method of valuation which applies the principles of time value of the money. The method consists of determination of all the future cash flows which would be discounted to determine the present value. This method is widely used in the business sectors related to the fields of investment finance, real estate development and corporate financial management. The method is illustrated using an example as given below. Stan buys a house for US $ 100,00 with the expectation of selling it at a price of $150,000 after 3 years. In this process. Mr. Stan would get a profit of $ 50,000. The internal rate of return calculated for the profit amount of $ 50,000 would be 14.5 %. In other words the initial sum of $100,000 would have a compounded growth at the rate of 14.5 % annually (1.1453 x 100000 = 150000). If the present interests rates are 5 % then $1,00,000 at 5 % interest would mean the net present value of $150,000 is $129,576. The by discounting the cash flow with respect to the present value terms the investment proposition would be evaluated. d) What are the main differences between project management and line management What are the qualities you would expect to find in a project manager that may not be present in a line manager The project management refers to the system of managing sequence of events that would be leading to a common objective, which involves interrelated actions of different groups that need to be completed within a specified time frame. While the line management refers to the management operation undertaken to ensure the effective operation in the line of fixed system or an organization. Unit heads who supervises the works undertaken by the subordinates is a line manager. A line manager would be more of a manger for specific tasks while a project manger would be responsible for the whole process, which consists of different tasks. The project manager need to be well updated on the entire sequence of events leading to the project objective, For example in the case of construction project, the manager of the project should be well updated on the sequence of operation like construction process, material management, financial management etc. While a line manager in the construction industry could be a materials manager who would hold the responsibility for purchase of materials and their issue to the respective project sites. References Booz Allen Hamilton (2002) , Real Demand, Governance Framework Are Key Elements in Risk-Sharing of Infrastructure Projects, Retrived from 19 March 2009. Bnet (n.d) Philosophy of TQM, Retrieved from 18 March 2009 Clader, A (2005), Nine steps to success : an ISO 27001 implementation overview, I.T. Governance Publishing , Retrieved from < http://www.itgovernance.co.uk/products/151> 19 March 2009 Issac, G., Reentrant , C.. and Anantharaman, R.N. (2004), A Holistic Framework for TQM in the Software Industry: A Confirmatory Factor Analysis Approach, Quality Management Journal, 11( 3) : pp 35-60. Li, E Y, Chen, H G and Cheung, W. (2000), Total quality management in software development process, The Journal of Quality Assurance Institute, 14(1) pp 35-41. Read More