Transcript aiktcDspace1825.4.ppsx - AIKTC Institutional Repository!

Project Planning
eCourseware@AIKTC

Planning is thinking deeply through a problem, examining all
the logical paths and writing down all the times in their
logical and time order. Planning in any project sector should
justify the following- Planning would help to optimize the use of scarce
resources.
-Optimization and better utilization of the existing resources
- Results in the desired benefits.
-Within the budgetary provision of the financial institutions.
Corporate planning involves four main phasesChoice of definition of goals and objectives.
Preparation of operating plans for budgets to
achieve the objectives, choice of criterion that
should be used for selecting a course of action.
3. Evolving strategies and taking strategic decisions in
order to integrate these plans.
4. Implementation.

1.
2.
Decision making
point
To realize goals in
best manner
Top management
responsibility
Functional or
management
responsibility
Operating plans
Designing,
planning, control
of recourse
utilization within
each functional
areas
Cover sheet
Name of business
Names of principals
Address and telephone numbers
of business

Statement of purpose(
Executive summary)
Description of business- product
or service
Business structure
Description of;
-amount of money being
requested
-how funds will be used
-how funds will be repaid

Marketing plan
The industry
Competition
Market size and opportunity
Markets segments served
Marketing mix
Key factors to success in market
 Financial plan
Sources and application of funds
Capital equipment list
Balance sheet
Break even analysis
Income statements
Pro-forma cash flow statements

Organizational plan
Location of business
Organizational structure
Management
Non-management
personnel
 Summary
Application and expected
effect of loan on
business

Supporting documents
(as required)
Personnel resumes
Job descriptions
Credit reports
Letters of reference
Copies of contracts
Copy of leases
Copies of letters of intent
Legal documents
Production requirements

Dividing projects into simpler and manageable tasks
is the process identified as work breakdown structure
 Following are few reasons for creating WBS in a
project
1. Accurate and readable project organization
2. Accurate assignment of responsibilities to project
team
3. Indicates the project milestones and control points
4. Helps to estimate, cost, time and risk
5. Illustrate the project scope so that the stakeholders
can have a better understanding of the same


1.
2.
3.
4.
Design goals of WBS:
Giving visibility to
important work efforts
Giving visibility to risky
work efforts
Illustrate the correlation
between the activities and
deliverables
Show clear ownership by
task leaders
Network analysis helps in designing, planning, coordinating, controlling
and decision making in order to accomplish the project economically in d
minimum available time with limited available resources.
 Network techniques were developed from Gantt milestone chart and bar
chart which had the following disadvantages- too cumbersome in dealing with large and complex project where the
interdependencies and interactions are to be studied
- Has complete disregard to prioritizing.
- Effects of changes in schedule cannot be evaluated with the help of bar
charts
- Does not indicate the timings at which activities begin nor does it indicate
the tolerance limits of timings.

PERT(Programme Evaluation And Review Technique) works a
method of minimizing production delays, interruptions, and
conflicts of co0rdinating and synchronizing the various parts of the
overall jobs; and of expediting the completion of projects towards
scheduling and budgeting resources so as to accomplish a
predetermined job.
 PERT is concerned with two concepts:
1. Events: An event is a specific accomplishment that occurs at a
recognizable point of time and does not call for either the need of
time or resources.
2. Activities: An activity is the work required to complete a specific
event.


1.
2.
3.
4.
5.
Steps in PERT:
Development of project
network.
Time estimation.
Determination of critical
paths, event slacks, and
activity floats.
Development of project
schedule.
Calculation of variable
duration and the probability
of completion in a given time.
Times estimates for PERT:
The optimistic time : Shortest
time possible if everything
goes perfectly well.
2. The pessimistic time: Longest
time conceivable and
included time for unusual
delays.
3. The most likely time: Best
estimate of what normally
would occur.

1.
Advantages of PERT
Gives management the ability to plan
the best possible use of resources
to achieve a given goal within the
overall time and cost estimates.


Helps management tackle the
uncertainties involved in
programmes.
It presses for the right action, at the
right point , at right time in
organization.
Disadvantages of PERT:
The basic difficulty comes in the way
of time estimates for the
completion of activities because
the activities of the non-repetitive
type.

This techniques do not consider
resources required at every stages
of project.
Use of this technique for active
control of project requires frequent
updating and revising the PERT
calculations


A Critical Path Method is a project management tool used to
formulate a time frame for a project in order to determine
where potential delays are most likely to occur. The process
includes a step-by-step process that provides the developer
with a visual representation of potential bottlenecks
throughout the course of the project.
The CPM was originally designed in the 1950's as a method
of organizing and tracking the numerous activities regarding
the Polaris missile defense program. However, a CPM is
useful with many projects and makes the planning process
easier.
By Completing a CPM the following will be found:
 The total time to complete the project.
 The scheduled start and finish dates for each task
pertaining to the projects completion.
 The tasks that are ”critical“ to the project and must be
completed exactly as scheduled.
 The ”slack“ time available in non-critical tasks, as well as
how long they can be delayed before they affect the
project finish date.
Advantages of Using a CPM
 Helpful for scheduling, monitoring, and controlling projects
 A project manager can determine actual dates for each activity
and compare what should be happening to what is taking place
and react accordingly
 The activities and their outcomes can be shown as a network
 Displays dependencies to help scheduling
 Evaluates which activities can run parallel to each other
 Determines slack and float times
 Widely used in industry
 Can define multiple, equally critical paths
 CMP determines the project duration, which minimized the sum of
direct and indirect costs
Disadvantages of Using a CPM
 CPM's can be complicated, and complexity increases for
larger projects
 Does not handle the scheduling of personnel or the
allocation of resources
 The critical path is not always clear and needs to be
calculated carefully
 Estimating activity completion times can be difficult
PERT
CPM
The origin is military
The origin is industrial
Even oriented approach
Activity oriented approach
Allowance for uncertainity
No such allowance
Three time estimates
One single estimate with
emphasis on cost
Probabilistic model with
Deterministic model with well
uncertainity in activity duration known activity times
PERT
CPM
Suitable when high precision is
required time estimates eg defense
projects
Suitable when reasonable precision
is required eg civil construction
Time is averaged
No averaging of time
Concept of crashing is not applied
Concept of crashing is applied
It is time based and emphasizes
more on reduction of execution
time
It is cost based with emphasis on
reduction of completion time

Project managers use trade-offs during
project planning and every week
during the life of the project whenever
they have a variance or a change
request.

Trade-offs are part of the language
good project managers use. You must
build the project plan with quantified
measurable outcomes.

The schedule must have work
estimates and accurate precedence
relationships.

Then you can model every change with
a compensating trade off.

Here is an example of a project
trade-off. The sponsor demands an
earlier finish date and the project
manager says, “Yes I can shorten
the duration of the project by two
weeks. But to do that, I will need
to have two additional engineers
for the month of April.” A trade-off
has two sides. First, there’s the
positive side where the PM
shortens the duration of the
project. Second, there’s the
negative side where the project
manager says they need two
additional engineers for the month
of April.


1.
2.
3.
Material requirements planning (MRP) is a production
planning, scheduling, and inventory control system used
to manage manufacturing processes. Most MRP systems
are software-based, while it is possible to conduct MRP by
hand as well.
An MRP system is intended to simultaneously meet three
objectives:
Ensure materials are available
for production and products are available for delivery to
customers.
Maintain the lowest possible material and product levels in
store
Plan manufacturing activities, delivery schedules
and purchasing activities.
For example;
 If a company purchases insufficient quantities of an item used in
manufacturing (or the wrong item) it may be unable to meet contract
obligations to supply products on time.
 If a company purchases excessive quantities of an item, money is wasted - the
excess quantity ties up cash while it remains as stock and may never even be
used at all.
 Beginning production of an order at the wrong time can cause customer
deadlines to be missed.
MRP is a tool to deal with these problems. It provides answers for several
questions:
 What items are required?
 How many are required?
 When are they required?...
 MRP can be applied both to items that are purchased from outside suppliers
and to sub-assemblies, produced internally, that are components of more
complex items.

1.
2.
3.
Drawbacks of MRP:
If there are any errors in the inventory data, the bill of
materials (commonly referred to as 'BOM') data, or
the master production schedule, then the output data will
also be incorrect
Systems require that the user specify how long it will take for
a factory to make a product from its component parts
(assuming they are all available).
A manufacturer may have factories in different cities or even
countries. It is not good for an MRP system to say that we do
not need to order some material, because we have plenty of
it thousands of miles away
In the context of a business, technology has a wide range of potential effects on
management:
 Reduced costs of operations. For example, Dell Computer Corporation used
technology to lower manufacturing and administrative costs, enabling the
company to sell computers cheaper than most other vendors.

New product and new market creation. For example, Sony Corporation
pioneered the technology of miniaturization to create a whole new class of
portable consumer electronics (such as radios, cassette tape recorders, and
CD players).

Adaptation to changes in scale and format. In the early part of the twenty-first
century, companies addressed how small devices such as cell phones,
personal digital assistants (PDAs), and MP3 players could practically become,
as well as how each product could support various features and functions. For
example, cell phones began to support email, web browsing, text messaging,
and even picture taking as well as phone calls.

Improved customer service. The sophisticated package-tracking system
developed by Federal Express enables that company to locate a shipment
while in transit and report its status to the customer. With the development
of the World Wide Web, customers can find the location of their shipments
without even talking to a Federal Express employee.

Reorganized administrative operations. For example, the banking industry has
reduced the cost of serving its customers by using technologies such as
automated teller machines, toll-free call centers, and the Web. As of early
2005, the cost of a bank transaction conducted by a human teller was
approximately $2, compared to $1 for a telephone banking transaction, $.501.00 for an ATM transaction, and about ten cents for banking over the
Internet. Automated Clearing House (ACH) or "checkless" check processing
costs were $.25-.50 per transaction. This reduction in cost could be attributed
primarily to reduction the amount of labor involved, which had a profound
effect on employment and labor-management relations in banking.
Type of project organization to be selected is largely
determined by,
 Type of organization- service, trade, manufacturing
 Selection of industry and area of operation
 Scope of operation
 Amount of capital funds required
 Possibility of raising resources from market
 Costs and procedures
 Comparative tax advantage
 Risk size
 Continuity of enterprise
 Degree of direct control and adaptability of organization

Definition:
“an organization is the systematic bringing
together of interdependent parts to form a
united whole through which authority,
coordination and control may be exercised to
achieve a given purpose”

Importance of organization:
 Encourages specialization and increases productivity
 Streamlines process of activities . Duplication and
consequent confusion is avoided
 Fosters co-ordination of various activities
 Facilitates precise and effective delegation of authority
 Ensures proper direction, motivation, coordination and
control
 Aids expansion and growth of enterprise
 Provides for optimum use of technological improvements
and manpower for higher growth

Steps In organizing:
Identify activities in order to attain objectives
Classifying and grouping the activities as Grouping activities into individual jobs
 Grouping jobs into section
 Grouping sections into departments
 Grouping departments into administrative units
 Defining responsibility and accountability
 Delegating the authority and requisite facility to
enable each one to carry out their responsibility



 Functions of an organisation:
1. Division of labour
2. Combination of labour
3. Coordination
1. Functional organizational structure.
 Functional organizational structure is to be
managed in the current organization hierarchical
structure, once the project begins operation, the
various components of the project are taken by
the functional units, each unit is responsible for
its charged component. If the the project
established, a functional area play a dominant
role, functional areas on completion of the
project, senior managers will be responsible for
project coordination.
Advantages of this structure:
First, the use of personnel with greater flexibility,
Second, when the project team members leave or leave the company, the functions can be
used as the basis for maintaining the continuity of the project;
Third, functional department can provide a normal career path for professionals.
 The disadvantage of this structure is:
First, projects often lack of focus, each unit has its own core functions of general business,
sometimes in order to meet their basic needs, responsibility for the project will be
ignored, especially when the interest taken in the project brought to the unit not the
same interest;
Second, such organization has certain difficulties in the inter-departmental cooperation
and exchanges;
Third, motivation is not strong enough for project participants, they think the project is an
additional burden, and not directly related to their career development and upgrading;
Fourth, in such organizational structure, sometimes no one should assume full
responsibility for the project, often the project manager is only responsible for part of
the project,

2. Project-based organizational structure.
 Project organizational structure refers to the
creation of an independent project team, the
team’s management is separated from the
parent organization’s other units, have their
own technical staff and management,
enterprise assigns certain resources to
project team, and grant project manager of
the largest free implementation of the
project .
The advantages of this structure:
First, project manager is solely responsible for the project, the only task for project
members is to complete the project, and they only report to the project manager,
avoiding the multiple leadership;
Second, the project team’s decision is developed within the project, the reaction time is
short;
Third, in this project, members shared the common goal of the project, and individual
has clear responsibilities.

The disadvantage of this organizational structure:
First, when a company has several projects, each project has its own separate team,
which will lead to duplication of efforts;
Second, the project team itself is an independent entity, prone to a condition known as
“Project inflammatory” disease, that is, there is a clear dividing line between the
project team and the parent organization, weakening the effective integration
between project team and the parent organization;
Third, the project team members lack of a business continuity and security, once the
project ended, return to their original functions may be more difficult.

3. Matrix organizational structure.
Matrix organizational structure is a hybrid form, it loads a
level of project management structure on the functional
hierarchical structure. According to the relative power of
project managers and functional managers, in practice
there are different types of matrix systems, respectively,
Functional Matrix: in this matrix, functional managers
have greater powers than project managers);
 Project Matrix: in this matrix, project managers have
greater powers than functional managers);
 Balance Matrix: in this matrix, functional managers and
project managers have the equal powers.

The advantages of this organizational structure:
 First, it is the same as functional structure that resources can be
shared in multiple projects, which can significantly reduces the
problem of redundant staff;
 Second, project is the focus of work, with a formal designated project
manager will make him give more attention to the project, and
responsible for the coordination and integration work between
different units;
 Third, when there are multiple projects simultaneously, the company
can balance the resources to ensure that all the projects can progress
to complete their respective costs and quality requirements;
 Fourth, the anxiety of project members is reduced greatly after the
end of the project, while they are strongly associated with the
project, on the other hand, they have a “home” feeling about their
functions.
The disadvantage is that this organizational structure:
 First, the matrix structure has exacerbated the tensions
between functional manager and project manager;
 Second, under any circumstances, sharing equipment,
resources and personnel among different projects will lead to
conflict and competition for scarce resources;
 Third, in the process of project implementation, the project
manager must negotiate and consult with the department
managers on various issues, which leads to the delay in
decision making;
 Fourth, matrix management is not according to the
principles of unified management, project members have
two bosses, the project manager and functional managers,
when their commands are divided, it will make members at a
loss.
Budgeting is the process of creating a plan to spend your money.
This spending plan is called a budget. Creating this spending plan
allows you to determine in advance whether you will have enough
money to do the things you need to do or would like to do.
 If you don't have enough money to do everything you would like to
do, then you can use this planning process to prioritize your
spending and focus your money on the things that are most
important to you.
 Budgeting is simply balancing your expenses with your income. If
they don't balance and you spend
more than you make, you will have a problem. Many people don't
realize that they spend more
than they earn and slowly sink deeper into debt every year.

Advantages of budgetary control
 Helps in process planning
 Delegation of authority
 Keeps expenditure in check
 Coordinates activities
 Determines policies of enterprise
 Aids in measuring performance
 Promotes coorperation and enhances control
o business activities
Steps in budgetary control
1. Preparation of budget
2. Publishing the budget
3. Measuring results
4. Comparing the performance with the budget
5. Correcting unfavorable variance for better
growth

Statutory requirement
 Definition: Something, such as official approval, a license, or
a permit that is required by law for engaging in a certain activity (such
as land development, mineral or oil exploration, sale of securities)
Resource allocation definition
Resource allocation is the process of assigning
and managing assets in a manner that supports an
organization's strategic goals.
 Resource allocation includes managing tangible assets such
as hardware to make the best use of softer assets such
as human capital.
 Resource allocation involves balancing competing needs
and priorities and determining the most effective course of
action in order to maximize the effective use of limited
resources and gain the best return on investment.
 In practicing resource allocation, organizations must first
establish their desired end goal, such as increased revenue,
improved productivity or better brand recognition.


"A technique in which start and finish dates are adjusted based on
resource constraints with the goal of balancing demand for resources
with the available supply.“
Resource leveling is a technique in project management
that overlooks resource allocation and resolves possible
conflict arising from over-allocation.
 This will benefit the organization without having to face
conflicts and not being able to deliver on time.
 Resource leveling is considered one of the key elements to
resource management in the organization.
 An organization starts to face problems if resources are
not allocated properly i.e., some resource may be overallocated whilst others will be under-allocated. Both will
bring about a financial risk to the organization.

The Two Key Elements of Resource leveling

As the main aim of resource leveling is to allocate resource
efficiently, so that the project can be completed in the
given time period. Hence, resource leveling can be broken
down into two main areas; projects that can be completed
by using up all resources, which are available and projects
that can be completed with limited resources

Projects, which use limited resources can be extended for
over a period of time until the resources required are
available. If then again, the number of projects that an
organization undertakes exceeds the resources available,
then it's wiser to postpone the project for a later date.
Structure of Resource leveling

Many organizations have a structured hierarchy of resource leveling. A
work-based structure is as follows:
-Stage
-Phase
-Task/Deliverable

All of the above-mentioned layers will determine the scope of the project
and find ways to organize tasks across the team. This will make it easier
for the project team to complete the tasks.

In addition, depending on the three parameters above, the level of the
resources required (seniority, experience, skills, etc.) may be different.
Therefore, the resource requirement for a project is always a variable,
which is corresponding to the above structure.
Establishing Dependencies
The main reason for a project manager to establish dependencies is
to ensure that tasks get executed properly. By identifying correct
dependencies from that of incorrect dependencies allows the
project to be completed within the set timeframe.
Here are some of the constraints that a project manager will come
across during the project execution cycle. The constraints a project
manager will face can be categorized into three categories.
 Mandatory - These constraints arise due to physical limitations
such as experiments.
 Discretionary - These are constraints based on preferences or
decisions taken by teams.
 External - Often based on needs or desires involving a third party.
By resource conflicts, there are numerous
disadvantages suffered by the organization,
such as:
 Delay in certain tasks being completed
 Difficulty in assigning a different resource
 Unable to change task dependencies
 To remove certain tasks
 To add more tasks
 Overall delays and budget overruns of
projects
Resource leveling Techniques
Critical path is a common type of technique used by project
managers when it comes to resource leveling. The critical path
represents for both the longest and shortest time duration
paths in the network diagram to complete the project.
However, apart from the widely used critical path concept, project
managers use fast tracking and crashing if things get out of
hand.
 Fast tracking - This performs critical path tasks. This buys time.
The prominent feature of this technique is that although the
work is completed for the moment, possibility of rework is
higher.
 Crashing - This refers to assigning resources in addition to
existing resources to get work done faster, associated with
additional cost such as labor, equipment, etc.
Project management software has the capacity to help
plan, organize, and manage resource tools and
develop resource estimates.
 Depending on the sophistication of the software, it
can manage estimation and planning, scheduling, cost
control and budget management, resource
allocation, collaboration,
software, communication, decision-making, quality
management and documentation or administration
systems.
 Today, numerous PC & browser based project
management software solutions exist and they are
finding their way into almost every type of business.








Freshdesk
ManageEngine ServiceDesk Plus
Zoho Projects
OneSoft Connect
Redbooth
eXo Platform
Basecamp
MS Project

Human Resource Planning is the process for " identifying and
documenting project roles, responsibilities, and reporting relationships,
as well as creating the staffing management plan" . The main task of this
process is the creation of the staffing management plan which includes
at least the following points:

"how and when how many project team members will be required"
"the criteria for releasing them from the project"
"identification of training needs"
"plans for recognitions and rewards"
"compliance considerations"
"safety issues"
"impact of the staffing management plan on the organization"






Organization charts and position descriptions have the task to
describe "member roles and responsibilities" and can be classified
into three types .
 Hierachical-type charts are used to represent top down orientied
structures like the
 Organizational Breakdown Structure (OBS) (for explaining the
"organization's [...] departments, units, or teams"),
 Resource Breakdown Structure (RBS) (for explaining the types
and subtypes of the project resources)





Matrix-based charts are used to represent flat connection oriented
structures like the responsibility assignment matrix (RAM) (for
connecting tasks and realizes).
Text oriented formats are used to describe explicitly who has to do
what and how and who has to report to whom.
Networking is a method for being connected to other people and for
connecting other people to the project
Organizational theory is a description of the behavior of human beings
inside of larger frameworks while respecting and using the rules of the
organization
-Maslow's Hierarchy of Needs
-Herzberg's Motivational Theory

The list of Roles and Responsibilities contains units
which are defined by four aspects:
 role :- the describing name for that what should be done
 authority :- the description of what the role owner are
allowed to decided and so on
 responsibility :- the description of what the role owner has
to do
 competency :- the description of those skills which the
owner has to have


Sometimes when a particular project is running behind schedule, the project manager
has to decide whether to go for project 'crashing' or 'fast tracking'. Before
understanding these concepts, let's evaluate the factors which force the management
to speed-up project execution midway:
1) While doing project planning, the initial time given to the project, was too
'optimistic' and now the ground realities are 'pessimistic'. This usually happens when
project planners don’t take into account various predictable/unpredictable risks which
may adversely affect the time taken for project execution.
2) Due to some unavoidable reasons, the project is running behind schedule and the
organisation needs to complete it on time.
3) Market needs the product, which is being developed, earlier than expected. This
demand forces the organisation to speed-up the project in order to fulfil the
requirements of the market.
4) Penalties, that late execution of project will attract, are high. Not only penalties, the
loss in goodwill also needs to be taken into account.

It is the process by which duration of project is reduced by
INCREASING the amount of RESOURCES allocated. It is important to
note that crashing is done only to CRITICAL activities. This can be
achieved by any of the following approaches:
1) Addressing productivity issues of the current resources and making
them more efficient. This can be done by taking better care of
resources available and cutting cost and time wherever possible.
2) Bringing in new additional resources to speed up the processes.
3) By evaluating alternatives available and analysing them in order to
find which one will help in compressing the duration with lowest cost.

Risks of Project Crashing in Project Management (PM)
1) Various external and internal factors may lead project
manager to go for crashing but it usually affects the quality
of work as the time taken (besides cost) is the major issue on
his mind.
2) Using additional resources does not always guarantee
better results. Example if an organisation decides to hire
more employees or outsource them, one can't be sure that
they are trained enough to deliver as per expected
standards.
Cost Estimating is the process of "developing an approximation of
the costs of the resources needed to complete the project
activities". Cost estimating is part of the Project Cost
Management which includes the processes involved in planning,
estimating, budgeting, and controlling costs so that project can be
completed within the approved budget“
By comparing Cost Estimating and Cost Budgeting one sees that cost
estimating means estimating the costs of each activitiy: Cost
estimating is executed on the level of the activity list. Cost
budgeting aggregates and is executed at least on the level of work
packages if not on the level of control accounts.

Tools and Techniques
Analogous estimating means estimating on the base of
historical information by using a special idea / assumption
Determine resource cost rates is the step of collecting unit
cost rates.
Bottom up estimating means decomposing an identified
activity, estimating the subtasks and aggregating the results
as estimating for the activity as whole.
Parametric estimating computes the costs by formulars which
operates on more or less unsure values.
Project management software often helps to collect, document,
and compute estimates and the needed basic values,
 Vendor bid analysis means that the bid of a vendor will be
compared with bids of other vendors and/or by an own detailed
cost analysis
 Reserve analysis regards the more or less hidden contingency
reserves which may be implicitly embedded into activity durance
or explicitly integrated by the critical chain method. A good
method is to integrate estimatings for known unknowns into the
cost baseline.
 Cost of quality analysis normally delivers results which can
influence the cost estimatings.

Process Output

Activity Cost Estimates are :quantitative assessments of likely costs of the resources
required to complete schedule activities": for each activity of the activity list the document
of the Activity cost estimates contain one value.

Activity Cost Estimate Supporting Detail is the activity specific documentation which
(provides) a clear professional, and complete picture by which the cost estimate was
derived". It contains constraints, assumptions, computations and basic values.

Requested Changes may be generated if - for example - the cost target budget can't be
met and the scope or the WBS and the activity list must be refined

Updates of the Cost Management Plan may be generated by changings which are
elaborated of the basis of the practice and which concern the definitions, how to manage
the costs.

Multi-project Management is always challenging for organizations, but
when you are handling different type of projects for multiple
organizations the complexity increases manyfold. Managing and tracking
different project plans, keeping track of your budgets and costs, handling
different types of resources and materials, communications with your
clients and colleagues, sharing your project related information in a
secure way and generating reports that are accurate and meaningful will
be formidable without the right solutions to assist you in your project
management.

Efficient resource management
Have full control on your expenses
Active collaboration in multi-project management
Ease in documentation


