Introduction

Project
Management
SK Srivastava
 What is Project?
As per PMI


• “Project is an temporary Endeavour

undertaken to create an unique
product or service”
• Examples:
– Creation of Infrastructure for Common
Wealth Game was a large project
which had many sub projects to
accomplish the task.
– Metro for Pune is a project
• Therefore, Projects,
– Are Complex
– Require multidisciplinary knowledge
and expertise
– Would have interconnected elements.
– Would have interdependencies.
– Would require a team comprising of
people with different expertise.
– Comprise of tasks and subtasks.
– Projects are a time bound activity and
would have mile stones to be
accomplished.
 Project
• A Project is an temporary Endeavour
undertaken to create a unique
product or services. It is specific,
timely, usually multidisciplinary and
always conflict ridden.
• Projects are parts of overall programs
and may be broken down in tasks
and subtasks and further as desired.
 Project Management Vs General
Project Management
Management
General Management

High level of conflicts Generally smooth operation

PM must be creative and flexible Manage by exception (handled routinely

by subordinates)

Success depends on careful planning Good planning would yield better result

Project Budget are not standard Mostly based on previous period budget
with certain modification

Sequence of execution may vary even if Generallysequence of activities are fixed

deliverables are similar to the earlier at the time of setting up production line
projects

Note : Pro je ct p la n n in g is th e so u rce o f b u d g e t, sch e d u le , co n tro l

and evolution
 What is Managed?
• Three Goals of Project
Pe rfo rm a n
– Time ce
– Cost
– Performance

C os
Projects have three t
interrelated objectives
Meet the budget
Finish on schedule Tim
Meet specifications e
that satisfies the
client
Project Manager must know/decide how to
trade off one project goal against the
another to keep the project on track.

Pe rfo rm a n
ce

C os
t

Tim
e
 Life Cycle of the projects
are two different paths along which project progresses

%
Pr S lo w
oj Fin ish
ec
t
Q u ick m o m e n tu m
co
m
%
pl
Pr S lo w S ta rt
et
oj
io
ec
n
t  Time
co
m
pl
et Tim e
io
 How to select a project?

• Nonnumeric Selection Method

– Sacred Projects
– Operating and competitive necessity
– Comparative Benefits
• Numeric Method
– Financial Assessment Methods
– Real Options
– Scoring Methods
 Numeric Selection Method

• Payback Period
• Discounted cash flow method

n t

N PV ( Pro je ct) = -I0 +t Σ F /(1+k)
t=1


 Where
t I0 = Initial Investment
 F = Net cash flow in time period t
 k = required rate of return or hurdle
rate



 A B C D E F G
1 Year Inflow Out flow Net flow DiscountF NPV
actor
2 2000 $0 $12,500 $
3 2001 $0 $10,000
4 2002 $0 $9,000
5 2003 $5000 $0
6 2005 $12000 $1500
7 2006 $11500 $0

8 2007 9700 $1500

9 2008 9000 $0
10 2009 5000
 Project Portfolio Process
• Project Portfolio Process (PPP) attempts to link the
organization projects directly to the goals and strategy
of the Organization
• PPP also meant for monitoring the and controlling the
organization’s strategic projects.


Step 1: Establish a project council ( articulate strategic

direction)
Step2 : Identify project categories and criteria


 Types of projects
– Derivative Projects ( Incremental difference)
– Platform Projects (major departure from existing offerings)
– Breakthrough Projects
– R&D Projects

 PPP
• Step 3: Collect Project Data
• Step 4: Assess Resources Availability
• Step 5: Reduce the project and
criteria set
• Step 6: Prioritize the project within
categories
• Step 7: Select the projects to be
funded and held in reserve
• Step 8 : Implement the project