Master of Business Administration - MBA Semester 2
MB0049 – Project Management
(Book ID: B1138)
ASSIGNMENT- Set 1
Q1. Define project management. Discuss the need for project management.
A.1 Project Management – It is an art of controlling the cost, time, manpower, and hardware and software resources involved in a project.
Project management is necessary because it helps an organisation execute a project successfully by:
a) Preventing Project Failure: A project requires huge investments which should not go waste. A loss in any project would have direct or indirect impact on the society. Project management helps an organisation prevent failures in projects.
b) Controlling Project Scope: Scope of the project activity may undergo a change. Project management helps an organisation define and control project scope.
c) Improving understanding: Lack of understanding of the project among the participants leads to failure. Project management helps participants understand the project and its purpose.
d) Managing Risks: A project is vulnerable to various risks. A project is affected if the technology used is changed during the course of project execution. Similarly changes in economic conditions may affect a project. Project management is very useful in assessing and mitigating such risks.
e) Managing Project Problems: Consequences of ignoring project related problems can be very serious. Project management helps in identification and communication of problem areas.
Q2. What is meant by risk management? Explain the components of risk management.
A.2 Risks are those events or conditions that may occur and whose occurrence has a harmful or negative impact on a project. Risk management aims to identify the risks and then take actions to minimise their effect on the project. Risk management entails additional cost. Hence risk management can be considered cost-effective only if the cost of risk management is considerably less than the cost incurred if the risk materialises.
Important components in risk management are shown in figure
a) Risk Assessment – Identify the possible risks and assess the consequences by means of checklists of possible risks, surveys, meetings and brainstorming and reviews of plans, processes and products. The project manager can also use the process database to get information about risks and risk management on similar projects.
b) Risk Control – Identify the actions needed to minimise the risk consequences. This is also known as risk mitigation. Develop a risk management plan. Focus on the highest prioritised risks. Prioritisation requires analysing the possible effects of the risk event in case it actually occurs. This approach requires a quantitative assessment of the risk probability and the risk consequences. For each risk, determine the rate of its occurrence and indicate whether the risk is low, medium or of high category. If necessary, assign probability values in the ranges as prescribed based upon experience. If necessary assign a weight on a scale of 1 to 10.
c) Risk Ranking – Rank the risk based on the probability and effects on the project; for example, a high probability, high impact item will have higher rank than a risk item with a medium probability and high impact. In case of conflict, use judgment.
d) Risk Mitigation – Select the top few risk items for mitigation and tracking. Refer to a list of commonly used risk mitigation steps for various risks from the previous risk logs maintained by the project manager and select suitable risk mitigation step. The risk mitigation step must be properly executed by incorporating them into the project schedule. In addition to monitoring the progress of the planned risk mitigation steps, periodically revisit the risk perception for the entire project. The results of this review are reported in each milestone analysis report. To prepare this report, make fresh risk analysis to determine whether the priorities have changed.
Q3. Discuss the various steps in project monitoring and control.
A.3 Any project aimed at delivering a product or a service has to go through phases in a planned manner in order to meet the requirements. It is very important to measure the performance of the current status of the project at anytime against its planned version. This helps to tackle any unexpected deviation in time, efforts and cost. It is possible to work according to the project plan only by careful and close monitoring of the project progress.
It requires establishing control factors to keep the project on the track of progress. The results of any stage in a project, depends on the inputs to that stage. It is therefore necessary to control all the inputs and the corresponding outputs from a stage. This is achieved through devising proper controls for every stage.
A project manager may use certain standard tools to keep the project on track. The project manager and the team members should be fully aware of the techniques and methods to rectify the factors influencing delay of the project and its product. It is important for all stakeholders to know the impact of the changes in any parameters to the overall project. The various steps involved in monitoring and controlling a project from start to end are shown in figure
1 Preliminary work
The team members understand the project plans, project stage schedule, progress controls, tracking schedules, summary of the stage cost and related worksheets. All the members have to understand the tolerances in any change and maintain a change control log. They must realise the need and importance of quality for which they have to strictly follow a quality review schedule and frequently discuss the quality agendas. They must understand the stage status reports, stage end reports, stage end approval reports.
2 Project Progress
The members must keep a track of the project progress and communicate the same to other related members of the project. They must monitor and control project progress, through the use of regular check points, quality charts, and statistical tables; control the quality factors which are likely to deviate from expected values as any deviation may result in changes to the stage schedule. The project manager ensures that these changes are made smoothly and organises review meeting with the project management group. Thus all the members are aware about the progress of the project at all times. This helps them to plan well in advance for any exigency arising due to deviation from planned schedule.
The manager must establish a project check point cycle. For this, a suitable stage version control procedures may be followed. The details are to be documented stage wise. Project files have to be timely updated with appropriate version control number and revision status should be maintained for each change. Team members are identified who will exercise controls at various points of the project.
Plan the resources required for various stage of the project well in advance. Communication is the key. Brief both the project team and the key resources about the objectives of every stage, planned activities, products, organisation, metrics and the project controls. This increases the visibility into the project performance and hence a quality control can be achieved. Allocating a right resource at the right place and the right time will significantly enhance the efficiency and effectiveness of the resource.
5 Quality Control
This is very important in any project. It is a tool which helps in tracking the progress of various parameters at any stage of the project. A project manager may use a standard quality control or customise according to the requirements. Quality control is possible if the project members follow the quality charts and norms very strictly. It is also important for all the project team members to know the importance of such quality checks and should have a good visibility into project performance.
6 Schedule Quality Review
Conduct quality reviews at regular intervals. It is recommended that quality review be scheduled at the beginning of the stage and also at the ending of every stage. This helps the project manager and team members to plan well in advance for any unforeseen deviation.
7 Agenda for Quality Review
Create and distribute a quality review agenda specifying the objective, products, logistics, roles, responsibilities and time frame. This increases the effectiveness of the review and also reduces the time gap.
8 Conduct Quality Review
Conduct the quality review in a structured and formal manner. Quality review should focus on product development and its quality factors. Focus on whether it meets the prescribed quality standard.
9 Follow Up
Revise the complete quality review product status from ‘In-progress’ to ‘QR Complete’. Follow up the actions planned in strict manner which ensures conformity to the standards.
10 Review Quality Control Procedure
Verify that the quality objectives for each product are appropriate and that all participants are satisfied both with the process and its outcome. This is to ensure that all the stakeholders of the project are in conformity of control procedures.
Q4. What is Project Management Information System (PMIS)? What are the major aspects of PMIS?
A.4 An information system is mainly aimed at providing the management at different levels with information related to the system of the organisation. It helps in maintaining discipline in the system.
An information system dealing with project management tasks is the project management information system. It helps in decision making in arriving at optimum allocation of resources. The information system is based on a database of the organisation. A project management information system also holds schedule, scope changes, risk assessment and actual results.
The information is communicated to managers at different levels of the organisation depending upon the need. Let us find how a project management information system is used by different stakeholders.
The four major aspects of a PMIS are –
a. Providing information to the major stakeholders
b. Assisting the team members, stakeholders, managers with necessary information and summary of the information shared to the higher level managers
c. Assisting the managers in doing what if analyses about project staffing, proposed staffing changes and total allocation of resources
d. Helping organisational learning by helping the members of the organisation learn about project management
Q5. What is PERT chart? What are the advantages of PERT chart?
A.5 A number of activities make a project. Due to technological necessities, some activities can be performed only after some others have been completed. Some activities are independent of some other set of activities.
Different activities have different duration for their completion. Some projects are big and a number of clearly distinguishable stages or milestones are identified. Since some activities run concurrently, there are possibilities that one set of activities end up early and have to wait for some other activities to proceed further. This means that there are more paths from the beginning to the end, and one of them takes more time than the others. We call that critical path. A PERT chart helps us to follow the critical path. Let us become familiar with the PERT chart.
PERT stands for Program (or Project) Evaluation and Review Technique. It is a popular project management model designed to analyse and represent the tasks involved in completing a given project. It also helps in identifying the minimum time required for completing the total project.
A PERT chart is a graphic representation of a project’s schedule, showing the sequence of tasks. It also shows the tasks that can be performed parallely, and the critical path of tasks which has direct impact on the project schedule. The tasks in the critical path must be completed as per schedule in order for the project to meet its completion deadline. The chart can be constructed with a variety of attributes, such as:
· earliest and latest start dates for each task
· earliest and latest finish dates for each task
· slack time between tasks
Advantages of PERT Chart :
(1) PERT chart explicitly defines and makes visible dependencies (precedence relationships) between the WBS elements
(2) PERT facilitates identification of the critical path and makes this visible
(3) PERT facilitates identification of early start, late start, and slack for each activity,
(4) PERT provides for potentially reduced project duration due to better understanding of dependencies leading to improved overlapping of activities and tasks where feasible.
(5) The large amount of project data can be organized & presented in diagram for use in decision making.
Q6. Write brief notes on the following: (i) Re-engineering and (ii) Re-structuring
A.6 (i) Re-engineering : - Business process re-engineering is the analysis and design of workflows and processes within an organization. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management.
Business process re-engineering is also known as business process redesign, business transformation, or business process change management.
(ii) Re-structuring :- Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons for restructuring include a change of ownership or ownership structure, demerger, or a response to a crisis or major change in the business such as bankruptcy, repositioning, or buyout. Restructuring may also be described as corporate restructuring, debt restructuring and financial restructuring.
Executives involved in restructuring often hire financial and legal advisors to assist in the transaction details and negotiation. It may also be done by a new CEO hired specifically to make the difficult and controversial decisions required to save or reposition the company. It generally involves financing debt, selling portions of the company to investors, and reorganizing or reducing operations.
The basic nature of restructuring is a zero sum game. Strategic restructuring reduces financial losses, simultaneously reducing tensions between debt and equity holders to facilitate a prompt resolution of a distressed situation.
Corporate debt restructuring is the reorganization of companies’ outstanding liabilities. It generally a mechanism used by companies which are facing difficulties in repaying their debts. In the process of restructuring, the credit obligations are spread out over longer duration with smaller payments. This allows company’s ability to meet debt obligations. Also, as part of process, some creditors may agree to exchange debt for some portion of equity. It is based on the principle that restructuring facilities available to companies in a timely and transparent matter goes a long way in ensuring their viability which is sometimes threatened by internal and external factors. This process tries to resolve the difficulties faced by the corporate sector and enables them to become viable again.
(1) ensure the company has enough liquidity to operate during implementation of a complete restructuring
(2) produce accurate working capital forecasts
(3) provide open and clear lines of communication with creditors who mostly control the company's ability to raise financing
(4) update detailed business plan and considerations