Introduction to Project Management

1. Learning outcomes
a) Differentiate between project and non-project.
b) Describe the main characteristics of project management.
c) Explain about the influence and impact of the forces in the external environment to
a project.
d) Describe about the main components of project management: scope, budget,
schedule and quality.
e) Discuss about the relationships among the main components of project
management: scope, budget, schedule and quality.
f) Discuss about the meaning of Triple Constraints: time, cost and performance for a
project.
g) Describe about the various categories of construction projects.
h) Discuss about the construction project stakeholders and their role and influence on
a particular project.
i) Explain about the degree of risk and uncertainty, and cost of making changes with
respect to project time.
j) Describe about construction project life cycle and phases.
2. Project, project management and project charter
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013):
A project is a temporary endeavor undertaken to create a unique product, service,
or result.
The temporary nature of projects indicates that a project has a definite beginning
and end. The end is reached when the projects objectives have been achieved or
when the project is terminated because its objectives will not or cannot be met, or
when the need for the project no longer exists.
A project may also be terminated if the client (customer, sponsor, or champion)
wishes to terminate the project.
Temporary does not necessarily mean the duration of the project is short. It refers to
the projects engagement and its longevity.

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Lecture Notes

An example of a product is a building that is completed upon completion for a

construction project. An example of a service is a particular function for production or
distribution of products and services that is the outcome of a strategic management
project. An example of a result is knowledge from a research project.
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013):
The relationship among portfolios, programs, and projects is such that a portfolio
refers to a collection of projects, programs, subportfolios, and operations managed
as a group to achieve strategic objectives.
Programs are grouped within a portfolio and are comprised of subprograms,
projects, or other work that are managed in a coordinated fashion in support of the
portfolio.
Individual projects that are either within or outside of a program are still considered
part of a portfolio. Although the projects or programs within the portfolio may not
necessarily be interdependent or directly related, they are linked to the
organizations strategic plan by means of the organizations portfolio.
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013):
Project management is the application of knowledge, skills, tools, and techniques to
project activities to meet the project requirements.
There are 10 project management knowledge areas:
1) Project integration management
2) Project scope management
3) Project time management
4) Project cost management
5) Project quality management
6) Project human resource management
7) Project communications management
8) Project risk management
9) Project procurement management
10) Project stakeholder management
Common and fundamental project requirements are
1) Complete the project within time no project delays.
2) Complete the project within budget no over budget.

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Lecture Notes

Project management is accomplished through the appropriate application and

integration of the 47 logically grouped project management processes, which are
categorized into five Process Groups. These five Process Groups are:
1) Initiating
2) Planning
3) Executing
4) Monitoring and Controlling, and
5) Closing.
Project Charter is a document that formally authorizes the existence of a project and
provides the project manager with the authority to apply organizational resources to
project activities.
3. Project environment
A project is surrounded by its external environment as illustrated in Figure 1 (Lester,
2007).

Figure 1: A project is surrounded by factors or forces in its external environment

Source: Figure 4.1, Lester (2007).
These external environmental factors or forces can be grouped as the immediate factors
that include the companys management, contractors, distributors, clients, end users,
public, competitors and suppliers. These forces have a direct influence and impact on the
project for example the project is constructed based on requirements from clients as
well as from the end users that will be using the facilities.
Similarly contractors, suppliers, public and competitors can also influence the cost and
quality of the project how?
There are also other bigger factors or forces: economic, political, environment, legal,
technology and socio-cultural, that have an influence and impact not only on the project
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Lecture Notes

but also on all immediate forces such as the contractors, end users and suppliers as
described above. For example the countrys economy, political stability and legal
requirements have positive and negative influences on the project. During an economic
recession, potential clients may not have the necessary financial resource to offer the
company to initiate the project. The company would have to find suppliers that can offer
the construction materials at a very low price but with the risk of getting them with a
lower quality.
How does technology, legal and socio-cultural influence the project and immediate
factors?
4. Basic components of project management
4.1 Basic components: Scope, budget, schedule and quality
Oberlender (2000) defines a project to comprise of the following basic
components: scope, budget, schedule and quality, as illustrated in Figure 2.

Figure 2: Scope-Budget-Schedule-Quality in a project

Source: Figure 1-1, p. 5, Oberlender (2000)
Scope is the work to be accomplished in terms of quantity and quality of
work. For example the project has 6 reinforced concrete buildings that can
withstand earthquake of up to a particular magnitude, etc.
Budget is the costs of the project measured in Ringgit and/or labour-hours
of work. For example the project must be delivered within a budget of RM
20 million, etc.
Schedule is the logical sequencing and timing of the work to be performed.
For example the project must start no later than 1st January 2013 and to be
completed by 31st December 2013; the classrooms must be completed first
before the start of the construction of the sports facilities, etc.

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Lecture Notes

Quality refers to meeting the project owners satisfaction and is integrated

into and between the project scope, budget and schedule. For example the
floors in all classrooms must be fully carpeted and that can last for at least
10 years, etc.
A balance is necessary between the scope, budget, schedule and quality.
If the scope increases for example if there were two more buildings to be
constructed, the budget would also increase (for example RM 4 million will have to
be added to the initial project budget) and schedule would also increase (for
example the project can only be completed with an additional 3 years for the
construction of the additional buildings). Similarly any reduction in the project
scope would usually result in reduction of the budget and schedule.
Any adjustment in the project budget would cause a corresponding adjustment to
be done in the scope. For example if the project budget needs to be reduced
because the owner failed to get the required financing from the banks, the project
scope would have to be reduced (for example the facility will not be a 4-storey
building but just a 2-storey building because it would cost less) and therefore the
project schedule may be shortened (for example since the building construction
duration is shortened due to lesser number of floors to be constructed, the project
duration would also be shortened). Similarly any increase in the project budget
may result (but not necessarily) in an increase of the scope (only if the project
owner decides to have additional facilities, etc.) and also the schedule and total
project duration may increase due to the additional work to be done.
If the project owner wants to use the facility earlier than the original due date, the
project scope may need to be reduced (therefore less facilities to construct that
would result in shorter project duration) or shorten the schedule by having more
resources (for example more workers and machineries to speed up the
construction process).
4.2 Triple Constraint: Time, cost and performance
Brown and Hyer (2010) referred to the basic project components: time, cost and
performance as the Triple Constraint of a project (refer to Figure 3 below).
They form potentially competing and conflicting project priorities which is similar
to the earlier discussions from Oberlender (2000) (the different perspective is that
schedule is included in time, and scope and quality are regarded as part of project
performance).
There must be a clear relative priority among the triple constraint elements time,
cost and performance because usually a project cannot be better, faster,
cheaper (Leonard and Kiron, 2002) which is an ambiguous slogan to project team
members.

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Lecture Notes

Time

Cost
Performance
Figure 3: The Triple Constraint in a project
Source: Exhibit 1.5, page9, Brown and Hyer (2010)
Table 1 lists the definition and measures of the triple constraint elements and
illustrates an example of the triple constraint application in Chinas first manned
space shot (expedition). Note that the priorities in Table 1 are just an example.
Other projects may have other priorities for example cost and time may be the
highest and second priorities.
Table 1: An example of triple constraint in Chinas first manned space shot (expedition)
Triple
Constraint
elements

Definition and Measures

Priority among Triple Constraint elements

Performance

Performance is the most broadly

defined Triple Constraint element
and may include scope, quality,
extent to which specifications are
met, ability of the product to
perform required functions, and
other factors.

The highest priority was technical

performance; the spacecraft Shenzou 5 had
to reach a designated altitude and return
the taikonaut safely to a landing site in
inner Mongolia. Chinese officials knew the
entire world was watching, many questions
about the countrys quick rise out of the
ranks of developing nations.

Time

This dimension refers to measures

of a projects ability to meet a
specified deadline.

Time was the second priority and although

sooner was better, it was not at the expense
of performance. Team members took the
extra time to test the technology and
support systems with unmanned flights to
ensure performance effectiveness.

Cost

This dimension addresses

Although neither the project team nor
measures of the cost of the
government agencies ignored cost,
project, which can be broken down everyone no doubt was aware that the
to manageable components
other two priorities performance and time
associated with individual work
were more important. The project was
packages, labor, subcontracts,
estimated at about USD $2.2 billion (but
materials, equipment, etc., and
numerous indirect costs are probably not
also can include indirect and
included in that figure).
overhead costs.
Adapted from: Exhibit 1.6, page10, Brown and Hyer (2010)

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Lecture Notes

5. Categories of construction projects

Civil Engineering projects may be design, construction or a combination of both design
and construction projects (Oberlender, 2000). Projects in the construction industry can
be categorized by the following industry sectors (Gould and Joyce, 2009):
a) Residential sector
This sector is comprised of individual homes, small condominiums and apartment
complexes that are usually privately funded. These buildings are usually designed
by architects and are strongly influenced by government housing policies. The
owner of these facilities can either be the government, private organizations or
individuals.
b) Commercial building sector
Commercial buildings such as office buildings, large apartment complexes,
shopping malls, theaters, schools, universities and hospitals are included in this
sector. These buildings are usually designed by architects and are highly
depended on the economic health of the country or region. The owner of these
facilities can either be the government, private organizations or individuals.
c) Infrastructure sector
Examples of projects in this sector include roadways, bridges, canals, dams and
tunnels. These projects are principally designed by civil engineers and built by
heavy construction contractors. Most of these projects are for the public and
therefore they are usually publicly funded i.e. the government is the owner of
the project and provides the necessary project funding.
d) Industrial sector
This sector is comprised of industrial facilities such as steel mills, petroleum
refineries, chemical processing plants and automobile production facilities. These
projects are for a particular industry or production activities and therefore are
usually privately funded.
6. Construction project stakeholders
6.1 Stakeholders
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition
(2013):

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Lecture Notes

Stakeholder is an individual, group, or organization who may affect, be

affected by, or perceive itself to be affected by a decision, activity, or outcome
of a project.
Project stakeholders include all members of the project team as well as all
interested entities that are internal or external to the organization
6.2 Owner
There are two types of owners public owners and private owners. Public owners
refer to the government and its agencies as the owner whereby the project is
constructed using public money i.e. money collected through taxes from taxpayers.
Private owners are individuals, companies and organizations that are not a
government agency and are not using money from taxes (Gould and Joyce, 2009).
An owner is also referred to as the client or customer of the project.
The owners need to specify how the completed project will be used i.e. the project
requirements and operational criteria that will be used to design the project
(Oberlender, 2000).
Project owners would usually have project professionals and companies to
represent them as the owner representatives. The owner representatives would
represent the owners in project discussions and to make decisions on behalf of the
owners if necessary.
6.3 End user
The owner of the project may not necessarily use the project when it is completed.
The people who will be using the completed facility are referred to as the end user
irrespective whether they are the owner or not. Owners and design professionals
must determine the requirements of end users based on how they will use the
facility when the project is completed. Failure to adequately incorporate end user
requirements would result in practical problems in the operation and maintenance
of the facility.
6.4 Design professionals
Architects and engineers are regarded as design professionals because they are the
principal designers of construction projects. The architect would be the primary
designer for most building and residential projects who would transfer the project
concepts on paper with participation from the owner and/or owner
representative. Engineers from varying disciplines such as civil, structural, electrical
and mechanical engineering would be involved later to support the design by the
architects. Both architects and engineers are also commonly referred to as the
project consultant (Gould and Joyce, 2009).

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Lecture Notes

The consultants are usually required to provide design alternatives to be selected

by the owner. Other than design, the consultants may also be required by the
owner to participate in other activities in the phases of the life cycle of a project
such as to supervise the construction activities at the construction site which is to
make sure that the facilities are constructed according to the design and
specifications (Oberlender, 2000).
It is also quite common for the architects and engineers to be referred to as the
A/E for the project. They may also provide construction management services and
will therefore be called the construction manager (Hegazy, 2002).
Design professionals are not only limited to architects and engineers but also to
other professionals in design such as interior designer, landscape architect and
specification writers (Gould and Joyce, 2009).
6.5 Construction professionals
The company that builds and constructs the facility is called the constructor and it
is also commonly called the contractor. They do the construction activities
according to the designs and specifications from A/E.
The primary contractor that is awarded the construction contract is referred to as
the main contractor or general contractor. It has been an established practice that
they may not do the entire construction activities but may contract out parts of the
work to other contractors that are called sub-contractors. These sub-contractors
may be specialists in a certain field of construction for example the supply and
construction of formworks and supply and installation of elevators (Gould and
Joyce, 2009).
A developer is an organization that develops the project. For example a developer
who may not own any land may offer the owner of a piece of land to develop and
build a housing project on the land. If the developer does not have enough money,
they can therefore apply for loans from banks. If the developer does not have the
resources to sell and market the houses, they can appoint a sales and marketing
company, and may pay the company sales commissions on the basis of the number
of houses sold by the company. The developer may offer the land owner a profit
sharing scheme from the sale of the houses and therefore may not pay to the land
owner until when the houses are sold by the sales and marketing company.
6.6 Project manager
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition
(2013):
The project manager is the person assigned by the performing organization to
lead the team that is responsible for achieving the project objectives.

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Lecture Notes

A project manager is responsible to lead the project team to achieve the goals and
objectives of the project. Each party to the project owner, consultant, contractor,
etc. may have their own project manager. For example the project manager of a
design project may be occupying the position of Chief Design Engineer since he is
the head of the design team. The project manager would perform the functions of
management: planning, organizing, leading and controlling for his employer.
6.7 Other construction project participants
There are many other construction project participants for example financial
institutions that provide the loans to cover the project costs; government agencies
such as department of occupational safety and health (OSH) that must be
consulted and any health and safety problems and accidents must be reported to
the department; and suppliers of construction materials, equipment and
machineries (Gould and Joyce, 2009).
How can an owner, end user, design professional, construction professional and project
manager influence the project?
7. Generic project life cycle and phases
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013):
All projects can be mapped to the following generic life cycle structure:
1) Starting the project,
2) Organizing and preparing,
3) Carrying out the project work, and
4) Closing the project.
Figure 4 illustrates the typical cost and staffing levels in a generic life cycle structure.
A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013):
A project life cycle is the series of phases that a project passes through from its
initiation to its closure.
A project phase is a collection of logically related project activities that culminates in
the completion of one or more deliverables.
Project phases are used when the nature of the work to be performed is unique to a
portion of the project, and are typically linked to the development of a specific major
deliverable.

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Lecture Notes

Figure 4: Typical cost and staffing levels in a generic life cycle structure
Source: A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013)

Refer to Figure 5 for an illustration of a single phase project.

Figure 5: Example of a Single-Phase Project

Source: A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013)

There are two basic types of phase-to-phase relationships:

1) A sequential relationship: A phase starts after the predecessor phase has
finished. For example the design phase is completed first and then the
construction phase starts. Refer to Figure 6.
2) An overlapping relationship: A successor phase starts before the predecessor
phase is completed (this relationship is also known as fast tracking). For example
the construction phase starts before the design phase is completed. Refer to
Figure 7.
What is one main advantage of having phases with overlapping relationship?

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Lecture Notes

Figure 6: Example of a sequential three-phase project

Source: A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013)

Figure 7: Example of an overlapping two-phase project

Source: A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013)

8. Risk, uncertainty and cost of changes

Figure 8 illustrates that the degree of risk and uncertainty is high at the beginning of the
project but decreases towards the end of the project time. On the contrary the cost of
making changes and correcting errors would be low at the beginning of the project but
increases towards the end of the project time.
How can the above situation be explained?
9. Construction project life cycle
Any construction project would have a particular life cycle which is comprised of phases
or stages in the initiation, development, use and disposal of the deliverables of the
project. The following Table 2 lists the phases of a typical life cycle of a construction
project (BS 6079; Lester, 2007; Oberlender, 2000; Hegazy, 2002; Shtub et. al., 2005;
Ruskin and Estes, 1995).

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Lecture Notes

Figure 8: Risk, uncertainty and cost of changes in a project time

Source: A Guide to the Project Management Body of Knowledge (PMBOK), 5th edition (2013)

Table 2: A typical life cycle of a construction project

No.

Phase

1. Project
conception

Description
This phase begins with the owner having some basic ideas of
the project due to some kind of requirements such as a facility
to start a business or need / desire such as a house.
Subsequently the owner and end-user requirements are
determined in project definition based on the intended use of
the completed project: needs, objectives, goals, scope, budget,
start and completion dates, basic configuration and layout of
the facility, project deliverables, etc.
It is crucial to have a clear project definition because the ability
to influence project quality, cost and schedule would be more
difficult as the project progressed from the first to the last
phase of the project life cycle (refer to Figure 8 and the
subsequent discussions). Similarly, it becomes more costly to
make any changes in project quality, cost and schedule as the
project progressed from the first to the last phase of the project
life cycle.

2. Feasibility
study

Investigation and evaluation for technical (for example site

inspection and investigation), commercial (investment
appraisal) and financial (availability of loans from financial
institutions) feasibilities based on the project definitions.
Check and apply for authorization and permits from relevant
government agencies such as for the construction of buildings
close to a jungle reserve or hospital.

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No.

Introduction to Project Management

Phase

3. Design

Lecture Notes

Description
The project workforce is organized by having a particular
organization structure (for example Matrix organization
structure) for the project team.
Design professionals determine the configuration (for example
size and dimensions of rooms), and types (for example
reinforced concrete building) of facilities, buildings and
structures based on the project definitions.
Subsequently drawings, specifications and contract documents
are produced.
Project construction planning and scheduling (for example
Work Breakdown Structure (WBS), bar chart and network
diagram) are prepared and consultants and contractors are
appointed based on the selected construction delivery system
(for example fast track) and contract arrangements (for
example design and build contract).
Funds to finance the project i.e. a project budget is defined and
applied for, that include all direct costs (for example material
costs), indirect costs (for example costs to entertain clients) and
contingencies (for example costs because of delays due to
unforeseen rainy days that will prevent the contractor from
carrying out concreting works).

4. Construction

Contractors carry out construction work (which includes any

installation and fabrication) at construction site and supervised
by consultants according to approved construction drawings,
specifications, plans, schedules, methods, etc.
Procurement and allocation of resources (workers, materials,
machineries, money, etc.) is done by all parties involved in the
project.
Project monitoring, supervision and control to make sure that
construction is according to plans, schedules, drawings,
specifications, etc.
A variety of tests are done to approve the use of construction
materials; confirm the satisfactory performance level of
equipment; verify the satisfactory functioning of project
components before commissioning and handing-over the
completed project to the client, etc.
Production of As-built drawings and project completion report
that records all relevant data and information about the
completed project for future reference for operation, repair,
maintenance and improvement works.
The final part of this phase is the project close-out and the

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No.

Phase

Introduction to Project Management

Lecture Notes

Description
completed project is handed over to the owner after the final
testing and joint inspection are successfully done by the design
and construction professionals together with the owner and/or
owner representative and contractors.
All final payments i.e. the last payment based on the
construction contracts to all relevant parties are made at the
end of the project.

5. Operation and
maintenance

This is the phase when the completed project is being used by

the owner and/or end user. The owner or/end users employees
and contractors carry out the operation and maintenance of
the facility.
If the facility is for business, then this is the revenue earning
period. If the facility is a factory, then this is the production
period, etc.

6. Termination

This is the end of the facilitys useful life or service life. The
entire, a major or substantial part of the project may be
renovated, overhauled, decommissioned, closed down,
abandoned or demolished to be removed and disposed to
make way for other projects at its site.
References

1. Brown, Karen. A and Hyer, Nancy Lea (2010); Managing projects: A team-based
approach; International Edition, McGraw-Hill.
2. Gould, F. M. and Joyce, J. A. (2009); Construction Project Management; 3rd Edition,
Prentice Hall.
3. Hegazy, T. (2002); Computer-based Construction Project Management; Prentice Hall.
4. Leonard, D. and Kiron, D. (2002); Managing knowledge and learning at NASA and the Jet
Propulsion Laboratory (JPL); Harvard Business School Case(Boston: HBS Publishing).
5. Lester, Albert (2007); Project Management, Planning and Control; 5th Edition, Elsevier.
6. Oberlender, G. D. (2000); Project Management for Engineering and Construction; 2nd
Edition, McGraw-Hill.
7. Project Management Institute (PMI) (2013); A Guide to the Project Management Body of
Knowledge (PMBOK), 5th edition.
8. Ruskin, A. M. and Estes, W. E. (1995); Whatevery engineer should know about project
management; 2nd Edition, Marcel Dekker Inc.

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Lecture Notes

9. Shtub, A., Bard, J. F. and Globerson, S.; Project Management: Processes, Methodologies
and Economics; 2nd Edition, Prentice Hall.
10. Tak-wa, C. C. and Hoi-Cheung, S. (2009); Construction Project Management from
theory to practice; Prentice Hall.
Latest update: 30th May 2016

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